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Developers Of The Atlantic Coast Pipeline Throw In The Towel

The developers of the Atlantic Coast Pipeline are giving up, saying on Sunday that the pending lawsuits and the rising costs are making it impossible to proceed. Dominion Energy and Duke Energy
pointed to a decision by a Montana federal judge that required pipeline operators to get multiple permits to cross streams instead of a single one that would cut costs and limit delays.

The decision is a surprise because the two companies had won a major U.S. Supreme Court ruling in June. In a 7-t0-2 decision, the justices said that the two companies could proceed with a small portion of the line — one that crossed under the Appalachian Trail in Virginia. The case is formally known as the United States Forest Services versus Cowpasture River Preservation.

But the same line still faced seven other lawsuits that were to be decided by a federal court in Richmond, Virginia. One of the issues involved is similar to that in which Keystone XL Pipeline is facing. There, the United States District Court for the District of Montana had ruled that the pipeline operator, TC Energy Corp., had to get several different permits to cross various waterways — not just one. The court said that U.S. Army Corps of Engineers had cut corners. And now the U.S. government has asked the Supreme Court to take up the Keystone case.

“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,” Thomas F. Farrell, Dominion Energy’s chief executive officer and Lynn J. Good, Duke Energy’s chief executive officer said in a release. “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.”

They go on to say that they cannot justify the litigation risks to shareholders. That is, they cannot predict how the plethora of lawsuits will turn out. As a result, they say that the cost of the project has increased from about $5 billion to $8 billion. Moreover, the line would not be completed until early 2022, which is three-and-one-half years later than first estimated.

The Atlantic Coast Pipeline was conceived in 2014 — a response to the rising demand for natural gas. The line would have run through West Virginia, Virginia and North Carolina and it would have fed energy-starved population centers.

An economic study by Chmura Economics & Analytics says that the project would have generated $479 million for West Virginia, $1.4 billion for Virginia and $680 million for North Carolina. The fuel is used to power electric generators as well as a feedstock for chemical and manufacturing plants that make goods exported around the world.

While the environmental community says that the Atlantic Coast Pipeline is about ecological preservation, the natural gas industry says that the long-term implications are negative: Between 29,000 and 62,000 miles of new pipeline is needed over the next 25 years to accommodate the expected demand.

“The Supreme Court had earlier ruled that the United States Forest Services had the authority to run this line under the Appalachian Trial. But that will not affect the other seven lawsuits holding up this Atlantic Coast Pipeline,” says Noah Sachs, law professor at the University of Richmond, in a conversation with this reporter before Dominion and Duke dropped out. “It will not not provide justification to green-light all pipeline cases because it is extremely specific.”

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