Atlantic Coast Pipeline Canceled as Delays and Costs Mount

Two of the nation’s largest utility companies announced on Sunday that they had canceled the Atlantic Coast Pipeline, which would have carried natural gas across the Appalachian Trail, as delays and rising costs threatened the viability of the project.

Duke Energy and Dominion Energy said lawsuits, mainly from environmentalists aimed at blocking the project, increased costs to as much as $8 billion from about $4.5 billion to $5 billion when it was first announced in 2014. The utilities said they began developing the project “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 two energy companies had won a victory only last month in the Supreme Court over a permit from the U.S. Forest Service but said “recent developments have created an unacceptable layer of uncertainty and anticipated delays” for the pipeline. They cited the potential for further legal challenges.

Dominion also said on Sunday that it was selling all of its gas transmission and storage assets to an affiliate of Warren Buffett’s Berkshire Hathaway in a deal valued at $9.7 billion.

Environmental groups have long criticized Dominion and Duke for their continued development of fossil fuel projects. The two companies have argued that they have increasingly added renewable energy sources to produce electricity that include wind, solar and hydro power, but they also contend that they need natural gas for the times when those clean energy resources are not available.

“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,” executives for the Dominion and Duke said in a prepared statement. “This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States.”

Gillian Giannetti, an attorney in the Sustainable FERC Project at Natural Resources Defense Council, quickly issued a statement in support of the utilities’ move. “The costly and unneeded Atlantic Coast Pipeline would have threatened waterways and communities across its 600-mile path,” he said. “As they abandon this dirty pipe dream, Dominion and Duke should now pivot to investing more in energy efficiency, wind and solar — that’s how to provide jobs and a better future for all.”

Dominion’s agreement with Berkshire Hathaway Energy includes the sale of more than 7,700 miles of natural gas storage and transmission pipelines and about 900 billion cubic feet of gas storage. As part of the deal, Berkshire Hathaway will assume about $5.7 billion in debt and make a $4 billion cash payment to Dominion at the closing.

Dominion, a Richmond, Va., based company, provides electricity and natural gas to more seven million customers across 20 states. Berkshire Hathaway Energy’s operations include a portfolio of more than $100 billion in assets and provide service to 12 million electric and natural gas users.

“We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business,” Mr. Buffett said in a statement.

Source Article