In Hampton Roads, Life Is Not a Gas

natural_gasHampton Roads and other Tidewater communities see proposed natural gas pipelines in Virginia as a boon to economic James A. Bacon

While debate rages in western Virginia over the economic impact of natural gas pipelines on property values and local economies, we hardly hear a peep from the low country areas of Virginia and North Carolina that would benefit from an expanded supply of gas.

Elected officials claim, and economic developers confirm, that inadequate supplies of gas to Hampton Roads and outlying communities prevent them from competing for energy-intensive industrial customers, crimping efforts to grow their economies and create jobs.

“I’ve heard from cities and developers and builders. … We’ve got to get more capacity here,” says Sen. Bill DeSteph, R-Virginia Beach, chair of the Hampton Roads Caucus, who persuaded the region’s 33 state senators and delegates to sign a March letter supporting the proposed Atlantic Coast Pipeline (ACP).

Voices from Hampton Roads and places like Brunswick and Greensville counties, where new gas-fired power plants are being built, have been quiet during the pipeline controversy. The impact of pipeline construction is less tangible and immediate than it is for, say, landowners in the path of the ACP and the proposed Mountain Valley Pipeline. And the benefits are more theoretical — fresh gas supplies would put their communities in the running for manufacturing projects they can’t compete for now, but it’s not as if there’s a big job-creating project waiting in the wings. Natural gas proponents aren’t barraging the media with press releases, filing lawsuits or marching on the state capitol.

Still, economic developers and political leaders have quietly lined up behind pipeline development, especially the Atlantic Coast Pipeline. For DeSteph, the aha! moment occurred about two-and-a-half years ago when demand from a severe cold snap swamped the local gas distributor, Virginia National Gas. The utility had to tell some of its largest customers to curtail their use of the fuel, as called for under contract. “I was shocked that we shut down the gas supply,” says DeSteph. “In my opinion that’s something we should never do.”

While big industrial customers usually can manage such outages, supply curtailments send a signal that gas supplies are limited. No energy-intensive manufacturer would want to locate or expand in Hampton Roads when they could locate worry-free in other communities. Noting that the Norfolk Naval Station was one of the entities that curtailed its gas use, DeSteph even fears that the capped gas supply could undermine the region’s status as a military hub.

The decline in natural gas prices made possible by fracking and the exploitation of the Marcellus/Utica gas fields has driven the re-shoring of energy-intensive manufacturing back to the United States, says Rick Weddle, president of the Hampton Roads Economic Development Partnership. But the areas benefiting from the trend have been those with access to the abundant gas supplies. Hampton Roads isn’t in the running.

The Atlantic Coast Pipeline, designed to carry 1.5 billion cubic feet of gas per day, could change that. The pipeline would run from West Virginia through Virginia to North Carolina. A spur would split off from the main pipeline to deliver gas to Virginia Natural Gas, which has signed a 20-year customer agreement, and whose parent company AGL Resources is one of the partners in the project. The pipeline also would serve Piedmont Natural Gas serving the North Carolina market, which is a partner, too. (Dominion Resources, a sponsor of this blog, is the managing partner.)

A bigger supply of natural gas to the region would expand the prospects that Hampton Roads could compete for. “We would target new industries,” Weddle says.

The same logic applies to smaller communities in eastern Virginia and North Carolina, which also sit at the end of the existing pipeline distribution system.

The big five utilities in the industrial recruitment game are wastewater, electricity, fiber-optic cable and natural gas, says Christopher Chung, CEO of the Economic Development Partnership of North Carolina. “Most companies want gas, whether they’re using it for heating or as part of the manufacturing process. Not one hundred percent need it, but most do. It’s really hard for a community to make the case to recruit a manufacturer if it doesn’t have natural gas. Not impossible. But so many locations do have it that you’re at a major competitive disadvantage if you don’t.”

Vince Barnett, a spokesman for the Virginia Economic Development Partnership says much the same: “If natural gas is one of the top five drivers for a project, it certainly would preclude any Virginia communities that don’t have it.” Among the energy-intensive industries that Virginia competes for are plastics, aerospace and food & beverage.

Hampton Roads has many advantages in competing for economic development, such as a skilled workforce and the deepest shipping channels on the East Coast, noted DeSteph in the March letter. But inadequate access to natural gas constitutes a “significant, and at times crippling disadvantage.”

In the letter DeSteph also noted the advantages of gas as a home heating fuel and a quality-of-life benefit to Hampton Roads residents. “Once operating,” he says, quoting the numbers of an ICF study, “the pipeline would produce energy costs savings averaging $243 million per year for Virginia consumers.”

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41 responses to “In Hampton Roads, Life Is Not a Gas”

  1. LarrytheG Avatar

    One has to wonder if these folks advocating are aware of other efforts:

    What is HRX?

    The Hampton Roads Crossing (HRX) pipeline project was completed in January 2010 and connects two gas distribution systems within the Virginia Natural Gas service area. Prior to HRX, the Virginia Natural Gas distribution system was divided into two non-contiguous systems (Southern and Northern) due to the geography of the Hampton Roads harbor. The Southern system includes the areas of Norfolk, Virginia Beach, Chesapeake and Suffolk in south side Hampton Roads. The Northern system includes Hampton, Newport News, Poquoson, York, James City, Williamsburg, New Kent, and Charles City on the Peninsula, as well as Hanover and King William counties.

    Why does Dominion want to do it’s own pipeline when there are many existing ones already including the new HRX crossing that serves Hampton?

    1. Gee, Larry, either Hampton Roads’ 33 legislators and its economic developers are so mind-numbingly stupid that they don’t realize there’s plenty of natural gas supplied to the region…. Or maybe you’re missing something!

      Virginia Natural Gas, a subsidiary of AGL Resources, wants the Atlantic Coast Pipeline. Indeed, VNG and AGL are so convinced of the need for the pipeline that AGL has invested in the ACP as one of four partners.

      1. jalbertbowden Avatar

        its not that they’re stupid, they’re liars. they pipeline is for exporting natural gas out of the country. point.blank.period. this is more smoke and mirrors to rally the troops to suppress acp opposition.

      2. LarrytheG Avatar

        Jim – how about providing some proof that VNG/AGL supports the ACP.

        I can find no expression of support on a search.. but maybe I’m not looking for the right words.

        1. Are you serious? Do you think it remotely conceivable that VNG/AGL would invest in a pipeline they don’t want to see built?

          For what it’s worth, I did have a conversation with Jim Kibler, AGL’s senior vp of external affairs and public policy, about a year ago in which he defended the ACP. I think I read in the past week that he has been appointed as head of VNG.

          1. Steve Haner Avatar
            Steve Haner

            Kibler is about to become president.

          2. LarrytheG Avatar

            A 5% share is not support – it’s hedging bets.

            So show me where AGP or VNG publically support the ACP..
            where is it?

            a little history here by the way: ” Formerly the natural gas operations of Dominion Virginia Power, VNG was sold to Consolidated Natural Gas in 1990.[8] When CNG was acquired by Dominion in 2000, VNG was sold to AGL”

            so I’m looking here:

            Supporters of ACP


            but I don’t see AGL nor VNG – why?

  2. Steve Haner Avatar
    Steve Haner

    HRX greatly improved the distribution system in the region, but did not bring in any additional supply, Larry. The Atlantic Coast Pipeline links the region to additional supply. The supply is off to the west.

    I’m tired of arguing about all this. People want us to be poorer. Virginia will be lucky to hold #13 on the “best states for business” ranking because the NIMBY faction is in almost total control and driving us down rapidly. I’ve seen some recent stories about new interstate highways out in the western part of the state and it doubles me over with laughter – if we can’t get approval for buried pipelines with minimal right of way requirements, how can anybody envision approval for a new interstate highway?

  3. LarrytheG Avatar

    I don’t want us to be poorer at all – but I don’t like seeing the power of the state used to force people to sell their land – for duplicative facilities that are “for-profit”.

    So if Jim can provide some links to back up his claim that VNG actually wants DVP to build their pipeline then I’ll re-think my position.

    I thought VNG was working with Columbia and Transco to provide more capacity to Hampton with HRX and would do more if demand was there.

    Steve – I’ve pointed out before the Rockies Express pipeline – a “for-profit” venture that DID ACQUIRE well over 90% of it’s right of way via willing-seller, willing-buyer transactions – no NIMBY blockades because the transactions were not eminent domain.

    Why don’t you support the same approach for pipelines in Virginia if you say you do support progress and are opposed to “poor”?

    My view is that we already have existing rights-of-ways and existing companies that are more than capable provided expanded access and capacity to the shale gas – and I’m ALL FOR IT.

    I’m ALL FOR – VNG building more capacity to Hampton Roads …

    and I’m ALL FOR additional pipelines and capacity that is not duplicative and that is obtained not through eminent domain except for the small number of true hold-outs as was done by the Rockies Express project.

    I am not a sympathizer of NIMBY’s at all but I do think that for-profit ventures that are duplicative of existing infrastructures and services should not be able to use ED for their own benefit.

  4. LandLover Avatar

    First of all, supply shortages during peak times may not have been due to lack of pipeline capacity. I’ve seen nothing solid to prove that the trunk lines serving this area were an issue, or the local distributor, for that matter. Some quick searches reveal that much of Virginia’s pipeline system is not anywhere close to capacity.

    In addition, I would caution residents about the future plans of their representatives. The largest industrial users of natural gas may not be the most desirable neighbors, e.g., fertilizers, chemicals, and plastics. Hampton is heavily populated and these are dangerous facilities to have near flood prone areas.

    I love that the Rockies Express was used as an example. Losing your private property and all future use (regardless of what the industry asks us to believe) is no joking matter. Standing on one’s constitutional rights should never translate to NIMBYISM. I dare say that folks in the western counties of Virginia probably know more about this project than the residents along the coast, and their fears are well founded.

    If the ACP wants green space, let them buy it for a fair price and offer people who are in the blast zone a total buyout. Do not mask corporate profits with artificial need, and for goodness sake, if there are industries knocking at Hampton’s doors, let’s hear from them!

  5. Steve Haner Avatar
    Steve Haner

    Larry, I will hold you to that because the gas distribution company in the region very much supports building this pipeline to bring in the shale gas from out of state. This pipeline is largely subscribed and is not going to be providing gas for export. There certainly won’t be an LNG terminal in a densely populated area like Hampton Roads – that is not why that spur is added to the line, the spur is to serve regional customers (current and future.)

    I’m sure some pipelines have been and can be built without recourse to eminent domain, but that doesn’t mean they all can be built without eminient domain. (And I’ve said before that the I’m all for making sure landowners are well compensated.) Colorado is not quite the same population density as Virginia, with a larger percentage of land owned by the feds.

    That last comment from Landlover is a key one. He or she demands that the industries who want the gas should speak up! There is no chicken and egg debate on this. If the gas is not put in place FIRST the economic development prospect will never look at the region at all. Who would designate a plant location for Virginia and risk the uncertainty of the current NIMBY environment and wait for the gas? If you build it they will come….

    And yeah, it’s pure NIMBY in many cases. The Wintergreen Whiners in particular say: oh we ain’t against the gas, you need the gas, but Not In My Back Yard!

  6. LarrytheG Avatar

    Steve – you might not realize the scope of the RE – it’s way more than Colorado:

    further – if the gas in that pipeline is to be sold at a profit in a competitive market then what exactly justifies the use of eminent domain?

    It appears to me that DVP wants to enter the pipeline market in Virginia and compete against companies like Transco and Columbia -and apparently is guaranteed a 14% ROI.

    I don’t have a problem with ANY of that – at all – as long as they are operating as a for-profit business and not using the powers of the State to acquire right-of-way.

    That’s just plain wrong and it actually is crony capitalism that gives DVP a material competitive advantage over those they are competing .

    If Tallgrass Energy can build a 1,698 mile pipeline across 8 states by acquiring right-of-way via willing-seller/willing-buyer why can’t Dominion do it for a 500 mile pipeline?

  7. sharon Avatar

    Perhaps you folks would like your property devalued and your family being placed in the blast zone of one of these 42″ high pressure pipelines. Some of us would prefer to live without that risk.

    Additionally, the proposed ACP is a redundant source of natural gas for the plants being built in Brunswick and Greensville County. Current pipeline capacity is not full. So, why don’t we start there…instead of forcing people to give up their property and putting additional families at risk.

    Talk about those of us against the proposed pipelines keeping you “poor,” is ridiculous. These projects are almost always placed…in rural, poor, and in most instances communities with large minority populations. There is a history of environmental injustice. The PHMSA guidelines are set up to offer unequal protection to rural communities…the developers can use thinner walled pipe, have fewer shutoff valves. For example, in a Class 1 location, which is 10 or fewer existing structures in a 1 mile span,regulations only require a shutoff valve 10 miles from any single point on a pipeline. Meaning, the valves can be placed 20 miles apart. A Class 3 location is 4 miles, Class 4 is 2.5 miles. The communities who will remain “poor” are the communities who are forced to accept the industrialization of their properties against their will.

    The Governor repeatedly claims that these proposals will bring new business to Virginia. There are thousands of miles of pipelines already in Virginia. Why hasn’t the business already come to the routes of those pipelines?

  8. VaConsumer Avatar

    Sharon, you are exactly right. Where’s the proof that the pipelines will bring jobs anywhere and especially in the regions where it will be? It appears that the high cost of connecting to the pipelines and the high minimum regular use level required to access the gas is designed to make sure there are no taps into the line but the gas moves to the end of the line. So far, the communities that are being “asked” to “host” the pipelines, and especially the landowners, are not being offered anything that will compensate us for our loss or the risk we will personally have to live with every day. Let’s change things so only landowners who actually agree have to accept the pipelines, and those who do are compensated fairly every day that the pipe is in our land (IF we agree to have it!) Why should we give up our choice of use of our land, safety, and clean water and air so people in populated areas that already have more than we do can earn more? Why don’t we try expanding our industry related to renewables as well as our use of renewables instead?

  9. VaConsumer Avatar

    Steve Haner, there has been a pipeline in Buckingham county for many years but no local person or business has access to gas and there’s no sign that will change. In that time, we’ve lost the textile, shoe, and furniture businesses in the area. Nothing else has come in to take over the buildings or hire the workers. It’s very hard for those of us who’ve lived with that situation and the lack of economic development in our communities for decades to see why yet another gas line will bring change. The one we have hasn’t brought anything. The proposed pipeline just takes more from us since we are not adequately compensated and its presence makes it less likely that we’ll ever have productive communities since people won’t want to live next to a pipeline when they can avoid it. No one wants to spend money to provide real internet or road improvements to us. They say the money is needed elsewhere. They just want us to accept a dangerous pipeline for a pittance and to sacrifice us for their benefit.

  10. VaConsumer Avatar

    The horsepower for the compression station in Buckingham on the ACP has been increased three times now. They claim the latest increase is because of the extra miles the gas has to move on the latest path through Bath county. You can push or pull, but it seems logical that the increase should have been above the Buckingham section.

    However, at the Buckingham compression station the ACP will cross the Transco line that has access to the Cove Point export facility. It’s more logical that the increase in horsepower in Buckingham is to help with that activity, not with moving gas along the ACP.

    1. The compressor station must be in Buckingham because that is where the ACP is projected to connect with the Transco Corridor.

      Cove Point is served by a Dominion pipeline coming from their natural gas storage locations in Pennsylvania, plus a connection to Transco as it goes through Maryland. There is adequate capacity in those two pipelines to service Cove Point.

      The ACP is designed as a 2.0 Bcf/d pipeline. To add an additional .5 Bcf/d they only need to add compressor stations. Many pipelines are now reducing the initial number of compressor stations to reduce costs and opposition, then adding more compressor stations once the route has been certified.

  11. Virginia Natural Gas, once owned by Dominion, is now a subsidiary of AGL. AGL is a 5% owner of the Atlantic Coast Pipeline and has recently been acquired by Southern Company, the second largest utility holding company after Duke (Dominion is 12th).

    I think what gets lost in the conversation is that the Chesapeake/Hampton area would like to have access to more natural gas. They have been told that the ACP is the only way to do that so that is what they are promoting, with help from Dominion.

    The Polar Vortex that caused the curtailment of some customers in the area was a result of poor gas dispatch procedures rather than a lack of capacity (based on after the fact studies).

    However, the community seems interested in attracting new industry and a greater supply of natural gas would make that easier. AGL/VNG has reserved 155,000 Dth/d from the Atlantic Coast Pipeline, which is equivalent to about a 900 MW high-efficiency power plant. I don’t know who they are trying to attract, but that is a huge amount of gas for general industrial use.

    Dominion has identified Chesapeake as an alternate point of delivery for some of the gas that they have reserved. So some of the gas might eventually be used by DVP. The Chesapeake Energy Center has been retired which is right at the end of the ACP spur into Chesapeake. Perhaps Dominion has plans for some peaking units there.

    As I keep suggesting, rather than focusing on a specific pipeline as “the” solution. If we step back and examine the best ways to get more gas supply to Chesapeake, other alternatives come into view.

    An expansion project by Columbia Gas (the WB XPress) will add 1.3 Bcf/d of capacity (nearly the size of the ACP) to their pipeline system in West Virginia and Virginia, requiring just 3 miles of new pipeline and a new compressor station. Larry’s map in the first comment shows how extensive the Columbia Gas system is in Virginia.. The map clearly shows the existing connection between Columbia Gas and Virginia Natural Gas in Chesapeake. I do not have the details about that line (any information would be appreciated). My guess is that it is not large enough to transport an additional volume of 155,000 Dth/d.

    However, it is quite likely that that 155,000 Dth/d could be obtained from the 1,300,000 Dth/d of additional capacity that Columbia Gas will have available before the ACP is ready. Columbia’s supply zone is near that used by the ACP so the same prices and potential suppliers would be available for either option.

    The advantage of using the existing pipeline rather than the ACP is that it would be faster, cheaper, with far less impacts. If expansion of the existing pipelines was required it could all be done on existing right-of-way. This would be less expensive and less disruptive than the 77 miles of new pipeline required to serve this area from North Carolina as proposed for the ACP.

    If a portion of the Columbia Gas line needed expansion as well. It could be expanded in a way that provided more gas supply to the Peninsula and could fuel peakers or combined heat and power plants that would relieve the need for the Skiffes Creek transmission line.

    I understand the community’s position. AGL/Virginia Natural Gas has told them that the ACP is their only solution because they have a commercial interest in that outcome. A more objective view shows that using existing pipelines would be faster and less expensive for them, with no need to disturb new right-of-way in Virginia or dispossess unwilling landowners.

    Seeking another alternative to the ACP or any other pipeline is not a NIMBY issue but a search for a superior alternative. We seem to get caught in these “either – or” debates that only serve to polarize us. If we could use our collective wisdom to find solutions that meet most everyone’s requirements we all would be better off. We don’t have to chose between an adequate supply of natural gas and protecting the ecological and financial well-being of Virginia.

  12. LarrytheG Avatar

    StevenH said: ” if we can’t get approval for buried pipelines with minimal right of way requirements, how can anybody envision approval for a new interstate highway?”

    I think that’s a really good question

    If you need more interstate capacity from Richmond to Tidewater would you build a completely new location interstate or would you add lanes to I-64?

    I don’t think FHWA would let you build a new corridor without a really good justification.

    FERC on the other hand is still back in the wild wild west days and I suspect some judge is going to put the NEPA word on them – and bring them into the 21st century where Need is demonstrated and Wants are rejected especially if they are the wants of for-profit companies.

    I’d not be surprised that DVP is pretty much done on this given the level of opposition and people’s propensity to go to court.

    DVP , Tranco, Columbia – ANY company should have to clearly demonstrate that there is no other way to increase capacity other than a new corridor if they want to use Eminent Domain – and I’d bet that’s how the courts are going to see it. willin seller-willing buyer – no problem.

    and I think VaConsumer has an excellent point – if natural gas is such an economic development powerhouse – you’d think there would be a stampede of land speculation all along the proposed (or even existing) pipelines and where is that land-rush? It’s nowhere.

    And DVP is not even willing to offer each locality – access to natural gas for their communities to attract industry either.. so what gives?

    this is only about economic development for some localities?

  13. LarrytheG Avatar

    re: ” The big five utilities in the industrial recruitment game are wastewater, electricity, fiber-optic cable and natural gas”

    if we’re talking about manufacturing which ain’t what it used to be – but there ARE new economy opportunities being ignored.

    Specifically – distributed grid with 3rd party players who would put up hybrid solar farms to run in tandem with natural gas peaker plants – all along the pipeline route. That would benefit those communities along it’s path. Farmers would get leases on their lands no longer used. Local jobs would be created … Data centers who could put up their own solar and use natural gas as a backup could be attracted.

    But this goes back to what DVP’s view of the future is – and their strategic planning for that future – which denies distributed grid and doubles down on central utility baseload generation – now with natural gas instead of coal – but the same conventional grid rather than a distributed grid.

    The question is – does DVP’s strategic vision – serve the public – to include those communities along the proposed route of the pipeline ?

    1. Interesting idea, but I doubt that the easement allows any structures to be erected in the right-of-way. The landowner can still use the property in the R-O-W. It is still theirs. Landowners must pay taxes on it every year. But the uses of it are limited. They cannot run heavy equipment over the R-O-W for various farm activities. Unfortunately this also prohibits many types of fire trucks. They can no longer harvest timber from their property if the log hauler has to cross the R-O-W, no trees can be grown on it, etc. And ACP has the right to enter it at any time.

      Landowners are typically reimbursed for fair market value of the sliver of land used by the right-of-way. To receive compensation for any other loss of value – the burden of proof is entirely on the landowner.

      The tax bases for the communities along the corridor will be significantly reduced. Real estate agents and tax assessors know that the value of properties even near the right-of-way will be reduced, even if the ACP or a federal judge will not recognize it.

  14. LandLover Avatar

    To the commenter who compared eminent domain for an interstate highway to eminent domain for a natural gas pipeline. Those impacted by new highways are often reluctant, and rightly so, but at least the land is purchased outright. They are not forced to live in the median and required to pay property taxes on this land for the rest of their lives. In theory, they are justly compensated for the loss of value to their remaining property, and given an option of a complete buyout if their home is situated within a zone that would impact their quality of life.

    In spite of the fact that PHMSA recommends that localities enact ordinances that limit land use for property within the impact zone (1,150 ft.) of a natural gas pipeline of this size, the ACP is allowed to route it some 50 feet from homes, and this is a reality for many along this current route. The pitiful dollars offered by the ACP only cover the width of the easement. There will be zero compensation for adjoining properties that will fall within this 1,150-foot zone, but nonetheless, they will be limited on future development and use of this property and expected to notify the ACP whenever they conduct “land disturbing” activities. This is a bleak picture when considering the environmental damage, the economic losses to tourist-driven economies and the loss of tax revenues inherent with decline in property values.

    We can argue the “public need” for this pipeline all day long, but few can argue that property owners along this route are being treated unjustly. And, why would any responsible parent choose to have their kids live scant feet from the equivalent of a bomb, or the median of an interstate for that matter, in order to serve a very questionable “public need”?

  15. Peter Galuszka Avatar
    Peter Galuszka

    Once again, we are hearing cheers from a business community and politicians about he “need” for a certain project, although no one can say exactly what projects those are.

    I see many contradictions and areas of uncertainty.

    (1) Dominion Resources is the lead partner in the $5 billion Atlantic Coast Pipeline that is using hard ball tactics to muscle through quiet and bucolic places where local residents have sunk a lot of their own money. It is not a NIMBY put away. It is a real story about land rights, public need and whether one group of landowners must suffer for a commercial project pushed by a well-connected and deep-pocketed utility with profits in their eyes. It has not been established that there is a true energy need by Virginia consumers for the pipeline’s gas. As commenters have stated, the state is already criss-crossed by gas pipelines. Where is the need for this one.

    (2) Having said that, I wonder why, if Hampton Roads is so “underserved” with natural gas, then the business and political communities there don’t contact Transco or other gas transporters that already have big pipelines maybe 80 or 90 miles from the port complex. Wouldn’t it be cheaper and less disruptive to simply build additional capacity by adding a much shorter trunk line than putting a new pipeline hundreds of miles over the Appalachians and then down through the Blue Ridge that has been carefully grooming itself for decades as a farming, recreation and retirement area?

    (3) Jim, can you provide a list of potential new businesses that would supposedly benefit from the ACP in Hampton Roads? When Dominion applied to FERC to switch Cove Point into a LNG export rather than import facility, it already had contracts in hand for the LNG — namely utilities in India and Japan. Their names are freely available. Why can’t anyone seem to name them?

    (4) Commenters on this blog make excellent points that while the state has so many pipelines already, they haven’t exactly led to economic booms in some poor areas of the state like Southside. Hampton Roads already has plenty to attract new industries, such as a highly-skilled blue color workforce, great logistics and shipping, a gigantic tie to the military and so on. I can’t think of a phonier argument that the ACP is somehow going to “save” the region’s economy.
    (5) Since Dominion is the sponsor of this blog, maybe it could explain its complete gas strategy. It is paying $4.4 billion to buy Questar which supplies most of Utah with gas. Why Utah? It’s a fair ride from Richmond. There are already questions about the deal because Questar has operated in a much less bullying way than Dominion has:

    Here’s a quote from the Salt Lake City Tribune:

    Carl Tobias, a professor at the University of Richmond School of Law, said Dominion is “a huge player in Virginia government … [that’s] used to having their own way.”

    “They’re always in the paper because they’re always running a pipeline somewhere in a way that’s going to be an issue for someone,” he said. “They’re more than willing to litigate issues if they have to — and usually do pretty well.”

    Once again, this Dominion-sponsored post is based on few facts and lots of flimsy assumptions. If I owned a beautiful piece of property in the Blue Ridge and was told I was going to have to ruin it so Dominion and its partners can make a a great return while not enhancing their worthy role of providing reliable and cheap electricity, I would be mighty pissed off, too.

    1. No question, there are legitimate questions about landowner rights, as well as questions on how the pipeline would impact safety and the environment. I have written extensively about these issues, and I will do more in the future. A sampling:

      Putting a Price on the Priceless: How does the state put a dollar value on historic, cultural and environmental assets threatened by eminent domain?

      Clash of Competing Values: Virginians need pipelines and transmission lines to keep the economy humming. But we also value our historical, cultural and historical heritage. The trade-offs are getting harder and harder.

      Putting Easements to the Test: As gas and electric companies propose dozens of pipeline and transmission-line projects in Virginia, landowners are finding their conservation easements don’t provide as much protection as they thought.

      I have written many more, shorter blog posts. However, I cannot fully rehash all of these issues in every story, although I hope you’ll notice that I did allude to them with in the lead to the article: “While debate rages in western Virginia over the economic impact of natural gas pipelines on property values and local economies.”

      The real problem, Peter, is that I actually explore other dimensions to the pipeline story than the ones that suit you.

    2. Peter asked, “Jim, can you provide a list of potential new businesses that would supposedly benefit from the ACP in Hampton Roads?”

      No, I can’t. And I said so, which you would have noticed if you had read the article with any care: ” The benefits are more theoretical — fresh gas supplies would put their communities in the running for manufacturing projects they can’t compete for now, but it’s not as if there’s a big job-creating project waiting in the wings.”

  16. I finally caught up with Del. Matthew James, D-Portsmouth, whose perspectives I had hoped to include in the article. I thought his viewpoint would be valuable because he is a Democrat, and he has been involved in the economic development profession for most of his career. Currently, he is CEO of the Peninsula Council for Workforce Development. He said:

    “When issues like that come on board, we have to take a critical look. My read is, if we want to remain competitive in terms of business development, we have to take a hard look at energy sustainability. I didn’t see another alternative that we could offer existing and future employers.”

    Given the comments in this thread regarding alternatives to the Atlantic Coast Pipeline, I followed up on the lack of alternatives.

    “When people talk to me, I challenge them to bring forth an alternative. There really wasn’t a cost-effective alternative.” He does recall that some theoretical alternatives were discussed but none of them were practical.

    1. “When people talk to me, I challenge them to bring forth an alternative. There really wasn’t a cost-effective alternative.”

      There is so little awareness that we have available lower cost options that create far fewer impacts. Dominion dismisses any alternative to building the pipeline out of hand, without any discussion of why that should be the case.

      FERC is required by federal law (NEPA) to fully assess the alternatives to a project but historically they have not.

      Whenever I speak to people, even high level policymakers, they all are amazed that an alternative exists where we can have the gas we need without the impacts and at a much lower cost.

      It is just very difficult to get the word out, especially when the communication networks are dominated by large companies with established connections.

      We need a fair, open discussion of all of our choices before we make decisions that affect so many people.

  17. VaConsumer Avatar

    Jim, If you check the record at FERC you’ll see that Dominion offers little hard data and primarily just says that the alternatives will not meet their needs when addressing the required analysis of alternatives. FERC has been accepting this and other short, no data responses so Dominion doesn’t feel it has to justify what it says. That’s something that needs to change. We need real, verifiable data.

    Dominion has also painted solar and wind with a broad brush of excuses why it can’t be used here. Further, it has done everything possible to keep distributed generation and other alternatives that don’t allow it to have full and unchallenged control over the system. These are some of the things that could be useful but have no chance since none of our elected officials dare to cross the company. They – neither Dominion nor officials – won’t even listen to alternative perspectives.

    1. Irene, I agree with you that Dominion cannot be relied upon to give an unbiased representation of competing proposals. But I respectfully ask this question: If there are other viable proposals out there, why is no one coming forward with them? If, for example, Transco has abundant extra gas capacity, why has it been so silent? Why isn’t the company yelling and screaming about how Dominion is unfairly stealing its business?

      I don’t know the answer. Perhaps it’s a question I should pose to Transco.

  18. Peter Galuszka Avatar
    Peter Galuszka

    Y0u may have whatever opinion of me you will, but I am asking legitimate questions. There are many unanswered questions with this controversy and Dominion is not providing answers.
    Of course, economic development officials will go for anything that they see as enhancing their “competitive” position in grabbing new industries from other areas.
    But using that to justify a 500 mile pipeline to give Dominion big returns is rather dubious. Hampton Roads already has a strong competitive position because of its experience with the Navy, shipbuilding, fabricating and so on. I can’t think of a phonier argument than saying that unless this ACP goes forward, Hampton Roads is going to sink into the sea. But hey, it’s already happening because of global warming that adding new natural gas infrastructure will only exacerbate.
    When you go around talking to the Portsmouth mayor ( a DEMOCRAT!) why not ask why, when you drive over the NC line, you suddenly see acres and acres of solar panels?
    Why don’t you see them in Virginia? Because Dominion wants to keep its older model generating capacity going for as long as possible.
    One more thing. I do read your pieces. I find the headlines and art often don’t match the stories, in which you add some equivocating bullshit as some kind of weird defense. If someone questions something, you say, “but I say here it might not be so.”
    I’d love to be your editor, Jim. I’d even do it for free.

    1. I guess we agree on one thing, there are lots of legitimate questions — including even the ones you raise. I think many questions should be part of the public conversation. If Hampton Roads economic politicians and economic developers support the pipeline, we should ask if the benefits are real or just theoretical.

      At the same time, it is wrong to ignore their viewpoint. I get the sense that you deem illegitimate any line of thinking that does not advance your narrative.

  19. LarrytheG Avatar

    re: what is the alternative? and ‘why doesn’t Transco complain?

    wrong questions.

    What is the need and what are the options for meeting that need?

    Can anyone with a financial motive get up and proclaim a “need” and their solution to that need then say that it’s up to others to come up with a better alternative?

    this gets worse. Who defines what a “public need” is that actually justifies taking land and property rights away from some people to benefit the greater good?

    DVP gets to define what is a public need and then challenge others to come up with better alternatives to what DVP has claimed is a need ?

    You want a better process?

    No problem – you claim there is a need -You get an objective determination from a source that does not have a financial interest then you put it out RFP or even a PPA.

    The basic problem here is that you have a private sector business claiming there is a need – but the need is theirs – and they are claiming that this justifies the use of eminent domain.

    this is not VDOT saying there is a need for an interstate.

    let’s be clear.

    this is a private sector venture wanting to use Eminent Domain – plain and simple.

    If this was a true interstate type proposal – someone besides private companies would be claiming the need.

    The proof of this is that several different private companies are proposing and all of them are claiming this justifies the use of Eminent Domain – and we have nonsensical questions like “what is the alternative”.

    this is bogus.

  20. VaConsumer Avatar

    Jim, I suspect that the reason Transco is not screaming is that a deal has been struck to give it advantages from the ACP. In another location, it might be Transco that wants to build more and Dominion might have the competing pipelines. In my experience, companies in this space work together. If the ACP gas gets routed through its lines from Buckingham, surely Transco will benefit financially, especially if it gets benefit from the compressor equipment without having to build it.

    I do not see anywhere in the record a true, full evaluation of alternatives, even for where the pipeline goes, much less alternatives that would make it not necessary. Further, the fact that the company says it has sold all the gas is accepted as evidence of the need. There is no consideration of how long the gas supply will last, or of what trade-offs will occur if gas from the ACP displaces other lines’ gas.

    This is because the regulatory environment is not set up to create the least amount of infrastructure needed, but to create the most. We have a federal agency in charge of a decision that affects all but they do not fully consider all aspects and all impacted. Their “client” is the industry, not the common good. That needs to change.

    Folks in Nelson and Augusta counties, in particular have repeatedly asked that existing rights of way be considered as an alternative. Dominion simply says it’s not possible and offers little else. If FERC was doing the job all of us need them to do, it’d fully consider all angles, not just what benefits the company requesting the opportunity to build.

    As for the jobs in Hampton Roads, IF there will be economic benefit there, will they be willing to share it with the parts of the state that would lose control of our land and options for what we can ever do with and on our land with no ongoing benefit and only minimal compensation in order for them to get that benefit from the ACP? Like moving water from western Virginia to Virginia Beach, there is a loss to the rural areas. No one seems to be willing to consider this and in fact, I hear over and over again from our more populated areas that they do not want their tax money and their resources going to the less populated areas. They view us all as stupid, unmotivated, and just taking from them, with no idea of the things our areas provide to them.

  21. Historically, the FERC procedure for establishing need is to evaluate if there are customers (precedence agreements) for a substantial portion of the capacity of the pipeline. FERC recognizes the inadequacy of this test but they have not formally replaced it with anything. For example, the ACP has customers that need a supply of gas. The MVP has agreements from 9 organizations, almost all of them are gas producers in search of customers. Rather than FERC saying let the producers connect with the customers using one pipeline, they would say that the existence of agreements indicates that there is a need for both pipelines. This is absurd but it is the way that gas pipelines have been approved for decades.

    Transco will not oppose the plans for several reasons: 1) they presently serve Dominion, Duke, Piedmont, and Public Service Company of North Carolina (and probably AGL in other states); 2) they, like other pipeline developers, believe that there is room for more and more pipelines. A CEO of a pipeline developer said – we will always overbuild and others will overbuild around us. That’s what competitive people do.

    FERC staff told the commissioners last year, that if all of the proposed pipelines are built, there will be 40% more pipeline capacity than the maximum potential output of the Marcellus.

    The ACP plans to connect to Transco and Columbia Gas and Transco and Columbia will be connected by the WB XPress. The idea is to create a network of pipelines to allow for the exchange and arbitrage of natural gas throughout the Southeast to further add to profits.

    Effects on our land, resources and local communities are not part of the calculus. Unfortunately, the benefit to the public good isn’t considered much either. Obviously an adequate supply of energy is a public benefit, but all of the proposals for new pipelines will cost ratepayers far more than using existing pipelines, even though each has been promoted as a great blessing serving the public interest.

    It doesn’t have to be like this. FERC has a fairly effective process for approving interstate electric transmission lines that avoids duplication of resources and thoroughly analyzes the need for a project in cooperation with the ISO’s (such as PJM). The application is evaluated in an evidentiary proceeding in front of an Administrative Law Judge. The applicant can be cross examined and cannot avoid answering the questions the way Dominion is doing in the paper exchange that is the method used for gas projects.

    With transmission lines, FERC’s staff acts as representatives of the public interest not as corporate cheerleaders as with the gas pipeline certification process. Federal law (NEPA) requires that the gas process have a thorough examination of need and alternatives, but so far FERC has been able to avoid it.

  22. LarrytheG Avatar

    If FERC is required to follow NEPA – then it’s a pretty good bet the opponents are going to mount that legal challenge.

    the idea that we overbuild pipeline capacity – and tack that extra cost onto the price of the gas that consumers pay all the while claiming there is a “need” is bad enough but even worse when realizing how many additional property owners were unnecessarily affected also.

    the idea of how “need” is characterized is amusing. It’s like if a company produces a product or provides service the public “needs” that it justifies that company using eminent domain to build their store … eh?

    shades of Kelo

  23. Peter Galuszka Avatar
    Peter Galuszka

    Reminds me of the late 1990s when fiber lines were the rage and all of these companies overbuild trans-oceanic capacity. Of course when obvious market forces killed a bunch, they didn’t ruin lots of peoples’ hard won properties in beautiful parts of Virginia.

  24. Jim Kibler Avatar
    Jim Kibler

    Virginia Natural Gas fully supports the proposed Atlantic Coast Pipeline and, for that matter, any pipeline project that will bring additional supplies of natural gas to the Hampton Roads region. For us, access to a new source of natural gas solves the dilemma of how Virginia Natural Gas will meet the needs of current and future natural gas customers when existing pipelines are becoming more constrained due to decades of sustained growth. The last major pipeline to connect Hampton Roads to additional sources of natural gas was built in the early 1990s; prior to that, in the 1940s. We believe that ACP is the type of “once-in-a generation” pipeline that will support future growth on our system and attract new economic development prospects that might look elsewhere if we cannot provide adequate capacity to meet their needs.

    Jim Kibler, president, Virginia Natural Gas

    1. Mr. Kibler,

      Thank you for contributing to the discussion. Would you be willing to share whether it is the size of the VNG pipeline that connects to Columbia Gas that is the constraint to you receiving more natural gas or is it is the capacity of the Columbia Gas pipeline that serves you that is the constraint?

      The 155,000 Dth/d that your company has reserved from the Atlantic Coast Pipeline is sufficient to fuel a large power plant, which means it is sufficient to serve an enormous amount of industrial demand. Do you expect to be able to attract that much new industry or is a significant portion of your share intended for future Dominion facilities in your region?

      If you could receive the same or greater amount of natural gas via your connection to Columbia Gas more quickly and at a lower price – would that serve your needs or do you feel that your commitment to the ACP forecloses consideration of other options regardless of their potential benefits?

      1. LarrytheG Avatar

        24 inches according to this:

        which also says this:

        ” VNG designed the project to minimize impacts to the community and the environment. The company used existing utility corridors and public right of way wherever possible ”

        and this:

        “Hampton Roads now has a gateway [the completed HRX] to access natural gas supplies from the Marcellus Shale, Rockies, Mid-Continent, Gulf Coast and other locations – meaning a broader array of supply options”

        this was written before the ACP proposal …

        Someone had mentioned earlier that these companies basically all support more pipe – and capacity – more gas to sell and more affordable.

        Nothing wrong with that – but VNG also states that it is sensitive to the idea of using existing rights-of-ways when available rather than duplicating and needing additional right-of-way.

        and there is a Chesapeake LNG port facility – to this point used apparently for import – but probably lacks only what it would take to compress gas for export as it is already connected to existing pipelines.

        I don’t think VNG really cares how VDP gets their pipeline – they just hope that they do.

        And clearly there will be enough gas to power another combined cycle plant for Hampton rather than powerlines at Jamestown.

  25. LarrytheG Avatar

    Thank you for weighing in. Would you have time to comment on HRX specifically where the gas for HRX came from or will and if HRX is enough to handle the load for Hampton or more crossings will be required with the advent of ACP?

    Also – why can’t more gas be brought down the existing rights of way from Richmond on the peninsula shown on this map:

  26. LarrytheG Avatar

    here’s another pretty interesting map:

    seems to indicate there is an or is a proposed LNG facility in Virginia

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