Skip to main content
You are the owner of this article.
You have permission to edit this article.
Edit
Dominion cancels Atlantic Coast Pipeline, sells natural gas transmission business

Dominion cancels Atlantic Coast Pipeline, sells natural gas transmission business

{{featured_button_text}}
Pipeline scene at Wintergreen (copy)

Before Dominion and Duke Energy abandoned the project, a path had been cleared for the Atlantic Coast Pipeline on this Blue Ridge Mountain slope near the Wintergreen resort, just below the pipeline’s planned crossing underneath the Appalachian Trail.

The Atlantic Coast Pipeline is dead, abandoned by Dominion Energy and its partner, Duke Energy, after the $8 billion project reached a regulatory dead end.

The decision, announced Sunday, ends a six-year effort to build the 42-inch-wide natural gas pipeline through the heart of Virginia to connect gas shale fields in West Virginia with markets in southeastern Virginia and eastern North Carolina.

Thwarted by environmental groups repeatedly in the federal courts, the project was more than three years behind schedule and more than $3 billion over budget, with no clear path to completion after federal courts in Montana threw out a nationwide federal water quality permit that the Atlantic Coast Pipeline relied upon to cross hundreds of bodies of water in its path.

Dominion, a Richmond-based company with a majority interest in the project, will absorb about 53% of the $3.4 billion already spent on the pipeline as it refocuses its mission on electric and natural gas public utilities in Virginia, the Carolinas, and three other states in a business powered by renewable energy instead of fossil fuels. The partners spent $400 million on the pipe alone.

“We regret that we will be unable to complete the Atlantic Coast Pipeline,” Tom Farrell, chairman, president and CEO of Dominion, and Lynn Good, his counterpart at Duke, said in a joint statement Sunday.

Dominion also announced that it was selling its natural gas transmission and storage business to Berkshire Hathaway Energy for almost $10 billion.

“For almost six years, we have worked diligently and invested billions of dollars to complete the project and deliver the much needed infrastructure, to our customers and communities,” Farrell and Good said.

However, they concluded, “This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged.”

For opponents, the abandonment of the project represents vindication of grass-roots opposition that arose along the pipeline’s path.

“It’s all about the people,” said Nancy Sorrells, who helped form the Augusta County Alliance against the project in 2014 and represents the county in the Alliance of the Shenandoah Valley. “They knew it was wrong from start to finish and just never gave up.”

“It’s been the best Fourth of July since 1776,” she added.

Rick Webb, a retired environmental scientist who helped lead the Dominion Pipeline Monitoring Coalition from his home in Highland County, said of Dominion, “They should have known better. It was a bad idea from the beginning.

“Dominion, with its ill-conceived project, has done a lot to strengthen the environmental community in the region,” Webb said. “Thank goodness for that.”

The grass-roots opposition also drove an aggressive legal strategy led by the Southern Environmental Law Center in Charlottesville and Appalachian Mountain Advocates, which foiled the project by persuading the 4th U.S. Circuit Court of Appeals in Richmond to throw out numerous federal and state permits needed to complete the project.

Greg Buppert, senior attorney for the Southern Environment Law Center, was stunned by the announcement that the project was dead.

“Wow!” he said when he heard the news on Sunday. “Wow!”

“This is a victory for all the communities that were in the path of this risky and unnecessary project,” Buppert said later in a statement by the law center.

The law center lost a pivotal legal fight with Dominion in the U.S. Supreme Court last month over a permit for the pipeline to cross the Appalachian Trail in the Blue Ridge Mountains between Augusta and Nelson counties.

The court voted 7-2 to overturn a portion of a ruling by the 4th Circuit in December 2018 that had thrown out a permit issued by the U.S. Forest Service to allow the pipeline to cross beneath the national scenic trail at Reed’s Gap above the Wintergreen Resort.

But the project still had to get a new permit from the Forest Service to cross the George Washington and Monongahela national forests, as well as a new biological opinion from the U.S. Fish and Wildlife Service to ensure protection of endangered and threatened animal species in the pipeline’s path.

Dominion halted construction of the project in December 2018, after the 4th Circuit stayed the Fish and Wildlife Service permit along the length of the pipeline because of concerns about its effects on endangered and threatened species.

The project also needed a new federal permit for the pipeline to cross beneath the Blue Ridge Parkway and a revised state air pollution control permit to build a natural gas compressor station in Buckingham County, where the project’s effect on the historically African-American community of Union Hill raised national concerns over environmental justice.

Former Virginia Gov. Terry McAuliffe announced the Atlantic Coast Pipeline with Farrell in September 2014, but he said Sunday he wasn’t surprised by the decision to end the project.

“I’m surprised they didn’t do it earlier, with all of the regulatory reviews,” he said.

McAuliffe said he always conditioned his strong public support of the project on its success in addressing environmental and other regulatory concerns.

“If they get all of the permits, great,” he said. “If they can’t, it shouldn’t happen.”

The Virginia Chamber, a prominent voice for business, voiced dismay at the demise of a project it had supported because of the construction jobs it would create and the gas supplies it would offer to companies seeking to build or expand operations in Virginia.

“The Atlantic Coast Pipeline was an invaluable gas infrastructure investment that would spur economic development,” Virginia Chamber President and CEO Barry DuVal said Sunday.

“Unfortunately, today’s announcement detrimentally impacts the commonwealth’s access to affordable, reliable energy,” DuVal said. “It also demonstrates the significant regulatory burdens businesses must deal with in order to operate.”

The decision to end the project also didn’t sit well with Virginia House Minority Leader Todd Gilbert, R-Shenandoah. He is a strong critic of legislation adopted by the new Democratic majorities in the General Assembly this year to move Virginia away from fossil fuels and instead expand use of solar, wind and other renewable energy sources.

“Don’t ever again let a Virginia Democrat tell you they want you to have cheap and reliable sources of energy,” Gilbert said Sunday on Twitter. “Don’t ever again believe them when they purport to care about those least able to pay for their energy policies. Never again.“

But Michael Town, executive director of the League of Conservation Voters, said, “With this pipeline out of the way, Virginia’s clean energy future is that much closer.”

Dominion announced separately on Sunday that it is selling its natural gas transmission and storage business to Berkshire Hathaway by the end of the year.

Berkshire will take on $5.7 billion in debt from Dominion’s transmission and storage business — which does not reflect the parent company’s investment in the pipeline — and pay the company $4 billion, which will allow it to buy back stock to stabilize its earnings.

The sale includes more than 7,700 miles of gas pipelines and 900 billion cubic feet of gas storage. Dominion will keep a 50% interest in the Cove Point liquefied natural gas terminal on the Chesapeake Bay, but Berkshire will receive a 25% interest in the facility and operate it.

Farrell said the deal would allow the company to focus on its electric utilities in Virginia, North Carolina and South Carolina, as well as local gas distribution companies in the Carolinas, West Virginia, Ohio and Utah.

He said the company plans to invest $55 billion over the next 15 years in technologies to reduce emission of carbon dioxide and other greenhouse gases linked to global warming, retire fossil fuel power plants, and develop sources of renewable natural gas, including animal waste.

“This transaction represents another significant step in our evolution as a company, allowing us to focus even more on fulfilling utility customer needs and positioning us for a bright and increasingly sustainable future,” he said.

Sorrells, one of the pipeline’s opponents in Augusta, hopes Dominion means it.

“If Dominion is smart, the time is right to save face and move toward a better energy outlook,” she said.

Related to this story

Get up-to-the-minute news sent straight to your device.

Topics

Breaking News