US gas sector tries to avert pipeline shutdown

Natural gas pipelines and utilities are warning an appeals court of significant harm to consumers and industry if it declines to revise a ruling to shut down the 65-mile (105km) Spire STL natural gas pipeline because of problems with its federal approval.

Keeping the ruling intact could cost gas companies in Missouri tens of millions of dollars, raise the risk of gas supply disruptions and increase the cost of capital for future pipelines nationally, trade group Interstate Natural Gas Association of America (INGAA) said yesterday. The 22 June ruling against the 386mn cf/d (11mn m³/d) Spire STL pipeline, which began operations in 2019, marks the first time a court has sought to shut down an operating natural gas pipeline because of issues with its underlying approval.

"Temporarily shutting down an operational natural gas pipeline is not a simple matter of flicking a switch," the trade group said in a "friends of the court" brief. "Costs from this process easily run into millions of dollars, with the cleaning alone costing roughly $35,000 per mile."

The industry is hoping to avoid a legal precedent under which pipelines are at risk of having to close if their certificates from the US Federal Energy Regulatory Commission (FERC) do not survive judicial review. The US Court of Appeals for the DC Circuit in past cases of faulty certificates has always given FERC a chance to fix its work, giving investors assurances that once a pipeline starts operating it is at low risk of having to close. INGAA and other gas companies are arguing the court should revise its decision and not break from its past practices.

The DC Circuit, in its 3-0 decision against Spire STL, said it decided to throw out the pipeline's certificate because it was "far from certain" that underlying issues could be resolved. The court said FERC ignored evidence of self-dealing by the companies who built the pipeline and did not seriously evaluate whether the project was actually needed when it was approved in 2018. The ruling will not take effect while the court decides on a request by Spire STL to reconsider.

The shutdown of Spire STL could have effects across the region. The owner of the MoGas Pipeline yesterday filed a legal brief that warns shutting Spire STL would cause it to lose line pressure and cause a "significant loss of service for some customers" to the west of St. Louis, Missouri, and possibly require it to spend up to $100mn on new piping. MoGas, asked for comment, said it did not know how many customers might loser service but it believes a shutdown is "highly unlikely."

The gas utility Spire Missouri and Spire STL, which have the same owner, last week urged the court to reconsider its ruling by providing FERC a chance to supplement the project's certificate. The companies say they cannot quickly replace the capacity from the pipeline if it must shut down, creating the risk that people will die from gas service disruptions this winter. The companies last month separately asked FERC for emergency approval so the pipeline can keep operating.

By Chris Knight