Are Temporary Jobs an Adequate Justification for MVP or ACP?

by Duane Nichols on December 11, 2017

Thomas Hadwin, Former Gas Utility Executive

Expensive Pipelines Not Needed for Natural Gas Service in Virginia or North Carolina

From an Essay by Thomas Hadwin, Friends of the Central Shenandoah, December 8, 2017

For large construction jobs these days, often the supervisors and highly skilled positions are union members because of their skill and experience. The far more numerous lower skilled jobs are usually filled by non-union workers.

These jobs will last just 8-10 months according to the pipeline owners. The MVP says 10% of the workforce will be hired locally. The ACP says 50% will be local. You form your own opinion about which is more accurate. This will hardly rebuild the middle class in Virginia communities.

All of this attention on construction jobs continues to overlook the fundamental realities. Existing pipelines in our region are adding several times the capacity to their systems than are being provided by the ACP and MVP combined. Between 2007 and 2016 we added 121 Bcf/d to our nation’s pipeline capacity. For comparison, the EIA says natural gas use in the U.S. in 2016 averaged 75.11 Bcf/d, with a seasonal high use of 93.1 Bcf/d in January 2017.

We don’t have a shortage of pipeline capacity, especially since forecasts of traditional natural gas use and electricity use are relatively flat. Florida, one of the states with the fastest growth in population and economic activity, experienced total natural gas use that is 4% lower this year than last year. Florida Power & Light expects this downward trend to continue in the 10-year plan they submitted to state regulators. Yet, like elsewhere, they are continuing to overbuild gas-fired power plants and the pipelines they think will be necessary to serve them.

The major point that is overlooked in all of this cheer-leading is that these new pipelines will cost us billions of dollars. Over the 20-year contracts signed by the utilities controlled by the owners of the ACP, the ratepayers of those utilities will pay about $3 billion more in Virginia and over $6 billion more in North Carolina than they would if they were served by connections to existing pipelines.

Why are we so eager to trade a few months of temporary work for a thousand, when millions of families and businesses in Virginia and North Carolina will pay billions extra because of the ACP?

The MVP has no customers. About a third of its capacity is spoken for by utilities. But they are located in Florida, D.C., and New York. The New York Public Service Commission is opening an inquiry into why New York City ratepayers would be better off getting gas via the MVP than they would if they were served directly from northeastern Pennsylvania as they are today. ConEd failed to notify the PSC that they were part-owners of the MVP.

All of the utilities that are shippers on the MVP could receive gas far more cheaply from existing pipelines than they could from the MVP. Only Roanoke Gas is connected to the MVP, taking only 0.5% of its capacity. But even Roanoke Gas could likely receive gas cheaper by connecting to nearby existing pipelines than they could from the MVP.

Nearly two-thirds of the capacity of the MVP is reserved by EQT, the largest gas producer in the Appalachian Basin. It has no customers, but will owe the MVP over $9 billion for its 20-year contract. In recent financial filings, EQT admitted it did not have sufficient capital to complete construction of the project.

By overlooking this information, regulators, political, business, and labor leaders are trading an extremely short-term gain for long-term pain for everybody else. By this short-sighted action they are harming their own long-term interests along with everyone else’s. There is a better way.


See Video: True Costs of the Atlantic Coast Pipeline ACP

{ 1 comment… read it below or add one }

Blue Virginia December 11, 2017 at 2:35 pm

New Economic Analysis: Fracked-Gas Pipelines Could Lead to Billions More in Charges to Dominion Customers, No Job Growth in Virginia

From Blue Virginia, December 5, 2017

You know how Gov. Terry McAuliffe has spent the past four years running around Virginia, repeating Dominion’s (laughable, false) talking points about how the Atlantic Coast Pipeline will be a “game changer” that will supposedly “spur economic growth in all parts of the commonwealth? Or how we’re supposedly “talking jobs, economic development, and it’s good for the environment…a win-win today for everybody?” Or how the pipeline will supposedly “create 8,800 jobs, produce $1.42 billion in economic activity in the Commonwealth and generate $14.6 million?” On and on it goes. I mean, is there anything the Atlantic Coast Pipeline can’t do? Cure the common cold? Done!

Bring unemployment down to zero, with everyone making $1 gazillion a year for sitting home and watching Netflix? No problem! I mean, seriously, has this been the most laughably overhyped, oversold boondoggle in Virginia history or what?

Pretty much, yeah, according to an actual economic analysis, just published by the Applied Economics Clinic at Tufts University. Key findings from this study basically demolish all the Dominion Energy hot air TMac’s been spewing.

This could cost Dominion customers a ton. “Dominion claims that the ACP will save consumers money by supplying the region’s power producers with shale gas, even accounting for the additional cost to transport the gas from farther away…In fact, testimony using Dominion’s own, more recent cost projections concludes that Dominion’s customers may actually pay $1.61 to $2.36 billion more with the ACP than without the ACP over the next 20 years.”

There’s no need, from a demand perspective, for the ACP. “Dominion and its pipeline partner Duke Energy (Duke Energy Carolinas and Duke Energy Progress) have lowered forecasted demand by 15,468 GWh in 2025 since the ICF report was released. This reduction in future energy load reflects a reduced need for new natural gas combined cycle generating capacity, and a corresponding reduction in demand for natural gas…. These lower utility demand forecasts would eliminate the need for a large amount of new natural gas generating capacity and avoid 375 million cubic feet per day of natural gas delivery.”

Pipeline-induced job growth? Not likely. “Recent evidence from states with new natural gas pipeline capacity shows no support for the conclusion that the addition of new pipelines leads to additional opportunities for new manufacturing jobs in those states.

There is no clear support for the claim that the ACP would lead to additional opportunities for new manufacturing in the region, and this is likely the case for other new natural gas pipelines such as the Mountain Valley Pipeline.”

It’s even possible we’ll LOSE manufacturing jobs with the ACP. “Seven states with additional pipeline capacity saw both falling electricity prices and losses to manufacturing jobs, including Virginia,31 one of the states in which the ACP and MVP would deliver natural gas. West Virginia—a major natural gas producer and the origin for a number of new natural gas pipelines including the ACP and MVP—has experienced increased electricity prices coupled with losses in manufacturing jobs in the state.”



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