(The Center Square) – Energy companies have canceled the multibillion dollar Atlantic Coast Pipeline plan, which was designed to build a natural gas pipeline through parts of West Virginia, Virginia and North Carolina.
The proposed 600-mile pipeline, which would have traveled from Harrison County, West Virginia, through Virginia, and ended in Robeson County, North Carolina, was expected to create about 17,000 jobs and $2.7 billion in economic activity in the three states.
The plan faced legal challenges from environmental groups that failed to stop the pipeline after the U.S. Supreme Court overturned a lower court ruling that would have halted parts of the project.
Although Dominion Energy and Duke Energy finally won the legal fight, they came out of the battle heavily damaged with a project three years behind schedule and a budget expected to be $3 billion higher than initial projections. Fearing additional legal challenges and unsure about the future of the project, the companies ended their six-year-long venture.
"We regret that we will be unable to complete the Atlantic Coast Pipeline,” Dominion Energy President Thomas Farrell and Duke Energy President Lynn Good said in a joint statement.
“For almost six years we have worked diligently and invested billions of dollars to complete the project and deliver the much-needed infrastructure to our customers and communities,” the statement read. “ … This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country's energy needs will be significantly challenged."
The announcement brought disappointment for some members of the business community and Republican government officials, some of whom have hyped the project for more than a half-decade. Alternatively, the decision brought satisfaction to environmental groups who had been fighting the creation of the pipeline and politicians who have aligned themselves with environmentalist policies.
Garrett Ballengee, the executive director of the West Virginia-based, free-market Cardinal Institute, told The Center Square the pipeline’s cancelation hurts families that were going to rely on its construction, the regional economy and state and local tax revenue, all of which have been hurt by the response to COVID-19. He said it also will have a negative effect on the environment because it will force the region to rely on more carbon-intensive energy sources.
“I think it's also a defeat for progress, as it's becoming clearer that the nexus of regulatory, judicial, and activist pressure makes it increasingly unlikely that large-scale, positively impactful, energy-creating projects will even be attempted, let alone completed,” Ballengee said. “I think many people forget that a modern world and modern economy relies on consistent, reliable and cheap energy, and the Atlantic Coast Pipeline is yet another indicator that few people consider energy policy in a thoughtful, reasoned or even pragmatic way. It's a sad day for West Virginia, and it's a sad day for progress.”
Stephen Haner, a senior fellow for state and local tax policy at the Virginia-based, free-market Thomas Jefferson Institute, said the cancelation of the pipeline will negatively effect Virginia’s economy, too.
“Remember, the construction industry and even craft unions were enthusiastic for this project, and the work it would bring,” Haner told The Center Square. “Many people were obviously opposed to the easements on their land, but others were probably counting on that revenue. And the pipeline would have produced steady tax revenue in every jurisdiction it touched, with more dollars for the state. In comparison, two wind turbines were just installed off Virginia Beach by foreign work crews in foreign ships that never touched a U.S. port. Expect more of that.”
Haner said Virginia's economic competitiveness will suffer if the collapse of this project hurts the businesses environment. He said many major industries need natural gas to operate or grow.
The project also had support from more than two dozen local chambers of commerce.
West Virginia Gov. Jim Justice tweeted out his disappointment. Justice was elected to his position as a Democrat, but switched his party to Republican while in office.
“I am disappointed by the decision to shut down the Atlantic Coast pipeline project,” Justice said. “I’ve always said West Virginia abounds in natural resources unlike anywhere else. This project would have meant countless dollars and thousands of jobs for our state.”
The Democratic governors of the other two states felt differently.
“This decision and the changing energy landscape should lead to cleaner and more reliable energy generation in North Carolina,” North Carolina Gov. Roy Cooper said in a statement. “Our Clean Energy Plan provides an excellent framework and stakeholder process for renewable energy moving forward.”
Virginia Gov. Ralph Northam’s press secretary, Alena Yarmosky, told The Center Square that Northam also approved of the decision.
“Gov. Northam spoke with Dominion Energy leaders [Sunday] and told them he supports this decision and the company’s transition to clean energy,” Yarmosky said. “Renewable, clean energy will power America’s future, and the governor will continue to work with the company and environmental advocates to make Virginia a national leader.”