Atlantic Coast Pipeline project canceled

Published: Jul. 5, 2020 at 3:47 PM EDT
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HUNTINGTON, W.Va. (WSAZ) -Dominion Energy and Duke Energy announced Sunday the cancellation of the Atlantic Coast Pipeline due to ongoing delays and increasing cost uncertainty which threaten the economic viability of the project.

According to a news release, despite last month’s 7-2 victory in favor of the pipeline at the United States Supreme Court, recent developments created a layer of uncertainty and anticipated delays for ACP.

U.S. Senator Joe Manchin (D-WV), Ranking Member of the Senate Energy and Natural Resources Committee, released the following statement on the announcement that the Atlantic Coast Pipeline project has been cancelled.

“I’m disappointed to learn plans to build the Atlantic Coast Pipeline have been cancelled. The Atlantic Coast Pipeline project took meaningful steps to ensure the pipeline was safely constructed and the Appalachian Trail and surrounding areas were protected. The pipeline would have created good paying construction and manufacturing jobs for hard working West Virginians, reinvested in our energy markets increasing our domestic energy supply, and strengthened national security with reliable energy to key military installations. Today’s announcement is yet another reminder of why it is critically important we work together to find a responsible balance between the environment and economy. We must take steps to modernize our nation’s energy policy by passing the bipartisan American Energy Innovation Act.”

The news release goes on to say, a series of legal challenges to the project’s federal and state permits caused significant project cost increases and timing delays. The lawsuits and decisions 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."

The Atlantic Coast Pipeline was initially announced in 2014 in response to a lack of energy supply and delivery diversification for millions of families, businesses, schools, and national defense installations across North Carolina and Virginia. Robust demand for the project is driven by the regional retirement of coal-fired electric generation in favor of environmentally superior, lower cost natural gas-fired generation combined with widespread growing demand for residential, commercial, defense, and industrial applications of low-cost and low-emitting natural gas. Those needs are as real today as they were at project inception as evidenced by the recently renewed customer subscription of approximately 90 percent of the project’s capacity. The project was also expected to create thousands of construction jobs and millions of dollars in tax revenue for local communities across West Virginia, Virginia and North Carolina.

West Virginia Attorney General Patrick Morrisey expressed deep disappointment in light of Sunday’s decision by Dominion Energy and Duke Energy to cancel the Atlantic Coast Pipeline. The decision comes just weeks after the Attorney General led an 18-state coalition that helped convince the U.S. Supreme Court to overturn a lower court ruling that had unnecessarily blocked construction.

“I’m deeply disappointed about this decision to cancel construction of the Atlantic Coast Pipeline — a project which would have provided more than 1,000 West Virginian families with good paying jobs. My office helped lead the fight to reopen the pipeline at the U.S. Supreme Court and currently leads efforts to reverse the flawed national injunction to further limit construction on pipelines that recently came out of a Montana district court. The concept of one district court judge paralyzing the construction of pipelines across our country is very disconcerting. My office will look even more closely at this matter and will keep up our all-in fight for West Virginia jobs. We should and must not quit fights like these.”

West Virginia Attorney General, Patrick Morrisey

The Attorney General, earlier this month, helped lead a coalition urging the Supreme Court to stay the Montana decision – an overly broad, federal district court order that impacts the construction of new oil and natural gas pipelines across the country. The lower court ruling brought a sudden and unexpected halt to construction projects far beyond the matter in question. The coalition argues, without a stay to block its enforcement, the order will immediately disrupt the economy at an already precarious time as the projects — and the energy resources they provide — are critical to each state. With regards to the Atlantic Coast Pipeline, the Attorney General successfully argued that a 4th U.S. Circuit Court of Appeals’ ruling would have transformed 1,000 miles of the Appalachian Trail into a near-impenetrable barrier to energy development – all to avoid a one-tenth mile crossing deep beneath the surface on a 600-mile pipeline. Halting of the Atlantic Coast Pipeline’s construction cost the state at least 1,500 well-paying jobs and lost revenue from income and property taxes. The jobs in question paid laborers between $25 to $40 per hour plus per diem. When completed, the Atlantic Coast Pipeline would have transported natural gas through Harrison, Lewis, Upshur, Randolph and Pocahontas counties en route to Virginia and North Carolina. The Attorney General successfully contended that, if applied nationwide, the 4th Circuit decision would have sealed off more than 11,000 miles of federal trails from development and potentially disrupted the national power grid because of the chilling effect it could have had on infrastructure investment.

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