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Appalachia shale fields face pipeline capacity challenges

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Trump's policies encourage new pipeline projects

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Environmental groups oppose new pipeline developments

By Scott DiSavino

June 30 (Reuters) - U.S. energy companies are eying

renewed opportunities to build natural gas pipelines to tap in

to Appalachia shale formations in Pennsylvania, Ohio and West

Virginia, buoyed by U.S. President Donald Trump's pro-energy

policies and expectations that demand for the fuel will rise in

coming years.

The U.S. is already the world's top gas producer and

exporter of liquefied natural gas. While the country helps meet

fuel demand around the world, many consumers in the U.S.

Northeast do not have access to gas due to a lack of pipeline

infrastructure and instead continue to use heating oil in their

homes and businesses.

The Appalachia shale fields, which cover the Marcellus and

Utica formations, have the largest gas reserves in the U.S., but

energy companies have limited ability to move more of that fuel

to the rest of the country because most existing pipelines are

already near full. In addition, companies have found it tough to

build new projects in the region due to legal and regulatory

pushback from states and local and environmental groups.

Output growth in the region, which produces about a third of

the nation's gas, has stalled in recent years after some firms

lost billions on delayed or canceled pipes.

But now, as Trump rolls back regulations to boost domestic

energy production, several U.S. firms, including Williams Cos ( WMB )

, Boardwalk Pipeline, DT Midstream ( DTM ) and EQT

, have proposed building or expanding pipelines and other

infrastructure in the Northeast.

"We are actively evaluating opportunities to expand

infrastructure," Amy Rogers, spokeswoman at EQT, the nation's

second-biggest gas producer with operations in Appalachia, told

Reuters.

"Enhancing pipeline capacity is essential to unlocking

Appalachian supply," she said.

LNG EXPORTS BOOST GAS DEMAND

In 2024, the U.S. produced about 103.2 billion cubic feet

per day (bcfd) of gas and consumed a record 90.5 bcfd of the

fuel, according to U.S. Energy Information Administration data.

One billion cubic feet of gas is enough to supply about 5

million U.S. homes for a day.

Analysts expect that new LNG export plants and electric

generation facilities to power artificial intelligence at data

centers will push U.S. power and gas demand to record highs in

2025 and 2026 and beyond.

Output from Appalachia has increased every year since at

least 2009 when the region produced just 1.7 bcfd of gas. Lack

of pipeline capacity, however, has slowed that growth to an

average of just 2% a year from 2020 to 2024 versus an average of

15% a year from 2015 to 2019, according to EIA data.

Looking forward, output in the region is expected to grow by

an average of only 1% a year in 2025 and 2026 - to 36.2 bcfd and

36.6 bcfd, respectively - according to EIA projections.

New infrastructure, coupled with growing energy needs in the

U.S., could add up to 5 bcfd of new demand for Appalachia gas

supplies through 2030, said Jack Weixel, an analyst with

consultancy East Daley Analytics.

"That is definitely a lot more than anyone was expecting

from Appalachia just a mere 12 months ago," he said.

CONSTITUTION AND OTHER PIPES

Support from the Trump administration has already prompted

pipeline operator Williams to begin reviving two canceled

projects to transport gas from Pennsylvania: the 0.65 bcfd

Constitution Pipeline to New York and the 0.4 bcfd Northeast

Supply Enhancement to New Jersey and New York.

"The NESE and Constitution projects are essential to address

persistent natural gas supply constraints in the Northeast,

constraints that have led to higher energy costs for consumers,"

said a spokesperson for Williams.

During the winter of 2024-2025, it cost about twice as much

to heat a home with oil than with gas, according to federal

energy estimates. More than 80% of the roughly 4.6 million U.S.

homes still using heating oil as their primary heating fuel in

2024 were located in the Northeast region.

Williams canceled Constitution in 2020 and NESE in 2024

after years of fighting for permits, especially water permits,

from state regulators.

State environmental regulators in New York and New Jersey

did not comment directly on Williams filings to revive the NESE

project, which runs through both states.

In New York, Millennium Pipeline, meanwhile, said it plans

to begin negotiations for binding commitments for a proposed

expansion that could add up to 0.5 bcfd of capacity to its

existing 2.0 bcfd pipe.

High interest from shippers underscored the need for

additional pipeline capacity in the region, Millennium said,

which anticipates that the expansion, if approved by its owners,

could start service by late 2029.

Millennium is owned by units of DT Midstream ( DTM ) and Canadian

energy firm TC Energy ( TRP ).

Meanwhile, EQT and partners want to extend their existing

2.0 bcfd Mountain Valley Pipeline from West Virginia to Virginia

into North Carolina with the proposed 0.55 bcfd Southgate

expansion project.

The $7.85 billion Mountain Valley Pipeline, which entered

service in 2024 and whose construction cost was more than twice

the amount originally planned, was the last big pipeline to

enter service in the Northeast region after years of delays.

In Ohio, Boardwalk Pipelines said it is evaluating interest

for its proposed Borealis pipeline project, which could create

up to 2.0 bcfd of incremental transportation to markets from

Ohio to Louisiana.

Still, despite Trump's pro-energy policies, some of the same

headwinds pipeline projects faced in the past are likely to

resurface. Several organizations, including the Sierra Club

environmental group, have already filed protests against

Williams' NESE with the U.S. Federal Energy Regulatory

Commission, which oversees federal permitting of gas pipeline

projects.

"The Northeast does not need more gas pipelines that pollute

our neighborhoods and leave us vulnerable to price spikes from

global volatility, especially as gas demand locally is already

beginning to wane," Jasmine Vazin, director of the Beyond Dirty

Fuels campaign at the Sierra Club, told Reuters in an email.

The following table lists the gas pipes in various stages of

development in recent years that could move more fuel from the

Appalachia region.

Company Proposed State(s) Esti Possi

Pipeline mate ble

d in

Size Servi

in ce

Bcfd Date

Williams - Transco Northeast Supply PA, NJ, 0.40 Nov

Enhancement NY 2027

(NESE)

Williams / Coterra Constitution PA, NY 0.65 Q3

2027

Williams - Transco Southeast Supply VA, NC, 1.60 Q4

Enhancement SC, GA, 2027

AL

EQT - Mountain Mountain Valley VA, NC 0.55 mid

Valley Pipeline Pipeline - 2028

Southgate

DT Midstream/TC Millennium NY 0.50 Nov

Energy expansion 2029

Williams - Transco Power Express VA 0.95 Q3

2030

Boardwalk Borealis OH 2.00

Pipelines - Texas

Gas Transmission

EQT Mountain Valley WV, VA 0.50

Pipeline

expansion