ACP project canceled
Facing even more delays as well as increasing cost uncertainty that threatens the economic viability of the project, the Atlantic Coast Pipeline (ACP) has been canceled.
Dominion Energy and Duke Energy, partners in the multi-billion-dollar project, made the announcement on Sunday.
There is local impact of the canceled project as a portion of the pipeline would cross Northampton County, basically along the I-95 corridor. The project called for a regional office to be built near the Northampton community of Pleasant Hill. That construction was completed in October of last year.
Right-of-way purchases have been made in Northampton and some of the pipeline work was underway before permitting delays forced that to end.
“There are many issues that will need to be addressed as we wind down the ACP,” stated Dominion spokesperson Ann E. Nallo in answering questions posed by this newspaper.
“As this was a federally-approved project, we’ll be working with FERC (Federal Energy Regulatory Commission) and other agencies over the coming months to decide the best path forward for the completed infrastructure related to the project, the restoration plan, and the easement agreements with landowners. Landowners will of course keep any compensation they have already received.”
In a joint press release, the partners said that despite last month’s overwhelming 7-2 victory at the United States Supreme Court, which vindicated the project and decisions made by permitting agencies that would allow the pipeline to cross more than 600 feet underneath the Appalachian Trail, recent developments have created an unacceptable layer of uncertainty and anticipated delays for ACP.
Specifically, the decision of the United States District Court for the District of Montana that overturned a long-standing federal permit authority for waterbody and wetland crossings (Nationwide Permit 12), followed by a Ninth Circuit ruling on May 28 indicating an appeal is not likely to be successful, were deemed as “new and serious challenges” to the project.
“This new information and litigation risk, among other continuing execution risks, make the project too uncertain to justify investing more shareholder capital. Unfortunately, the inability to predict with confidence the outcome of the project’s permits and the potential for additional incremental delays associated with continued legal challenges, means that committing millions of dollars of additional investment for tree-felling and subsequent ramp up for full construction is no longer a prudent use of shareholder capital,” the press release stated.
The release went on to say that a series of legal challenges to the project’s federal and state permits has caused significant project cost increases and timing delays. These lawsuits and decisions have sought to dramatically rewrite decades of permitting and legal precedent including as implemented by presidential administrations of both political parties. As a result, recent public guidance of project cost has increased to $8 billion from the original estimate of $4.5 to $5 billion. In addition, the most recent public estimate of commercial in-service in early 2022 represents a nearly three-and- a-half-year delay with uncertainty remaining.
In a joint statement, Thomas F. Farrell, II, Dominion Energy chairman, president, and chief executive officer, and Lynn J. Good, Duke Energy chair, president, and chief executive officer, said, “For almost six years we have worked diligently and invested billions of dollars to complete the project and deliver the much-needed infrastructure to our customers and communities. We express sincere appreciation for the tireless efforts and important contributions made by all who were involved in this essential project. This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged.”
The Atlantic Coast Pipeline was initially announced in 2014 in response to a lack of energy supply and delivery diversification for millions of families, businesses, schools, and national defense installations across North Carolina and Virginia.
The project was also expected to create thousands of construction jobs and millions of dollars in tax revenue for local communities across West Virginia, Virginia and North Carolina. It was estimated that Northampton County would receive $1.3 million annually in tax benefits once the pipeline was up and running.