What Needs To Be Done After the ACP

By Peter Galuszka

For six long years, Dominion Energy and its partners in the $8 billion Atlantic Coast Pipeline have waged war against Virginians as they have pushed their way forward with the 600-mile-long natural gas project.

Their strong-armed methods have created untold misery and expense  for land-owners, members of lower income minority communities, nature lovers, bird watchers, fishermen, and many others.

When some declined to let the ACP to trespass on their property for survey work, they ended up in lengthy and expensive lawsuits. Others spent hundreds of hours on their own time and dime fighting Virginia regulatory agencies who all but seemed to be in the pocket of the ACP.

And so it goes. For what? So Dominion and its partners could make billions of dollars, some of it paid for by electricity ratepayers, for a project whose public need was always in doubt. On July 5, the ACP threw in the towel.

I put together this commentary in The Washington Post suggesting what might be done to prevent this from happening again:

(1) Change laws to keep pipeline builders off property for surveys if they are not wanted and if a true public need for the project cannot be demonstrated in court.

(2) Change the Federal Energy Regulatory Commission so it has to really look at whether a project before it has an economic purpose. FERC has met few projects it didn’t like. It usually needs just proof of a contract. In the ACP case, that was a contract between ACP and its partners and their own subsidiaries. Does someone smell rotten eggs?

(3) There need to be stronger legal protections to prevent powerful companies from having their way with communities of color.

(4) Energy projects must be considered in a holistic way and not piecemeal. Do we really need the ACP, the Mountain Valley Pipeline and a bunch of others?

(5) The fix always seems to be for Big Business with state regulators. Change that.

The death of the ACP could be, and should be, a watershed moment.

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19 responses to “What Needs To Be Done After the ACP

  1. Mr. Galuszka

    Take a look at your item #1. I think you may have left out a “not”:

    “…and if a true public need for the project can NOT be demonstrated in court.

  2. The death of the ACP, especially if followed by crushing the other pending projects such as the Mountain Valley Pipeline and the VNG Header project, will indeed be a watershed moment. Virginia will be a denuded watershed, leaving the rich soil of your kids’ and grandkids’ economic vitality draining out to sea.

    Peter’s list ranges from ridiculous to simplistic. It is a recipe for stagnation and an invitation for investors to seek greener pastures. The rules he suggests cannot be for pipelines only but will be applied to everything (only fair) and we end up with NIMBY and BANANA. But it’s of a piece with where the New Democrats want to take the U.S. You see it on display again — they need voters poor and dependent on government.

    • “Virginia will be a denuded watershed, leaving the rich soil of your kids’ and grandkids’ economic vitality draining out to sea.”

      Give it up already. King Coal is dead. Long live the King!

      NIMBY was at play. Do you really see these thing going through the rich folks property?

  3. “Virginia will be a denuded watershed, leaving the rich soil of your kids’ and grandkids’ economic vitality draining out to sea.”

    Nice! Your writing is one of the things that keeps me coming back to BR.

  4. ‘Ranges from the ridiculous to the simplistic?” Gee, I only spoke to a number of lawyers, environmentalists and community activists. This list is essentially theirs. I guess that according to Stephen D. Haner, they do not have a right to their ideas even though they spent six years and lots of their own time and money on this expensive debacle. Only Stephen D. Haner has enough genius to think this through.

    • I probably know most of those you talked to, and have also watched the ACP process from the beginning (for a while as a Wintergreen homeowner.) If that’s their list, you should have cited them. We’ve debated eminent domain here often, I see the need for FERC and have few complaints, the SCC exists to accomplish #4, and #5 is a campaign slogan with no meat. How, baby, how? And will it apply to the Greedy Green Energy big boys you like as well as those you don’t?

      But then there is #3. Who loses when the economy crashes? Who suffers the most when energy costs get out of hand? Look at the pandemic impacts!! Not the rich folks. I think at the end of the day the biggest losers are the lower and middle income Virginians. That whole game over the compressor station was appalling, and that community lost a huge financial windfall. If you actually cared about “economic justice” your first priority (as has been mine) would be the lowest cost energy approach possible, and investments that paid taxes out the wazoo. You just want to keep them poor and voting your way.

  5. Yep, given the news about Tom Farrell, the ACP is indeed a watershed moment.

  6. Don’t forget then Gov McAuliffe strongly supported this project when there was a lot of opposition at the outset. That allowed the project to continue even though it now seems like it might have been a hot-dogging project by Dominion and Duke. I am not here to defend Dominion, it looks like a non-well-thought-out-plan, possibly with less scrupulous (typical politics) methods as far as dealing with towns/people.

    I do not have expertise/aptitude on when imminent domain should be allowed. But I tend to feel if it is a regular company risking a loss/failure if the project fails, then they have skin in the game. Utilities are a concern because their losses are covered by rate payers, so they have an “Easy Button” on deciding expensive projects: just do it.

  7. The collapse of the ACP will be a watershed event whether it was the right decision or not. It marks the death of the old Byrd Machine where Richmond-based special interests could bull anything through Virginia’s legal and regulatory subculture through contributions and connections. Of course, there is a risk to a thoroughly corrupt operation like Virginia’s state government. The risk is that anything and everything undertaken by that government or the special interests that control it will be considered de-facto corrupt. Even good ideas are assumed to be manipulations of the system for the benefit of crony capitalists. That’s why there never really was a clear and reasoned debate over the ACP. Grass root activists and people like me just assume that Dominion was playing fast and loose with the facts in order to reward shareholders with ratepayers covering most of the risk. The commentary from supporters in our political class were viewed as equally useless given the depth of control that Dominion (and other special interests) exert over that political class.

    There’s a reason that corrupt banana republics never succeed. Nobody trusts the governments running those countries. In Virginia the equivalent is that nobody trusts anything put forth by the special interests. It is assumed to be corrupt.

    • Man, you are making me miss it!

      • Ha ha. Of course my natural paranoia and preoccupation with game theory makes me wonder if the ACP was a price both Dominion and the General Assembly were willing to pay in order to provide the appearance of a new day dawning.

    • “It marks the death of the old Byrd Machine where Richmond-based special interests could bull anything through Virginia’s legal and regulatory subculture through contributions and connections. ”

      Uh, let’s wait until we see to whom the bill is sent, eh?

  8. Jim. Thanks fixed it. Was too rushed. The Post piece went live at 8 am and I had something else at 8:30.sorry

  9. TBill. I know about terry the Mac and have noted it before. I did get northam in the Post piece txs

  10. The Natural Gas Act requires FERC to certify that a new interstate pipeline serves the public convenience and necessity. Despite having issued guidelines for how the Commission would evaluate these issues, FERC never followed them.

    Numerous considerations to determine the need for the project were identified in the 1999 guidelines, but FERC used the presence of contracts for at least a portion of the pipeline capacity as the sole criterion for establishing need. The Commission has elected not to “look behind” the contracts to see if they truly represented an increase in market demand. Pipeline developers realized that signing up their own subsidiaries as shippers was all that was needed to gain approval of the pipeline. Of over 470 pipeline applications that were submitted in the past 20 years, only two or three failed to be approved. Those few had no signed contracts.

    The Commission also failed to independently evaluate whether pipeline projects served the “public convenience.” They either used information provided by the applicant without examination or considered that just because the pipeline transported gas for possible public use – it provided a public benefit.

    Steve – I have never been able to have you accept that building unnecessary pipelines that cost far more than readily available alternatives is what would cause an economic calamity for your children and grandchildren.

    If FERC made an “area review” of multiple projects intended to serve the same market (as the Supreme Court encouraged them to do decades ago) they would have discovered that the ACP, MVP, and Atlantic Sunrise/Transco were all intended to serve a similar market (mostly new power plants in the Mid-Atlantic and the Southeast). That market is now less than half (and probably far less) of what it was when the pipeline projects were first proposed.

    Existing pipelines have already added available capacity greater than what the ACP and MVP combined would provide to the region.

    Southeast Virginia (VNG) could connect to Columbia Gas or Transco for any required capacity far less expensively than paying $6 billion for the ACP over 40 years, as required by their contract with the ACP. VNG has testified to the SCC that they currently have excess pipeline capacity and now sell that surplus to others.

    I know your manufacturing background causes you to see this problem differently, but other, far less expensive, options exist to meet the energy needs of Hampton Roads that would not require you to mortgage your offspring.

    The ACP was hatched as a money-making scheme at ratepayers’ expense, not because it was needed to meet the energy needs of Virginia. It failed because it was unnecessary, ill-conceived and poorly executed.

    • “Southeast Virginia (VNG) could connect to Columbia Gas or Transco for any required capacity far less expensively….”

      What worries me, Tom, is you would oppose those approaches as well. Since the beginning of the MVP/ACP projects, and you can look this up, I’ve wondered out loud if both were justified and doubted both would be built. And you had more impact than you realize, and I became quite worried that Dominion faced almost zero risk on the project if its sweetheart contracts could not be rejected by the SCC. The legislation on that may have had more impact than many realize, and I wrote in favor of that bill.

      I do not disagree that FERC may be somewhat a captive regulator, but some regulator that can rise above state squabbling is required. The panel is going through some changes and perhaps the approach will change. I’ve been resisting writing about my friend Christie but still might…

      You and I have a fundamental disagreement about the utility or danger of natural gas as a basic energy fuel. I remain persuaded it is essential, I do not think CO2 is the thermostat running the climate, and even if it has some role the rest of the world remains addicted so we should not reject it. Somebody sent my son to Iraq to possibly be killed for oil and that cannot happen again. Energy independence feels great.

  11. Steve. Tom supports my point. Do you agree?

    • “(2) Change the Federal Energy Regulatory Commission so it has to really look at whether a project before it has an economic purpose.” Well, my point is that is already its official role, and Tom agrees that is what it is required to do by law. The issue is, did it fail to do that with the ACP? He says yes, I’m no expert. One thing that won’t change is lawyers got rich arguing that point, and the same argument will move on. So I don’t agree with your point that FERC needs to “change” its mandate, it has the mandate you mention.

  12. Steve,

    I always respect your opinion and I think your articles about Virginia’s energy system provide an excellent public service by informing people about these important issues and providing a platform for further discourse.

    Without going into the possible future of gas in the U.S., my argument about the ACP and MVP is simply this:

    1. The FERC authorized expansion of existing pipelines serving Virginia and the Carolinas has already added new capacity that is greater than what the ACP and MVP combined would provide.

    2. The cost of transporting gas on those expanded pipelines is much cheaper than using the MVP or ACP.

    3. Existing new pipeline capacity is greater than what was projected to be required in 2014-2015 when the ACP and MVP were proposed.

    4. The maximum expected need for more gas supply in our region is now less than half of what was identified when the ACP application was submitted. Therefore, the pipeline capacity in the ground today is more than enough to meet the needs of Virginia and the Carolinas through 2050. FERC did not consider any of this information before issuing their certificate for the ACP.

    5. There are some challenges getting the existing abundant supply of gas to the Hampton Roads region, but that can be overcome much less expensively than the many billions of dollars required by the ACP, if more gas is truly needed.

    6. I do not see gas supply being the choke point for economic development in Southeast Virginia. It is portrayed that way because businesses and economic developers still have a 20th-century perspective about energy issues and are mostly unaware of the energy trends and available options for supplying the energy needs of most businesses without the use of gas.

    7. I think it is poor strategy to base economic development plans on the need for more gas when several pieces of legislation have been adopted in Virginia that will significantly reduce the use of gas in the state by 2050.

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