On March 25, 2019, Oil Change International released a new report, Atlantic Coast Pipeline – Risk Upon Risk, about the public health, ecological, and economic risks of the now $7.5 billion dollar ACP. As the transition to clean energy gathers pace, the risks and costs of this huge fracked gas pipeline project are growing rapidly in the face of major legal, regulatory, financial, and community challenges.
The ACP is now two years behind schedule and substantially over-budget. The latest update from Duke Energy estimates the project cost at between $7 to $7.8 billion – 37% to 53% higher than the original estimate of$5.1 billion – with the latest date for full operation now pushed back to 2021.
Lorne Stockman of Oil Change International says the ACP is facing a triple threat of challenges that combine to present serious obstacles for the project to reach completion:
- Extensive legal and regulatory challenges that are delaying construction and raising costs, which may lead to cancellation. ““The ACP is facing an onslaught of legal challenges and losses. 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.”
- 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. “In Dominion’s 2018 long-term Integrated Resource Plan (IRP), four out of five modeled scenarios showed no increase in methane gas consumption for power generation from 2019 through 2033. However, in December 2018, this IRP was rejected by Virginia state regulators, in part for overstating projections of future electricity demand.” “Over the next decade, it is likely that the demand for methane 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.”
- The Pipeline Compliance Surveillance Initiative (CSI), an unprecedented citizen initiative, is positioned to ensure strict compliance with environmental laws and regulations, even in remote locations, if construction proceeds. [Three cheers for the CSI!]
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.