By Ryan Cooper
In April 2012, President Obama boasted that under his administration, “We’ve added enough new oil and gas pipeline to circle the Earth and then some.” He wasn’t wrong — indeed, under his watch, American production of oil and natural gas exploded, driving the United States to become today the largest producer of oil and gas in the world, surpassing even Russia and Saudi Arabia.
That is the context for yet another natural gas pipeline under development, the Atlantic Coast Pipeline, a 600-mile-long, 42-inch-wide affair stretching from West Virginia to the Virginia coast, which began construction in late 2017 but has since stalled. This one is being pushed by a coalition of companies led by Virginia’s Dominion Energy (and its powerful CEO, Tom Farrell), and another main partner, North Carolina’s Duke Energy. Southern Company of Georgia has a much smaller stake.
But despite the gusher of Big Carbon profits, like all natural gas infrastructure proposed or under construction, the ACP is a risky project both financially and in its direct effect on the landscapes and communities through which it will run. Worse, it is doubling down on a losing hand — locking in huge investments in assets which will very likely be worthless long before they are exhausted. Far from being a relatively clean “transition fuel,” natural gas is a climate disaster that might even be worse than coal. The ACP and all other expansions of gas infrastructure should be stopped permanently.
Let’s start with the most attention-grabbing risks — noise, pollution, and explosions. Pipelines are underground for most of their distance, but they still require huge compressor stations at regular intervals to keep the gas moving. The Atlantic Coast Pipeline will have three — one at the start in Lewis County, West Virginia, one in the middle in Buckingham County, Virginia, and one near the end in Northampton County, North Carolina.
Each compressor station is basically a big factory operating 24 hours a day. Like pipelines in general, they pollute. They typically have either diesel or natural gas-fueled compressors, which make a deafening racket and emit all manner of toxins in a concentrated area. In cases of gas flow mismanagement, or an emergency, or a need for maintenance, it can be necessary to conduct a “blowdown” to release the gas — sometimes “flaring” or burning it, but sometimes venting it directly into the atmosphere. Natural gas is toxic to breathe, and since it is under so much pressure, it comes out at high (sometimes supersonic) velocity, making an ear-splitting noise akin to a large jet engine.
The ACP’s 54,000-horsepower middle compressor station is proposed for Union Hill, Virginia, a lower-income rural community whose African-American roots stretch back to the Reconstruction period of the 1870s. Some locals have mobilized furiously to keep the compressor station out. The station would be 100 yards from the property of Richard Walker, whose family bought part of his land for $15 in 1887, he told The Week in an interview. It is a “huge industrial facility” that poses a clear threat to his family and livelihood, he said. “It should be stopped.” (A federal appeals court recently threw out Dominion’s permit for the Union Hill station, but Dominion can still apply again.)
In addition to the routine pollution, if pipelines or compressor stations leak, they can create dangerous pockets of flammable gas — which take just a spark to explode. Multiple pipeline explosions near Midland, Texas, in August 2018 “sent five people to hospital with critical burn injuries.” A pipeline in Kentucky exploded in August 2019, killing one person and hospitalizing five others, and sending flames shooting 300 feet into the air. Another blew up in April 2016 in Salem, Pennsylvania, obliterating one man’s home and causing a half-mile radius of land to be evacuated. The Fractracker Alliance compiled federal data (self-reported by the gas industry), and found 1,069 incidents involving gas transmission or gathering between January 2000 and November 2018 which caused 99 injuries, 24 fatalities, and $1.1 billion in damages.
Leslie and Jason Harris, homeowners in Churchville, Virginia who have been forced through eminent domain to accept the pipeline crossing near their home, worry the ACP will destroy their wealth and endanger their family. If you were shopping for a home, and there was even a 0.001 percent chance that a nearby 42-inch gas pipeline might spring a leak and poison you in your sleep, or catch fire and blow you and the house to smithereens, would you buy that house?
That may seem paranoid. But consider that because Dominion and its partners began construction of the ACP before obtaining all necessary approval, and then ran into legal roadblocks, the actual pipe for the project has been stacked up outdoors for years. The pipe is coated with an epoxy compound to protect it from corrosion (which itself contains carcinogenic solvents). But the coating is designed to sit underground, not outside in weather and direct sunlight. As Amy Mall at the Natural Resources Defense Council notes, the National Association of Pipe Coating Applicators recommends that coated pipe not be allowed to sit outside for more than six months without protection from sunlight. Not exactly the kind of thing you want to be trusting to contain extremely flammable gas at high pressure.
Finally, the pipeline would create a permanent gash across the landscape, as the vegetation around it will have to be kept down so workers can perform maintenance and repairs. That is one reason why a federal court recently ruled that the U.S. Forest Service’s approval for the ACP to cross the Appalachian Trail was improper. (The Supreme Court will hear the case on February 24.)
So if the Atlantic Coast Pipeline is such a physically risky and noxious project, let’s examine the other side of the ledger. What sort of benefits will these pipelines provide?
There are almost none, at least not for the American people. The ostensible point of a natural gas pipeline is to provide just that — fuel for American consumers. “The pipelines serving our region are fully tapped and unable to keep up with consumer demand,” claims the ACP website. But this is hard to credit — on the contrary, the American gas market is saturated. The post-2008 fracking revolution created a flood of new gas supply, driving the price per BTU of gas at the Henry Hub (a huge gas terminal in Louisiana that is commonly used as a market indicator for the whole country) from $13.40 in 2008 to $1.79 at time of writing. This in turn has driven a major expansion of natural gas electricity production, but not enough to soak up all the supply — especially given that renewables are quickly achieving cost-competitiveness even with gas in some regions. “Persistent oversupply” is a common refrain in business coverage of the gas industry.
Now, the whole country is not perfectly wired up into the gas pipeline system, particularly in the thinly-populated Mountain West. California also has somewhat indirect access to the biggest supplier states, which are Texas and Pennsylvania. But the eastern half the country is criss-crossed with a rat’s nest of gas pipelines, which already serve the gas needs of the population perfectly adequately. Indeed, because of the way pipelines are financed (more on this below), ACP gas could easily be more expensive than what is currently available. Lorne Stockman and Kelly Trout studied several proposed pipelines in a report for Oil Change International (an environmentalist think tank), and using government data estimated that ACP gas would be 3.5 times more expensive than that from the existing Transco pipeline for Dominion’s gas power plants in southern Virginia, and 28 percent more expensive for ordinary delivered gas. Indeed, the Federal Energy Regulatory Commission, which must approve any new pipeline project, “does not look at need” when considering an application, said Joan Walker (who works for the Sierra Club’s Beyond Fuels Campaign) in an interview with The Week.
A Dominion Energy representative argued in an email to The Week that “The pipelines currently serving Virginia and North Carolina are extremely congested, and they’re operating at full capacity,” pointing to a report that local Navy bases were forced to accept reduced gas supply for three days back in 2015, and a letter from the bipartisan Hampton Roads caucus in the Virginia legislature arguing more capacity is needed. It may be the case that some or all of the vast ACP capacity could be put to use soon. But if so, that is in large part thanks to demand that Dominion has itself created by building several large gas plants in the area over the last few years, including a 1,588 megawatt facility that began operation on December 8. Dominion claims they are “all-in” on renewable energy, yet another big gas plant is in the works in Chesterfield, Virginia. Furthermore, a report from S&P Global (a market research firm) found that Dominion “has consistently over-forecast electricity demand to justify building new capacity, primarily natural gas plants with dubious economics that will ultimately be paid for by ratepayers.” (It’s also worth noting that six Republican members of the Hampton Roads caucus have large personal investments in Dominion stock.)
All this is characteristic of a gas industry which is clearly moving to increase both production and consumption of natural gas by any means necessary. It’s not about current energy needs so much as ensuring that as much energy production as possible is gas-based.
For aside from domestic power, the gas industry has drastically increased its export capacity, and is planning to increase it further. As recently as 2015, the U.S. had no terminals to export liquid natural gas (LNG), and could only export through pipelines to Canada and Mexico. But energy companies have built six major export terminals for LNG since 2016 (one of them a Dominion facility in Maryland). Together with steadily increasing production, this enabled an enormous surge of gas export, which more than doubled between 2013 and 2018 (through both pipelines and terminals). Yet even that has not been enough to absorb all gas production, which increased by a whopping 12 percent in 2018 — the largest percentage increase on record, from an already-high base. Production continued to increase in 2019. Domestic storage ended up with the balance, by October nearly reaching record levels set in 2016. That is surely why energy companies have eight more export terminals under construction, 13 more approved but not yet being built, and a further nine in the application process.
Now, the ACP will apparently not have a direct export terminal connected, but it will be hooked up into the rest of the pipeline system that does. Canada, Mexico, France, Spain, South Korea, and Japan already use lots of U.S. natural gas — and the general European supply has been disrupted by the ongoing dispute with Russia over Ukraine. Financial analysts have already written about how best to profit from Dominion’s previous Cove Point export terminal in Maryland, and predicted that additional export capacity will keep the domestic price at or above $2.50 per BTU. Incidentally, this implies that more pipelines might actually increase the domestic gas price by tapping overseas demand and reducing domestic supply.
But it might be an even worse deal than that for consumers. Surprisingly, gas demand of any kind is largely irrelevant for financing actual pipeline construction. The ACP will be financed not by gas sales, but by utility ratepayers (or customers, whose bills are controlled by state regulation). As Stockman and Trout explain, when a pipeline is approved by the Federal Energy Regulatory Commission (FERC), the owner is allowed a rate of return on investment of up to 14 percent — which usually comes out of the pockets of regulated utility customers regardless of how, or even if, the gas is used. (This 14 percent figure was set in 1997 when prevailing interest rates were about twice the current figure.)
Now, this 14 percent return is subject to local regulatory approval, but Dominion is famously influential over both state regulators and legislatures. Democratic Virginia Delegate Sam Rasoul of Roanoke (part of a new caucus of anti-monopoly Democrats who refuse to accept Dominion campaign donations) described a 2015 utility bill pushed by Dominion as “corrupt” in a speech on the floor of the Virginia legislature. A 2018 report from the Virginia energy regulator found Dominion had overcharged its customers to the tune of $277 million.
It’s not hard to miss how this applies to the ACP. For instance, the companies that will distribute the gas are themselves associated with the pipeline owners themselves. As Cathy Kunkel shows for the Institute for Energy Economics and Financial Analysis, six companies, all of whom are affiliates of Dominion, Duke, or Southern, have contracted for 96 percent of ACP capacity. So long as local regulators approve, they can then pass on the pipeline cost (including that 14 percent profit) to their captive ratepayers through a surcharge, no matter how much gas actually passes through it. Heads the energy companies win, tails the ratepayers lose.
Ultimately, the only people who will really benefit from the ACP are Dominion, Duke, and Southern investors and executives, and perhaps foreign countries that might see a small drop in their gas bills.
Any profits enjoyed by a tiny minority of already-wealthy American oligarchs, or slight reductions in energy costs in other nations, however, are far outweighed by the climate effects of any natural gas pipeline. Climate change is overwhelmingly the most important aspect of the ACP project, and it should be a conclusive blow against any possible argument for it or any other natural gas investment. Natural gas is a climate disaster, and it should be extirpated as a fuel at the earliest practicable moment. It should have been done decades ago.
The gullible centrist line on natural gas for years has been that it is a “bridge fuel,” because it is less carbon-intensive than coal when burned. But this assumption fails to account for leaks (that is, when the gas escapes at some point instead of being burned), especially given the fact that methane (the primary ingredient of natural gas) itself is an enormously powerful greenhouse gas, some 86 times as powerful as carbon dioxide over a 20-year timespan. A mere 2.7 percent leak rate will completely cancel out any climate benefit from gas-fired electricity relative to coal, and more than that makes it worse. Sure enough, scientists have taken measurements around the wellheads, the collector pipelines, the processing refineries, the compressor stations, and the distribution networks, and found significant leaking at every point in natural gas production. A recent meta-analysis published in the journal Science found an overall leak rate of between 2 and 2.7 percent — and that is probably an underestimate, since they had few studies to include on distribution and end use, and both city pipe systems and gas-fired appliances are often old and prone to leaks. (A Dominion spokesman argued that their infrastructure does not leak this much, pointing to a company report finding only 0.102 percent loss of gas. But this is internal Dominion data, not a peer-reviewed external study.)
In other words, the supposed climate benefits of natural gas, even as a temporary measure, are a mirage.
So far, the multinational Big Carbon industries have largely succeeded in stymieing any global attack on climate change and are continuing to build out investments to enable consumption of even more fossil fuels. But this is driving an increasingly desperate mobilization among the trapped citizenry of countries across the globe — witness the worldwide mass demonstrations inspired by Greta Thunberg, who became one of the world’s most famous people virtually overnight on the strength of her climate protests. The gap between what governments must do to head off climate apocalypse — the threat of which is ever more apparent in increasingly extreme fires, flooding, drought, heat waves, and storms — and their backing of Big Carbon projects will only build and build. Every frontrunner in the Democratic Party supports plans for a crash decarbonization program.
It is highly likely that at some point in the next decade the stranglehold Big Carbon oligarchs have over global climate policy will snap, and there will be an all-out assault on United States fossil fuel infrastructure. Towards the top of the agenda will be cutting consumption of natural gas, as electricity generation is shifted to green power, and home heating is shifted to heat pumps and other methods. With the United States leading the way (instead of sabotaging things), Europe, East Asian democracies, and Mexico will likely step up their climate policy efforts.
There is every chance expensive pipelines like the ACP will become worthless “stranded assets” — meaning either Dominion and Duke Energy will absorb a crushing financial blow (possibly requiring a taxpayer bailout) or regulated ratepayers will continue paying for pointless, idle pipelines for the next several decades. Either way it would be a huge waste of money and resources.
Natural gas is a bridge to nowhere. The Atlantic Coast Pipeline and all its brethren should be halted immediately.