Alan Armstrong, CEO of Williams Cos., said his midstream business now spends about twice as much on permitting costs as it does on steel.
“A project we're working on right now—the permitting cost side of the project, and this is if everything goes well, this is not assuming we get into a fight—the permitting cost is twice as much as we're spending on the pipe,” said Armstrong, who later clarified that he was referring to Williams Cos.’ Southeast Supply Enhancement project.
The Williams Cos. head discussed that costs along with newly declared Canadian tariffs at CERAWeek by S&P Global Conference on March 12.
“People talk about tariffs and say ‘Gosh, isn't that going to ruin your space?’ We'd be glad to pay the 25% tariff as long as we can get our permits done,” Armstrong said.
Armstrong used the Southeast Supply Enhancement Project cost example to discuss the need for permitting reform, and not just on a national level. The project will upgrade facilities on Williams’ Transcontinental Gas Pipeline from Alabama through Virginia.
Winning the AI race
Williams said the differences in infrastructure permitting procedures among states is increasingly becoming a factor in economic development, including development of AI data centers.
Data centers have been a recurring theme at this year’s CERAWeek. Williams recently announced its intention to invest $1.6 billion to supply natural gas to a behind-the-meter on-site power generator. Williams has not disclosed the name of the customer and Armstrong did not divulge it on March 12.
The CEO emphasized that tech companies want to move quickly. The project announced last week is scheduled to completed by the second half of of 2026.
“And it's a large-scale facility,” Armstrong said. “The reason we're even able to operate in that way is that it doesn't require a federal permitting process, and therefore, we're not exposed to the court objections that tend to come from the Sierra Club, and so forth, for a project like that.”
States that already have permitting-friendly rules in place are likely to grab the lion’s share of future AI business, he said. Tech companies want to move now, and permit reform is a legislative process that could take years.
“We're not having problems building projects in Louisiana or Texas or Wyoming,” he said.
“I'll just tell you that the states that are friendly towards having energy infrastructure built are absolutely going to win in the in the AI race. That’s because [tech companies] are not going to wait around to let the political will switch. … They are moving ahead, period.”
Constitution Pipeline
Armstrong also discussed an older project that has resurfaced in recent news reports: the stalled Constitution Pipeline.
In February, President Donald Trump said he wanted the project to be completed, saying it could reduce energy costs in parts of the Northeast U.S. by 70%.
The Constitution Pipeline would ship natural gas from Appalachia to terminals connecting to New England—a region of the U.S. that occasionally imports LNG due to the lack of pipeline infrastructure in the region. In 2018, for instance, an LNG tanker offloaded natural gas produced at a Russian facility in Boston Harbor.
In 2020, then-New York Gov. Andrew Cuomo canceled the pipeline project. Williams was one of the primary partners behind the project.
Following Trump’s statement, several news sources reported that the company was cold to the idea because of the current hostility to pipeline projects in the area. Armstrong said Williams would be more than happy to finally complete the Constitution project if the governments in the area are amenable.
“We are absolutely in support of building the Constitution Pipeline,” he said. “We absolutely intend to try to get Constitution built, but obviously we’re going to be working to try to gain the states’ support and the local support in those areas as well.”