Hundreds Seek Pipeline Construction Jobs

Atlantic Coast Pipeline construction will create 7,200 temporary jobs.

Pipeline construction.

The proposed Atlantic Coast Pipeline (ACP) is highly controversial in Augusta County, where property owners fear pipeline construction will jeopardize water supplies, create a safety hazard for nearby residents, and drive down property values. But hundreds of mechanics, welders, electricians and other blue-collar workers see the $5 billion project as a potential boon.

By noon Thursday, 157 people had signed up at the Augusta Expo put on by the ACP to inform local vendors and workers of opportunities to work on the 600-mile pipeline, according to the News Virginian.

At peak construction in 2018, said ACP spokesman Aaron Ruby, the pipeline will employ 7,220 workers.

Wrote the News Virginian:

Scott Bazzarre, the founder and president of Budget Electrical & Mechanical in Palmyra, wants to be considered for electrical work on the pipeline. He calls the pipeline a boon for workers like him and for the economy. “It’s a no-brainer, not just for the tax base but for a struggling economy.”

Unlike landowners, who will have to live with the pipeline as a permanent fixture on their property, construction workers will benefit only for the duration of the construction project. But there are undoubtedly thousands of workers who think like Bazarre: “We have to have good-paying jobs for my kids and grandkids.”

Bacon’s bottom line: Is it a stretch to suggest that the ACP pipeline controversy reflects the same societal schisms as the 2016 election: the propertied, educated class versus blue collar workers struggling to survive economically? Such a framework over-simplifies a complex reality, but I think there’s something to it. Even though Virginia’s unemployment rate stands at 3.7%, theoretically full employment, rural/small town Virginia has a higher jobless rate, and the “unemployment” figures don’t take into account discouraged workers who have dropped out of the workforce. Pipeline construction would throw construction workers a lifeline.

On the other hand, property owners can’t be blamed for wanting to be left alone. The value of land in the Shenandoah Valley is determined increasingly by aesthetics — bucolic rural landscapes, mountain views, wildlife habitats — not by farming/timbering income streams that traditionally determine compensation for land taken by eminent domain. One can argue that Virginia’s eminent-domain laws do not provide fair compensation for lost value.

In any case, Virginia’s blue collar workers have been largely invisible in the pipeline debate until now. Don’t be surprised to see ACP maximize their exposure.

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10 responses to “Hundreds Seek Pipeline Construction Jobs

  1. I have attached a copy of a letter to the Editor of the Staunton Newsleader that I recently submitted about this issue:

    Pipeline Won’t Add to Economic Vitality

    Many people want better-paying jobs and more economic vitality in Virginia. The Atlantic Coast Pipeline will not help with that. Dominion hopes to speed up construction of the pipeline by adding more jobs with a shorter duration. They notified FERC that the typical pipeline job will last 8-10 months. Even with higher pay, this is not a solution for those hoping for a better economic future.

    The local jobs will be spread over three states because construction will occur simultaneously along various segments of the pipeline. Despite the headlines, 8-10 months of employment is not what most people envision when they hear “new jobs”.

    Many repeat the claim that the ACP is the only way to get the natural gas we need in Virginia. Again, this is misleading. The Department of Energy says that existing pipelines can supply all the gas we need in Virginia and the Carolinas through 2040. Dominion says this can’t be so because the projects providing this additional capacity are “fully subscribed”. They neglect to add that these “subscribers” are natural gas suppliers looking for customers.

    The ACP developers argue that they will save Virginians $377 million per year. According to information Dominion filed with FERC, the price of transporting the gas will actually cost ratepayers $218 million per year more to fully supply the Brunswick and Greensville plants in Southside Virginia using the ACP compared to the existing connection with Transco. Costs to ratepayers get higher as more power plants are connected to the ACP instead of the cheaper existing pipelines.

    Proponents of the pipeline pose the choice between having energy and a healthy economy versus caring for Virginia’s land and water. This is a false choice. More long-term jobs will be created and utility rates will be lower if we invest in energy-efficiency and modern energy technology instead of a new pipeline. We must change the rules so that Dominion can prosper by serving the interests of the ratepayers. Now they are chasing 50% higher rates of return by building pipelines rather than serving the interests of Virginia.

    I think we are doing ourselves a disservice by pitting workers against consideration for the land and communities of Virginia. The 20th-century energy projects of pipelines and power plants do not really add to our local economy in terms of long-term employment. They do employ thousands of workers but most come from out of the area. These jobs last only 8-10 months for the pipeline, probably less for a particular craft for building a power plant.

    Making efficiency improvements on our building stock over many years would give long-term employment to many in the building trades. The same applies to the widespread development of distributed solar. Utility-scale batteries come pretty well set up in a shipping container but could be a boon to electrical workers and people who build foundations.

    It is interesting that new technology can provide more local labor employment than the old tech. I think the economic arguments about the pipeline are creating divisions that need not exist.

  2. re: ” Costs to ratepayers get higher as more power plants are connected to the ACP instead of the cheaper existing pipelines.”

    Would the SCC allow Dominion to pay more for natural gas than from lower-priced suppliers?

    If that’s true – then what it means is that ratepayers are essentially paying for the new pipeline – and I don’t know what it means if Dominion would sell electricity from it’s two ACP-supplied plants to PJM.

    so then this adds to the curiosity:

    ” The Matex rezoning application in Chesapeake says natural gas for the project would be supplied by a new lateral pipeline, which a company led by Dominion proposes to build as part of the Atlantic Coast Pipeline.”

    Could it be that when Dominion switches from Transco to it’s own ACP that Matex would then get the freed-up Transco gas?

    interesting RTD article about some of this:

    http://www.richmond.com/news/virginia/article_85cbeca7-8fef-55ab-bbb7-feebc93a5abc.html

  3. Someone should ask for a bit more definition about those 7,000+ pipeline jobs. … Looks like Tom did … Pipelines provide short-term jobs, and as I understand it, most of those construction jobs are not filled with local people. They may not be much of a lifeline.

    Those of us who don’t want the pipeline built through neighbor’s yards are concerned about more than just being left alone and preserving the value of untouched natural areas. We believe a clean energy future does not include additional natural gas plants or expensive risky pipelines to support them. We have enough pipeline capacity for today’s plants. We don’t see a future with more and more gas.

    Nationally, renewable energy generated 16% of total energy in 2015. The workforce to meet that increase had grown to 2.5 million jobs. By 2018 that number is expected to be 3.3 million. Here are some more facts and predictions from Booz Allen’s study for the Green Building Council … “this study projects that green construction will generate an additional $303.4 billion in GDP, 3.9 million jobs, and $268.4 billion in labor earnings in the coming years 2015 – 2018. LEED, (performance goals for efficient buildings) … specifically is projected to contribute an additional $108.8 billion in GDP, 1.4 million jobs, and $95.7 billion in labor earnings in the coming years 2015 ‐ 2018. “

    Creating that type of growth in VA will take a change in direction from our legislature and our utilities. Pipelines, and business as usual, won’t do it.

  4. “Would the SCC allow Dominion to pay more for natural gas than from lower-priced suppliers?”

    This is exactly the question I posed to the SCC Commissioners when I gave testimony on Dominion’s 2016 IRP.

    The ACP filed a tariff with FERC that identifies its cost to transport natural gas. A tariff is also on file with FERC for the cost to transport gas using the Transco connection to the Brunswick and Greensville plants. Eventually, negotiated rates will replace the published rates for both of these pipelines but the difference in cost between them is likely to remain about the same.

    I testified that the transportation cost of supplying 500,000 Dth/d is $218 million more in the first year to use the ACP compared to the Transco connection. Based on price differentials in July 2016, the cost of the gas would be higher by $91 million per year for the ACP compared to the source used by Transco.

    My point was that either the ratepayers paid more for gas delivered by the ACP or if DVP was limited to paying the ACP its existing cost of delivery then the ACP would not recover all of its costs. Judge Christie responded that the existing Fuel Factor review would be sufficient to deal with this. I believe that if the SCC waits until the pipeline is built they are only picking who wins and who loses (probably the ratepayer). The AG’s office said it would be difficult for the SCC to create a proceeding to review the consequences of an action before it occurred. I thought it was only fair that the ratepayers would know that they could pay higher rates ahead of time and voice their opinion on the pipeline or that the ACP developers should know whether or not they would recover all of their costs before they invested $5 billion.

    Larry, you are exactly right, the ratepayers are subsidizing the ACP. By having 93% of the subscribed capacity going to captive subsidiaries of the pipeline owners, the utility customers of Duke and Dominion are forced to pay higher rates to pay for the ACP. The pipeline will not result in lower costs as was advertised.

    Virginia Natural Gas/AGL has reserved 155,000 Dth/d to be delivered via the ACP lateral line from North Carolina to Chesapeake. This is not enough to fuel a 1400 MW power plant that would use about 250,000 Dth/d. This would also use up all of AGL’s allotment and result in only about 40-45 long-term jobs. This region has loudly supported the ACP in order to create more economic development in the area by gaining access to more natural gas. That would not come to pass with the proposed power plant.

    “Could it be that when Dominion switches from Transco to its own ACP that Matex would then get the freed-up Transco gas?”

    The Transco lateral does not extend to Chesapeake so this is not currently a way to serve the Chesapeake area. Columbia Gas does have a pipeline that connects to Virginia Natural Gas and that system will be expanding by an amount nearly equal to the capacity of the ACP. It would be cheaper to modify that pipeline on existing right-of-way than build 600 miles of new pipeline to serve the Chesapeake area.

    I don’t think the ACP will actually provide much gas to the Southside plants. Even though Dominion’s press releases said that the ACP was essential to provide lower cost gas to these new power plants, the Transco connection is a much better deal. Besides, Dominion has only reserved 300,000 Dth/d of capacity from the ACP which is not enough to fuel these two plants.

    Service to Brunswick and Greensville provided a justification for building the ACP and provided a reason for bringing the pipeline almost into North Carolina. Two-thirds of the capacity of the ACP will serve NC users.

    Bringing the ACP almost to the South Carolina border also requires little investment to extend it to serve Dominion’s pipeline system in South Carolina.

    We should all worry about this huge build-out of new natural gas-fired power plants. We have these new proposals from IPP’s, plus Dominion’s three new plants proposed by 2030. Eight more in North Carolina. An NRDC witness said as many as 50 new plants are planned in Pennsylvania. Only 12 more coal plants are scheduled for decommissioning in all of the U.S. by 2020. There is no load growth to support all of these new plants. PJM projects about 0.5% per year, and we might not even see that.

    Dominion expects 1.5% a year but this is almost entirely for the new data centers and they want solar. We are heading for enormous stranded costs if the state utility commissions don’t get a more realistic grip on actual load growth. This expansion of unnecessary new power plants is also creating an artificial demand for more pipelines. A bad scenario all the way around. We have created a short-term demand bubble and are responding to it with projects that take 40+ years to pay off.

    • TomH – I commend you for taking the time to prepare and give testimony on these issues. Few people make the considerable effort to participate in the regulatory process. Too many people, companies and organizations feel someone else will carry their water. It doesn’t work that way.

      • Thank you, TMT. I have a lot to learn about how things are done in Virginia. But I am genuinely interested in seeing us have a modern, job producing, low cost and clean energy system that serves the interests of Virginians.

        I have great respect for utilities and utility employees having worked in that industry for some time. However, I do think that our current regulatory system and the short-sightedness of the investment community encourages choices that are not optimal in the long-run.

        I hope we can find an opportunity in Virginia to explore these issues in a constructive way. We need financially healthy utilities, but they should be rewarded for serving both the ratepayers and the shareholders.

  5. If Marcellus Shale gets rapidly exploited and depleted, then much more expensive – then wouldn’t that accelerate the use of solar and only use gas when you absolutely have to?

    this whole thing could be self regulating – and actually force the adoption of more solar just to conserve dwindling supplies of gas.

    It may also change the economics of storage…

    • The future supply of natural gas will be mainly a function of price. Using current scenarios, Dominion has projected (in their 2016 IRP) that gas prices will be 3 times higher than current prices in less than 10 years and 4 times higher 14 years from now. This would mean that the energy from the Brunswick plant would be about 80-120% more costly than what it is today in 2025-2030.

      It will be self-regulating in the sense that the gas-fired plants will not be economically dispatched to nearly the degree that was expected when they were approved. California is finding that out today. It might take longer for us to realize it in Virginia.

      Let ‘s be extremely conservative in our assumptions. First, nothing is needed to “force” the adoption of more solar. It will come on in a rush if there are no obstacles to its adoption. Dominion experts testified under cross-examination that solar was cost competitive with new gas-fired plants today. They had to apply an arbitrary 40% penalty to solar to force their models to select for new gas plants.

      Both solar and storage are decreasing in price by half every 4-5 years. This is expected to continue or accelerate. But let’s assume they only experience two 50% price decreases in the next 15 years instead of three. Let’s also assume that the gas plants only increase in price by 2 times rather than the greater amount that Dominion projects. That means the 1:1 ratio between the energy costs from gas-fired plants to solar that exists today would become 2:1/4 in 15 years. We should add storage to solar to make it fair so that both options are dispatchable. That means a ratio of 2:1/2 in 2030. (this is not a precise calculation, but it illustrates the point)

      To be clear, this shows that by 2030 energy from dispatchable solar generation (including storage) would be up to 4 times cheaper than the modern gas combined-cycle plants being built by Dominion (the real situation is much more complex than this – many assumptions would have to be made to make an accurate calculation). What happens to Warren (2014), Brunswick (2016), Greensville (2018), New Plant (2022), New Plant II (2030)? They will be 0-16 years into a 40-year financial life without enough revenues to pay them off.

      Rather than embracing this chance to lower energy costs to customers, many utilities are developing ways to slow down the implementation of these new technologies that destroy their business models.

      As you can see, the price of gas does not have to change a bit to make the solar and storage option cheaper than the lowest cost conventional technology available. How can we continue to support continued approval of these old approaches? Any concern about meeting load increases in the near term could easily be met by investments in energy efficiency to maintain reliability and still lower the rates.

      • Tom, a couple of points:

        (1) While it’s true that the price of gas is projected to increase significantly over the life of the Brunswick and Greensville power stations, Dominion’s “savings” projections take that price increase into account. (I’m not sure what assumptions Dom makes regarding the cost of solar.)

        (2) If New Plant 1 is not scheduled to be built until 2022, that means it doesn’t need regulatory approval until 2020. That’s 3-4 years away. If you’re right, the relative economics of gas vs. solar should be clearer by then, and the plant might never be built. If you’re right, New Plant II almost certainly will not be built.

        • Jim,

          Dominion does say in the IRP that the fuel cost increase is included in its “savings” calculation. But it never says what the savings is compared to. Perhaps a less efficient natural gas plant. The new combined-cycle plants are much more efficient than the older units. I was taking the higher efficiency into account by assuming that the fuel cost was just 40% of the cost of energy for the new combined cycle units rather than the more typical 50% value.

          The “savings” would not hold up to a solar facility since the energy costs are essentially fixed at the time of construction and remain so for the 30-35 year life of the unit. Unless the arbitrary 40% penalty had something to do with it. Dominion claims this is a “grid integration” cost. Great Britain installed 12 GW of solar over the past several years with zero spent on “grid integration”.

          New plant 1 is more likely to begin the licensing approval process in 2018 or 2019. Unless VA has an express lane licensing process, it took us a full year to do the environmental studies (the regulators required 12 months of on-site data), the Environmental Impact Statement had to be prepared, interrogatories and the licensing hearings took another 12-18 months. Once approved, a new gas plant probably takes 18-24 months to complete.

          I have never been through a start-to-finish SCC new plant approval process in Virginia. Perhaps it is not the same as the very thorough state and federal processes that I have experienced in other states.

          With the policies and procedures currently in force here in Virginia, it is unlikely that we will install enough energy efficiency and distributed generation to establish an adequate track record to show that a different path is superior. Odds are high that Plant I will get approved but probably not Plant II.

          My concern is that to make the lower cost, higher tech option work for Dominion, we need to make substantial changes to the way utilities are regulated in Virginia. We will not successfully move to a modern energy system here unless we can make it work for Dominion. Because of the current mindset and 100 years of history, the conversation and working out the details will take longer than 2 years even if we were willing to start today – and we are not. I would guess that most policymakers in Virginia and certainly the executives of Dominion think we are on the right track.

          In the meantime, I will continue to be a lonely voice in the wilderness because I believe it will be better for both the utilities and the ratepayers if we can move to a 21st-century regulatory structure as is being done in other states.

          The cost trends that I have outlined are clearly established throughout the world. This is not conjecture. The displacement of conventional generation by solar is happening in California as documented by Bloomberg New Energy Finance. This won’t happen for a while in Virginia which helps us to learn from others’ painful experiences if we choose to do so.

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