Category Archives: Economic development

Building the New Midtown Tunnel

tunnel_construction

Graphic credit: Virginia Business. Click for more legible image.

Building the new Midtown Tunnel between Norfolk and Portsmouth is one of the more spectacular engineering feats ever attempted in Virginia. Elizabeth River Crossings (ERC), the private-sector partner in charge of the $1.5 billion construction project, has to dredge a 95-foot-deep trench in the Elizabeth River, float 11 massive concrete tubes the length of football fields down from Sparrows Point Md., submerge them, and then place them together within one-inch tolerances in order to snap them together.

The tunnel, only the second in the nation to be constructed in this manner, is engineered to withstand the weight of a Nimitz-class aircraft carrier. Virginia Business has the story.

– JAB

The Fifth Anniversary of Upper Big Branch

A memorial to the Massey Energy miners at Upper Big Branch

A memorial to the Massey Energy miners at Upper Big Branch

By Peter Galuszka

Five years ago this morning, miners near Montcoal, W.Va. clambered into low, truck-like vehicles called “mantrips” for a nearly-hour-long ride to their positions at Upper Big Branch, a coal mine owned by a subsidiary of Richmond-based Massey Energy.

Some of the miners were queasy because the mine, known as UBB, was especially gassy, had substantial air ventilation problems and lots of coal dust. Even worse, the chief executive of Massey Energy, Donald L. Blankenship, was known as a hard-charging bean counter who liked to cut corners and maximize profits, investigators say.

As the shift neared its end, a “long wall” machine that rips into coal seams hit a clump of slate. Sparks flew from the badly-maintained long wall device. A jet of methane flame about the size of a basketball flared out. Safety measures, such as streams of waters designed to extinguish such flames, didn’t work. As miners scrambled for their lives, an enormous blast, fed by high levels of coal dust, roared through seven miles of shafts, blowing apart or suffocating 29 miners.

It was the worst disaster in this country in 40 years. Several investigations gave scathing reports of Massey’s lax attitude about mine safety. One report was titled “Industrial Homicide.”

So what’s been done to improve mine safety lives? Not very much.

Federal legislation such as the Robert C. Byrd bill that would give federal regulators subpoena power when probing safety violations has gotten nowhere in Congress.

Worried about slumps in coal production caused by as flood of natural gas from fracking drilling methods, the West Virginia legislature has come up with the “Creating Coal Jobs and Safety Act.” You read that right. The bill puts “jobs” first and “safety” second.

As W.Va. Del. Barbara Fleischauer of Monongalia County puts it: “There’s not anything in this bill that improves safety, nothing. And I can’t believe, after all the fires and explosions we’ve had in this state, recently, we would, and you know what they are; Upper Big Branch, Aracoma, Sego, that we would ever consider rolling back safety protections.”

The Associated Press reports that while mine deaths are down, thanks because of the competition against coal by natural gas. Mine inspections spiked after UBB and accidents, while they still occur, are down.

But, the AP says, the coal dust problem hasn’t been resolved. Massey had been fined continuously for not keeping levels of coal dust low. There was so much coal dust in the mine that autopsies of dead miners (at least the ones that had enough long tissue that could be recovered after the massive blast) all showed evidence of black lung disease, which was supposed to have been rooted out years before by regulatory upgrades.

Coal dust problems are still evident. In January, federal officials found excess methane and coal dust at Mill Branch Coal Corp’s Osaka mine in Wise County, Va. Another mine, Camp Creek in Wayne County, W.Va., had been cited 64 times in the last two years for failing to follow ventilation plans. And, a miner was recently killed at a showcase Virginia mine.

What do these mines have in common? They are owned by Bristol-based Alpha Natural Resources, which bought failing Massey Energy in 2011 for $7 billion. Alpha tried to absorb Massey miners and retrain them in its “Running Right” safety program, but it obviously has lingering problems.

Alpha has been lying off many miners because of the production downturns and lack of demand for both steam and metallurgical coal. After enduring millions of dollars in losses, its stock has trading at a dollar and a penny. Cash short Alpha has had to sell its new headquarters building just off of Interstate 81 in the Bristol area.

Blankenship, meanwhile, is slated to go on trial for criminal charges related to UBB in Beckley W.Va. on April 20. It is the first time a coal chief executive has been so indicted. Blankenship’s lawyers are trying to get a change of venue, claiming that he is so well-known and disliked in southern West Virginia that he can’t get a fair trial. For a time, he won a gag order preventing anyone, including families of the deceased UBB miners, from discussing the trial but it was overturned by the U.S. Fourth Circuit Court of Appeals in Richmond.

His trial may be delayed, but it won’t be much of a victory. Alpha Natural Resources, meanwhile, is refusing to pay his legal bills.

Note: Peter A. Galuszka is author of “Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal.” It was first published by St. Martin’s Press in September 2012 and is now available in paperback from West Virginia University Press.

 

Pulp and Circumstance in Chesterfield

Gov. Terry McAuliffe talks with Jerry Peng of Tranlin

Gov. Terry McAuliffe talks with Jerry Peng of Tranlin

By Peter Galuszka

Jim Bacon has a fascinating cover story about the future of Short Pump in the latest Henrico Monthly magazine.

Not to be outdone, I humbly point out that I have a cover story in the Chesterfield Monthly, a sister publication.

I explain how Chesterfield County, the state and other officials landed Shandong Tranlin, an advanced paper mill in the eastern part of Chesterfield. At $2 billion, it’s the biggest Chinese greenfield project ever planned in this country.

The story actually starts when Jerry Peng, a Chinese businessman who happened to go to the Darden School at the University of Virginia, went to the U.S. to look for a place for a new type of paper plant. After becoming frustrated looking on the U.S. West Coast, he plugged his Hoo connections in Virginia and “Project Cavalier” was born.

In less than two years, Virginia and Chesterfield landed the plum. It will employ 2,000 within a few years. It is a story about how county, state and private industry worked quickly and well together. The whirlwind of negotiations credits both former Gov. Robert F. McDonnell, current Gov. Terry McAuliffe and their staff.

The pulp mill is expected to be less polluting because it does not use trees for pulp but uses leftover farmfield waste such as wheat and corn stalk. There is little air pollution because most processes involve steam. There is no extremely toxic dioxin produced because there is no bleaching of paper product. Leftovers are then collected into a “black liquor” that supposedly can be used as a less polluting farm fertilizer which may be used by Virginia farmers that now use polluting fertilizers harmful to the Chesapeake Bay.

It just so happened that Chesterfield had all the right ingredients – proximity to farm field waste; ample highway and rail connections, a large, skilled workforce; deepwater access, lots of process water from the James River and plenty of locally-available power.

It’s is part of a switch in economic policy by the Middle Kingdom. After three decades of drawing in foreign investment, Beijing is now looking for advanced industrial countries. That is why a Chinese firm spent $4 billion to buy Smithfield Foods. Now, there’s Shandong Tranlin.

I do have my doubts about the much-touted environmental benefits of the project, having been to China and seen the enormous industrial pollution there. Air quality in Beijing or Shanghai is routinely many times the highest permissible levels in the West. But plenty of people seem to think that Shandong Tranlin is on to something.

Let’s hope so.

(Note: the Henrico and Chesterfield Monthly are doing some interesting new journalism in the area. Watch for them.)

Dueling Reports

tjippFor each and every report, there is an opposing report. Yesterday, Peter G. cited an issue brief published by the Natural Resources Defense Council (NRDC), which contended that an Environmental Protection Agency (EPA) plan to curtail CO2 emissions would create 5,600 jobs in the Old Dominion and shave $1 billion off Virginians’ electric bills.

Now comes a report issued by the Thomas Jefferson Institute for Public Policy, “The Costs of New EPA Rules to Virginia.” The institute hired the Beacon Hill Institute to gauge the impact on Virginia’s economy. Concludes TJI Chairman Michael Thompson:

Virginia will need to reduce its CO2 levels by 38% from 2012 levels and the costs to our state’s industries will be $1.7 billion by 2030. Those costs will be paid for by our citizens in higher prices. Our electric bills will increase by 25% and we will lose over 38,000 jobs that would not be lost if these EPA regulations were not implemented here in Virginia.

My point here is not to side with one report over another. Both NRDC and the Thomas Jefferson Institute probably had reasonable grounds for reaching the conclusions they did. The trick is to dig into the assumptions and methodologies that each side is making to see if they stand up to scrutiny.

I’m working on an in-depth analysis that, hopefully, will lay bare the logic of the opposing sides. Not that it will change anyone’s minds. People believe whom they want to believe, and as long as someone provides them a fig leaf of a justification, they will continue believing whom they want to believe.

– JAB

NRDC Says Clean Power Plan Benefits Virginia

coal plant burnsBy Peter Galuszka

In a sweeping contradiction of the positions of Dominion Virginia Power and assorted politicians and regulators, the Natural  Resources Defense Council has issued a report saying that Virginia will benefit by following a proposed federal plan to cut carbon dioxide.

The U.S. Environmental Protection Administration has put forth a proposed plan for comment that would cut carbon dioxide pollution intensity — measured in pounds per megawatt hour of electricity– in the state by 38 percent by 2030.

The draft plan brought on protests from Dominion, the State Corporation Commission, Gov. Terry McAuliffe, The Virginia Department of Environmental Quality and many legislators who say compliance with the plan would cost ratepayers an extra $5 billion to $6 billion in rate hikes and force the closure of some coal-fired plants.

The situation was considered so dire that Dominion convinced the General Assembly to pass a bill letting it freeze its rate base and avoid audits by the SCC for five years.

Reading the NRDC document is like reading an instruction manual from another planet. The key point:

“The Commonwealth is already 80 percent on the way toward achieving the EPA Clean Power Plan’s carbon reduction for the state,” it says. The remaining 20 percent goal could be reached by pressing on with renewable energy and energy efficiency while developing a robust new work force that would total about 5,600 “and the state’s households and businesses would save $1 billion on their electric bills by 2020.”

One reason for the progress in achieving the goal is that Dominion has converted coal plants to natural gas or had announced plans to shut down some aging coal plants .

The NDRC notes that the Clean Power Plan does not specifically target coal-fired plants or other fossil fuel units and leaves it to the utilities to choose how they want to achieve the goals. Among ways to do this are to make coal plants more efficient, use natural gas plants more effectively by switching them on before coal plants and increasing renewables and efficiency.

Deutsche Bank reports that by 2016, solar power (which only just beginning to be tapped) will be cheaper than the average retail power, the report says.

The NRDC report brings up another topic that rarely is discussed in Virginia. Switching to cleaner power can “usher in climate and health benefits worth an estimated $55 billion to $93 billion by 2030. This could prevent from 2,700 to 6,600 premature deaths — a topic rarely broached in Richmond.

As for concerns of base loaded reliability, the report says that PJM, the regional grid to which Virginia belongs, can kick in during a major and unexpected plant outage with 3,350 megawatts of backup electricity.

Another interesting fact: NDRC reports that coal’s share of Virginia’s generation is now only about 20 percent. Dominion had reported it as being up to 49 percent of its mix a few years back. It is hard to understand given that Dominion has been shutting down coal-plants that are 50 or 60 years old. Opponents of the EPA’s new rules claim the plants are being shut down because of EPA’s “War on Coal” but simple age is the more logical reason.

In any event, it is amazing that hardly any of the points raised by NRDC were part of the harried discussion against the proposed Clean Power Plan and Dominion’s almost hysterical need for rate freezes and freedom from audits so it could have time assessing just how damaging the proposed Clean Power Plan would be.

What’s needed is an honest and transparent discussion and review of what the plan really is, how much it will really cost and how its goals can be achieved. That debate cannot be held captive by bankrolled legislators and regulators bullied by utilities.

A New, Improved Ken Cuccinelli?

ken-cuccinelliBy Peter Galuszka

Is one-time conservative firebrand Ken Cuccinelli undergoing a makeover?

The hard line former Virginia attorney general who lost a bitter gubernatorial race to Terry McAuliffe in 2013 is now helping run an oyster farm and sounding warning alarms about a rising police state.

This is remarkable switch from the man who battled a climatologist in court over global warming; tried to prevent children of illegal immigrants born in this country from getting automatic citizenship; schemed to shut down legal abortion clinics; tried to keep legal protection away from state gay employees; and wanted to arm Medicaid investigators with handguns.

Yet on March 31, Cuccinelli was the co-author with Claire Guthrie Gastanaga, executive director of the American Civil Liberties Union of Virginia of an opinion column in the Richmond Times Dispatch. Their piece pushes bipartisan bills passed by the General Assembly that would limit the use of drones and electronic devices to read and record car license plate numbers called license plate readers or LPRs.

Cuccinelli and Gastanaga say that McAuliffe may amend the bills in ways that would expand police powers instead of protect privacy. “The governor’s proposed amendments to the LPR bills gut privacy protections secured by the legislation,” they write. The governor’s amendments would extend the time police could keep data collected from surveillance devices and let police collect and save crime-related data from drones used during flights that don’t involve law enforcement, they claim.

When not protecting Virginians from Big Brother, Cuccinelli’s been busy oyster farming. He has helped start a farm for the tasty mollusks on the historic Chesapeake Bay island of Tangier. According to an article in The Washington Post, Cuccinelli got involved when he was practicing law in Prince William County after he left office.

He would visit the business and get roped into working at odd jobs. He apparently enjoyed the physical labor and the idea that oysters are entirely self-sustaining and help cleanse bay water.

Environmentalists scoff at the idea, noting that as attorney general, Cuccinelli spent several years investigating Michael Mann, a former University of Virginia climatologist who noted that humans were responsible for the generation of more carbon dioxide emissions and that has brought on climate change.

Some have pointed out that if Cuccinelli had had his way, he would have helped quash climate science, generated even more global warming and sped up the inundation of Tangier Island by rising water levels.

It will be interesting to see if Cuccinelli intends to rebrand himself for future political campaigns and how he tries to reinvent himself.

Nerdistans in Trouble

nerdistan

How badly are suburban office parks getting clobbered in the current real estate environment? Take a look at the Westfields Corporate Center near Washington Dulles International Airport. Two buildings known as Washington Technology Park I and II were appraised at $187.5 million at the peak of the 2000s-era real estate boom. They were just reappraised for $61.1 million — a 68% reduction, according to the Washington Post.

How could that happen? WaPo reporter Jonathan O’Connell provides the background: First, the buildings lost key tenants as the slowdown in defense spending gutted Northern Virginia’s defense-contracting sector. Defense giant Northrup Grumman paid $4.7 million to get out of the lease. Government consulting firm CSC cut back its space from 180,000 square feet to 20,000. Meanwhile, the office vacancy rate climbed throughout Northern Virginia, driving down lease rates generally. Then, on top of that, writes O’Connell:

Buildings far from public transit and walkable amenities like restaurants began to suffer in particular, as young workers flocked to more urban, transit-accessible neighborhoods. So far this year, 92 percent of all office leases of 20,000 square feet or more are within half a mile of an existing or planned Metro station, according to the services firm JLL.

A decade ago, urban geographer Richard Florida famously termed the sterile and isolated office campuses as “nerdistans,” predicting that they would have little appeal to the rising generation of the so-called “creative class.” It has taken a while, but Florida’s insight has become the new conventional wisdom.

The two Washington Technology Park buildings have other problems as well. The owner, Corporate Office Properties Trust (COPT) based in Columbia, Md., has been unable to keep up payments on the $150 million in debt it took on to acquire the buildings. Unable to renegotiate terms, the company stopped making payments. The debt has been transferred to a firm that manages distressed loans. COPT has blamed the drop in market value in part on the property’s fractured ownership.

Bacon’s bottom line: The Washington Technology Park buildings may be an extreme case, but they are indicative of systemic problems in the Northern Virginia real estate market — and suburban real estate markets generally.  In a down market, some properties suffer worse than others. There’s nothing wrong with the buildings. The problem is location. The worst off are office parks on the metropolitan fringe offering none of the community amenities — walkable urbanism, access to mass transit — that workers and employers are increasingly looking for.

Residential development continues in outlying suburban counties because the population continues to grow and urban cores can’t infill fast enough to handle the surge in demand. Not so with commercial development. Businesses are moving to more space-efficient work patterns and they need less space per employee than they once did. That problem is compounded in Northern Virginia, where the market over-built commercial space in anticipation that the 2000s economic boom would continue forever. With the shift in consumer preference to walkable urbanism, car-dependent Nerdistans are the big losers. We’re accustomed to the specter of ghost malls. Don’t be surprised if we soon start seeing ghost office parks.

– JAB

A Plan to Build the Best Educated Workforce by 2030

A multi ethnic group of graduates in graduation gownsby James A. Bacon

Virginia has one of the better educated workforces among the 50 states. The Old Dominion ranked 4th nationally in 2009 by the percentage of population 25 years or older with an advanced degree, and 6th nationally for the percentage with a Bachelor’s degree. Those statistics reflect the fact that the Northern Virginia suburbs of Washington, D.C., have among the highest levels of educational attainment anywhere in the country. Go outside of Northern Virginia, and it’s a different picture. Ranked by the percentage of workers who have graduated from high school, Virginia tumbled to 30th.

What would it take to set the standard for the United States — to build the best educated workforce in the entire country?

The State Council for Higher Education in Virginia (SCHEV) has been asking that question. Indeed SCHEV has developed a statewide strategic plan with four broad goals to achieve that objective by 2030. This plan has no money behind it at present but it provides a road map for how to become No. 1 in educational attainment should the political and cultural will exist to get there.

Virginia’s public universities will develop their own six-year plans that align with the SCHEV plan, says Peter Blake, SCHEV’s executive director, but they can’t get there by themselves.  At some point, he says, the General Assembly will have to increase its public support to make it a reality. Says he: “It’s the commonwealth’s plan.”

The statewide strategic plan has four broad goals:

Provide affordable access for all. Strategies include expanding outreach to traditionally underserved populations; improving readiness of all students; cultivating affordable post-secondary pathways; and align state appropriation financial aid and tuition and fees so students have access regardless of their ability to pay.

Optimize student success. The plan calls for strengthening curricular options to ensure graduates have competencies necessary for employment and civic engagement; helping students to complete their degrees; and engaging adults and veterans in certificate and degree-completion programs and lifelong learning.

Drive change through innovation and investment. Blake describes these goals as the “creative disruption” part of the plan, in which colleges and universities rigorously evaluate what they’re doing on an ongoing basis. Strategies include cultivating innovations that enrich quality, promote collaboration and improve efficiency; fostering faculty excellence, scholarship and diversity; and enhancing higher ed leadership, governance and accountability.

Advancing economic and cultural prosperity. Strategies include building a future-ready workforce in all regions of the state; catalyzing entrepreneurship and business incubation; promoting research and development; and expanding public service to the community.

The framework (goals and strategies) is in place, says Blake. The next step is to adopt metrics by which to measure progress toward those goals. Draft metrics include the following targets:

  • 1.5 million total undergraduate awards
  • Closing the graduation gap between under-represented populations (URPs) and other populations
  • Address the financial needs of 50% of low- and middle-income students
  • 80% of graduates earn sustainable wages within three years of graduation
  • Double R&D expenditures to $2.84 million

Those are the biggies, says Blake, although SCHEV proposes 12 more “related indicators” such as persistence (the percentage of enrollees who graduate within six years), default rates on student loans, state funding, and completions of high-demand degrees.

Cruz, “Liberty” and Teletubbies

AP CRUZ A USA VA By Peter Galuszka

Where’s the “Liberty” in Liberty University?

The Christian school founded by the controversial televangelist Jerry Falwell required students under threat of a $10 “fine” and other punishments to attend a “convocation” Monday where hard-right U.S. Sen. Ted Cruz announced his candidacy for president.

Thus, Liberty produced a throng of people, some 10,000 strong, to cheer on Cruz who wants to throttle Obamacare, gay marriage, abolish the Internal Revenue Service and blunt immigration reform.

Some students stood up to the school for forcing them to become political props. Some wore T-Shirts proclaiming their support of libertarian Rand Paul while others protested the university’s coercion. “I just think it’s unfair. I wouldn’t say it’s dishonest, but it’s approaching dishonesty,” Titus Folks, a Liberty student, told reporters.

University officials, including Jerry Falwell, the son of the late founder, claim they have the right as a private institution to require students to attend “convocations” when they say so. But it doesn’t give them the power to take away the political rights of individual students not to be human displays  in a big and perhaps false show.

There’s another odd issue here. While Liberty obviously supports hard right Tea Party types, the traditional Republican Party in the state is struggling financially.

Russ Moulton, a GOP activist who helped Dave Brat unseat House Majority Leader Eric Cantor in a primary last summer, has emailed party members begging them to come up with $30,000 to help the cash-strapped state party.

GOP party officials downplay the money problem, but it is abundantly clear that the struggles among Virginia Republicans are as stressed out as ever. Brat won in part because he cast himself as a Tea Party favorite painting Cantor as toady for big money interests. The upset drew national attention.

Liberty University has grown from a collection of mobile homes to a successful school, but it always has had the deal with the shadow of its founder. The Rev. Falwell gained notoriety over the years for putting segregationists on his television show and opposing gay rights, going so far as to claim that “Teletubbies,” a cartoon production for young children, covertly backed homosexual role models.

Years ago, the Richmond Times-Dispatch published a story showing that the Rev. Falwell took liberties in promoting the school he founded in 1971. Brochures touting the school pictured a downtown Lynchburg bank building with the bank’s logo airbrushed off. This gave the impression that Liberty was thriving with stately miniature skyscrapers for its campus.

Some observers have noted that Liberty might be an appropriate place for the outspoken Cruz to launch his campaign. The setting tends to blunt the fact that he’s the product of an Ivy League education – something that might not go down too well with Tea Party types – and that he was actually born in Canada, although there is no question about his U.S. citizenship and eligibility to run for question.

Hard-line conservatives have questioned the eligibility of Barack Obama to run for U.S. president although he is likewise qualified.

With Cruz in the ring and Liberty cheering him, it will make for an interesting campaign.

An Inexpensive Experiment

Henrico industrial property anyone?

Henrico industrial property anyone?

by James A. Bacon

Henrico County, my home county, is conducting an inexpensive public policy experiment. If it pans out, the county could improve its competitive posture as a manufacturing location. If it doesn’t, the county hasn’t lost much and can always revert to the previous status quo.

County Manager John A. Vithoulkas has included a 70% cut to the county’s machine & tools tax in next year’s annual budget from $1 per $100 in value to $0.30, a measure that will cost the county an estimated $1.5 million a year in revenue. The cut appears poised to pass, reports Ted Strong with the Richmond Times-Dispatch. It received no opposition in last week’s legislative budget hearings.

“In the long term, this should lead to more manufacturing jobs, which will add more revenue to the county’s coffers,” Vithoulkas said. “We are competing for jobs in the world market now. And we aim to not just compete, but to win.”

The move will help the county capitalize on increased activity in the manufacturing sector, especially “on-shoring” or the repatriation of manufacturing jobs to the United States from abroad, said Gary McLaren, executive director of the Henrico County Economic Development Authority. “We’re serious about attracting manufacturing jobs to Henrico County, and I think this is proof of that.”

Brett Vassey, president of the Virginia Manufacturers Association, described the tax as one of the biggest impediments to manufacturing expansion in Virginia. The tax discourages companies from spending on new equipment that will make them more competitive. “Capital is like water. It flows to the lowest point,” he said.

I’m not totally convinced that the tax cut will make a difference, and it will be hard to determine if is a decisive factor even if Henrico does attract new manufacturing investment. But I think it’s worth a try. On-shoring is a major trend, and Virginia localities should try to exploit it. As labor costs rise in China, many companies are thinking about pulling some of their manufacturing operations back to the U.S. The trend is especially strong in energy-intensive industries that can take advantage of super-low natural gas prices.

But I have two questions. First, will the surging value of the U.S. dollar hurt Virginia (and the rest of the nation) as a manufacturing platform? The economic commentary is almost unanimous that manufacturing will be one one of the hardest-hit sectors. As long as Europe and Japan persist in competitive devaluations of their currencies as a tool to stimulate their economies through their own versions of Quantitative Easing, U.S. manufacturing will suffer.

Second, will Virginia be in a position to exploit natural gas prices? Virginia produces very little of its own natural gas; it relies upon pipelines to bring in gas from the Gulf Coast or (in the future) the Marcellus Shale gas-producing areas of the country. Virginia is bumping up against the ceiling of its gas capacity.

During a February cold snap, Virginia Natural Gas, the AGL Resources subsidiary that distributes gas to the Hampton Roads area, was hard pressed to keep the gas flowing. “Every valve was open,” Ken Yagelski, managing director of gas supply, told me in a recent interview. “We were utilizing all the capacity resources we had to serve our customers.” The company curtailed service to all 108 of its customers who had contracted to have their gas supply interrupted in exchange for a discount in rates. Those customers were prepared for the interruption, so no harm was done, but Yagelski says the incident could be a prelude to the future.

Demand for natural gas in in VNG’s service area is growing one or two percent yearly. VNG is looking to the proposed 550-mile Atlantic Coast Pipeline, a venture in which it is a partner, to supply the gas for the next generation of growth. But the routing of that pipeline has proved to be incredibly controversial, and there is no guarantee at this point that it will be built. If it isn’t,  supply curtailments likely will become more frequent and, at some point, VNG would have to stop taking new customers.

VNG serves Hampton Roads, but would-be industrial customers in the Richmond region would be just as concerned about the reliability of gas supplies.

Bacon’s bottom line: Attracting new manufacturing investment through lower machine & tool taxes is no slam-dunk, and it would be unwise to create expectations that it will lead to sudden success. But if the spike in the value of the dollar proves to be temporary and the Atlantic Coast Pipeline does get built, Henrico’s bet should be one well worth taking. At the very least, a broad-based tax cut that benefits incumbent businesses as well as newcomers is vastly preferable to doling out subsidies and tax incentives to bribe one specific company to invest here.