Given the minute-by-minute focus on the latest coronavirus statistics, it’s difficult to pay attention to other major events. But the cancellation of the Atlantic Coast Pipeline announced a week ago marked a huge milestone for North Carolina that deserves attention.
Environmental groups hailed the decision by utility powerhouses Duke Energy and Dominion Energy as a victory for advocates of alternative energies and less reliance on natural gas and other fossil fuels. The public’s concern about climate change has accelerated in recent years amid increasing wildfires, rising sea levels, melting glaciers and higher average temperatures.
Meanwhile, the energy industry contends that environmental activism and judicial resistance are making it nearly impossible for U.S. companies to build infrastructure projects, even in underserved areas. The result is likely to be more expensive — and potentially less reliable — energy.
Indeed, the environmental movement has gained the upper hand in battling virtually every long-term project proposed by the energy industry in recent years, Bill McKibben, cofounder of the 350.org nonprofit climate change group, said in a recent New Yorker podcast. That’s an amazing shift given Big Energy’s traditional clout, he noted.
Whatever one’s environmental views, the decision was an obvious blow for eastern North Carolina’s ability to attract new plants and businesses that require natural gas service, says Christopher Chung, president of the Economic Development Partnership of North Carolina. The pipeline was expected to deliver natural gas from northeast U.S. wells to parts of Virginia and North Carolina lacking current service.
North Carolina routinely struggles to convince businesses looking for expansion sites to consider the eastern region, he says. Population in 43 of North Carolina’s 100 counties declined between 2010 and 2018, many in the east.
“We take any advantage we can get to get companies to look there,” Chung says. “The ACP would have allowed more industrial parks in the region to offer natural gas service where it is now prohibitively out of reach.” Losing the ACP option takes away a potential selling point for a needy region, he adds.
N.C. Chamber CEO Gary Salamido criticizes the environmental groups for showing no regard for the region. “This type of activist environmental legal strategy is hurting working people. Businesses and the people who work for them want a clean environment as much as anyone. We can do both,” he says.
North Carolina remains resilient, but business recruitment will inevitably be affected adversely by the decision, Salamido says.
The decision has big financial implications. Dominion Energy lost 11% of its market value last week, or more than $6 billion. Along with the cancellation, the Richmond, Va.-based utility sold its long-haul natural-gas pipeline network for $10 billion to a Berkshire Hathaway subsidiary. It had a 53% ownership in the ACP, with the balance controlled by Duke and subsidiary Piedmont Natural Gas.
Duke’s stock declined immediately after the news was announced, but rebounded later in the week. Still, it expects to write down its ACP investment by as much as $2.5 billion in the second quarter. And it marks another difficult chapter for CEO Lynn Good, who is battling to force N.C. customers to pay part of the $8 billion or more costs of coal-ash removal, following a 2014 Dan River spill that attracted national attention.
Asked about the region’s prospects, Duke spokesman Neil Nissan noted in an email: “Without the ACP, longstanding challenges in eastern North Carolina remain. The lack of additional natural gas infrastructure in the region hinders the ability of existing businesses to grow and is an impediment to new businesses locating in the region. We believe eastern North Carolina deserves the same opportunities for job growth and economic development as the rest of the state.”
In September, Duke will file an “Integrated Resource Plan” to provide multiple approaches to offer “clean, reliable, affordable” energy over the next few decades after working with state leaders, customers and others, Nissan says.