• Max Clark

Dominion Cancels Atlantic Coast Pipeline, Sells Gas Transmission Assets

The Atlantic Coast Pipeline (ACP) has been the center of discussion in recent weeks following a Supreme Court decision that allowed the project to continue after permit issues halted construction where it would cross under the Appalachian Trail in Virginia.


Now, just under a month from the date of the court’s decision, Dominion Energy and Duke Energy, the owners of the ACP, announced the permanent cancellation of the project. The planned 600-mile, $8 billion pipeline that would carry Appalachian natural gas from West Virginia through Virginia to North Carolina was announced in 2014. Like many other pipeline projects within the US, it quickly became a point of controversy, both legal and environmental.


Though the ACP was on the winning side of its legal battle in the Supreme Court over the Appalachian Trail issue, it was still the subject of several other lawsuits. In a statement, Dominion Energy CEO Thomas F. Farrell II and Duke Energy CEO Lynn J. Good said that the decision to stop the project “reflects the increasing legal uncertainty that overhands large-scale energy and industrial infrastructure development in the United States”.


The ACP’s legal issues could, ironically, stem from the Trump Administration’s push to streamline permitting for pipeline projects. While permitting processes have been expedited under Trump, environmental groups took legal action against the industry and governmental agencies to stop these projects from continuing on the grounds that federal environmental laws were not being followed. It is this reality that made Dominion unwilling to operate further.


Dominion is not only pulling the plug on the ACP, but doubling down on its exit from gas. On the same day that the ACP’s abandonment was announced, Warren Buffett’s Berkshire Hathaway investment firm purchased Dominion’s natural gas storage and transmission assets, as well as a large portion of its debt, in an approximately $10 billion deal. For their billions, Berkshire will take control of 7,700 miles of transmission lines, 900 bcf of storages, and a piece of the Cove Point LNG export terminal.


Buffett’s move is a big vote of confidence for the battered natural gas industry, especially in the wake of the ACP’s saga. Last year, Berkshire made a similar move, investing $10 billion in oil, but lost big after the oil markets tanked. The move did garner criticism of Buffett’s decision to invest in fossil fuels in lieu of renewable energy.


With the demise of the ACP and a recent court-ordered shutdown of the Dakota Access pipeline due to environmental concerns, the future viability of gas and oil pipelines will be carefully watched as other projects face similar legal struggles.

JOIN OUR MAILING LIST

 Get the Latest News & Updates

ADDRESS

Washington & Jefferson College

60 S Lincoln St

Washington, PA 15147

PHONE

724-531-6871

© 2019 Shale Gas Knowledge Hub