The big energy companies behind the proposed Atlantic Coast Pipeline announced July 5 they are dropping the controversial project, blaming legal setbacks and economic uncertainty.
The 600-mile pipeline would have carried natural gas from West Virginia through Virginia to North Carolina. Dominion Energy and Duke Energy launched the project in 2014 to address what they said was “a lack of energy supply and delivery diversification” in the region.
The announcement comes less than a month after the U.S. Supreme Court ruled 7-2 in favor of allowing the pipeline to cross the Appalachian Trail and 21 miles of national forest lands. But several other permits have been vacated by lower courts, leading to a construction stoppage dating to late 2018.
Those legal challenges cost the developers time and money. In a joint statement, Dominion and Duke estimated that the earliest the pipeline could have been in service would have been in 2022 – 3 ½ years later than initially planned. Meanwhile, the price tag had soared from $4.5 billion to $8 billion.
Dominion and Duke said cases decided elsewhere also undermined the pipeline’s financial viability. The U.S. District Court for the District of Montana overturned long-standing federal authority to permit pipelines to cross wetlands and water bodies. The Ninth Circuit on May 28 upheld the lower court’s freeze on the fast-track permitting approach.
“This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States,” Dominion CEO Thomas F. Farrell II and Duke CEO Lynn G. Good said in a joint statement. “Until these issues are resolved, the ability to satisfy the country's energy needs will be significantly challenged."
The permitting uncertainty upended other decisions for the project, the companies said. For example, they planned to clear trees this coming winter to make room for digging and construction. But committing millions of dollars to that endeavor when the pipeline’s fate remained up in the air would have been too risky, they said.
Opponents included environmentalists, environmental justice advocates, farmers and residents in the pipeline’s path. They characterized the project’s cancellation as a watershed moment in the nation’s agonizingly slow transition away from reliance on fossil fuels.
““The fossil fuel era is rapidly drawing to a close in Virginia and nationwide thanks to the ferocious six-year opposition to this destructive pipeline,”said Mike Tidwell, executive director of the Chesapeake Climate Action Network.
The Southern Environmental Law Center, another courtroom foe, called the decision a victory against a “risky and unnecessary” project. The group led the successful fight to overturn a federal air permit for a compressor station associated with the pipeline in the predominately Black community of Union Hill in Virginia.
In that case, the Fourth Circuit of the U.S. Court of Appeals ruled that the state had failed to adequately consider the environmental justice implications of constructing the compressor.
“This is a great day for the people of Union Hill, for public lands, for landowners in the path, and for all North Carolinians and Virginians who deserve a clean energy future and are no longer on the hook to pay for this $8 billion pipeline,” said Greg Buppert, an SELC senior attorney.
In a separate announcement on July 5, Dominion said it was selling its gas transmission and storage assets to Warren Buffett’s Berkshire Hathaway Energy. The transaction was valued at nearly $10 billion.