Sunday, July 5, 2020

Energy Companies Cancel Atlantic Coast Pipeline

The Two Energy Companies behind Plans to Build a Natural Gas Pipeline spanning from West Virginia to North Carolina announced Sunday, July 5th, that the Project was Canceled, citing Ongoing Legal Battles over the Pipeline's Construction.

In a Statement, Dominion Energy and Duke Energy, pointed to a recent Court Decision in Montana ending the Army Corps. of Engineers' Authority to issue Utility Line Permits across Wetlands and Bodies of Water as a sign of the continued Legal Troubles the Project faced before Completion. The Project was slated to be completed in 2021, and had Won a Permit Battle at the Supreme Court earlier this year.

"The potential for a Supreme Court stay of the district court's injunction would not ultimately change the judicial venue for appeal nor decrease the uncertainty associated with an eventual ruling. The Montana district court decision is also likely to prompt similar challenges in other Circuits related to permits issued under the nationwide program including for ACP," the Companies said.

"This new information and litigation risk, among other continuing execution risks, make the project too uncertain to justify investing more shareholder capital. For example, a productive tree-felling season this winter is a key milestone to maintaining the project's cost and schedule," they added.

Environmental Groups had fought the Project for years, with Opposition to the Pipeline cropping up particularly in Virginia shortly after the Project was announced in 2014. The Pipeline planned to carry Fracked Natural Gas 600 miles across West Virginia, Virginia, and North Carolina.

The Pipeline would run, in part, through the George Washington National Forest, where a 0.1-mile Segment of the Pipeline would Cross about 600 feet beneath the Appalachian Trail. The Sierra Club and other Environmental Groups had argued that because the 2,200-mile Scenic Trail from Georgia to Maine is considered a Unit of the National Park System, No Federal Agency can Grant a Right-of-Way for the Pipeline. They say Only Congress can Approve such a Crossing.

Construction Costs for the Project soared from Initial estimates of $4.5-$5 billion when it was First announced to at least $8 billion, according to the News Release.

Activist Groups Celebrated News of the Project's Demise on Social Media. "There are way too many people to thank for this huge victory, but from the trees to the streets to the courtrooms, you all know who you are. This project should have never been approved in the first place, and your work made it unviable," wrote Brennan Gilmore, executive director of Clean Virginia, adding: "THANK YOU!"

Dominion Energy President, Thomas F. Farrell II, said in a Joint Statement with Lynn J. Good, Chair of Duke Energy, that they were Disappointed in the End Result of years of Legal Battles over the Pipeline's Future. "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," they said.

"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," the Two added.

West Virginia Sen. Joe Manchin (D) also expressed Disappointment over the Project's End, arguing in a Statement that the Project "would have created good paying construction and and manufacturing jobs for hard working West Virginians."

Dominion Energy Inc., the Second-Biggest U.S. Power Company by Market Value, on Sunday, said it’s Selling substantially All of its Gas Pipeline and Storage Assets to Berkshire Hathaway Inc. for $4 billion.

Dominion’s Deal with Berkshire calls for the Giant Conglomerate to assume $5.7 billion in Debt. The Utility will use $3 billion of the Proceeds to buy back Shares. Dominion also Cut its Projected 2021 Dividend Payment to around $2.50 a Share, reflecting the Assets being Divested and a New Payout Ratio that aligns it better with Industry Peers.

The Transaction is expected to Close during the Fourth Quarter of 2020. It will Require the Approval of Federal Agencies including the U.S. Department of Energy.

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