Between new regulations, and activist opposition, fossil-fuel project developers across the U.S. are struggling to keep projects on track.
Since 2012, about $33 billion worth of projects have been cancelled or rejected by regulators with billions more sunk into projects that have yet to be approved, according to Wall Street Journal, including a $850 million coal-export terminal proposed for Cherry Point, Wash. Five of the last six export projects proposed in the Pacific Northwest failed to survive regulatory challenges, the sixth is awaiting approval.
Coal may be especially unpopular, but natural gas and oil infrastructure projects are also finding it difficult to get the green light from government entities. The case of the Keystone XL Pipeline Project in particular comes to mind. The years of debate leading up to the rejection of the project by President Obama saw some of the most conspicuous examples of conflict between political, industry, and activist forces, and though the project’s demise in late 2015 coincided with the glut that killed so many other projects, it exposed bitter divisions in Congress that would make any developers wary.
In its push to encourage lower-carbon, higher-cost electricity sources, the Obama administration is encouraging environmental groups to create obstacles for developers already facing skeptical investors.
In late April, Kinder Morgan abandoned its Northeast Energy Direct, a roughly $3 billion gas transport project in Massachusetts, citing a lack of interest from utilities after local activist opposition. Later that month, New York regulators refused to issue a water quality permit for Constitution, a natural gas pipeline. Most new pipelines are concentrated in high production areas, such as North Dakota and Texas, rather than heavily populated areas on the coasts.
With the Clinton administration expected to continue the policies in place, fossil-fuel projects will probably continue to see capital flow towards less controversial renewable energy projects. Nate Silver’s 538 Election Forecast Polls-plus forecast puts Clinton at around an 80% chance of victory.