(Bloomberg) -- Six hundred days and counting. That’s the time one developer has waited just to build a 7-mile natural gas pipeline, while some projects have been in limbo for as long as three years.
Chesapeake Utilities Corp.’s long-awaited $29.8 million project in Pennsylvania and Delaware is needed to ease bottlenecks in transporting gas from the Marcellus shale formation, according to Jeff Tietbohl, a vice president of Chesapeake’s Eastern Shore Natural Gas unit. Regulators approved the project Thursday after requesting changes to the pipeline route to minimize environmental impacts and steer clear of homes in the area.
Chesapeake isn’t alone. As developers propose new lines to handle supplies from the U.S. shale boom, the median time to secure federal approval since the start of 2015 is up by 60 days, data from Bloomberg Intelligence show. The slowdown is depressing prices and forcing some producers to shut in wells in the Marcellus, the most prolific basin in the U.S. Output is seen falling for the sixth straight month in August after reaching a peak in February, according to government data.
“For a pipeline project of our size it has been disappointing,” Tietbohl said in a phone interview last week. “It’s clearly longer than what we had anticipated.”
The U.S. has emerged as the world’s largest producer of gas by using advanced drilling technologies to reach previously hard-to-get shale reserves. Building the links needed to get the power-plant fuel to consumers has proven more difficult amid intensified opposition from environmental groups and lengthier reviews by the Federal Energy Regulatory Commission.
The commission declined to comment.
"Projects, especially in the Northeast, are encountering difficulties with the permitting process through FERC and the state permit process," Colette Breshears, a natural gas analyst at Louisville, Kentucky-based Genscape Inc., said by phone. "FERC has been a little bit slower."
Williams Partners LP applied more than three years ago to break ground on its 124-mile (200-kilometer) Constitution pipeline serving the Northeast. The project is in limbo after New York regulators found that an environmental permit application failed to meet the state’s standards.
Exxon Mobil Corp. and Qatar Petroleum International Ltd., which applied to build the $10 billion Golden Pass export terminal in Sabine Pass, Texas, more than two years ago, are still waiting.
All that’s fine by Tyson Slocum, Washington-based director of energy at Public Citizen, who said regulators should vet pipelines more extensively, even if it means longer delays.
“The current environmental impact review is too limited,” Slocum said by phone July 19. “The more important thing is to get it right, not to get it done quickly.”
Since 2009, it takes on average 382 days for a developer to gain approval to build a pipeline, according to a report by Brandon Barnes, an analyst at Bloomberg Intelligence.
"The protests are much more organized," Barnes said by phone. "More people are commenting than there used to be and that has to do with this grassroots environmental movement."
Chesapeake fell 0.5 percent to $64.89 at 11:11 a.m. in New York. The shares are up 24 percent in the past year.
Eastern Shore applied for the pipeline approved Thursday Nov. 21, 2014.
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