NPC: U.S. Needs to Expand Fossil Fuel Infrastructure

By The Maritime Executive 12-14-2019 12:56:30

The National Petroleum Council (NPC) has presented two reports, Dynamic Delivery and Meeting the Dual Challenge, to U.S. Secretary of Energy Dan Brouillette. 

The reports demonstrate how the U.S. can address the dual challenge of providing affordable, reliable energy while addressing the risks of climate change by advancing carbon capture, utilization and storage (CCUS) and spurring investments in new energy infrastructure. They are the NPC’s responses to requests for advice from Secretary of Energy Rick Perry.

NPC found that America’s largest energy sources will continue to be natural gas and oil through at least 2040. Dynamic Delivery, in its analysis through 2040, finds that public and private investment in new and existing pipelines, ports, rail facilities and inland waterways will be essential in connecting America’s abundant energy supplies with domestic and global demand. 

. The U.S. infrastructure supporting oil and natural gas includes:

• 300,000+ miles of natural gas transmission lines
• 210,000+ miles of pipelines for crude oil, refined oil products and natural gas liquids
• 4,000,000+ miles of public roads
• 135,000+ miles of freight railroads
• 12,000+ miles of inland waterways
• 388 active natural gas storage facilities
• 1,499 crude oil and products terminals
• 777 marine oil terminals
• five operating LNG export terminals

This needs to be maintained and expanded, states the report, due to geographic shifts in production and changes in demand. For example, Appalachia has become one of the top producing regions of natural gas, growing from almost nothing in 2009 to more than 30 percent of U.S. production in 2018. The Permian Basin in west Texas and southeast New Mexico has displaced the Gulf of Mexico as the top crude oil producing region, and the Eagle Ford in south Texas grew from producing nearly nothing in 2005 to 16 percent of U.S. production in 2018.

Project uncertainty caused by regulations and litigation is creating bottlenecks to energy delivery in some regions, states the report. “Overlapping and duplicative regulatory requirements, inconsistencies across multiple federal and state agencies, and unnecessarily lengthy administrative procedures have created a complex and unpredictable permitting process. While there have been bipartisan actions by Congress and the Executive Branch to expedite the permitting process, more improvements are necessary.”

Addressing climate change and creating greater regulatory certainty is critical to ensure cost-effective and reliable energy supplies for consumers. “We will fail, however, unless Congress develops a clear policy that clarifies the permitting process for infrastructure development and enacts a comprehensive national policy to reduce greenhouse gas emissions,” said Study Chair Alan Armstrong.

The U.S. is uniquely positioned as the world leader in CCUS, with approximately 80 percent of the world’s CCUS capacity and substantial capability to drive widespread deployment in the U.S. and abroad. Study Chair John Mingé noted that “CCUS is necessary for deep decarbonization. This report is the most comprehensive ever undertaken and provides a highly actionable roadmap to widescale deployment that will shape U.S. policy today and for years to come.”

The American Petroleum Institute (API) has welcomed the reports. “Our industry is leading the way in meeting the world’s growing energy demand while delivering solutions to reduce greenhouse gas emissions,” API President and CEO Mike Sommers said. “The natural gas and oil industry continues to drive emissions to their lowest levels in a generation, and as this study shows, we can build on this progress by fostering collaboration between the private and public sectors and advancing CCUS research and development. We urge Congress to make bipartisan CCUS legislation a priority and support innovative efforts to reduce emissions and achieve environmental progress.”