ACP Talking Points Don’t Stand Up to Scrutiny

In the first in a series of Oil Change International blogs building on their September 2017 report, Art of the Self-Deal, and responding to statements (the same statements. over and over) offered by Dominion Energy’s spokespersons, Oil Change International discusses why the report on the economic impact of the ACP by Dominion’s consultant, ICF, never did make any sense.

The ICF report claims that consumers in Virginia and North Carolina combined could save $377 million over twenty years due to the discounted Appalachian gas the project might deliver, $243 million in Virginia alone. “These numbers have been repeatedly stated by Dominion and other pipeline supporters in promotional materials, opinion pieces and in comments in response to dissent from pipeline opponents.

“The numbers are calculated based on the idea that the pipeline will deliver gas from the Appalachian Basin that sells at a discount to gas delivered from the Gulf Coast by existing pipelines. But this assumption is fundamentally flawed. So much so that it is hard to imagine ICF was not aware of at least some of the flaws. But let’s give them the benefit of the doubt for now.

“There are three reasons this assumption is flawed:

  • The assumption that price discounts in Appalachia will continue into the 2030s — even as new pipeline capacity, including ACP, is added — defies the laws of supply and demand.
  • The price of gas is not the only cost associated with gas delivered by a pipeline. The transportation cost of using the pipeline must be added and was not clearly included in the ICF analysis.
  • Owners of the existing pipeline system were also planning to connect their system to Appalachian Basin gas. Indeed, the Transco pipeline is already flowing gas from Pennsylvania. Therefore, the comparison with the price of gas on the Gulf Coast is invalid.”

Read the full blog post here.