ACP faces many issues of financing, federal regulations and state laws

“The ACP is facing a triple threat,” so concludes a new study released March 25 by Oil Change International and Friends of the Earth.

“Atlantic Coast Pipeline – Risk Upon Risk” cites three principal threats to the viability of the Atlantic Coast Pipeline:

1) extensive legal and regulatory challenges that are delaying construction and raising costs;

2) fundamental challenges to its financial viability in the face of lack of growth in domestic demand for methane gas and increased affordability of renewable energy options; and

3) an unprecedented citizen initiative positioned to ensure strict compliance with environmental laws and regulations.

Some further highlights from the six-page study:

• “The ACP is a climate, environmental and human rights boondoggle.”

• “The ACP is facing an onslaught of legal challenges and loss¬es. Seven federal permits have been stayed, suspended or vacated; in fact, all construction on the pipeline is currently stopped. When — or if — construction will start up again is unknown. Environmental groups, Indigenous Peoples and others have brought at least nine court challenges to ACP permits and certifications, most of which are ongoing.”

• “In Dominion’s 2018 long-term Integrated Resource Plan (IRP), four out of five modeled scenarios showed no in¬crease in methane gas consumption for power generation from 2019 through 2033.9 However, in December 2018, this IRP was rejected by Virginia state regulators, in part for overstating projections of future electricity demand.”

• “The most recent IRPs of Duke Energy Progress and Duke Energy Carolinas also revealed that previously planned methane gas plants have been delayed by at least five years beyond the original proposal, and none have been approved by the state regulator.”

• “Over the next decade, it is likely that the demand for methZane gas in Virginia and North Carolina will decrease further as renewable energy and storage technologies continue to rapidly decline in price and undercut the cost of running methane gas-fired power plants.”

• “If construction proceeds, an unprecedented, highly coordinated science and technology-based Pipeline Compliance Surveillance Initiative (CSI) is positioned to make sure environmental laws and regulations are strictly applied and enforced during construction. It is spearheaded by the Allegheny-Blue Ridge Alliance and member organizations.”

These challenges and the accompanying risk are likely to further delay construction and raise the project’s price tag even higher. If completed, state utility regulators in North Carolina and Virginia are unlikely to justify passing the full cost of methane gas transportation contracts onto ratepayers.

It would be prudent for investors in Dominion, Duke, and Southern to question whether pursuing the ACP further is a good use of capital. As the transition to clean energy gathers pace, the risks and growing costs of this major methane gas pipeline project look increasingly unwise to ratepayers, regulators and investors alike.

Briefing: Atlantic Coast Pipeline – Risk Upon Risk – Lorne Stockman, Oil Change International

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See also: Duke Needs ‘Another Project’ If Atlantic Coast Pipeline Fails, CEO Says – Bloomberg