FERC Approves Atlantic Coast, Mountain Valley Pipelines

map credit: Marcellusdrilling.com

The Federal Energy Regulatory Commission (FERC) approved the Atlantic Coast Pipeline (ACP) and Mountain Valley Pipeline (MVP) in rulings issued Friday.

The three-person commission was divided on the issue of granting the pipelines a Certificate of Public Convenience and Necessity, with two commission members appointed by President Trump ruling in favor while an Obama administration holdover issued a dissenting opinion.

While FERC approval was required for the two natural gas pipeline projects to advance, the battle is not over. Environmentalists and landowners remain adamantly opposed to the projects, and they have vowed to continue resisting. Major sticking points are reviews by West Virginia, Virginia and North Carolina environmental agencies of pipeline impacts on water quality.

Naturally, Dominion Energy, which is the managing partner of the ACP, is delighted at news. Said Leslie Hartz, Dominion vice president of engineering & construction:

We are very pleased to receive FERC approval for this vitally important project. This is the most significant milestone yet for a project that will bring jobs, economic growth and cleaner energy to our region. In the coming days we will fully review the Certificate and finalize our plans for complying with its conditions. We will also continue working with the other state and federal agencies to complete the environmental review process and make this critically important project a reality.

All three commissioners acknowledge the need for more natural gas infrastructure to serve consumers in Virginia and North Carolina. In her dissent, Commissioner LaFleur noted that more than 90 percent of the ACP’s capacity is subscribed by public utility customers in the two states. The end use of this gas is well established on the public record and is a matter of urgent public necessity.

The FERC ruling also garnered kudos from Dominion’s business allies. This joint statement comes from Barry Duval, president of the Virginia Chamber of Commerce, and Matt Yonka, president of the Virginia Building & Construction Trades Council:

This is great news for our economy, our working men and women and energy consumers all across our region. This project will serve as a catalyst for economic growth, job creation and greater energy security in our region for years to come. The hardworking men and women who built our nation are ready to get to work rebuilding our region’s infrastructure. We’re eager to see the thousands of new jobs and billions of dollars in new income this project will bring to the region.

By lowering energy costs in Virginia and North Carolina by more than $370 million a year, this pipeline will allow businesses to grow and families to save. The pipeline will also mean lower emissions and cleaner air in all of our communities as electric utilities continue making the transition from coal to cleaner-burning natural gas.

Equally predictably, pipeline foes were appalled by the ruling. This from the Allegheny-Blue Ridge Alliance, a coalition of 52 organizations in Virginia and West Virginia:

The Commission’s judgment has been made in advance of necessary and required decisions by the U.S. Forest Service, the U.S. Army Corp of Engineers and the state environmental authorities in the affected states of Virginia, West Virginia and North Carolina on critical environmental issues. We concur with the thoughtful dissent of Commissioner LeFleur’s, who has served on the Commission for 7 years, raising serious questions about the basis of need for both the ACP and the Mountain Valley Pipeline and expressing concerns about environmental impacts that both projects present. The majority decision does not reflect an understanding of the issues at hand and is clearly not in the public interest. It calls into serious question the agency’s regulatory credibility.

Greg Buppert, a senior attorney with the Southern Environmental Law Center, said this:

While FERC’s anticipated rubber-stamp of the Atlantic Coast Pipeline follows a long trend of this agency’s failure to carry out its responsibilities and properly assess projects, Commissioner LaFleur’s unexpected dissent shows that even within FERC, this pipeline is seen as harmful and unnecessary.

SELC plans to challenge the majority’s decision to brush under the rug compelling evidence that this environmentally destructive pipeline is not needed to meet the energy demands of our region. The utilities involved in the construction of the Atlantic Coast Pipeline claim utility customers will save money, when in fact this pipeline will drive up ratepayers’ bills – and cause harm to national forests and to rivers and streams while threatening to commit our states to fossil fuels for decades to come. But today’s decision is not the end. It’s now up to North Carolina and Virginia state leaders to actually take a look at the real, serious, and unnecessary risks to water quality and other resources, and put the brakes on this wasteful project.

The pipeline foes’ main line of attack now is that digging pipeline trenches in steep mountain terrain with karst geology is likely to create erosion, generate massive volumes of sediment, and pollute water quality. Dominion has vowed to implement state-of-the-art environmental controls during pipeline construction, but it must gain approval from state regulators along the pipeline route in Virginia, West Virginia and North Carolina.

Earlier this month the North Carolina Department of Environmental Quality rejected the ACP’s environmental plans for the North Carolina portion of the 600-mile pipeline. As the News & Observer summarized the regulatory issues:

The erosion plan is one of several hurdles the Atlantic Coast Pipeline needs to clear in North Carolina. The project also needs an air-quality permit for a compressor, a machine that pushes the gas through the pipeline. And it needs a water-quality permit allowing developers to drill through streams and wetlands, as well as several storm water control permits for multiple locations along the proposed route.

“In Virginia, residents will now rely on the State Water Control Board, which has the authority to deny the required state water permits if the pipelines are likely to fail Virginia’s water quality standards,” said Lara Mack with Appalachian Voices. “We call on the water board members to fulfill their duty to protect Virginians and deny the energy companies their needless pipelines, which would harm Virginia businesses, communities and resident across the state. At the very least, we urge them to meet their obligation to request more information and time to ensure they are sufficiently analyzing the effect on our water.”

Bacon’s bottom line: With the FERC ruling, the question isn’t whether the Atlantic Coast Pipeline project will be built but how tight the water-quality regulations will be and how much the controls will add to costs and affect pipeline profitability. Dominion Energy has ordered and stockpiled hundreds of million of dollars worth of pipe with detailed specs in anticipation of the construction project — it cannot afford to not go forward.

The ACP also has contracts with Dominion Energy Virginia (Dominion’s regulated subsidiary), Duke Energy, Virginia Natural Gas and Piedmont Natural Gas, each of which is a partner in the project, reserving 90% of the pipeline capacity of 1.5-million cubic feet per day. These companies are counting on the added supply of gas for electric-generating plants, industrial and residential use. While some or all of the gas could be supplied by building lateral lines from the giant Transco pipeline running up the east coast, such alternative projects would require years-long regulatory approval processes, and there is no assurance that environmental groups, which oppose fossil fuels from any source, wouldn’t fight these proposals as well.

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48 responses to “FERC Approves Atlantic Coast, Mountain Valley Pipelines”

  1. Steve Haner Avatar
    Steve Haner

    The issue is far from settled – many conditions attached – but it is fair to say the project has crested the hill and it now has gravity on its side. There was an air of acceptance in some comments I heard at a Wintergreen property owners meeting this weekend. And, in a sign of the times, discussions about how the local police are starting to think about and prepare for attempts to protest and even disrupt the project in the region, where a tunnel will be built to take it well below the Blue Ridge Parkway and the Appalachian Trail.

    We came down from the Parkway on VA 664 yesterday, passing all the cars parked right there for the AT access point. A year from now it might be very unpleasant around that road. Maybe three years from now, back to normal.

    Early on my prediction was only one of the projects would be approved, but then I heard that in its long history FERC had only rejected a couple of major pipeline proposals. Its job is to facility the transportation of energy.

    Your map lacks the spur over to the Hampton Roads region.

  2. LarrytheG Avatar

    It’s pretty hard to accept the “public necessity” for TWO independent lines which in turn gives both of them – as for-profit ventures – the right to use eminent domain … as “necessary” for the “public” … “need”.. what a crock.

    Don’t get me wrong Steve – I LIKE the idea of more natural gas.. I just think it’s no different than fuel oil or gasoline or propane that are done by for-profit companies competing in markets without the govt taking property rights from people.. to help the companies engaging in providing products to the market.

    People would be outraged if Walmart or Exxon claimed that they would provide a “good and needed service” to citizens therefor govt should allow them to pick locations and tell the property owners that eminent domain was being used.

    So what this shows is basically how feckless FERC is at it’s own mission – they’re little more than a bunch of bureaucratic rubber stampers.

    Like I said.. I LIKE Toyota , Facebook, Exxon.. and DOminion as free market competitors not companies using eminent domain to get what they should be negotiating for in the market..

    I keep citing Rockies Express – a pipeline that goes about 2000 miles across the country – and 99% of it’s right-of-way was obtained via willing buyer- willing seller.. and if they can do it – why not Dominion?

  3. Tom Christoffel Avatar
    Tom Christoffel

    “State of the art” = Greetings Crash-test Dummy”

    There is no remediation for petroleum pollutants which leak into the underground limestone channels and caves carved by water over millennia. Luray Caverns is karst. Imagine a pipeline through the stalactite organ room at the Caverns.

    I’m not confident that contractors can be managed to assure quality. The Dominion natural gas power plant in Front Royal has not been producing power on any regular basis, for the approximate two years since completion. No plume comes from the three “state of the art” facility.

    A wonderful presentation was made at the Front Royal Rotary Club years ago by the construction manager, but that crew is long gone and nothing seems to be coming from the stacks.

    Thus, this crash-test dummy is concerned about anything Dominion management claims will happen, given the above situation.

    I suppose the plant could be not operating because there is no market for the power it would produce. Would that not be a failure too?

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Crash Dummy –

      Sorry to learn of your two year now plight. You must be powered by a backyard propane gas generator to be able to type on this blog. Either that, or you’re driving over to mountain to Haymarket to hook into the grid and get your blogging in over there, before heading back over the mountain to blacked out Front Royal.

      Hope the kids at Randolph Macon Academy are doing okay during these times of cold, desolation and darkness. Give ’em my best. And good luck on getting your own power back.

      1. Tom Christoffel Avatar
        Tom Christoffel

        This is a commercial project. Front Royal is a crossroads for Columbia Natural Gas transmission and regional electric transmission lines. There was an early proposal in the 1970s for a slaked lime bed coal plant, but it never got going. It couldn’t meet the air quality standards of the nearby Shenandoah National Park. The current project planning began maybe 15 years ago, and as permissions were granted, it went from group to group. My impression is that it now belongs to Dominion. It got an award in 2015 according to this: Dominion VA Power’s Warren County Power Station Takes Top Honors at Projects of the Year Awards Front Royal has its own electric system and has long term cooperative contracts for its power. This part of what was Potomac Edison is now served by the Rappahannock Electric Cooperative. We have electric power. That the place isn’t smokin’ suggests it is a non-performing asset. Nothing in the local newspapers about it.

  4. Dominion’s Response:

    “We are very pleased to receive FERC approval for this vitally important project.”

    It is vitally important for Dominion Energy and its shareholders, but it is not needed by any of the utility subsidiaries of the owners of the pipeline. Dominion’s first possible use for the pipeline is not until 2025. But that is suspect because Dominion has reduced by half the amount of major gas-consuming (combined cycle) plants it thinks it needs since the pipeline was announced, the same for Duke Energy.

    Existing pipelines are sufficient to supply all of the possible new plants identified at the time of the ACP application. PJM has 75% more capacity than needed to meet reserve requirements, with a number of new gas-fired units on deck in Pennsylvania and Ohio. There is no need for new gas-fired generation in Virginia in the foreseeable future and Dominion has not proved to the SCC that there is.

    “The end use of this gas is well established on the public record and is a matter of urgent public necessity.”

    The need for a new pipeline was never established on the public record, as Commissioner LaFleur recognized. Never was there provided a detailed explanation of new market demand for natural gas that could not be supplied by existing pipelines. ACP’s only argument was that customers under the control of the pipeline owners signed long-term contracts for pipeline capacity. That was all that was considered by FERC, even though their own guidelines call into question self-dealing contracts between pipeline owners and their own subsidiaries.

    Virginia Chamber of Commerce and the Virginia Building & Construction Trades Council comments:

    “This is great news for our economy, our working men and women and energy consumers all across our region. This project will serve as a catalyst for economic growth, job creation and greater energy security in our region for years to come.”

    Unfortunately, these groups have been used as hand puppets by the ACP. The study that claims $377 million per year in energy savings due to the ACP did not include the cost of using the new pipeline. When that cost is factored in, even the overly optimistic savings in gas prices are overwhelmed by the cost of transportation using the ACP.

    The ACP will deliver gas at a significantly higher price than can be obtained using existing pipelines. Families and businesses in Virginia will pay billions more to use the ACP. It will not be a “catalyst for economic growth, job creation and greater energy security in our region for years to come.” But it will be several years before these well-meaning organizations realize that they have been duped.

    Dominion’s study claimed that the lower cost of gas at its trading hub in the western Marcellus would increase its advantage compared to the national price through 2038, but existing pipelines serving the region also take their supplies from the Marcellus. The price difference at Dominion South has been steadily narrowing since the Polar Vortex extremes that were used as the starting point for the study.

    New pipelines coming online later this year and early next will equalize pricing between hubs, as is traditionally the case when enough pipelines exist to get all of the production to market. After that time, differences in the cost of delivered gas will depend mainly on the cost of pipeline transportation. This will put the ACP at a significant disadvantage. The ACP will likely be, by far, the most expensive pipeline on the east coast for transporting gas.

    The cost of gas at Dominion South in May 2017 plus the published rate for using the ACP was 28% higher than the delivered cost of gas using the existing Transco connection to the Brunswick plant. This comparison includes the existing price advantage at Dominion South, which is expected to soon disappear.

    An industry expert compared the net cost difference likely to occur using the ACP instead of existing pipelines to deliver gas to Dominion’s system over the first 20 years of ACP operation. His analysis showed that Dominion’s ratepayers would be asked to pay $1.6 to $2.3 billion more for delivered gas from the ACP compared to existing pipelines.

    Virginia Natural Gas and Duke’s utilities in North Carolina could access as much or more gas than would be provided by the ACP at a fraction of the cost by connecting to nearby existing pipelines that are expanding their capacity.

    The ACP has nothing to do with having all the gas we need. Dominion is using the same sources that it says are “unavailable” for power plants to bring more capacity to supply its Cove Point LNG facility. Cabot, the company providing the additional gas to Cove Point, says it has plenty more gas and the pipelines to move it to supply the needs of Virginia and the Carolinas. The subscribers of the new capacity that the ACP considers unavailable are mostly the marketing subsidiaries of gas producers who are desperately seeking new customers.

    How can our politicians and regulators approve a project that will harm communities, land and waters of Virginia when it is not needed and will cost us billions more? Who can justify the taking of land from unwilling landowners for a project that benefits just three companies?

    The project exists to take advantage of an exorbitantly high rate of return that has never been justified by FERC for natural gas pipelines. Executives of the utility holding companies that own the pipeline are looking for ways to provide shareholders with a long-term stream of income to buttress the stagnating revenues from their utility subsidiaries. The CEO of Dominion Energy has recently told financial analysts that it intends to use its newly acquired MLPs to return its equity investment in the ACP within 3-4 years.

    This pipeline is a financial scheme designed to enrich shareholders at the expense of ratepayers. Because the need for the pipeline is less than expected, it has been proposed to pick up new customers in South Carolina. But that state is already well-served by the Transco pipeline just as Virginia and North Carolina are. Extending the ACP into South Carolina will only expose a new group of families and businesses to the much higher costs of the ACP, even though they are being told exactly the opposite.

    I understand why the executives are heading in this direction, but no company succeeds in the long run pitting its shareholders against its customers. It doesn’t have to be this way. We can spend our time developing ways for everyone to win rather than using misleading studies and political muscle to push through unnecessary projects.

  5. Steve Haner Avatar
    Steve Haner

    “I understand why the executives are heading in this direction, but no company succeeds in the long run pitting its shareholders against its customers.”

    Amen to that, brother. I assume you are reading the TD series, but I doubt you are learning anything new.

    If the SCC disallows the sweetheart deal between Dominion’s gas purchasing agency and the affiliated pipeline, if the SCC requires Dominion to compete the supply and pay the fair market price, does the pipeline fail? Or does Dominion refuse to build it? Ultimately, over time, doesn’t the existence of so much supply 1) drive down retail cost and 2) encourage more industrial and residential use of natural gas? The existing coal plants have got to go eventually. The death of the CPP notwithstanding, the pressure is still on to switch to natural gas all across the spectrum, including industry.

    1. Steve,

      The issue of the SCC’s role is a crucial one. The SCC holds an annual review of Dominion’s Fuel Factor – the actual costs of Dominion’s various fuel supplies versus what was projected the year before. Adjustments are made for overages or shortfalls in revenues in the next year’s charges.

      I have testified in the IRP proceedings the past two years to encourage the Commissioners to issue some sort of guidance about recovery for the ACP in advance of construction, so that ratepayers and pipeline developers can know what to expect. In this year’s Fuel Factor hearing, Dominion successfully argued that since there are no charges currently from the ACP, no issues relating to the pipeline should be discussed.

      The SCC subsequently announced that they will decide about the amount of cost recovery for the pipeline on a year by year basis.

      There is a problem with waiting though. Dominion’s subsidiary, Virginia Power Services Energy (VPSE) has signed a 20-year firm transportation agreement with the ACP to help prove the pipeline is needed (FERC only looks at contracts such as these to assess the need for a new pipeline). Based on published rates (negotiated rates will be a bit cheaper, but are confidential), this obligates them to pay $4 billion over 20 years whether or not all of their allotted capacity is used.

      It is Dominion’s expressed intent to pass this entire cost on to the ratepayers. The SCC’s rules require them to limit recovery to the lower of cost or market prices. Based on evidence provided in this year’s fuel factor case, existing pipelines are 3-8 times cheaper than the ACP for transporting gas.

      Even a current, but likely short-lived, price advantage at the Dominion South hub cannot overcome this high cost of transportation. Utility ratepayers will pay billions more for using the ACP.

      If the pipeline is built, but only some or none of the $4 billion contract can be recovered from ratepayers, then what? VPSE still has a legal obligation to pay the ACP. They are a wholly owned subsidiary of VEPCO (now Dominion Energy Virginia). If the loss on the contract of up to $200 million per year occurs, will the utility request a rate increase to cover its bad business decision?

      It looks like the ratepayers might pay no matter what. If the SCC does not cooperate, the GA is always there for a bailout. This is why shareholders and lenders are confident about the pipeline. It appears that the ratepayers are assuming all of the risk.

      The developers would only refuse to build the pipeline if the VA and NC regulators made it clear that cost recovery from ratepayers would be limited to the market price. But the ACP could make the same phony argument that succeeded with FERC – that there are no market alternatives to the ACP.

      The ACP will not add a greater supply of natural gas. It will only add more pipeline capacity. We are headed towards a great surplus in pipeline capacity that might serve to increase prices as pipelines bid against each other for an insufficient supply in order to fill their pipes.


      Natural gas is an increasing cost commodity. Dominion predicts that gas prices will rise 3-4 times higher than the prices we experienced 1-2 years ago. Gas prices are already up 50% over the previous lows in 2015-2016. Total gas usage in Florida is down 4% over last year, even with increasing population and economic activity. The trend is expected to continue.

      Dominion is already adding enough new gas-fired plants (Warren, Brunswick, Greensville) to more than replace its coal fleet.

      Sooner or later we will wake up and realize that more new gas-fired plants will raise our energy prices. The industry sees this and is trying to get carbon pricing into the wholesale markets to subsidize gas-fired units. Although this will do nothing for climate issues, the public narrative says it will. The money will be made before the public realizes the truth, if they ever do.

      There are better, cheaper, cleaner, ways to deal with this that produce far more jobs and economic activity.

      Will will use the natural gas-fired plants we already have for many years. The questions is – do we need more? Demand is not growing.

  6. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    With all the solar that folks like Facebook demand we built, we’ll need huge amounts of gas just to keep the grid operational. Otherwise, after two cloudy days in a row, we’re all toast. And why we can cover great swaths of Virginia’s countryside with endless rows of humming steel and glass panels, but can’t put a pipe underground without destroying our air, water, and earth is beyond me.

    Last time we were running out of gas. Now we’re getting too much. Go figure.

    1. Reed,

      I’m with you on avoiding covering our countryside with solar farms. Utility-scale projects ignore the expense of adding transmission which artificially favors this approach. It also continues the old mainframe-like approach of central station power plants. The grid is much more reliable and resilient if we add distributed generation at the distribution level.

      We are not running out of gas, but we are adding more pipelines that won’t have enough gas to fill them for several years. We can get more gas if we are willing to pay more for it. But why should we, when there are many alternatives that are cheaper?

  7. LarrytheG Avatar

    IF the point of the gas is to produce electricity for the PJM region – why do the plants need to be that far east from the source of the gas or the existing north/south Transco pipeline?

    Mt Storm is a Dominion coal plant that exists very near to where the Marcellus Shale gas is and it’s electricity , from that location goes into the PJM grid that serves Virginia.

    It’s an obvious question – what can’t Mount Storm also burn Marcellus Shale Gas to produce electricity and put it into the grid without the need for longer pipelines to plants further east?

    Again – to anticipate Steve’s complaint – I am just fine with ANY for-profit venture participating in the market to meet a perceived demand – without using the power of govt to force people to sell their land – for a private sector for-profit venture which is exactly what this is.

    I strongly suspect Transco put up their own competing line in direct response to Dominion seeking to essentially move into the gas pipeline market and usurp Transco’s business.

    As Tom points out – there is not a need for one additional full-length pipeline much less two.. and it’s a pretty good bet – one of these two is going to drop out or they will join to form a consortium because the capital investment needed upfront is going to make it difficult to turn a profit in the short term.. You’re talking about 5 billion dollar per pipeline – even with the use of eminent domain.

    The only way that “works” for Dominion is if they are the only provider of natural gas in some locations and there are no competitors to keep the price of gas lower.

    I would submit that even in those locations where there is no competition that would-be prospective businesses are going to see where the Transco gas if offered – for a lower price – and that, in turn, will affect WHERE they would locate so that businesses are NOT going to pay Dominion more for gas if they can get it cheaper from Transco -at a different location.

    So.. to give an example… for the Facebook location in the White Oak Technology Park in Henrico… that technology park boasts that it has a large capacity of gas available . Who is providing that gas right now? I’m betting it’s not Dominion and that if Dominion ever sought to compete with other business parks – that Transaco will already be there with an existing pipeline and a lower price because the infrastructure already exists and has been amortized.

    Here’s the map of Transco’s existing pipeline and their Marcellus Shale feeder..


    1. Larry,

      As you have said before, it makes sense to locate new gas plants nearer to the source of gas and feed into the existing PJM transmission system. This is exactly what is happening. Many new gas-fired plants are under development near the gas fields in Pennsylvania and Ohio.

      They will add to an existing surplus of generation in PJM and make it unnecessary and uneconomical (unless the cost of the new plant is rate-based) to develop more new gas-fired plants. Dominion wants build new plants to add to the rate base to increase revenues. Nothing has been presented to the SCC so far that shows a new plant is needed anytime soon. The PJM forecast for the DOM Zone shows flat load growth for quite some time. In the 2017 IRP Dominion took issue with that view, but used arguments that don’t appear to hold water.

      The Transco Appalachian Connector project shown on your map has been abandoned. They have found a cheaper way of moving Marcellus gas to southbound markets by reversing flow in their main 4-pipeline corridor. This is sufficient to meet long-term supply requirements in Virginia, North and South Carolina and other southern states. Connections would only need to be made to the main Transco corridor, as was done for the connection to the Brunswick and Greensville plants, which transports gas over three times cheaper than does the ACP.

      1. Rowinguy1 Avatar

        TomH–I know next to nothing about the Mountain Valley, but the co-owners of the ACP, Duke and Progress, are not members of PJM, nor is any utility supplying South Carolina. Any capacity additions made in those states will not add to any capacity glut in PJM.

        1. Rowinguy – that is true, but if you look at the chart in my post below, you can see that all regions of the US are showing an excess of generating capacity. The southern states do not belong to any ISO such as PJM, but they are experiencing the same low load growth and and excess of generation. Even though they do not belong to a regional power pool, they still have access to surplus power from those regions and can share their excess capacity with PJM and others. Everything east of the Rockies is fairly well interconnected.

      2. LarrytheG Avatar

        Thanks Tom.. would you be able to provide an up-to-date map of how they plant to feed the Transco line?


        1. A map of the Transco pipeline is shown below:

          This map does not show all of the interconnections with other pipelines. There are many new pipelines coming on line in the Marcellus that connect to the main Transco corridor and will provide new capacity many times greater than the ACP. Many of them will bring Marcellus production directly to markets in the northeast freeing up capacity in the main corridor to bring gas south. Gas is currently traveling southbound via Transco all of the way to the Texas border.

          Dominion Transmission’s pipeline from Pennsylvania connects to Transco, as does Columbia Gas in northern Virginia. The MVP is expected to connect to Transco in southern Virginia (Pittsylvania County) in hopes of finding customers somewhere along the east coast.

          Virginia Natural Gas can connect to Transco, as it traverses Virginia, with a new pipeline that could travel along the Columbia Gas right-of-way that goes all of the way to Chesapeake or the Transco Virginia Southside right-of-way that can also get to Chesapeake over existing right-of-way. This would be many times cheaper than using the ACP.

          You can see the the lateral from Transco that goes through central North Carolina to Raleigh (the Cardinal Pipeline). A connection to Transco could be added along this right-of-way and use the last 90 miles of the ACP corridor to deliver as much or more gas in exactly the same locations as the ACP to North Carolina utilities for a fraction of the cost of the ACP.

  8. LarrytheG Avatar

    Here’s an interesting map showing Transco’s existing and planned pipelines and Dominions Atlantic Coast –

    Transco already serves the locations in Va and NC where Dominion is planning to put their pipeline.

    One could argue that Dominion would give Transco “competition” but the problem is that Transco has already recovered the costs of their existing pipeline and Dominion will have to incorporate the costs of their new pipeline in their prices.. it’s not likely they will offer a more competitive price and in fact, it likely that Transco will competitively set their prices low enough to hurt Dominion…

    and the fact that Transco also got approval.. is very likely very bad news for Dominion… because Transco will be able to expand coverage to more locations faster and cheaper than Dominion can.. and I’d not be surprised to see Dominion drop out.. their venture was only viable if they got approved and Transco got denied.


    1. As I said before, Virginia Natural Gas and the Duke subsidiaries could get as much or more natural gas far cheaper than the ACP by connecting to the Transco pipeline, mostly over existing rights-of-way. The utility holding companies would have to value the well-being of the utility customers more than the enrichment of their shareholders to do this, however.

      Or the federal regulator would actually have to begin to assess actual need for a new pipeline and its consequences on retail customers, before issuing a Certificate of Convenience and Necessity, allowing the use of eminent domain.

  9. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    My uninformed guess on this particular number of pipelines issue would grow from a few fundamental principles necessary to counter obvious risks.

    An electric utility’s highest and most critical priority must always be reliability. There must be zero toleration of a major public utility taking chances on assured reliability. The key here is constant hedging of bets. This requires back-ups and redundancies galore. Hence the historic need for multiple proven and technologically sound sources, kinds, and capacities of generation operating within a fully developed and mature infrastructure.

    This need is particularly great right now, this very moment, given the rapid increase in the historic unpredictability of local, national, and international energy markets as well as their technologies, politics, and regulation of those markets and of those industries generally.

    Predicting energy supply and demand today with any degree of certainty is just as impossible as its ever been. So every possible scenario, including the “worst’, must be taken into account today when planning and executing for tomorrow. Particularly so now, given rapidly changing technologies across the spectrum of energy productions, the unstable domestic politics increasingly injected into markets, and a highly unstable international scene that directly impacts energy markets, producers and consumers alike.

    For one of many examples:

    Imagine the US domestic energy market today if a Democrat had won the White House in 2016, whether it be Hillary Clinton or Bernie Sanders.

    Coal would dead. Nuclear power’s death spiral would be accelerated. Gas pipeline construction would be halted. Oil and refineries would be under threat too.

    And in sharp contrast to those old and reliable sources, solar and wind power generation would have been put on steroids. All of this driven by politics and ideology to fill the Gap that was being intentionally created and left by politicians who were working hard to intentionally dry up of the means of production and transport of carbon based fuels. So as to promote a land rush to build and deploy wind and solar power quickly and irrevocably.

    What would this election result have meant to a stable reliable gird?

    Here is what I think —

    Absent big technological breakthroughs, such a land rush would threaten to insert enormous risks into the reliability of the grid long and short term. This is a given by reason of the inherent variability of wind and solar that, when combined with 1/ the absence of storage, and 2/ the great uncertainty as to the ability of the industry to cobble together and gobble up the vast amounts of open acreage such natural power plants would demand, and 3/ their uncertain ability to build and cobble together all the transmission lines, inter-active switching between sources, and complex novel zoning and environmental issue in sufficient time, and 4/ to simultaneously meet the surging needs of huge new, novel customers like Facebook and Amazon. Such such a novel and giant task could overwhelm our existing grid system, especially one being rapidly deprived of its long term reliable tools like coal, and nuclear, and oil, and gas, all of them being replaced by untested and underdeveloped and highly variable and intermittent producers.

    Think this is far fetched. I don’t. Done wrong and too fast, this scenario could have easily happened. And thus could have created a nightmare of unreliability, instability, duplication, wastage, soaring costs, huge price spikes that cumulatively resulted in massive economic dislocation.

    Just like Obamacare but far worse. A debacle on massive overdrive, swinging a wrecking ball back and forth through the entire American economy.

    To dilute such a mess we would need immediately alternative sources of energy in vast amounts delivered quickly and efficiently by multiple sources around the nation. Gas then would be the only answers, lots of it, in many pipes, like vascular systems keeping a dying nation and its economy alive.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      TooManyTaxes has brought to our attention in a comment to the Jim’s Inside the Facebook Deal post an outstanding article on the failure of renewables (wind) in Minnnesota found at:


      This article goes into great depth and detail on issues highly relevant to the points I just made in my Oct 16 12:10 pm comment immediately above.

      This Minnesotal article also casts serious doubt on the claims by high tech data processing facility operators that they are operated by carbon free renewable electric power. Indeed it rejects that claim outright.

      1. It is hard to comment on the article that is referenced, because it contains so many factual errors.

        Wind energy from a high wind resource area such as the Great Plains is usually by far the cheapest source of energy (except for energy efficiency).

        It is variable though, often greatest at night. In the spring and fall when wind energy is high and demand is low, the lower cost of wind energy can disrupt the market for more expensive “must-run” nuclear units.

        Wind energy is subsidized with a production tax credit that is scheduled to expire soon, but the federal tax credits going to wind are far less than the subsidies that go to fossil fuel and nuclear.

        Any time wind energy displaces fossil fuel generation it reduces CO2 output. It is hard to tell from the data in the article why their CO2 emissions have not declined. Perhaps because their fossil fuel generators are continuing to produce energy for sale in other locations.

        Wind generators do require a pad to secure the tower. Typically, these are a small fraction of an acre. The acreage required for pads associated with a wind farm, would occupy only a small portion of the hundreds or thousands of acres required for the exclusion zone for a nuclear plant, for example.

        Wind generators are usually built by private investors and the output resold to utilities. If the projects were not cost-effective, they would not be built. They do not have the luxury of an old coal or nuclear plant that is still a drag on ratepayers, even though it is not paying for itself.

        As I said before, we need many types of generation. We should be careful about forming conclusions about one type or another based on incomplete or inaccurate information.

        Our regulators and independent system operators will sort out the best solutions, given the chance. Unfortunately, industry interference and state subsidies are skewing the energy marketplace and making it harder to reach rational decisions.

        1. TooManyTaxes Avatar

          Tom – are you suggesting that the data about the level of carbon emissions and price increases in Minnesota are wrong? I’m confused.

          1. TMT- No, I am only saying that that the data about carbon emissions and prices are not explained in the article. Wind energy is cheaper than conventional generation of all types. That has been well established for several years.

            The article says we have added more wind energy and our prices went up. That is correlation but not causation. Claiming causation flies in the face of data developed everywhere else. Something else is going on to increase prices but the article does not explore that. Wind energy is usually sold as a Power Purchase Agreement. It is a fixed price over several decades. It is either cheaper than other options or it is not. Buyers do not purchase it if it is more expensive, so it is not possible for wind to increase the price of electricity.

            The typical complaint against wind is that it is too cheap, sometimes selling for $0 in the Texas Panhandle during times of surplus generation. This gives owners of conventional units fits, because their units do not run as much, yielding lower revenues.

            The same goes for carbon emissions. Assume that demand is stable. If more zero carbon wind comes on line and displaces conventional generators, carbon emissions would be lower. The only reason carbon emissions would increase would be because more fossil-fired sources were added or they ran for longer periods. The article does not explore these possibilities.

    2. Reed,
      I respect your point of view. It is one that I think is shared by many.

      We have a more diverse energy system now than ever before. When I started in the utility business, nearly all of the power plants were fired by coal. There were some small hydro plants from early in the century. Nuclear was in a boom from the 1960s through the late 1970s. Gas-fired power plants didn’t come on in a big way until the early 80s with PURPA’s encouragement for independent producers. Gas supplies dwindled and prices rose. For a while, using gas to fire new power plants was prohibited.
      Although the Secretary of Energy tried to get an opinion from his staff to justify subsidies to coal and nuclear plants, the staff reported that we are in no danger from the direction the nation-wide energy system is moving, saying that we have an extremely reliable grid and new technologies will make it even more so.

      Every region of the country has a surplus of capacity, especially PJM.

      You say with a different party in the White House:
      “Coal would dead. Nuclear power’s death spiral would be accelerated. Gas pipeline construction would be halted. Oil and refineries would be under threat too.”

      Coal is already dead. Low natural gas prices and the rapid response and flexibility required for today’s grid saw to that. Only 5% of the curtailments during the Polar Vortex were due to shortages of natural gas or pipeline capacity. Most shortages were caused by frozen coal piles and gas-fired plant equipment, and poorly designed human systems.

      Nuclear is on life support, because its inflexible mode of operation is also in direct conflict with the need of a modern grid. Continued license extensions will become ever more expensive. Dominion is projecting that $4 billion or more will be required to extend the operation of the North Anna and Surrey plants for another 20 years. Recent attempts at building new nuclear units in the U.S. show how foolhardy that is from a cost and schedule viewpoint.

      Just because it does not makes sense to build new coal and nuclear units, does not mean that the existing units won’t have value for some time. People mistake the statement “don’t build new ones” to mean “don’t use the old ones” when it makes sense. We will continue to increase the diversity of our sources of energy in our modern grid.

      I am recommending that new gas pipeline construction be halted because we have already overshot the amount of pipeline capacity necessary to meet our needs (see the graph in the post above).

      You speak about the threat of a greater percentage of renewables on the system to supply customers like Facebook and Amazon, saying:

      ‘Such a novel and giant task could overwhelm our existing grid system, especially one being rapidly deprived of its long term reliable tools like coal, and nuclear, and oil, and gas, all of them being replaced by untested and underdeveloped and highly variable and intermittent producers.’

      The move to a modern grid with two-way flows of energy and information is necessary regardless of the amount of renewables added. Having such a grid will make it easier to incorporate the advantages of renewables, however. Dominion is planning to add only 240 MW of solar per year, far less than what has been added successfully in Georgia, for example.

      It is a typical misconception that more renewables means the disappearance of conventional generation. As more solar is added, it will displace intermediate and peaking units during daytime hours. No storage is required to provide reliability to the grid in this scenario.

      We have very accurate predictive tools to forecast the likely solar contribution in the day-ahead PJM auction. The conventional units that we already have will still be available, just used less often. They will continue to qualify for capacity payments from PJM. Whenever the output decreases from renewables, existing units will be dispatched to meet demand. Other resources within PJM can also be used to meet this need.
      It is easier for grid operators to cope with the predictable variations from renewables than it is for them to deal with unexpected outages of large coal, nuclear, or combined cycle units.

      There is no hysterical rush to add renewables in Virginia. If anything, the slow, the “utility owns it all” approach we are doing currently is slowing down the cost savings, reliability and resiliency advantages for customers that renewables provide.

  10. LarrytheG Avatar

    re: the “need”. If Dominion itself requested the pipeline SPECIFICALLY to provide reliable electricity – then it would have been a no-brainer and Dominin would have been entitled to the use of eminent domain – as well as regulation as a monopoly.

    But what they chose instead was a way to evade regulation as a monopoly by having a for-profit venture not subject to monopoly regulation to bill itself as if it were Dominion itself .. and while you can give points for creativity – it does not truly serve the best interest of ratepayers as any for-profit entity could build a gas plant – anywhere to serve the needs of electricity users in Virginia – and, in fact, they would – if it were not for the rules that gives Dominion exclusive rights to a “territory”.

    I would be fine if Dominion wanted to do the pipeline itself using eminent domain – but subjected to regulation by the SCC for the price of gas and electricity.

    What Dominion has done is to evade regulation and essentially allowed to pass on to ratepayers – gas that is priced higher than it would have been had it been regulated or provided by other suppliers.

    So what they seem to have accomplished is to maintain their monopoly control of their territory but slip out from underneath – SCC regulation for how much profit they are allowed.

  11. Rowinguy1 Avatar

    I didn’t read all the comments above real closely, but did anybody mention the incongruity of the “Ending the War on Coal” administration approving these massive gas projects? The 2 FERC Commissioners voting to approve were Powelson, a former Pennsylvania Commissioner, and Chatterjee, Mitch McConnell’s (R-KY) former chief of staff.

    Maybe they have plans to re-train miners to fit pipe…..

    1. Chatterjee did carry the water for McConnell in his attempt to revive coal in Kentucky. He is still looking to have FERC manipulate wholesale energy markets to include subsidies for coal and nuclear. Saying that plants that have a 90-day supply of fuel onsite should qualify for subsidies. Unfortunately, a lot of coal piles froze making the plants unable to operate, reducing reliability during the Polar Vortex.

      From a total greenhouse gas perspective, natural gas plants are as bad as coal plants.

      Powelson is from Pennsylvania, the fracking capital of the U.S. Both ignored any issues related to need or the higher costs to ratepayers related to the approval of the ACP and MVP. They relied solely on the existence of contracts that pipeline developers had signed with their own subsidiaries.

      The two new FERC Commissioners did not evaluate whether these pipelines are actually needed. They ignored the billions in higher energy costs that will be added to the bills of families and businesses due to the new pipelines.

      Most people assume that a thorough review is really taking place. They just accept the stories in the press and probably won’t ever know the truth about why these projects were approved, thinking that they really will lower energy costs and provide more jobs (they won’t).

      1. Rowinguy1 Avatar

        Yeah, Powelson is a big proponent of fracking, no doubt, but Pennsy had lots of coal too. I think there is a case for one of these pipes, but I can’t see any case for both. Those nukes in South Carolina are not going to get built and coal is, despite the current administration’s dreams, going away. Somebody has to get gas out to the coastline in the southern mid-Atlantic. Maybe I should say, somebody is going to be allowed to get gas out to the southern mid-Atlantic coast. I know you think no building is needed, but the train is out of the station, seems to me, Tom.

        1. Gas can get to the coast in SC or perhaps in Georgia. Elba Island has been mentioned as a possible LNG export location. Dominion’s gas pipeline system throughout South Carolina connects to the Transco corridor which can provide an abundant supply of gas.

          Using the ACP instead would add billions in extra cost, just as it does in Virginia and North Carolina.

          I would agree that the train is certainly building up a head of steam. The tracks have been laid from the very beginning with the “we’ve never met a pipeline we didn’t like” approach by FERC.

          There is at least two months before the water quality certifications are issued that would allow construction to commence.

          I have been involved in 401 permits in New York for utility projects. I do know that the new pipelines proposed for Virginia could not meet the full legal requirements for such a permit. It is only through the willingness of Virginia politicians, and the regulators they control, to cut corners in the permitting process that construction can be allowed to proceed.

          There is little doubt that this began with a steeply slanted playing field. I have been involved in rigorous permitting processes at both the state and federal level and have found that necessary projects can withstand stringent review with the cooperation and compliance with the law by utilities.

          All of the regulatory reviews began and ended with a thorough evaluation of the need for the project and an assessment of the effects on ratepayers. I began speaking up about these pipeline projects when it became clear that no such review was being done by any regulator at the state or federal level. In all of the projects in which I was involved in two states, the interests of the applicant were balanced with the interests of the citizens. That is not happening with these pipeline projects.

          It is especially galling to see that the public narrative about these projects is opposite of what will occur and no one seems to care.

          I’m just a private citizen who is willing to put my thumb in the dike until others notice that there is a leak. I want our energy companies to be successful, but not by building projects that serve only themselves.

  12. LarrytheG Avatar

    so here’s a question for Tom… others perhaps

    how did we deal with peak demand over baseload demand before there was gas?

    did we just run baseload at the highest demand level anticipated and when demand decreased.. just continue burning coal at the high demand level?

    1. Rowinguy1 Avatar

      We’ve had gas for quite a long time, but we also had units called combustion turbines that ran on diesel fuel or fuel oil, too.

    2. Yes, Rowinguy has it right. Combustion turbines using gas, oil, or diesel were used as peaking units. As were internal combustion engines using diesel as are still used on many islands today.

      Gas started coming on in the 1950s. New welding techniques pioneered during the war allowed for the construction of larger, reliable steel pipe for gas pipelines.

  13. Peter Galuszka Avatar
    Peter Galuszka

    First, it is no surprise whatsoever that FERC approved these pipelines. It approves most of what it gets sent to it. The real questions, as TomH and Larrythe G raise, are the true markets for the gas. As anyone with a passing knowledge of fossil fuel energy knows, pricing is always fickle. And, those complaints about wind and solar being unreliable are growing rather stale, given advances in lithium and other batteries. Yes, Transco can handle regional supply. Must be some LNG export play although Dominion denies it. But then, they said the only way to handle coal ash was in unlined pits.

    On the RTD and its Dominion series, I thought today’s final piece was well done. Not sure I understood the first one which tried to be a fly on the boardroom wall view. I could not figure out what the story was about — that in the 1980s and 1990s, America’s traditional holding companies were being snatched up by alphabet soup holding companies and Tom Capps maneuvered so VEPCO would do the same but remain in Virginia where it could dole out zillions on political payments on a state basis? Can someone please help me with this? I’ve been covering Vepco and Dominion since the early 1970s, but I was at a loss on this one.

  14. LarrytheG Avatar

    So, before gas – oil was used for both peaker and baseload… and, in fact, still is where nukes are not available and oil is cheaper to transport/use than gas or coal because of it’s energy density.

    fuel energy density [megajoules per liter (MJ/L)]

    Liquefied natural gas (LNG) 22
    Diesel 32-40
    Coal, anthracite 34-43
    Coal, bituminous 26-49

    The most cost effective fuel for electricity is the cost of extraction plus the cost of transport and oil wins where there are no pipelines – like islands and remote areas on continents where the cost of a long pipeline would drive the cost higher than if oil via conventional transport was used which is why you see oil used in many Northern Canada towns… They typically have diesel generators.. with the oil barged or trucked in..

    what does that have to do with pipelines in Virginia?

    Well, I think, a lot, because a 5 billion dollar pipeline is going to have to move a LOT of gas for a LONG time to be able to pay back the cost of the pipeline.

    One presumes that the backers of the pipeline has done that analysis and believe there is enough gas for a long enough time that the pipeline will pay for itself.

    But if you believe others – we already have enough capacity in existing pipelines to serve power plants so the economics don’t work unless the gas is also going to be sold for other uses… to attract industry that relies on cheap gas … and to heat homes… and businesses, etc.

    So.. the ACP is not really about electricity – as Tom and others have been saying all along… what it really is – is a play by Dominion to expand it’s business beyond electricity and into gas – and in competition with other existing providers who also have their own pipeline proposal both of them seem predicated not on current or even future demand but rather the availability of more natural gas to spur economic development.

    Unless of course – there is a belief that cars will become electric… and the “fueling” will convert from gasoline to electricity and that electricity essentially generated by natural gas fired power plants – which does not seem to be a longer-term sustainable idea if natural gas supplies are finite and will deplete at some point.. then what would we do?

    I think the only sustainable path is to incorporate solar – and to use natural gas sparingly ..when we need to when solar is not available.

    That will extend the lifespan of natural gas much farther into the future than if we siphon it out of the ground as fast as we can – then when it runs out – we don’t have an alternative path.

    So basically – the two pipelines are pure capitalistic ventures – good for the companies but perhaps not so good for everyone else in the longer run.

    1. Traditionally, pipelines were built when a production zone was cheaper than others and a market needed more supply.

      Within a year, gas prices at the Dominion South hub will equalize with other prices. Even with today’s price advantage the cost of transporting it using the ACP results in more expensive delivered gas than can be obtained in this region using existing pipelines. Therefore, no business case exists for the ACP.

      However, the ACP sells only the transportation service, not the gas itself. If the cost of long-term firm transportation can be passed through to ratepayers, the ACP makes billions regardless of the price of gas or much of it is actually transported by the pipeline. The ratepayers will pay extra for decades to insure the pipeline’s profitability.

      Dominion will use the tax protection and cash flow enhancing abilities of its Master Limited Partnerships to return its full equity investment in the ACP within 3-4 years according to a message given by CEO Tom Farrell to financial analysts.

  15. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    You’re forgetting the tyrant that rules the universe – Murphy’s Law. Count on it. It always happens. Sometimes positive. Sometimes horrible negative. Yet you can never predict it. Those who claim to are utter fools. But you must always plan for it, or build it (the unknown) into your plans. That means building all conceivable options to counter, dilute or take advantage of, the unknown triggered by the ubiquitous Murphy’s Law .

    Take fracking for example. Where would we be today without it? Totally lost. Fuel scarce and sky high. Russia rules. Yet, now we complain about it.

    1. Again, I respectfully disagree. You are right that energy systems must be designed to withstand a variety of unforeseen circumstances. We were always thinking at least 15 years ahead in the utility business. The department that I led adopted decision-making techniques pioneered by the Defense Department to make better decisions under conditions of high uncertainty.

      The most stable and adaptable systems are those with high diversity. We are now trading an over-reliance on coal for an over-reliance on natural gas. We know that shale gas wells lose about 85% of their production within 3-5 years. Although fossil fuel prices are always unpredictable, the trend is clear. The price is going up.

      Where would we be without fracking? Probably with a more sensible and lower cost energy system. We would have turned our attention to better options. Energy efficiency costs 2-3 cents per kWh. It is always available, lasts for decades and is not subject to changes in weather, fuel price increases or foreign adventures, and saves all ratepayers money. It just takes money away from utilities in our current system, but that can be remedied.

      Playing geopolitics with natural gas is a fools errand. Russia has the largest natural gas reserves of any nation. They can serve Europe via pipelines that are far cheaper and less vulnerable than LNG exports. Exports will only serve to accelerate domestic gas price increases.

      We currently have a reasonably priced domestic reserve of natural gas. We should carefully husband it, rather than rush off to export it or burn too much of it in power plants for the short-term profit of a few companies and the long-term detriment of our citizenry.

      We are not making thoughtful decisions about our energy system. Embedded interests are making a last dash to extract as much profit as possible from outmoded energy choices before people realize that there are far better options.

  16. LarrytheG Avatar

    Well, Murphy’s Law or not – planning and analysis are what drives decisions to invest money – and there are real penalties to building “too much”.

    And FERC basically bailed out of their responsibility in determining what is “necessary” when they approved both pipelines to include the cumulative impacts on the environment, on private property owners, as well as twice as much pipeline capacity that is needed.

    And if this was really about electricity – you don’t need pipelines this long. The ACP is primarily speculative to get new/future gas customers who normally would be served by Columbia and Transco.

    If Transco goes forward – it’s going to undermine the economics of the ACP – because they’re both pursuing the same market and that is going to go back to how much financial backing each proposal has.. and Transco is a subsidiary of Williams.. a fairly big company in the pipeline business.

    Once the permits are obtained.. it appears that Williams/Transco is well positioned to proceed quickly and that’s their business and they’re adding to an existing network.. I’d have to put money on Williams/Transco and see Dominion as the underdog.

    If Williams/Transco goes forward -I’d bet that’s going to be bad news for Dominion. Williams is the big dog in pipelines.. that’s their core business.

    1. Larry,

      Transco is already well positioned and moving forward. They can transport gas to Brunswick and Greensville three times cheaper than can the ACP. They have enough capacity to supply Hampton Roads and North Carolina at far lower costs than using the ACP.

      The lone combined cycle plant that Dominion says they need in the next 15 years has not been approved by the SCC and a site for it has not been selected. Transco or Columbia Gas could supply any new plant far cheaper than the ACP.

      However, Dominion and its partners want to pay themselves more rather than pay others less for pipeline transportation.

      If the pass-through of the 20-year Firm Transportation Agreements are approved by the state regulators, it will not make any difference how much cheaper existing pipelines are. The ratepayers will be on the hook to pay billions more than necessary.

      Now is the time to make this known. Not two years from now after an unnecessary pipeline is built.

  17. Peter Galuszka Avatar
    Peter Galuszka

    Look gang. Back in the day, when I was an intern at The Virginian-Pilot in 1973, Vepco got a lot of energy by importing oil. That was just before the Yom Kippur War sent oil prices skyrocketing.

    So, Vepco converted some oil units to coal.

    Then, in 1979, it was the Iranian crisis. Oil prices shot up. I was at the Pilot . I will never forget flying out of Norfolk one evening and looking down at about 100 coal colliers waiting at anchor for dock space to load coal. Most were from Europe.

    Now, we have coal plants being shut because fracking has made natural gas cheap (or, at least, did for a while).

    The moral. Times change. Energy demand changes. What happens to the ACP if gas prices go to $12 mm/BTU or much more? Simple. People will switch to something else. And there the lonely pipeline will be. Especially since many responsible and knowledgeable outfits say there is plenty of pipeline capacity already.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Or Peter, what happens if solar falls flat on its face like it has for decades (still at 2% of market share after all these years) despite all the promises and subsidies, or where solar and wind are shoved artificially onto the market, only to push usage of coal sky high to compensate for the failures of renewables like has happened overseas to compensate for the resultant wasteful, irregular sky high energy costs, and or if people revolt here against covering America’s lands with endless rows of humming glass and metal panels and towers of swirling metal blades.

      What then, after you’ve killed any chance of a flexible grid able to sustain affordable prices, and reliable power?

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Peter, sometimes we forget the hard facts of history;

      For example:

      In the year 2000, I did a study on energy. It was done in collaboration with a well known professional environmentalist. The task was to try and find new and innovative ways that segments of the Energy producers industry might work cooperatively with segments of the Environmental movement to jointly promote non carbon energy production efforts for the benefit all concerned.

      We produced a lengthy and heavily researched report that was well received by the client. If you would have told me back then, in the year 2000, that solar would have gained only a 2% share of the US market, I would have been dumbfounded.

      Absolutely Dumbfounded.

      Even back then the effort had been going on for decades. This is not a track record to bet our energy future on. I say this wishing that we could convert to all solar. But that does not change facts, and history, and the high risks involved in what so many are so sure of.

      1. Reed,

        We often confuse what we have in our energy system for what we are building. Over 60% of new generating capacity built in the U.S. in 2016 was either solar or wind. New gas-fired plants were about 27% of new additions.

        From an energy contribution standpoint, in recent months solar and wind have provided as much much as 10% of the total energy generated in the U.S. This will only continue to rise because both of these technologies are cheaper than the alternatives.

        Solar being planned today, for operation after 2020, is unsubsidized (except for the 10% credit that remains for utilities). The much higher subsidies for coal, gas and nuclear will continue or perhaps increase.

        A pilot project performed by the California grid operator showed that a 300 MW solar project could sustain system reliability as effectively and more efficiently than a natural gas plant. This surprised the grid operator, who is very concerned about grid reliability. The solar project’s response was “was much better, 24 points to 30 points better, than the fastest they now have in their ancillary services fleet,” said one of the project’s participants.

        As a utility guy, I am also concerned about reliability, but there are many tools available today that weren’t available 15 years ago. We will rely on a mix of generating sources for decades to come. To me the real policy issue is we go from here.

        An over-reliance on fossil fuels sets us clearly on a path of increasing costs and continued environmental degradation. What we have is useful, but we have enough.

        For the first time, the cheapest methods of generating electricity are also the cleanest.

        I agree with you about avoiding covering the countryside with big solar farms. The best way to increase grid reliability and resiliency is by creating most of our new generating additions using distributed resources rather than old-style central station plants.

        ConEd is avoiding a billion dollar investment in a new substation by partnering with third-parties to develop an enhanced grid using distributed resources.

        New York’s regulations are ahead of ours. Not building something reduces our utilities’ revenues, which is why we need to reset their role and pay them differently so they can help us create a modern energy system in Virginia.

        1. LarrytheG Avatar

          Like most emerging technologies – it takes longer for them to become practical and actually implemented and used than we’d hope.

          And I can, in addition, point to things like CSOs and storm water runoff to demonstrate that the technologies that would yield cleaner rivers is not yet mature.

          Ditto with mercury emissions from coal power plants – and yet unresolved ways of handling nuclear waste from Nuclear Power Plants.

          Ditto with those “ugly” high voltage power lines that mean old Dominion wants to string across the NoVa skyline…

          Solar still has a few hurdles also but the half’-glass empty mindset against solar is simply not reasonable.

          Solar is going to become a major part of our energy infrastructure.. it won’t happen overnight and it may well end up with “scenic impacts like we see with power lines or water towers or cell towers..

          GAWD knows.. we’d get rid of any technology that we can “see” …because that surely makes it “inappropriate”..


          I highly recommend a trip down to the Blue Plains Treatment plant to take a look of what happens to your own poop.. before you complain about solar and other “intrusive” stuff.

  18. LarrytheG Avatar

    If gas gets scarce and/or expensive, we switch to something else?

    okay I’ll bite.. what?

  19. […] FERC Approves Atlantic Coast, Mountain Valley Pipelines, Bacon’s Rebellion, 10/15/17. […]

  20. […] Virginia’s gubernatorial candidates in 2017, Virginia General Assembly members, and others]. FERC Approves Atlantic Coast, Mountain Valley Pipelines, Bacon’s Rebellion, 10/15/17. Nelson [County, Va.] residents react to federal approval of […]

  21. Chester Energy and Policy Avatar
    Chester Energy and Policy

    Great write-up and thorough write-up, thanks for the detailed analysis!
    If anyone else needs a primer on what FERC is or its history (as I did when I firs started looking into these type of regulatory issues), I put together a background post on the agency. Check it out here:

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