Utility Dive Brief: July 29, 2019

4th Circuit Court vacates permits for Dominion's Atlantic Coast Pipeline

By Robert Walton, Utility Dive

Dive Brief:

  • The Fourth Circuit Court of Appeals on Friday vacated permits issued to Dominion Energy’s Atlantic Coast Pipeline by the U.S. Fish and Wildlife Service, concluding the agency “lost sight of its mandate” to protect the environment as it fast-tracked some decisions.
  • The proposed pipeline would run 600 miles through parts of Virginia, West Virginia and North Carolina. It includes three compressor stations, and Dominion says it is necessary to meet gas demand in the Mid-Atlantic region.
  • Work on the pipeline has been on hold since December 2018, since the court invalidated Dominion’s crossing of the Appalachian Trail in Virginia. The delays forced Dominion earlier this year to raise cost estimates for the project by $1 billion, up to $7.5 billion

Dive Insight:

The Atlantic Coast Pipeline faced opposition at every step since the project was first proposed to the Federal Energy Regulatory Commission (FERC) in 2015. Project opponents say it would  “decapitate” miles of mountain ridges and that the gas it would carry is not needed.

Dominion officials say the pipeline is vital to growing the region’s economy, and they are committed to the project in spite of the circuit court’s decision.

The Fourth Circuit Court concluded the Fish and Wildlife Service did not sufficiently assess the project’s impacts under Endangered Species Act (ESA), and pointed to just 19 days the federal agency took to make some assessments.

“In fast-tracking its decisions, the agency appears to have lost sight of its mandate under the ESA,” the court wrote.

Dominion officials say they are looking for a quick resolution.

“We expect FERC and the Fish and Wildlife Service will be able to immediately begin working to correct the errors identified by the court,” Dominion spokesperson Aaron Ruby said in a statement.

The company says that once a new biological opinion and other assessments are issued, it will then seek approval from FERC to resume construction.

“We’re confident we remain on track to complete the project by late 2021,” the company said.

A legislative fix may be more likely for Dominion’s project, rather than turning to the U.S. Supreme Court, according to James Lucier at energy research assessment firm.

“We do not think that ACP can get a new permit administratively due to the Fourth Circuit appeals court ruling that places Appalachian Trail jurisdiction solely with the National Parks Service,” he said, referring to last year’s court decision, which Dominion has appealed.

“The best bet now is for ACP … to get a legislative fix,” Lucier said in an update on the pipeline’s progress. “We think the time for this to happen would be starting in October, when Congress will need to pass legislation to fund the government for the coming FY 2020 fiscal year and to raise or suspend the debt ceiling.”

Opponents of the project say Dominion customers and the environment would be better serviced if the company gave up on the pipeline.

The project “threatens endangered species, clean water, and human health for a fracked gas pipeline that we don’t even need,” Sierra Club Attorney Nathan Matthews said in a statement. “We have said all along that many of the ACP’s permits were issued in flawed, rushed processes, and time after time, the courts have agreed.”

Dominion has scheduled its second quarter earnings conference for 10 a.m. on July 31, and may provide additional details about the pipeline project.