UPDATE: July 6, 2020: Citing "legal uncertainties," Duke Energy and Dominion Energy announced on July 5 that they have decided to cancel the $8 billion Atlantic Coast Pipeline project.
Dominion officials, in a separate press release, said that they could not be sure whether the project would ultimately be granted the required permits, so it would not be "prudent" to invest more shareholder capital in the pipeline.
Thomas Farrell, chairman of Dominion said of the cancellation, "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."
Dominion also announced Sunday that it has agreed to sell its natural gas business to Berkshire Hathaway Inc. for $9.7 billion. The deal includes more than 7,700 miles of natural gas storage and transmission pipelines.
- On Monday, the U.S. Supreme Court ruled in a 7-2 vote that the U.S. Forest Service had the right to issue a permit for a segment of the $8 billion Atlantic Coast Pipeline (ACP), reversing a lower court decision and bringing the project one step closer to being able to restart construction. The natural gas pipeline will travel 600 miles from West Virginia through Virginia to North Carolina.
- The fight was over a 0.1-mile piece of the pipeline's planned route under the Appalachian National Scenic Trail in the George Washington National Forest, which lies in both Virginia and West Virginia. The U.S. Court of Appeals for the Fourth Circuit, located in Richmond, Virginia, maintained that the Forest Service did not have the authority to issue a special-use permit for that segment of the route, but the Supreme Court disagreed.
- The ACP, a joint venture between, Dominion Energy and Duke Energy, will have a capacity of 15 billion cubic feet of natural gas per day and is projected to generate $2.7 billion in economic output during the construction phase alone. The project, according to Dominion and Duke, will also create 17,000 construction jobs, 50% of which are intended for local workers who will receive free training and apprenticeships.
After the verdict, Dominion said that the Supreme Court was in line with "the longstanding precedent” of allowing pipelines, more than 50, to cross the trail. The energy company said that those pipelines have not disturbed the public's use of the trail and neither would the ACP.
"To avoid impacts to the trail," the company said, "the pipeline will be installed hundreds of feet below the surface and emerge more than a half-mile from each side of the trail. There will be no construction activity on or near the trail itself, and the public will be able to continue enjoying the trail as they always have.”
The Supreme Court's verdict is most likely good news to the construction companies involved in the project as well. The lead contractor, Spring Ridge Constructors, is a joint venture between four major pipeline construction companies:
- Michels Corp., based in Brownsville, Wisconsin
- Price Gregory International Inc., based in Houston
- Rockford Corp., based in Dallas
- U.S. Pipeline Inc., based in Houston
The first time that permit troubles forced a shutdown of the project was in 2018, an action that added approximately $500 million to project costs. During that shutdown, ACP contractors kept welders on the payroll so as not to lose them in such a tight labor market.
Despite this recent court victory, Dominion, in its statement, said that it "looks forward to resolving the remaining project permits," acknowledging that there are other obstacles to overcome in getting the pipeline back on course.
Ironically, according to the Southern Environmental Law Center, the project still lacks a valid special-use, right-of-way permit from the Forest Service to cross the trail, as well as several others including:
- Endangered Species Act permit from the U.S. Fish and Wildlife Service.
- Right-of-way permit from the National Park Service.
- Virginia air pollution permit for a compressor station.
- Four Clean Water Act authorizations from the U.S. Army Corps of Engineers for Pennsylvania, West Virginia, Virginia and North Carolina.
The center also said that the project's permit from the Federal Energy Regulatory Commission is currently under review by the D.C. Circuit Court of Appeals to determine whether the agency was correct in its decision that the pipeline was necessary. The appeals court is scheduled to hear arguments later this year.