Has Momentum Shifted in Pipeline Battles?

Anti-pipeline demonstrators cross Richmond’s Main Street near Department of Environmental Quality offices at noon on August 21. SDH Photo.

The drums and whistles overpowered traffic noise at Eighth and Main this morning as a group of protesters opposing Virginia’s two natural gas pipeline projects moved away from Department of Environmental Quality headquarters, perhaps coming from a State Water Control Board hearing down the street.

With both the Atlantic Coast (ACP) and Mountain Valley (MVP) projects entangled in legal challenges that have suspended some or all work, and with the shorter project releasing part of its workforce and pushing back its completion date, giving opponents opportunities to write articles hinting at a momentum shift.  It is hard from the outside to judge and certainly nobody expected this to go easily, but the setbacks have come quickly.

One concern I haven’t seen addressed:   With work stalled in several places, are there large swaths of cleared land sitting untouched and waiting for the next storm to cause more erosion?   Once the work is started, the best practice I would think is to quickly place and test the new line then get it back underground, so ground cover can be planted and start to grow.

The EnergySure Coalition public relations effort supporting the Dominion Energy-backed ACP is suddenly active again, with recent emails and a mailing focused on the needed air pollution permit for the ACP’s Buckingham County compressor station, which may be the next flashpoint.  The EnergySure mailer includes conveniently pre-printed post cards addressed to Governor Ralph Northam and to DEQ asking them to support the permit.

There is also an appeal for recipients to file further written comments and appear at a September 11 public hearing in the county.  A recent Virginia Mercury story focused on the compressor station and its proximity to a majority African-American community, which has added a different layer to the debate.

Whether or not an industrial facility meets air emissions quality standards is, to me anyway, an engineering question, answerable yes or no.  Any doubt about the developer’s claim that it is proposing a facility that will produce minimal air emissions should be easy to resolve without politics or emotion.  But this is now the battle line and the supporters are showing some sweat on their foreheads.

The EnergySure effort is now directly lobbying a state agency over a specific permit decision.  The cost of the television, social media and direct mail campaigns is being paid by someone and eventually needs to be reported somewhere.  But here is another example of Virginia’s devil-take-the-hindmost approach to transparency and disclosure.  Just try to find and follow the dollars (and frankly the same also goes for the opponents.)

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16 responses to “Has Momentum Shifted in Pipeline Battles?

  1. Note: Made a couple of amendments to the initial posting. It’s clear the protests were in the area because of a State Water Control Board hearing today, being conducted inside the General Assembly building, and the story about “momentum” I linked to was not on an energy industry-related website.

  2. I think the challenge to eminent domain is the big threat. If the 4th circuit finds that this is a for-profit venture and not a public necessity – Dom will be in trouble.

    Most of the supporters of the pipeline are saying it is for economic development – not electricity that we’ll be running out of without it.

  3. I have been trying to speak with Chambers of Commerce and industry and labor leaders to understand how they think these pipelines will increase economic development in the state.

    Just to keep it short – Dominion will ask its ratepayers to pay for the $4 billion 20-year firm transportation contract that its subsidiary signed with the ACP. With all of the new gas-fired plants canceled and Dominion’s admission that it has no plans to build more – there is no benefit to Dominion’s customers that will offset having $4 billion dollars taken from them. This will simply increase their energy costs.

    Nearly 80% of the pipeline was supposed to be used for new power plants. Both of Dominion’s plants have been canceled and four of six originally proposed plants in North Carolina have been canceled. The primary source of new gas demand in the U.S. is for exports. Both the MVP and the ACP are likely to seek this market to utilize their pipelines. Only 0.5% of MVP’s capacity is going to an end-user of gas.

    A consultant to the DOE said exports will increase domestic gas prices. Australia’s 10-year history showed that exports increased domestic gas prices by at least 300%, factories closed, utility bills skyrocketed.

    Why would we want that experience here in Virginia? Putting the environmental arguments aside – these projects are a very bad deal for Virginia.

  4. It sure looks like what TomH is saying is closer to the truth that what Dom is claiming… and if true – the opponents are going to hammer home the idea that such economic development is not a public necessity but instead a speculative for-profit venture – trying to use eminent domain when it should not. I don’t know if Dom could still go forward without eminent domain but I suspect investors would know that ROI was imperiled.

    For most lay folks, it’s hard to know exactly the situation because we know that Dominion colors things in their own interests…. and really has no hard requirement to generate a real and factual document and so it becomes their testosterone-laden /breast-beating view of their future rather than any kind of a useful planning document that can be relied upon.

    For instance, Dom did get rid of their plans to burn gas for baseload -but they now say they will need a bunch of peakers to complement more and more renewables. That does not seem unreasonable. But how much gas will it actually need ? Can existing pipelines serve that capacity? I’ve heard some
    say it’s more than enough.

    Second – depending on who one listens to – electric cars ARE coming… and it’s not clear how much demand. Gasoline packs more energy into less space that most other fuels – witness what happens when a car is converted to natural gas -it needs a large tank and it still has a significantly reduce range.

    so if you’re going to power that car with electricity generated from renewables AND natural gas electricity -how much will be needed? Do I believe Dom? Nope. Do I believe the advocates of renewables? eh.. a lot more so than Dom but still.. it’s a bit of a crap shoot.

    I’d want a more objective 3rd party with no dog in the hunt to weigh in with numbers also. Perhaps the State will do that.

    Finally, we have storage technology and I am a bit of a skeptic with regard to the timeline hopes of the advocates… It’s going to happen, yes – but when is still a question and we’ll know the reality when we actually see houses that were using diesel-generated electricity – switch to solar/storage systems.

    When that day comes – big time utilities like Dom will already know and be reacting… perhaps they are right now… one big breakthrough in storage technology – and the future is literally NOW!

    But here is what I’d like to see. Instead of critics picking about Doms IRP – why don’t we write a competing IRP and let Dom try to refute it in the public realm? And if Dom won’t then find a 3rd party utility entity that will.

    Then we’ll have a much better idea of where the truth and future direction is and put a hitch in the giddyup of Doms current IRP.

    • The SCC is supposed to be the objective arbiter, but they are very wary of the GA’s control over them. Thus they are cautious with their rulings.

      Electric vehicles are coming but so is transportation as a service (at least for urban areas). So fewer EVs will be needed to serve more people. It won’t be a one to one exchange. Power density of batteries is increasing so it is hard to estimate what the electricity demand from EVs will be in 2025.

      The peaking units run just 5-10% of the time and will be located in the load centers not along the pipeline corridor. They are planned for the mid 2020s and could well be replaced by lower cost batteries that provide more functions.

      • I think of Electric Vehicles as a government mandate like E10 ethanol, currently EV already mandated by Calfornia which forces the auto industry to devote much of its rescouces to meet California legislative demands. It will be interesting to see what happens when the Federal EV $7500 rebate phases out, but I fully expect the Dems to extend that rebate indefinitely, assuming they get a chance to do so by about November.

        • As I understand it, the federal rebate is by manufacturer. For example, Tesla has sold nearly 100,000 electric vehicles. At that point the rebate will decline then go to zero. When new manufacturers of EVs enter the American market such as BMW, Jaguar, etc. They can take advantage of the full rebate.

          The California regulation operates differently. I believe that they require a small percentage of each major manufacturer’s sales in CA to be from “clean” vehicles.

    • RE: the reasonableness of building gas peakers in the 20’s …

      NREL says we can meet peak energy demand all summer long with our Rooftop solar resources, which can produce 25% of our electricity without the need for new wires. And predictions say “within a few years ‘peaker’ plants and storage will be competing head to head and by the mid 2020’s storage always wins.”

      According to GTM Research, it is peakers that are going to fall first in the US. With the rate of decline in battery prices, they will be competing directly with peakers in a few years and beating them consistently by the mid-2020s. Of the 20 GW of peakers slated for between now and 2030, GTM estimates, 10 GW or more could get beat out by batteries. “I can’t see a reason why we should ever build a gas peaker again in the US after, say, 2025,” said Shayle Kann, then a senior adviser at GTM.

  5. Tom, one of the attractive features of the ACP was the spur line to serve Hampton Roads. Just how much future demand there will be for industrial or residential gas use in that part of Virginia is debatable, but nobody expects demand to go down and everybody has been assuming the basic rules of supply and demand will work and a strong supply will keep prices down. The MVP also was marketed as a source of gas for industrial use along its route, and I think that is still the plan. Access to gas like broadband is an essential economic development magnet.

    What nobody understood at the time that list of supporters was developed is the problem you have highlighted – the sweetheart pricing for the transportation cost side of the business. There is still reason to hope the SCC will disallow any charge to Virginia ratepayers that greatly exceeds what alternative suppliers would charge. There is still time to spread the word on that outrage.

    Dominion remains trusted by many, many people. It has a good reputation for service overall, and takes good care (on the service side) of its big customers. The creeping price rise is not noticed by most (the frog in the pot). When it approached all those companies with its pitch about the need for supply, the outcome of price stability, etc – they believed it without challenge. As for the Chambers of Commerce, that’s easy – Dominion belongs to all of them, gives big bucks and usually has a regional exec on those boards. Duh. When I was at the State Chamber Dominion was the largest contributor by a country mile.

    Larry – how many millions do you have to commit to put together that counter-IRP, which is entirely built with internal proprietary company data? Picking at the one they do is the only alternative.

    • Steve,
      You are exactly right about the Hampton Roads region. Their issue needs to be addressed with or without the ACP.

      You say “nobody expects demand to go down” but that is probably the secret to an economic turnaround in southeast Virginia. The fear of gas shortages has been overblown by Dominion. During the severe cold in January 2018, three industrial customers voluntarily curtailed their power use. They purchase gas at a cheaper rate that requires them to cut back when requested by Virginia Natural Gas. As interruptible customers, that is what they did. This is an indication of constraints in the gas system, but it can also be because the utility chose to sell more gas to other customers for a higher profit. I do not know the details.

      If Hampton Roads focused on an energy efficiency and new technology program it could provide a long-term low cost of occupancy for existing businesses, new businesses, and especially for federal installations. This would make the region a very attractive location for businesses by providing a fairly fixed cost of occupancy over many years. It would also create thousands of jobs that would last for decades not just 8-10 months as with the pipelines.

      The cost of gas will be going up because of the nature of the shale gas wells. Technology can always improve in ways that we don’t know about yet, but the one to two mile long laterals that are being used now are cannibalizing gas from neighboring wells and efficiency is declining. The next wells drilled are less productive than previous wells. The shale gas plays are much different than the conventional gas wells that supplied us for 60 years. Exports speed up the decline and increase prices faster.

      Both the MVP and ACP switched their tune about serving customers along the pipeline route when they found out that making that offer gained them more support. The problem is, actually doing it isn’t practical. Connecting to a 42” pipeline for local use is very expensive. A rough estimate for making the tap, installing the pressure reduction facilities and other piping, just to allow a connection by the Local Distribution Company might cost $5-$7million. It is not economic to serve an industrial park or a commercial or residential development at this price (the LDC still has to install its pipe and make a profit). It’s a clever marketing move but not likely a real benefit for development. The extension of the MVP outside of Roanoke could probably be done more cheaply from the existing East Tennessee pipeline.

      I am not sure what you mean by “sweetheart pricing for the transportation cost”. The ACP is anything but a sweetheart deal. Its transportation fee is $1.88 per thousand cubic feet (mcf). The Transco connection is serving the Brunswick and Greensville plants with a transportation fee of $.53 mcf. The published fee for the Columbia Gas expansion is $.26. The MVP will charge $.97 just to connect to Transco. If the SCC limited the recovery from Dominion and VNG ratepayers to “the lowest of cost or market” the utilities that signed the contract with the ACP would be out billions of dollars. The utility holding companies have put their subsidiaries in harm’s way with the ACP. Maybe they are playing a game of “chicken” with the regulators, thinking they wouldn’t vote against the pass-through, but there is a law in the way.

      From the service and cost control perspective, VEPCO is an effective utility. Everything I speak out about is to preserve their financial vitality and give them a chance to serve us well and prosper in the 21st century. It is the short-term profit activities with the pipeline and the new energy bill that the parent company is pursuing that I take issue with.

    • RE: the issue of serving the Hampton Roads area…

      Virginia’s offshore wind has the potential to generate 3+ times Dominion’s 2017 net energy load (3). Those offshore leases Dominion won in 2013 can provide the electricity equivalent of 2.5 nuclear plants, with more future leases available. A two windmill demonstration project over the next 15 years is an inadequate plan.

      In MA the old whaling port of New Bedford, is undergoing a more than $200 million commercial makeover to prepare for the offshore wind industry, including the construction of a marine commerce terminal financed by the state. The terminal, the first of its kind in the U.S., supports the construction and deployment of offshore wind projects. Recent bids for Vineyard Wind have come in at $74/MWh, a price that demonstrates the financial value of those onshore support facilities. Block Island’s price, built without onshore support facilities was $244 per megawatt-hour.

  6. Apparently rapid growth of renewables is significantly slowing down natural gas growth. Globally natural gas use is growing steadily (approx. +2% per annum) but slowly, and at the current modest growth pace, it will not be until 2040 that natural gas catches up to coal use as % of global energy demand. Somewhat similar trend in the USA, as evidenced by the slow down in GE’s power plant businesses.

    • Gas has recently passed coal in the U.S. as the fuel used to generate the most electricity. But the large surplus in generating capacity and the increase in gas prices has slowed the addition of new gas-fired plants considerably.

      The information about gas-fired plants having the same overall greenhouse gas effects as coal plants has also slowed the pace of adding new gas plants in states that care about that issue.

      Rising gas prices will have a considerable effect on the operation of gas-fired plants. Older, less efficient gas-fired units might run less often. With such a high percentage of gas-fired units now, new combined cycle units will probably continue to set the market price for much of the day in wholesale energy markets. But that will increase wholesale energy prices. That’s good for gas producers and Wall Street, but not so good for customers.

      A national or world-wide economic decline could keep prices low, but then we would have other problems to be concerned with.

  7. Here is something I am working on about the gas questions …

    The “shale revolution” was underway, and the enthusiasm for natural gas was based on 3 main premises …
    • Apparently large-scale gas reserves were being mined in the nearby shale rock of West Virginia, PA and Ohio using a horizontal drilling technique called fracking.
    • Burning natural gas doesn’t emit many of the air pollutants emitted by burning coal.
    • Burning natural gas creates CO2 emissions at a rate 50% lower than burning coal.

    A decade later, the shale revolution is now called the ‘shale bubble.’ New information has shown that …
    • the fracking industry has been a money losing proposition for the past decade.
    • maximum production of shale wells is reached in three years, questioning the size of gas reserves (1)
    • methane’s contribution to climate change while the gas is in our atmosphere is 85 times larger than CO2 (2)

    Rising gas production levels were based on drilling more and more wells … financed with borrowed money(3). The Wall Street Journal reported, according to investment advisors Evercore ISI, “energy companies [since 2007] have spent $280 billion more than they generated from operations on shale investments. Also, Bernstein Research has expressed doubts about the high levels of increasing debt, and the Bank of America analysts doubt that worldwide demand will hold up. The gas market reality is not as it is hyped to investors.

    Nor does it look like a good long-term bet for a couple of new pipelines to join all the others out of WVA.

  8. Gov. Ralph Northam discussed this topic today in WTOP Ask The Gov. I did not get the impression he was trying to stop the pipelines but there is apparently a need to correct some bad contruction practices causing some serious erosion/runoff damages. It was not clear to me if these damages were in Va. or some in WVa or both.

    Something about the enviros are pressuring to get anti-nat-gas folks on the key commitees, Northam said he was not going to do that. He will commit to DEQ calling for stricts contruction standards.

  9. The worst runoff has occurred in Virginia where 8-10″ of mud was deposited on a road down slope from excessive runoff. But several events have occurred along the pipeline corridor in WV and VA.

    The problem is not just bad construction practices. The MVP contractor is notorious for bad erosion and sedimentation control practices on other pipelines.

    The problem is that even the best practices are only about 42% effective (as admitted by industry experts) in the steep terrain being traversed by the pipelines.

    Both the pipeline developers and DEQ are leaning on the much more lenient standards offered by the Corps of Engineers Nationwide Permit 12. That standard sets maximum rainfall limits for erosion and sedimentation control. Basically, the position of the pipeline and DEQ is that “it rained more than it should have (our design storm) so we are not responsible.”

    What many people have been trying to tell the DEQ, the State Water Board and the Governor, is that state and federal law require that water quality standards must be met regardless of the circumstances. Virginia law says that construction projects cannot be allowed to degrade the waters of the State. That has occurred several times already. But the DEQ has turned a blind eye to it, and apparently now our citizen representatives on the State Water Control Board are willing to do the same.

    They just told the DEQ to do a better job enforcing the shortcuts provided by the Nationwide 12 permit.

    It happens too often these days that corporate and government officials are too eager to disregard a law if it is inconvenient to them.

    As citizens, we are becoming numb to the abuse and I believe that is dangerous. It doesn’t matter where you fall on the political spectrum.

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