2026 Watchlist: Projects, Permits, Power and Progressive Risk

Originally published for customers January 7, 2026.

What’s the issue?

As we enter 2026, permitting reform, Commission action, state politics, market pressure, and litigation continue to evolve. Change is constant, opposition adapts, and politics are unpredictable.

Why does it matter?

While some developments could reduce friction for infrastructure, others may harden resistance or introduce new forms of risk.

What’s our view?

In 2026 risk may narrow in some areas and rise in others as it continues to migrate, pulled by permitting reform, power demand, affordability and reliability pressures, and litigation.

As we enter 2026, permitting reform, Commission action, state politics, market pressure, and litigation continue to evolve. Change in this space is constant, opposition adapts, and politics are unpredictable. While some developments could reduce friction for infrastructure, others may harden resistance or introduce new forms of risk. In 2026 risk may narrow in some areas and rise in others as it continues to migrate, pulled by permitting reform, power demand, affordability and reliability pressures, as well as litigation.

Projects and Permitting Policy

At a high level, we expect inter- and intrastate pipeline projects to add up to approximately 22 Bcf/d of capacity by the end of 2026. This total comprises 12 Bcf/d from eight intrastate projects and 11 Bcf/d from 14 interstate projects, and assumes all pipelines enter service at full nameplate capacity. In practice, that is often not the case: some projects ramp over time, while others depend on downstream takeaway or complementary infrastructure that comes online later. Arbo’s project-level analysis of interconnections and scope allows us to model and forecast those ramp profiles on a project-by-project basis, and we will continue to track key construction and permitting milestones.

With respect to LNG, Golden Pass is the only project forecasted to reach in service this year. We will be tracking that project closely as well.

Like projects, the policy realm has some initiatives that are well underway, and others that are less certain. Thankfully, FERC seems unified in reducing project risk and streamlining regulatory burden. Blanket certificate authority has already moved significantly with the rise in cost thresholds, and 2026 looks to make meaningful progress toward making these changes permanent and potentially expanding on them through FERCs recently launched blanket-authorization Notice of Proposed Rulemaking (NOPR) for LNG and gas-facility activities.

Beyond FERC, permitting reform initiatives have started to take root with the recently passed SPEED and PERMIT acts we discussed in What’s on the Senate’s Menu of Permitting Reform Options. The two questions will be 1) to what extent these NEPA and Clean Water Act (CWA) reforms maintain their current form or complement other legislative initiatives the Senate already has in the works, and 2) whether anything that gets out of Congress will materially improve project risk, particularly in the realm of judicial reform. More concretely, we will be looking at how agencies operationalize the new expedited NEPA review process that came out of reconciliation to see if it improves permitting timelines.

Key Pipeline Issues: Litigation, Rates, Oil Indexing

A key overarching question will be how post-Seven County NEPA practice evolves and where the boundaries of agency discretion now lie. But ongoing litigation persists beyond NEPA, with the most obvious starting point being the intersection of NESE, Constitution, and New York politics.

With the petition to reissue the certificate authority for the Constitution pipeline now before the Commission (along with the request that FERC reaffirm that the CWA 401 certificate was waived by New York), NESE’s recent pathway remains the most instructive live analogue for Constitution’s revival. As summarized previously, NESE now faces three litigation fronts: a D.C. Circuit challenge to FERC’s certificate reissuance, consolidated Second Circuit appeals of New York and New Jersey’s CWA 401 certifications, and a shifting political landscape.

In particular we are watching whether any of the NESE CWA appeals migrate to the more conservative Third Circuit, whether the offshore wind politics that have again halted construction alter CWA dynamics with ramifications for either project, and how New York’s courts and legislature address climate-law implementation heading into the November gubernatorial election.

Other key litigation we are tracking includes the following cases with some of the main issues noted to illustrate the breadth of our coverage:

• CP2 LNG (NGA public interest) — DOE granted its non-fta authorization, FERC’s supplemental analysis is complete, and the court denied an emergency stay request, all leading to resumed briefing on the merits. The challenges assert that FERC’s NGA public-interest analysis was flawed, and its environmental review did not adequately address cumulative air and fishing impacts.
• Rio Grande LNG and Rio Bravo Pipeline (NEPA) — A December appeal challenges FERC’s Order on Remand affirming authorization. The key signal will be whether new arguments gain traction, or whether the case reinforces increased agency discretion in NEPA analysis after Seven County.
• Cumberland and Ridgeline (coal to gas conversions, NEPA, water permits) — Cumberland’s pipeline approvals are now secure; remaining litigation targets TVA’s NEPA process for the plant. Having secured the necessary authorizations including CWA 401 and 404, Ridgeline has begun construction, with current litigation limited to a cost-recovery dispute. We are watching for any new challenges to be filed that would mirror Cumberland’s path.
• Matterhorn (311 rates) — Following the Commission’s rehearing order clarifying straight fixed-variable rate requirements for Section 311 pipelines, the Fifth Circuit litigation was stayed. We are watching to see whether Matterhorn presses its appeal, and whether courts engage further with the Commission’s clarified framework for rate design.
• Blackfin and Commonwealth (state litigation, property rights, EJ, public trust) — At the state level, Blackfin’s compressor station dispute illustrates how land-use conflicts can still disrupt advanced projects. With the temporary injunction issued, we are watching for the May bench trial which will answer in more detail the extent to which the compressor station would violate a restrictive covenant on the land where it is to be located. Commonwealth’s reissued Coastal Use Permit, which is now being challenged again, shows how EJ-focused litigation can pose a threat even after federal approvals.
• Line 5 (venue, treaty, easements, water permits, public trust, trespass, state law) — The saga continues, and a summary of this complex litigation is best viewed in the chart in our recent article Line 5: One Pipeline, Four Plotlines. The cases show how one severely opposed project can be litigated in many venues with recent litigation shifts placing near-term attention on state-level permitting.

Beyond traditional litigation, we will continue to monitor rate cases and related developments at regular intervals. Also worth mentioning is the recent resolution of the long running oil indexing disputes. In 2026, we will be watching the resulting NOPR which proposed the index for the next five-year period (2026–2031) and any issues related to billing retroactively for the “Locked-in Period,” as discussed in LNG Blanket Authorizations Arrive, Oil Indexing Finally Settles.

Wrapping up With Power, Policy, and Politics

Nothing is simple in power right now. Data-center demand and large-load co-location, interconnection queue reform, and persistent transmission constraints are all converging. Gas remains a significant source of generation, a reliability backstop, and a flexible peaking resource even as capacity markets like PJM show increasing strain.

Add affordability concerns that have shaped recent elections, national-security pressure to support domestic AI development, and rising scrutiny of who ultimately pays for new infrastructure, and it becomes clear why power policy now sits at the center of permitting reform discussions.

At the same time, emergent power demand is driving gas development in new regions including the desert Southwest and the Dakotas along with complementary investments in carbon sequestration. These areas will test how quickly infrastructure can respond where markets are less saturated but permitting and politics still matter. Untangling the intersection between gas, power, and policy will be a core focus of our work in 2026.

If you would like to discuss how permitting reform, litigation, power demand, or regional growth may affect pipeline opportunities, LNG execution, or rate exposure, please contact us.