WASHINGTON, DC – FEBRUARY 24: Climate activist groups protest in front of the U.S. Supreme Court as … [+]
A major issue is bubbling just beneath America’s surface, literally: the Atlantic Coast Pipeline. It would be 605 miles long and would send natural gas from West Virginia to Virginia and North Carolina. Six hundred feet of this line would channel deep under the famed Appalachian Trail.
The U.S. Supreme Court listened on Monday to oral arguments in the case, which center on the precise entity that will get to decide whether the line is built along the trail: the U.S. Forest Service, which says that it is necessary to help meet the country’s energy goals, or the National Park Service, which says that the land is a national treasure and off-limits to energy use.
Getting any type of energy infrastructure built is cumbersome. But no oil or gas pipeline has ever traversed the Appalachian Trail on federal land. But they have crossed the trail on a state or private properties, says the Southern Environmental Law Center. The question now before the court is a narrow one — whether to allow such development federal lands that the National Park Service has declared sacred.
Denying the permit “would not convert the Appalachian Trail into an impenetrable barrier to pipeline development on the East Coast,” the law center says. “It would, however, likely require a reroute of the Atlantic Coast Pipeline from its current crossing location and, potentially, a reroute of the Mountain Valley Pipeline, sending the developers of these projects back to the drawing board.”
The Federal Energy Regulatory Commission is the five-person body to initially grant or deny those requests — a non-partisan group that tilts toward expanding energy infrastructure. To get a permit and to begin construction, companies must not just show the economic need for pipelines but also that they have worked in advance to satisfy the various stakeholders that include communities and environmentalists. Most disputes are resolved by re-routing pipelines.
In the case of the Atlantic Coast Pipeline, it was first approved in 2017 by FERC. The $5 billion initial costs is now estimated to be $7.5 billion. Legal delays are a reason: In December 2018, the U.S. Court of Appeals for the Fourth Circuit issued a critical ruling. Among its objections has been that the Forest Service did not fully analyze alternative routes. It also said that federal law prohibited energy development on this land — and that the National Park Service had the primary say over this issue, not the Forest Service.
Price of Success
Union members hold signs as they attend a rally to support the building of the Atlantic Coast … [+]
The utilities involved in the construction of the Atlantic Coast Pipeline are Dominion Energy and Duke Energy. Through their counsel and the Trump administration, they argued that a prohibition of development creates a de facto “Great Wall” that would cut off transportation.
“The Forest Service has administrative jurisdiction over federal lands in National Forests,” Noel Francisco, U.S. Solicitor General, wrote to the Supreme Court. “It therefore has authority to grant a pipeline right-of-way across those lands.”
“Simply put, there is no basis in any federal statute to conclude that Congress intended to convert the Appalachian Trail into a 2,200-mile barrier separating critical natural resources from the eastern seaboard,” adds Paul Clement, a lawyer for the utilities. The utilities are also arguing that the pipeline would be so far below the earth’s surface that no one would even notice.
An economic study by Chmura Economics & Analytics says that the project would generate $479 million for West Virginia, $1.4 billion for Virginia and $680 million for North Carolina. The fuel is used to power electric generators as well as a feedstock for chemical and manufacturing plants that make goods exported around the world.
While the environmental community says that the Atlantic Coast Pipeline is about whether the Forest Service can usurp the authority of the National Park Service, the natural gas industry fears the case could have wider implications: Between 29,000 and 62,000 miles of new pipeline is needed over the next 25 years to accommodate the expected demand.
Parallels exist between the Atlantic Coast Pipeline and the Keystone XL Pipeline. In effect, each has become a “line in the sand” for their respective causes: protecting national parks and mitigating climate change, respectively.
The economics of each pipeline is central to their futures, although the Atlantic will transport natural gas while the Keystone will move oil. In both cases, the value of the underlying commodity remains stagnant or is falling. McKinsey & Co., for example, says that by 2025, renewables will begin eating into the market share of natural gas that will still grow by 2% a year. Natural gas prices will not rise above $2.80 per million Btus, it concludes. Still, it says that Appalachia could supply 40% of the North American market in five years — and the natural gas needs a way out.
Oil Change International says that the growth of renewables and battery storage technologies are displacing the need for more natural gas plants: four out of five of Dominion’s modeled scenarios show no increase in natural gas consumption through 2033. Instead of projecting eight to 13 new gas plants, a revised plan has the utility estimating four to seven units.
“While the business case for the pipeline was predicated on the idea that Dominion’s and Duke’s utility subsidiaries would be able to recover the pipeline’s costs from their customers, the growing evidence that the original ‘need’ for the project was overstated increases the risk that utility regulators will not approve some or all of these costs,” says Cathy Kunkel, IEEFA energy analyst, in a release. “This outcome would jeopardize the profitability of the project.”
The Atlantic Coast Pipeline is a classic struggle between energy development and ecological preservation. If the utilities conclude that the pipeline is necessary to meet future demand and that it is financially viable, they can either wait-and-see what the High Court decides or they could choose now to once again re-route their pipeline. Either way, more legal battles are sure to come, elevating the line’s profile and hardening the positions on both sides.
