How the growing Southeast ended up with only one pipeline (and a constrained one at that)
Bad luck, competition, and the growing importance of existing right-of-way
The Southeast is a gas pipeline business developer’s dream: fast-growing customers with a rate base and supportive public utility commissions. From 2010-24, gas-fired generation in the Alabama-Georgia-Florida-Carolinas corridor grew ~4 Bcfd, accounting for more than 20% of the US total. Despite this prolific growth, and despite the area’s proximity to low-cost gas supplies in Appalachia, only Transco brings material gas volumes into these states. And Transco itself has been constrained at Station 165, just north of the North Carolina-Virginia border, since MVP came online in mid-2024.
How fast-growing customers with a willingness to pay for pipeline capacity ended up with only one constrained option reflects a mix of bad luck and commercial competition. But it also portends, at least until the National Environmental Policy Act is gutted, the growing importance of existing right-of-way to gas pipeline development nationwide.
Why don’t more projects move Northeast gas south on Transco?
Short answer: Baltimore.
Longer answer: Transco steps down from four to three parallel lines north of Baltimore before returning to four again south of the city. While Baltimore-area demand on Transco itself is minimal — just one BG&E meter with minimal deliveries, as BG&E is primarily served by Columbia Gas and Eastern Gas — it looms large in understanding Northeast gas bottlenecks.
In the 2015-18 period, four Northeast-to-Southeast projects fully reversed Transco through Baltimore. In 2020, Southeastern Trail expanded Transco southbound capacity by sourcing gas south of Baltimore, at the Pleasant Valley interconnect with Cove Point Pipeline.
Figure 1 | Transco southbound projects through Station 165
Why doesn’t MVP bring gas all the way to Southeast customers?
Understanding MVP’s suboptimal (at best) terminus at Transco Station 165 requires going way back to the original April 2014 Duke/Piedmont RFP that kicked off the much-maligned decade (!) of Northeast-to-Southeast pipeline development. The Mercury and Air Toxics Standards had a 2015-16 compliance date, and even coal-heavy Southeast utilities were gradually shifting to gas. The RFP had two main drivers:
Add capacity to serve growing gas-fired generation in the Southeast
While at the same time, giving the customers an alternative to Transco, which they relied on exclusively
Dominion won the RFP, and then naturally the RFP losers1 launched their own lookalike projects:
EQT’s2 Mountain Valley Pipeline
Transco’s Western Marcellus project, later renamed Appalachian Connector
EQT’s advantage was its vertical integration, with its affiliate E&P as the anchor shipper on MVP. Transco’s advantage was its superior market access, as evidenced by the unattractive prices that MVP shippers receive for much of the year due to the constraint at Station 165. A combination would have been the best option, but MVP went ahead in October 2015, heavily dependent on EQT contracts, while Williams shelved the Appalachian Connector. MVP’s answer to its lack of direct customer access was the follow-on MVP Southgate project. But just as MVP Southgate was under consideration, all hell broke loose in pipeline permitting.
The FERC issued certificates to both MVP and ACP in October 2017. However, the Sierra Club, newly well-funded in the wake of Trump’s first election, leveraged the woefully out-of-date NEPA to litigate projects into expensive delays. Despite a 7-23 Supreme Court victory in June 2020, Dominion and Duke cancelled ACP just weeks later. At that point, the outlook for MVP was similarly dim, with the nearly complete project facing continued cost overruns from legal battles to secure its final permits. But West Virginia Senator Joe Manchin4 negotiated provisions for MVP in the 2023 Fiscal Responsibility Act: approval of remaining permits and stripping the Fourth Circuit of jurisdiction over MVP challenges.
While the MVP sidecar was an important symbolic victory for the oil and gas industry, the resulting commercial situation was, at least temporarily, the worst of all worlds for the major principals: EQT was paying for expensive capacity to a constrained market, Duke still didn’t have any more or different access to gas, and Transco hadn’t gotten a fee-based project of its own off the ground. SSE, once it is in service, will address all three.
Where this leaves Williams, EQT, and Duke today
In a roundabout way, MVP plus SSE is the combined EQT-Williams project that the companies probably should have agreed to develop jointly eight years ago. Of the three, Williams is the biggest winner, with its Southeast fortress still intact.
But EQT also comes out ahead, as the owner of what is likely the last new right-of-way out of the Northeast. Not coincidentally, the Southeast utilities backed the forthcoming MVP Boost project. This expansion is the best of both worlds for EQT: fee-based revenues for its midstream business and higher realized prices for its E&P’s inlet volumes, without any FT burden.
Even for a $100-billion market-cap company like Duke, the decision to abandon ACP was understandable, given the cost trajectory and legal uncertainty; by 2020, the project had become a financial sinkhole with no clear path to completion. But now, a growing Duke is even more leveraged to Transco, in terms of delivered prices, rate cases, and potential outages. On Duke’s side, though, is that it is now strategically important to Transco, as shown between stations 150 and 155 in Figure 2.5
Figure 2 | Average 2025 Transco mainline flows
It wouldn’t be correct to say that Transco exists today to serve Duke, but it wouldn’t be incorrect, either — especially for the eastern half of the system. In 2025, Transco’s 1 Bcfd of deliveries to Duke surpassed those to any customer other than Sabine Pass LNG.
Future implications for pipeline development
Barring major permitting reform that would provide a clear path to reviving ACP, Duke (and Southern, Piedmont, et al) have made their peace with the devil they know in Transco over the devil they don’t in building something new.
For the industry as a whole, this decision, made by customers most willing to pay for new pipeline capacity, underscores the singular importance of existing right-of-way. Even new Texas intrastates leverage existing right-of-way: Gulf Coast Express, Whistler, and Blackcomb, among others.
As gas prices rise, the commercial challenges to new pipeline development ease for both E&Ps and consumers. But the current state of NEPA means that eventual expensive Northeast takeaway is likely to take the form of looping an existing system rather than a new-build. Texas Gas’s Borealis project, on offer since last year, is first out of the gate with such a proposal. But it would need another existing right-of-way expansion — whether on TETCO, REX, or Eastern Gas — to bring the gas to Lebanon.
Presumably!
EQT was then a combined upstream-midstream-utility business, not to be confused with the later three separate businesses, or the even later, recombined upstream-midstream business when EQT bought Equitrans
With Breyer and Ginsburg joining Roberts, Scalia, Thomas, Kavanaugh, and Gorsuch in the majority, if that tells you anything about how ludicrous the procedural tactics were
Gas industry executives love to point out how much more they like Joe Manchin than any other Democrat. But the next time I hear one of them point out that they were much better off having Manchin in that seat than a Republican will be the first, even though it is obviously true.
I estimate throughput along the mainline using meter-level receipt and delivery data along with a nodal graph structure and mass balance