What a Long, Strange Trip It’s Been

By Peter Galuszka

Back in the winter of 2015, Craig Vanderhoef, a former Navy captain, got a disturbing surprise in his mailbox at his retirement home near Afton in Nelson County. A letter from Dominion Resources noted that it wanted to survey his land for a new 600-mile-long natural gas pipeline.

On two occasions, he wrote the utility telling them no. Then he got another surprise. A sheriff’s deputy knocked on his door to serve him with papers notifying him that Dominion was suing him to get access to his property.

In short order, about 240 Virginia landowners were on notice that they too might be sued for Dominion’s proposed Atlantic Coast Pipeline. The county sheriff was notified that he, too, was being sued, although it was an error.

Thus, the stage was set for one of the nastiest environmental and property rights battles in Old Dominion history.

It centered around the Atlantic Coast Pipeline that would run from Harrison County, W.Va. across the rugged Appalachians, down through some of the most peacefully bucolic land in the Virginia., to Union Hill, a mostly African-American community in Buckingham county and on into North Carolina, running through the Tar Heel state’s mostly African-American concentration along its northeastern border with Virginia.

In other words, the project partners were targeting people, some of whom were poor minorities, unused to big industrial projects and legions of overpriced lawyers.

The project, whose partners at the time included southeastern energy giants such as Duke Energy and the Southern Company, was aimed at tapping vast quantities of cheap gas that fracking drilling methods had created in the Marcellus Shale formation in West Virginia and Pennsylvania.

To Richmond-based Dominion, it became a rallying cry for natural gas. About that time, Dominion was also repurposing its Cove Point Liquefied Natural Gas facility on the Maryland shore of the Chesapeake Bay from import to export and was picking up large gas pipeline networks in far-away spots like Utah.

The pipeline was just one of several ugly controversies that Dominion had tossed itself into, coming off to many as an inconsiderate bully. It demanded on handling coal ash disposal on watersides its cheap, minimalist way. It insisted on putting a high voltage line across the James River near historic Jamestown. It deployed its deep-pocketed lobbyists to spread money around Virginia lawmakers.

And now, after all that, the comeuppance has come. On July 5, Dominion and Duke announced that the ACP, whose price tag had risen from $5 billion to $8 billion, was being canceled. This was after Dominion had poured $1.8 billion into legal wars over property rights, environmental permits and propaganda campaigns touting the pipeline as a jobs creator.

The reversal had been coming for a long time. Dominion kept losing battles as it faced, a well-financed, well-organized opposition, let by citizen groups and the Southern Environmental Law Center. Opponents claimed that the ACP would kill wildlife, hurt ground water and release vast quantities of methane into the air, exacerbating climate change.

Most damning of all, the opposition kept noting that the extra natural gas was not needed. There was a glut and prices were dropping. Utilities needed to reposition themselves with renewables such as wind and solar. Tellingly, the Southern Company, a former partner, announced it was leaving the project several months ago.

To be sure, the ACP had won some skirmishes such as winning approval from the Federal Energy Regulatory Commission. The U.S. Supreme Court ruled its way last month. Cheerleaders, some related to such Koch Organization fossil fuel interests including the Thomas Jefferson Institute for Public Policy, the Heartland Institute and the Committee for a Constructive tomorrow, relentlessly kept up their climate change denying, anti-Democrat, anti- renewable mantra.

As late as June, Paul Dreissen of the Committee for a Constructive Tomorrow was writing in Bacon’s Rebellion: “Pipeline project developers Dominion Resources and Duke Energy should receive the USFS (U.S. Fish & Wildlife) and other permits relatively soon – and have the pipeline in operation by early 2022 – unless a Biden administration takes over in 2021 (with AOC as woke climate and energy advisor to Biden and Democrats) and imposes Green New Deal bans on drilling, fracking, pipelines, and eventually any use of natural gas, oil and coal..”

About the same time, Ann Nallo, a pipeline spokeswoman, touted the same line. She said the favorable Supreme Court decision is  an “affirmation for the Atlantic Coast Pipeline and communities across our region that are depending on it for jobs, economic growth and clean energy” and that they “look forward to  resolving the remaining project permits.”

Statements like these are all the more curious given the surprise cancellation. Did someone not get the memo?

As one news outlet put it, “In a call with investors Monday, (Dominion leader) Farrell said the company wants to focus on its renewable energy portfolio. It is hoping to generate 70% of its energy from renewable sources by 2035 and hit ‘comprehensive net-zero carbon targets’” by 2050, he said.

Meanwhile in a related move, Dominion announced it was selling most of its natural gas assets to Warren Buffett’s Berkshire Hathaway group. One conclusion: investors are skittish about ACP-style projects so Dominion is bunting towards regulated ones with guaranteed rates of return. That way, its customers shoulder risks.

So, we have the drum-beating about the wonders of natural gas from right-wing think tanks and corporate flaks one day and Farrell’s astonishing change of course the next. Some believe that Dominion read the tea leaves and concluded that Donald Trump was self-destructing so completely that he has no hope of being reelected.

Left in its wake have been years of strife that were borne chiefly by quiet property owners such as Capt. Vanderhoef who only wanted a peaceful retirement.

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14 responses to “What a Long, Strange Trip It’s Been

  1. Landowners who did not chose to be involved in the ACP but whose property Dominion targeted have had up to six long years of battle against this project. As some changes were made, some landowners were involved later in the process. We have invested untold hours in and driving to meetings, hearings, legal proceedings, one-sided negotiation, monitoring/documenting condition of our water, etc, monitoring/documenting construction activities, the list goes on and on.

    Contrary to the message the federal government and others are touting, the financial costs have largely been borne by property owners. We’ve paid our own attorneys and experts, contributed to project costs (including huge attorney fees), paid our own travel expenses to hearings and other proceedings, including meeting with groups such as the Pipeline Safety Trust and the Poor People’s Campaign. Yes, there’s been some excellent support from national and regional environmental organizations but to varying degrees, we’ve contributed the resources we had and stretched our resources and bodies almost to breaking. We’ve sought to influence elected and appointed officials at all levels, project financiers (like Black Rock and Bank of America), insurance companies, and even stockholders. We’ve used everything from reasonable discussion to non-violent protest. At every turn the company has tried to discredit us, present us as crazy, violent, and more.

    From this, we’ve learned that our country does not give the little guy the opportunities we have always touted. Big business is really in control. We would not have this victory except the company finally backed down. No one has motivation to build anything because bully big business can come along and take what it wants from you with NO consideration of your long time use, plans, or heritage. Laws need to be changed. No one should have their resources (human and other) drained and their hopes and dreams threatened like we’ve experienced. No one should be sacrificed so big business can pay its shareholders more.

    Thus, we are committed to continuing to work for changes so that others are not treated as we have been. No one deserves to live as we have for the last six years.

    BTW they still own the easements across our land. The division of families and communities over these activities remains. There is much left to do, even for ourselves, before this is over.

  2. Don’t bang the victory drums too loudly. All of the assets, court rulings, plans, drawings, etc., etc., are now in the hands of a man to whom $8B is an acceptable accounting error.

    Now about the BR’s use of the word “folly” when describing renewables and green energy.

    Btw, a couple of typos “shore”, for one.

    Ah, Cove Point. “Let’s store the dynamite in the metal fabrication shop right next to the acetylene torches.”

    • Nancy one of my thoughts through this is that those making decisions on the pipeline have so many more assets, and so much more income than we do that they have no empathy, no ability to understand that which they’ve done to us. They lack the ties to the land that we value. Everything is replaceable/ exchangeable and there’s no space for sentiment, which is how they appear to hear us say heritage. For them, only dollars matter. Those with the perspective that only dollars matter discount the perspective of those who believe there are some things of value that can’t be translated into dollars.

      No, this is not over.

      • What I can’t understand is that according to BR, all of the ULM at Dominion were educated in Marxist bastions of Liberalism, so how could this happen?

        It will be interesting to see how Warren handles this. He’s not a fool, but he’s reached that age where benevolence is a driver. Nevertheless, don’t put your files in the warehouse.

  3. I agree that Dominion has pretty much acted like a bully on not only the pipeline but the other issues – coal ash cleanup and the Jamestown powerline crossing… no return of excess profit, no return of tax rebates, etc…

    They decide what they want to do then they marshal all their resources, legal and related and push it through.

    They’re not going away…

  4. NN,

    Nothing related to the Atlantic Coast Pipeline was included in the transaction with Berkshire Hathaway. The easements are still owned by ACP, LLC. The restoration of the disturbed right-of-way will be the ACP’s responsibility.

    Removing the felled trees without the permits that allow heavy equipment on the R-O-W might be a problem. Landowners will probably have to go back to court to remove the easements and attempt to recover their costs of returning their land to something like its original condition.

    The monopoly utilities had no ownership interest in the pipeline, only an obligation to pay the contracts for pipeline capacity. The unregulated parent companies, Duke Energy and Dominion Energy, were the ultimate owners of the pipeline.

    • When I read BH was buying 100% of DE gas transmission lines, I had assumed… just read that DE is indeed keeping ACP, but wait, that means they’re retaining the debt, which I guess we’re paying. Sweet, they cashed in the assets and dump the liabilities on us.

      Oh well, way ‘a da world. Thems what got shall get.

    • Tom,
      Because the unregulated parent companies were the ultimate owners of the pipeline, does that mean that the $1.8 billion already spent will be borne by investors, rather than ratepayers?

      On a somewhat related note, what will happen to those easements? ACP had to pay the landowners for the easements. The easements presumably gave ACP the right to periodically go in and clear away growth to ensure access to the pipeline in case of leakage, etc.

      I have seen the pictures of entire swaths of Forest Service land cut away to make way for the pipeline. And all for nothing.

      From an ecological perspective, it would be best to leave the fallen trees in place, rather than remove them, on both Forest Service land and private land.

  5. Good point TomH. This is a whole new blog post. Reminds me of WVa and how coal operators leave the mess, go bankrupt and skeedaddle.

  6. Here is a very good summary of how Dominion’s short-cutting of the regulatory process came back to haunt them:

    How Trump’s ‘energy dominance’ backfired on an $8B pipeline
    Mike Soraghan, E&E News reporter Published: Tuesday, July 7, 2020

  7. There is no method for Dominion and Duke to recover money lost on the pipeline directly from ratepayers. That loss will come from the shareholders in the form of reduced dividends and lower stock value.

    The assets sold were other pipelines, gas storage facilities, and 25% of the Cove Point LNG plant. They received $9.7 billion for all of that, but it included BH assuming $5.7 billion in Dominion’s debt. From the $4 billion in cash they received, Dominion will use $3 billion to buy back their own stock. That way the remaining earnings will be spread over fewer outstanding shares so the earnings per share will look closer to what had been estimated if the ACP was contributing to profits. That will help keep the stock price up.

    Total costs spent on the ACP so far is about $5 billion. The Wall Street Journal estimated that $3.4 billion had been invested by Dominion and Duke, but that is probably just the equity contributions. They also had bank loans that must be repaid.

    Duke reported they were taking a $2.2 billion write-off in the 3rd quarter, with a bit more when the deal closes in December. Duke owns 47% of the ACP so their numbers would reflect about $5 billion in losses for the whole pipeline. That would make Dominion’s total losses about $2.65 billion.

    Although there is no direct way to recover this money from ratepayers, you can bet they will be as aggressive as possible to extract new profit-making opportunities from the GA so our utility bills will likely go higher than even currently projected to make up for the loss.

    It is unclear how the disturbed right-of-way will be cleared up. Dominion has no incentive to spend any more money. Some landowners will probably go to court to try and remove the easement.

    The ACP does not currently have the approvals to bring heavy equipment on to the right-of-way to remove the trees. The concentrated deadfall will eventually pose a fire-hazard. FERC or DEQ will have to figure out how to clean up the mess and stabilize the soil. I’m sure the ACP will try and recover as much value as they can from all of the pipes. Only 6% are in the ground.

    There is a lot to figure out yet and no reason for Dominion to be quick or responsive unless some regulator requires them to be.

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