Proposed Appalachia-to-Southeast pipelines likely to reduce emissions

A new report by Validere’s Market Fundamentals Team assesses the environmental impacts of potential natural gas projects.

HOUSTON & CALGARY, Alberta – December 16, 2022 – In the latest Validere Insights report, Validere’s Market Fundamentals Team finds that, despite facing public and political challenges to the natural gas industry’s climate benefits, proposed Appalachia-to-Southeast pipelines may provide tangible emissions reduction opportunities.

The report examines the market and environmental impacts of projects such as the canceled Atlantic Coast Pipeline (ACP) and delayed Mountain Valley Pipeline (MVP), and how they could reduce CO2-equivalent emissions as well as reduce the region’s reliance on coal.

“The burner-tip emissions benefits of ACP and MVP more than outweigh the methane emissions associated with their added gas production,” says Amber McCullagh, Senior Advisor at Validere and an author on the report. “We estimate that MVP and ACP would reduce CO2-equivalent emissions by approximately 8 and 14 Mmt annually, respectively, the equivalent of taking approximately 1.7 million and 3 million cars off the road.”

“The burner-tip emissions benefits of ACP and MVP more than outweigh the methane emissions associated with their added gas production.” — Amber McCullagh, Senior Advisor at Validere

Additionally, the team analyzes the likely full value chain methane emissions rate for Appalachian gas, using a synthesis of measurement-based national and regional studies to get the full picture of Appalachian producers and midstream operators’ impact on the environment.

The report’s main findings include:

• How new pipelines reroute flows of gas, electricity and even refined products and LNG: that added capacity by ACP would lead to year-round coal displacement and near-term growth in Appalachian gas production, whereas in the near term MVP would mostly displace winter coal generation and reshuffle Appalachian gas flows.
• Natural gas pipeline reform, such as that proposed by Sen. Joe Manchin, is likely to lead to major reductions in CO2-equivalent emissions, across a range of plausible methane emissions estimates for induced gas production. 
• Why producers and midstream operators need to embrace measurement-based emissions estimates to better quantify the emissions benefits of new gas pipelines and improve the environmental credibility of pipeline projects. 

“When accounting for the climate impacts of natural gas pipelines, you need to look at the full picture,” says McCullagh. “Natural gas pipeline development induces changes across the value chain, including in natural gas production, gas pipeline flows, gas- and coal-fired power generation, and even flows of LNG and refined products.”