According to a new report, USA might not be able to fully capitalise on it’s shale gas boom due to the deficiency in pipeline infrastructure. The new report from global law firm White & Case LLP examines why the US currently lacks the capacity to transport all of its available oil and gas to users and looks at the reasons why investors have been slow to support the development of additional pipeline capacity. “The United States has a golden opportunity to become a powerhouse in global energy markets, to truly achieve full energy independence and to use natural gas to power our economy,” said White & Case partner Daniel Hagan. “But that path is far from assured without a major expansion of the long-distance pipeline network.” The report explores four approaches that could hasten development of critical infrastructure, including:
- Incentivizing investment. Pipeline investment and financing must be made more attractive. One way to do this is to add revenue streams from pipeline systems. There is pending legislation before Congress around this issue.
- Breaking the bottleneck in liquefied natural gas (LNG) export authorizations. Tapping into world demand for LNG is critical to spurring investment in pipeline infrastructure.
- Forging a solid partnership between industry and regulators. The United States needs a national energy strategy to kick-start an ambitious pipeline expansion program.
- Improving gas-electric coordination. Improve coordination among gas and electric power companies.
The report also contains two case-studies that illustrate its findings. The first one demonstrates how the Rockies Express Pipeline deals with the difficulties in repurposing existing infrastructure to cope with the shale gas resources. The other examines the efforts made by North Dakota to find alternative solutions to wasteful gas flaring, which accompanies shale gas exploration. The full report can be downloaded here.
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