RALEIGH – The Atlantic Coast Pipeline, the conduit planned to bring natural gas from West Virginia to North Carolina, is no more. Dominion Energy and Duke Energy, two partners in the pipeline plagued with scandal and legal pressures, have decided to abandon the efforts because it was costing them about $1 billion a year.
From the press release:
“[…] Despite last month’s overwhelming 7-2 victory at the United States Supreme Court, which vindicated the project and decisions made by permitting agencies, recent developments have created an unacceptable layer of uncertainty and anticipated delays for ACP.
Specifically, the decision of the United States District Court for the District of Montana overturning long-standing federal permit authority for waterbody and wetland crossings (Nationwide Permit 12), followed by a Ninth Circuit ruling on May 28 indicating an appeal is not likely to be successful, are new and serious challenges. The potential for a Supreme Court stay of the district court’s injunction would not ultimately change the judicial venue for appeal nor decrease the uncertainty associated with an eventual ruling. The Montana district court decision is also likely to prompt similar challenges in other Circuits related to permits issued under the nationwide program including for ACP.
This new information and litigation risk, among other continuing execution risks, make the project too uncertain to justify investing more shareholder capital. […]”
So, the environmental activists have won. They’ve put up so many legal briers that it’s not prudent for energy utilities to follow through on the project, and necessarily indicates that less pipelines will even be attempted in the future.
With the loss of the ACP, so goes the associated jobs and economic development. Not to mention the energy infrastructure that would have expanded access to low cost energy around our state and region.
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Governor Roy Cooper is probably happy to see the ACP fall apart, being that he was caught using his permit approval powers as leverage to bilk the energy companies for a huge slush fund to unilaterally distribute in the most politically beneficial way.
More from the release:
“A series of legal challenges to the project’s federal and state permits has caused significant project cost increases and timing delays. These lawsuits and decisions have sought to dramatically rewrite decades of permitting and legal precedent including as implemented by presidential administrations of both political parties. As a result, recent public guidance of project cost has increased to $8 billion from the original estimate of $4.5 to $5.0 billion. In addition, the most recent public estimate of commercial in-service in early 2022 represents a nearly three-and- a-half-year delay with uncertainty remaining.
Thomas F. Farrell, II, Dominion Energy chairman, president, and chief executive officer, and Lynn J. Good, Duke Energy chair, president, and chief executive officer, said:
“We regret that we will be unable to complete the Atlantic Coast Pipeline. 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. Throughout we have engaged extensively with and incorporated feedback from local communities, labor and industrial leaders, government and permitting agencies, environmental interests and social justice organizations. We express sincere appreciation for the tireless efforts and important contributions made by all who were involved in this essential project. 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.”
This could be an ominous sign for energy development going forward. Dominion Energy recently gained a new, notable shareholder; Berkshire Hathaway (Warren Buffet) bought a $10 billion stake in the energy utility. The value investor is famous for his successful track record, turning him into one of the world’s richest men. The coincidence of a famed value investor becoming (probably) the biggest shareholder, and the company deciding to tie off what was quickly becoming an overly expensive project, is worthy of note even if it is mere coincidence.
In any case, the news raises a key question: Will environmentalists making building pipelines as expensive, onerous, and ‘not worth it’ as nuclear power plants? Such red tape and legal challenges have turned the world’s most productive, clean, and efficient source of power into a total non-starter. Will they do the same for new pipelines?
It certainly looks like they’ve done it with the ACP. The environmental whackos won, and anyone that uses electricity, or values economic freedom, loses.
Read more from the joint press release here.