COVERAGE AREA and macrothesis

On his fourth full day in office, President Donald Trump signed executive memoranda supporting the Keystone XL and Dakota Access pipelines. Dakota Access went into service over the summer, but a complex policy landscape awaits KXL and other oil and gas pipeline projects. When it comes to federal rights of way and cross-state infrastructure, Republican policymakers face tensions between ideological supporters of free trade in goods and services and doctrinal backers of states’ rights. Likewise, although we expect the GOP to emphasize federal policies that enable (rather than limit) energy transportation, increasingly sophisticated environmental and landowner opposition drew a commitment from the Federal Energy Regulatory Commission’s Chairman to revisit the 1999 Certificate Policy Statement governing natural gas pipeline approvals. Although we do not expect a wholesale redrawing of the existing review regime, a more overt consideration of environmental concerns in reviews could make them longer and more expensive.

We give low odds for an infrastructure bill to clear Congress before mid-terms, but legislation might not significantly change the energy infrastructure landscape in any case. Most midstream companies retain access to funding; their principal uncertainties lie in the permitting and construction phases.  House-side efforts to accelerate infrastructure permitting have not gained traction in the Senate. Moreover, those measures seem unlikely to preclude states from halting energy transportation projects under pressure from environmental activists or local landowners given that they leave current federal-state statutory arrangements in place.

Our coverage combines ongoing assessments of rates of return with deep dives into critical issues, such as cross-border pipelines and federal permitting processes. Clients receive as-needed research notes, reports and flash blasts regarding all of these topics. In addition, our monthly Regulated Energy Playbook for investors outlines key themes, examines recent legislative, regulatory and judicial developments and presents forward-looking assessments of coming events.

Updated: January 8, 2018.