U.S. Government Shutdown Could Cause Pipeline Permit Delays

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Researched by Industrial Info Resources (Sugar Land, Texas)--Today marks the fourth day of the U.S. federal government shutdown, following a stalemate in Congress over the Affordable Care Act. Interstate pipelines are required to file for regulatory permitting with multiple government agencies, such as the U.S. Department of Transportation (DOT) and the Federal Energy Regulatory Commission (FERC). These permitting procedures are notoriously lengthy and can hold up a project for months or years.

A prime example of this is the Keystone XL project by TransCanada Corporation (NYSE:TRP) (Calgary, Canada) which is waiting for presidential approval to move forward and has been for the better part of a full year. While the permitting process may be slow normally, with all non-essential arms of the U.S. government shut down, the process has come to a complete halt.

Industrial Info is tracking more than 120 Oil & Gas Transmission projects in the U.S. that are awaiting permits from a regulatory body at the federal, state, or local level. These projects represent more than $7.8 billion in investments in 25 states. The largest is the Keystone XL project, which spans six states, making it the largest geographically, to say nothing of its notoriety or potential impact..

Each day that the government is shut down, it costs roughly $300 million in taxpayer money. This cost estimate does not take into account the money that project owners are investing in their project teams during the shutdown, to say nothing of the delay in getting their product to market, so to speak.

To put that figure in perspective, Northwest Pipeline, a subsidiary of The Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma) has a project, the Washington Expansion. This project involves construction of 136 miles of natural gas transmission pipe, plus unit additions at five compressor stations in its system. This project's total budget, according to Industrial Info, is roughly $260 million, which is $40 million less than the cost of shutting down the federal government for a day.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.