Energy Companies Shelve Atlantic Coast Pipeline

Dominion Energy and Duke Energy have abandoned plans to continue with the Atlantic Coast Pipeline, an US$8 billion, 600 mile (965 km) pipeline slated to stretch from Harrison County, West Virginia to Robeson County, North Carolina.

Even with a 7-2 decision from the U.S. Supreme Court on June 15 that paved the way for the natural gas pipeline to pass underneath the Appalachian Trail in the George Washington National Forest, the two companies felt that ongoing delays and increasing cost uncertainty made the project less economically viable.

Other court decisions, however, created potential future challenges to the project. The U.S. District Court for the District of Montana recently overturned the long-standing federal permit authority for waterbody and wetland crossings (nationwide permit 12). On May 28, a Ninth Circuit ruling made it clear an appeal would likely not be successful.

While this is only one court case, the companies anticipate similar challenges from other circuit courts regarding environmental permits to surface, which would further complicate the project. Additionally, the Atlantic Coast Pipeline has already endured its share of legal challenges to its state and federal permits, all of which have significantly increased the costs of the project and contributed to several lengthy delays.

“We regret that we will be unable to complete the Atlantic Coast Pipeline. 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. Throughout we have engaged extensively with and incorporated feedback from local communities, labor and industrial leaders, government and permitting agencies, environmental interests and social justice organizations. We express sincere appreciation for the tireless efforts and important contributions made by all who were involved in this essential project,” said Thomas F. Farrell, II, Dominion Energy’s chairman, president, and chief executive officer, and Lynn J. Good, Duke Energy chair, president, and chief executive officer, in a joint statement. “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 Atlantic Coast Pipeline was initially announced in 2014 in response to a lack of energy supply and delivery diversification for millions of families, businesses, schools, and national defense installations across North Carolina and Virginia. The project’s original estimate was US$4.5 to $5 billion with an in-service estimate of early 2022, which represents a nearly three-and-a-half year delay.

Both companies said they will continue to aggressively pursuing the development of renewables, storage, nuclear license renewals, electric vehicle infrastructure, energy delivery infrastructure, as well as energy efficiency and demand side management programs to meet their customers’ needs while creating jobs and spurring new business growth in the aforementioned regions.

Dominion Energy and Duke Energy will separately provide additional information for their respective stakeholders and shareholders as relates to the company-specific financial, environmental, operational, and other impacts of this announcement.

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