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One of the largest U.S. pipeline companies is preparing to sue its archrival, underscoring the legal battle plaguing America’s energy infrastructure.
Williams CEO Alan Armstrong told the Financial Times his company would seek “big dollars” in damages from Energy Transfer – led by prominent Donald Trump donor Kelcy Warren – as it continues a legal stalemate over allegations of anti-competitive behaviour.
The two pipeline giants have been locked in a courtroom battle for months over Energy Transfer’s objections to its competitor’s development of a $1 billion pipeline to transport natural gas from a Louisiana oil field to the Gulf Coast. Armstrong said Williams is now pursuing the case.
“The next step for us will be to seek damages due for their attempts to stop us,” he said in an interview. “These are big dollars… it’s not an intangible amount, that’s for sure.”
Energy Transfer argued in court that Williams had not done enough to ensure the safety of the intersections between the pipeline development and its own lines.
In a statement to the Financial Times, Energy Transfer said it would “never regret standing up for the safety of its assets and the property of those whose property we cross, despite the misguided claims made by Williams’ CEO.”
The standoff highlights the pitfalls slowing pipeline construction in the US. It is a specific problem with natural gas, as demand increases, driven by rising exports and rising domestic consumption needed to meet the massive growth in electricity use for AI and data storage.
Tensions over pipelines have risen in recent years amid a surge in permitting lawsuits as climate activists seek to delay construction of projects they say will rely on fossil fuels for decades. It is unusual for companies to file objections of this nature for competing projects.
“Most of the operators we deal with are responsible operators,” Armstrong said. “I think Energy Transfer is an outlier in this regard and I think they will ultimately regret their actions in this area.”
Williams’ Louisiana Energy Gateway project is designed to ship 1.8 billion cubic feet of natural gas per day from the Haynesville Shale through Louisiana and Texas to liquefied natural gas terminals on the Gulf Coast. It was scheduled to come online this year, but the company says the clash with Energy Transfer has pushed back the launch date until the second half of 2025.
“Holding back on those kinds of things – there are consequences to that,” Armstrong said.
Energy Transfer has also opposed pipeline projects from other developers, including Momentum Midstream and DT Midstream, through intersections with its own network. The dispute with Momentum was settled earlier this month, allowing the company to proceed with its project. DT moved the planned pipeline to prevent Energy Transfer’s activities from intersecting.
“The truth is that Williams, unlike the other parties with whom we have settled, has not provided the critical information we need to adequately assess the impact of the large number of crossings they are seeking,” Energy Transfer said in its statement. “We must question Williams’ motives in resisting sharing this information, as this is standard process when requesting pipeline crossings.”
Due to lawsuits surrounding projects, there has been a sharp decline in pipeline development in the US. Less than 1 billion cu ft/d of interstate gas capacity has been added by 2023, according to the Federal Energy Regulatory Commission. That’s the lowest level ever, compared to the 28 billion cu ft/d added in 2017.
It has also led to high costs: the 300-mile Mountain Valley Pipeline in Virginia went into service this month after a flurry of legal action. The pipeline arrived six years late and cost $7.85 billion, more than double original projections.
However, the vast majority of lawsuits are led by environmentalists, not corporations, and Energy Transfer’s actions in Louisiana have sent industry and politicians into disarray.
Louisiana Governor Jeff Landry, in his previous role as attorney general, said that Energy Transfer’s lawsuit, if successful, would risk setting a precedent that “could make it virtually impossible (or at least too expensive) to bring many energy products to market.”
Energy Transfer and Williams have been bitter rivals since a $33 billion takeover bid led by Warren failed in 2016, triggering years of litigation. In October, the Delaware Supreme Court ruled that Energy Transfer must pay Williams $495 million for backing out of the proposed deal.