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Water Board Gives Atlantic Coast Pipeline Conditional Approval

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by

James A. Bacon
in , ,

In a 4 to 3 vote, the State Water Control Board gave a provisional water-quality certification for the Atlantic Coast Pipeline today, but added a big condition reports WHSV television: The permit won’t take effect until several additional studies are reviewed and approved by the Department of Environmental Quality.

Dominion Energy, managing partner of the ACP, is evaluating the additional conditions and will issue a response later today.

In the meantime, environmental groups were cautiously approving of the decision.

Said Peter Anderson, Virginia Program Manager of Appalachian Voices: “We are somewhat encouraged by the depth and scope of the board’s discussion about several critical issues today and their apparent recognition of the thousands of citizen voices they’ve heard from over the years, but we are disappointed they did not deny this deficient certification and remand it back to the Department of Environmental Quality for a thorough analysis.”

“We particularly commend members Roberta Kellam, Nissa Dean and Robert Wayland who cast the three dissenting votes,” he added.

Said Mike Tidwell, Executive Director of the Chesapeake Climate Action Network: 

In a setback for notorious polluter Dominion Energy, the Virginia State Water Control Board today sided with landowners and environmentalists in calling for more rigorous and comprehensive review of the controversial Atlantic Coast Pipeline. After being ignored for years by Governor Terry McAuliffe and Dominion, the voices of everyday Virginians were finally heard and we will work tirelessly to make sure all the facts can come to the table. CCAN and our allies have argued all along that any science-based and transparent review of all the harmful impacts of the ACP can only result in official and final denial of Dominion’s radical pipeline for fracked gas.

And Chesapeake Bay Foundation Assistant Director Peggy Sanner:

We are pleased that the Water Control Board refused to allow the pipeline project to proceed until threats from pollution are more thoroughly examined. This was the right decision. Thanks to the Board for its careful consideration of this vital matter. Building the pipeline without this information would disturb waterways across Virginia and increase pollution to local rivers, streams, and the Chesapeake Bay. We will continue working to make sure the pipeline is held to the strictest environmental standards possible.

Update:

Dominion spokesman Aaron Ruby said the following:

Today the Virginia State Water Control Board approved the state water quality certification for the Atlantic Coast Pipeline, a very significant milestone for the project and another major step toward final approval.

The Board reached its decision after the most thorough environmental review of any infrastructure project in Virginia history. After more than three years of exhaustive study by state agencies and extensive public input, the Board concluded that the project will preserve Virginia’s water quality under stringent state standards.

The Board approved several conditions to strengthen water quality protections and require other state approvals before the certification takes effect. We will work closely with the Virginia Department of Environmental Quality to complete all remaining approvals in a timely manner and ensure we meet all conditions of the certification.

At every stage of the project we’ve taken great care to meet the highest standards for the protection of water quality. In many cases, we’ve gone above and beyond regulatory requirements and adopted some of the most protective measures ever used by the industry. State and federal inspectors will carefully monitor our work throughout construction to ensure strict compliance with the law. The protective measures we’ve put in place and the regulatory oversight we’re receiving should assure all Virginians that the pipeline will be built safely and in a way that preserves the state’s water quality.

We commend the Board members and DEQ staff for the years of hard work and careful study they’ve dedicated to reviewing the project. We also appreciate the thoughtful and constructive input provided by members of the public. This has been a rigorous and transparent process, and everyone’s voice has been heard. The process has resulted in more environmental protection and higher water quality standards than any other project of this kind.

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2 responses to “Water Board Gives Atlantic Coast Pipeline Conditional Approval”

  1. TomH Avatar
    TomH

    The information below disappeared from the site after I posted it yesterday or the day before. I hope it is timely enough to still have some value for those who want to have a bit more information about the necessity and public benefits of the Atlantic Cost Pipeline.

  2. TomH Avatar
    TomH

    The main issue with the State Water Control Board was that they did not have adequate information to say they had “reasonable assurance” that the construction of the ACP would protect water quality in Virginia, as required by law. Dominion did not provide the necessary information to DEQ, so DEQ could not provide it to the Water Board. The original plan was to approve the permit, then get the information. The Water Board decided that the permit would be approved only after the material for Erosion & Sedimentation, Stormwater Control, etc. is provided by Dominion and properly reviewed by DEQ. No construction of the ACP can take place in Virginia until that review is complete and approved by the SWCB. DEQ’s spokesperson said that might take at least until March or April.

    The North Carolina DENR is also considering the economics of the pipeline as part of their water quality certification process. FERC has not considered this, even though they issued a certificate that said the ACP served the public convenience. Some regulator in Virginia should evaluate the need and economic benefits of the pipeline, since all of the support for the ACP comes from those who believe the pipeline is necessary for us to have the gas we need and that it will lower our energy costs and create jobs. A basic review of these issues by any regulator would reveal that the facts do not support those conclusions.

    I have addressed these issues many times in this blog, but I will try to summarize them.

    We can have all the gas we need without new pipelines

    1. We have much more pipeline capacity than we need already.

    2. From 2007 through 2016 we added 121 Bcf/d to our national gas transmission system. The EIA says U.S. gas use averaged 75 Bcf/d in 2016, with a seasonal peak of 93 Bcfd/d in 2017.

    3. At least 25 more pipelines are expected to go into service in the next year or so.

    4. Existing pipelines serving Virginia and the Carolinas are adding four times the capacity provided by the ACP.

    5. Dominion says this added capacity is spoken for. But many of the contracts for this added capacity are with marketing subsidiaries of gas producers that are eagerly seeking new customers.

    6. Dominion has contracted for capacity (that they say is “unavailable” for power plant use) from these gas producers to supply the Cove Point LNG facility, in an amount that is greater than what they need for power plants in Virginia.

    7. Less than 5% of the curtailments during the Polar Vortex were due to shortages of gas or pipeline capacity. If Southeast Virginia truly needs a greater supply of gas, they could obtain it far less expensively by connecting to existing pipelines than they could by using the ACP.

    Will the ACP save us money and create more jobs?

    1. The study commissioned by Dominion that promises $377 million per year in savings and new job creation resulting from the ACP did not include the cost of using the pipeline.

    2. When the cost of using the ACP is added in, it overwhelms any projected savings in natural gas costs and other stated benefits such as tax payments to local governments.

    3. A gas industry expert testified to the SCC that Dominion electricity customers would pay $1.6 to $2.3 billion more for gas delivered by the ACP compared to delivered gas from existing pipelines (over 20 years).

    4. Dominion filed information with the SCC showing that existing pipelines in Virginia are 3-8 times cheaper to use than the ACP. New pipelines are more expensive because existing pipelines have been mostly paid for by previous customers.

    5. Virginia Natural Gas customers could pay $1 billion more to use the ACP compared to connecting to existing pipelines (over 20 years).

    6. Customers of Duke’s utilities in North Carolina could pay more than $6 billion to use the ACP compared to connecting to existing pipelines.

    7. Based on gas prices in May 2017, the price of natural gas plus pipeline transportation using the Transco system to supply Dominion’s recently built Brunswick power plant is 28% cheaper than if gas from the Dominion South hub in West Virginia was delivered using the ACP (using rates published with FERC).

    8. The ACP will add billions to the energy costs of families and businesses in Virginia. More expensive energy could cost us jobs rather than add them.

    Why are we in such a hurry to build the ACP ?

    1. This is about getting revenues from the pipeline flowing as soon as possible, not about when we might need more gas.

    2. Dominion and Duke have cut the number of proposed major gas-consuming power plants in half since the ACP was announced, a trend that is likely to continue. The ACP told FERC that nearly 80% of the ACP capacity is needed for new power plants.

    3. A new power plant that might need more gas supply wouldn’t be needed until 2025, at the earliest, in Virginia, and 2022 in North Carolina. Yet, the utilities owned by the pipeline developers expect to pass on the cost of the pipeline to ratepayers as soon as it is finished whether or not the utilities use all of the reserved capacity. Dominion Energy Virginia wouldn’t use any capacity from the ACP because the big gas-fired power plants that are currently operating have long-term agreements with existing pipelines at prices far lower than the ACP.

    4. Neither Dominion nor Duke has filed an application to build a new gas-fired power plant.

    5. An SCC Commissioner asked a Dominion energy planner why their forecasts for the growth in electricity demand is overstated by so much, year after year.

    6. PJM has projected that load growth in Dominion’s territory will be essentially flat over the next 15 years, except for an uptick over the next few years for new data centers (but they want solar).

    7. FERC has not considered any information about actual market demand for the ACP or its higher cost to customers. They looked only at contracts for capacity. They disregarded that these contracts were signed with companies controlled by the owners of the pipeline, even though their own guidelines warned about the hazards of doing that.

    Is there a better way to get the gas we need?

    1. Connections could be made to Transco over existing rights-of-way that would deliver gas to Southeast Virginia far cheaper than would the ACP, saving VNG customers perhaps $1 billion compared to the 20-year contract signed with the ACP.

    2. North Carolina customers could benefit in the same way. A connection could be made to Transco using 105 miles of the existing Cardinal Pipeline right-of-way. Southeast of Raleigh, the new pipeline would connect to the last 90 miles or so of the corridor identified for the ACP. This would provide service to exactly the same delivery points proposed for the ACP.

    3. Based on average costs for pipeline construction, this 200-mile, 1.0 Bcf/d pipeline might be constructed for $1.0 – $1.5 billion, including a compressor station. This would provide 67% of the capacity of the ACP, all that North Carolina needs, at a fraction of the cost and far less environmental disruption than the ACP.

    4. North Carolina ratepayers could save $6 to $9 billion compared to the cost of the 20-year contract signed with the ACP.

    What is the ACP all about?

    The ACP exists to provide a long-term stream of income to the utility holding company owners of the pipeline to boost their share prices. These are unregulated for-profit companies, in business to make money. I take no issue with companies that prosper by serving their customers well.

    However, there are three major conflicts related to this pipeline:

    1. The costs and risks of the ACP are being shifted to the ratepayers of the utilities owned by the pipeline developers. This will cost families and businesses in Virginia and North Carolina billions of dollars more than using existing pipelines. Higher energy costs will depress job creation not increase it.

    2. The private companies that own the pipeline will use eminent domain to seize access to property from landowners unwilling to grant it, purely for their private gain. Because the pipeline is unnecessary for us to have the energy we need and will cost more than available options, there is no “public benefit” provided by the pipeline.

    3. The pipeline owners have mounted an expensive, aggressive campaign to promote this project. That is their right, but it is dishonorable that they have used inaccurate information in these communications to serve their corporate economic interests at the expense of their customers.

    Political, business, and labor leaders, as well as the general public have been misled about the benefits of this project. Supporters have been led to believe that the ACP will lower energy costs and create jobs, when the information Dominion has provided FERC shows exactly the opposite. The study that has been used to trumpet $377 million per year in savings to residents of Virginia and North Carolina failed to include the cost of using the pipeline. Families and businesses in the region will pay billions more unnecessarily as a result of the ACP. This will lead to less job creation not more. This is the opposite of what has been communicated to the public in the three years since the project was announced.

    Because no regulator at the state or federal level is considering these issues, the project is on track to gain the necessary permits and then the customers will be left with a bill for higher energy costs and unnecessary degradation of our land and waters.

    Regulators exist to balance the public interest with the financial interest of the project developers. Since FERC issues a Certificate of Public Convenience and Necessity, they should evaluate whether a pipeline is necessary and truly benefits the public. Instead, they rely solely on contracts with companies controlled by the pipeline owners. Why is it so difficult for a regulator to do what the law requires in assessing this project? All of us, regardless of our views about this pipeline, should support a thorough and open review of this project.

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