Duke Energy, Dominion abandon the $8 billion Atlantic Coast Pipeline

Despite their recent win in the Supreme Court three weeks ago, the companies involved in the project are throwing in the towel.

From The Charlotte Business Journal

The $8 billion, 600-mile long Atlantic Coast Pipeline is dead.

Dominion Energy Inc. and Duke Energy Corp. are canceling the project because of continuing court delays likely to drive the price tag higher. That would threaten the economic viability of the project, they say.

And bound up in the cancellation is Dominion’s decision, announced separately, to sell it gas transmission business to Berkshire Hathaway Energy for $4 billion in cash and the assumption of $5.7 billion in debt.

https://www.bizjournals.com/charlotte/news/2020/07/05/duke-energy-dominion-abandon-the-atlantic-coast-p.html

Endless lawfare from multiple directions is just making it too much of an uphill battle.

“This announcement reflects the increasing legal  uncertainty that overhangs largescale energy and industrial infrastructure development in the United States,” say Dominion CEO Tom Farrell, and CEO Lynn Good in a joint statement, speaking of the cancellation of the pipeline. “Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged.”

Duke and Dominion specifically cite the April decision by a federal judge in Montana that vacated a key water permit for the controversial Keystone XL pipeline issued by the U.S. Army Corps of Engineers.

Known as a Nationwide Permit 12, the permission to cross water bodies and wetlands was issued under an expedited process also used to permit the ACP. A decision by the 9th Circuit Court of Appeals at the end of May allowing the order to stand until it is heard on the merits threatened to delay the Duke and Dominion project for at least a year.

“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,” Duke and Dominion say in their joint press release.

The partners note that appeals court indicated an appeal is not likely to be successful in the Keystone case, creating “new and serious challenges.”

“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 release says.

And more.

And the cancellation also recognizes the reality that the 4th Circuit Court of Appeals has consistently ruled against the pipeline on every challenge to various permits that have come before it to date. 

The companies will have significant write downs, but will carry on.

The ACP faced opposition from the outset. And its abandonment is clearly a setback for Duke and Dominion. Still, the economic loss is nowhere near as serious, for instance, as abandoning the $25 billion V.C. Summer plant was for the now-defunct SCANA Corp. in South Carolina. That was a “bet the farm” project for the small power company, now a part of Dominion. Duke and Dominion both have market caps of more than $60 billion, allowing them to absorb the impact more easily.

It is still a blow, however.

“We regret that we will be unable to complete the Atlantic Coast Pipeline,” Dominion’s Farrell says. “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.”

The full article with the financial implications for the companies and East Virginia can be found here.

48 thoughts on “Duke Energy, Dominion abandon the $8 billion Atlantic Coast Pipeline

    • Could they use a “discount” like one used to calculate the cost of global warming?

    • Once again, “Global Warming” affects poor POC the most! (Of course the real world consequences are the exact opposite of the blather the alarmists typically spout.)

      These are regulated public utilities. All of the losses will be rolled into future rate increases. Increased energy costs have the same economic impact as regressive taxes.

      The poor will see higher energy bills in the future. Rich, limousine liberals can feel good about themselves about their victory.

      • Just a foretaste of what’s to come if the “New Green Deal,” loonies win in November. Is Germany a glimpse into America’s future? (From EIRNews): Both houses of parliament approved a bill planning to shut down the last coal-fired power plant in Germany by 2038, as part of Germany’s “energy transition” strategy to end the use of fossil fuels and to generate all of the country’s considerable energy needs from so-called renewable sources. Germany is also committed to phasing out nuclear power by the end of 2022. At present, coal is powering Germany with 20% of the national need, nuclear with 12%.

        “The days of coal are numbered in Germany,” Environment Minister Svenja Schulze said. “Germany is the first industrialized country that leaves behind both nuclear energy and coal.” Radical environmentalists however say the plan does not go far enough: “Germany, the country that burns the greatest amount of lignite coal worldwide, will burden the next generation with 18 more years of carbon dioxide,” Greenpeace told Associated Press, insisting that the final exit from coal should occur no later than 2030.

        The opposition Free Democrats also hit in a similar, radical direction, with Katja Suding, a leading FDP politician, demanding the government expand existing emissions trading systems that put a price on carbon, thereby encouraging operators to shut down unprofitable coal plants. “You just have to make it so expensive that it’s not profitable anymore to turn coal into electricity,” she said.

    • In the USA it well could be a “takings” issue under the fifth Amendment, which is what I utilized to fend off the BLM (not that one, the original one, you need the second Amendment for the new one).

    • This is more like stealth purposeful crippling of a country…. By single interest, angry, organized groups.

      Who do we blame? What is happening? Is like the last days of the Romans? The sad end to a great country?

      This is sort of like civil war. So we are competing with China and losing and we are fighting a cold civil war with the machine like chaotic power which was what we use to call the ‘Democrats’. Very, very powerful, Anti-American, anti working together, and anti solving problems. A ‘revolution’ that just destroys.

      The Democrats are using the legal system to attack our country, to do what they could not do via congress …. there are in fact stopping the construction of all pipelines by making it possible to delay any large project for the special hot button issues that give judges super powers…..

      To protect climate or protect indigenous US people right’s or BLM issues or something else.

      So now, because the steel and more importantly the right away must be purchased and stockpiled, years before a pipeline is constructed …

      If the pipeline’s permits can be pulled by Judges who now have the power to create chaos, by delay…

      It is not economical to construct any large multistate …. pipelines.

      • Be interesting to see how soon New York (state & city) will have to stop the ban on fracturing natural gas in order to keep the lights on and keep from freezing.

        I remember Houston back in the early ’70s when New York was freezing from lack of natural gas and fuel oil. Houston Power & Light told us to burn all we wanted. They had enough gas stored up in the salt mines for the next 10 years of so. Besides New York could very well freeze. It was their fault for now allowing enough pipe lines.

      • Hi William,

        It’s all a leftist scam – the enviro BS including the phony court challenges, the full-Gulag lockdown for Covid-19, paid-and-planned protests by Antifa and BLM – it’s all lies.

        We published that the climate-and-green-energy rant was a false narrative in 2002, and by 2012 or earlier I wrote that there was a covert agenda, Now the greens are admitting that climate-and-energy was false propaganda, a smokescreen for their totalitarian objectives.

        The green objective is to destroy prosperity and move the USA into a planned economy – with a few rich at the top looking down on the many poor peasants. That model now describes most of the countries in the world. Europe and Canada are far down that path, and the USA will follow if Biden and the Demo-Marxists are elected.

        Published 4July2020

        In 2002 Dr Sallie Baliunas, Astrophysicist, Harvard-Smithsonian, Dr Tim Patterson, Paleoclimatologist, Carleton U and Allan MacRae TOLD YOU SO 18 YEARS AGO:
        http://www.friendsofscience.org/assets/documents/KyotoAPEGA2002REV1.pdf

        1. “Climate science does not support the theory of catastrophic human-made global warming – the alleged warming crisis does not exist.”
        See Michael Shellenberger’s 2020 confession “On Behalf Of Environmentalists, I Apologize For The Climate Scare”. https://quillette.com/2020/06/30/on-behalf-of-environmentalists-i-apologize-for-the-climate-scare/

        2. “The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but this would result in a catastrophic shortfall in global energy supply – the wasteful, inefficient energy solutions proposed by Kyoto advocates simply cannot replace fossil fuels.”
        See Michael Moore’s 2020 film “Planet of the Humans”. https://www.youtube.com/watch?v=Zk11vI-7czE

        Regarding Michael Shellenberger’s 2020 condemnation of the false climate scare and Michael Moore’s 2020 film slagging green energy schemes based on intermittency and diffusivity, I say “better late than never”. The irony is that “the Michaels”, who were wrong for decades, have more credibility with their recent conversions than those of us who were never deceived by the leftists’ climate-and-energy scams. We never lied to you.

        The Michaels are now under attack by their former green comrades, who want to preserve their false climate and green-energy scams that have so effectively deceived the pubic and our politicians and squandered trillions of dollars. The Michaels both deserve kudos for having the courage to tell the truth, especially considering how radically they have changed direction from their former positions.

        The leftists have already started their counterattack – censoring Shellenberger’s article in Forbes magazine and attempting to block Moore’s film on YouTube. The Michaels are being cancelled.

  1. And when fuel prices go up due to lack of supply, who will be blamed? Well, it falls directly on those that fought the pipeline to begin with but the story will be that that companies proposing the pipeline failed to deliver a viable project. The media will go along with the latter version. Just about everyone has lost sight of what is the greater good for society.

  2. Yep , they sçeam we hàve saved the plànet, whàt a desaster , progress is an English word that has been eliminated from the American language .

  3. This is why every corporate meeting that I present a report in includes the segment “critical paths and fatal flaws”. On behalf of Pegasus Gold I fought the Kalifornia BLM (not that one, the other one), Sierra Club, and Sierra Club Legal Defense Fund, on a gold exploration permit issue in the Panamint Mountains, and won, but only won after forcing a consideration from lead BLM Attorney in Washington, Crime Capital USA. Since then I always view the political hazards of an exploration project along with the gold assay values before making a decision. The current lurch to the left is going to make things worse, and here’s the problem: they want to tear you down to their level instead of rising up to yours. Stay sane and safe (snowing in Argentina, where’s that global warming deal?).

  4. No project can advance when the courts hold perfection to be the required standard of performance.

    Perfection remains the enemy of good.

  5. The unrecorded costs of judicial and legal activism, and the ameliorating myths of green energy normalized by the Green blight, are first-order forcings of [catastrophic] anthropogenic evolutionary misalignment.

  6. There may be another reading of the tea leaves in Dominion’s decision. If the Democrat party succeeds in the US Presidential election and wins sufficient seats in the Senate to flip the US government to full control by the Democrats it will significantly affect any energy infrastructure project. In addition to the government being against the pipeline project, the government will shut down significant parts of the energy supply chain. There have already been promises to ban hydraulic fracturing, cutting supply, and the passage of any Green New Deal legislation or a carbon tax will raise energy prices and soften demand. Added together, that’s a lot of headwind.

    I would not be surprised if we see more retrenchment by energy companies in the near future.

  7. Salute!

    My feeling/conviction is that one day an area of our country will have the major power company shutdown due to the myriad of EPA rules and countless lawsuits from the greenies. The million or so customers will then have to make their own campfires and lanterns, but old landline phones might still work.

    Why? A small critter might face extinction!

    Once the A/C stops in August or the heater quits in January will the folks then living as we did 150 years ago make a fuss? I think so. They will say “to hell with the fish/critter/wildflower/etc”, ya think?

    Gums sends….

    • will the folks then living as we did 150 years ago make a fuss?

      Sure, they will make a fuss, ……. but no one will hear them because the liberal media won’t permit them access to a microphone or a social media.

  8. I was this close to buying Dominion stock due to their successful LNG terminal and 200 mile pipeline.
    Cove Point LNG export terminal and the pipeline feeding it faced the identical Sierra Club armada.
    And yet ………
    https://www.baltimoresun.com/news/investigations/bs-md-japan-lng-20180606-story.html
    “The new export terminal was pushed through regulatory and permitting processes during the administrations of President Barack Obama and Gov. Martin O’Malley, both Democrats, and has continued to enjoy support under their Republican successors.”

    https://www.williams.com/2018/10/06/atlantic-sunrise-project-placed-into-full-service/
    ATLANTIC SUNRISE PROJECT PLACED INTO FULL SERVICE
    After nearly a full year of greenfield pipeline construction, the Atlantic Sunrise pipeline project – a nearly $3 billion expansion of the existing Transco natural gas pipeline to connect abundant Marcellus gas supplies with markets in the Mid-Atlantic and Southeastern U.S. – was placed into full service on Oct. 6, 2018.

    The immense benefits have all come to fruition despite the perpetual Sierra Club propaganda that casts these projects as false promises and destructive.

    …”And Calvert County will get more than $50 million in taxes and other payments from the company this year — a massive influx for a jurisdiction with a general fund of less than $300 million.

    MUST READ — http://www.frackcheckwv.net/2019/03/21/cove-point-lng-terminal-of-dominion-energy-has-many-challenging-aspects/

  9. The $8 billion, 600-mile long Atlantic Coast Pipeline is dead.

    The Atlantic Coast Pipeline (ACP) is a 600-mile, 42-inch natural gas pipeline currently under construction to bring natural gas from northern West Virginia to Virginia and North Carolina.

    That is a really great loss for the State of West Virginia, …… a loss of construction jobs, … a loss of maintenance jobs, … a loss of sales of a natural resource …. and the loss of tax revenues.

    All because of lefty liberal Judges pandering to idiotic requests of the imbecilic minded calling themselves environmentalists.

    The fecal laden tails are “wagging” the liberal Justice horses.

  10. Wait, doesn’t the head of Berkshire-Hathaway have strong leftist political connections? And the Ninth Circus found in a way to his benefit? Wow, who would have seen that coming?

  11. The Alliance to Stop the Pipeline said that the pipeline “would cross Native American, African American, and low-income communities in eastern North Carolina, affecting water, climate, public health and land.”

    They also said:

    “Renewable energy and efficiency are more cost-effective than the expanded use of fracked gas, and that the gas exacerbates climate change through ongoing leaks and routine releases of methane at well sites and along pipelines.”

    Straight out of the playbook then. Use faux “issues” of race, class division, blatant lies, pseudoscience, and pseudoeconomics thrown in for good measure.

    • A convention of States is a progressive’s dream; our politicians would eliminate the protections our constitution currently provides while we blithely assume the constitution will be repaired.

      If we think about it, it will become apparent that there is very little in the constitution that needs repair; the real problem is that our government ignores the constitution. We could rewrite it yearly and still it would be ignored.

  12. Berkshire Hathaway Energy just invested $10 billion in the future of gas transmission. Clearly Warren Buffet sees the current anti-gas hysteria as a passing fad. Natural gas is increasingly the fuel of choice for commercial and residential use. Buffett sees long-term profits in building and owning its transportation infrastructure.

    • We underestimate them at our peril. They aren’t just anti-gas. The agendas include anti-fossil fuels, anti-nuke, anti-growth, anti-free market (aka “capitalist”), anti-democracy, anti-white (aka racist) and anti-US. Their hatred runs deep, and they don’t mind joining forces to “defeat the enemy”, even when agendas conflict.

  13. The weaknesses in the US legal system are being ruthlessly exposed. This is just one case where lawfare has worked very well and Judges are unashamedly complicit in the corruption. I anticipate another rather bigger one in the next couple of months.

  14. Seems to me similar measures should be used to challenge windmill and solar sites, and especially the required new transmission lines. Let’s tie up the whole process and force a real review of the science.

  15. I thought Trump had fixed this problem. This is terrible, not just on immediate economic matters, but for the encouragement it gives the campaigners for destruction of America. I was worried these easy to do Executive Orders would turn out to be pieces of paper.

    Get the vote out, especially for Congress. How did they lose the House anyway? Did Republicans drop the ball somehow?Somehow, there has to be a big campaign for cleaning out Swamp Republicans from House and Senate or the “American Experiment has run its course.

    • Gary Pearce,
      The Republican establishment (herein referred to as the Stupid Party) went along with the Russia Hoax and the the Weissman/Meuller investigation designed to create obstruction of justice by VSGPDJT! As early as March of 2017 the FIB and Dept. of Injustice knew that there was NO basis for the Hoax; only that it was paid for by the Hildebeast Campaign and the DemoKKKrats (herein referred to as the Criminal Party.)
      With help from their propaganda wing (LSM) the Criminal Party was able to tarnish VSGPDJT enough to cost the Stupid Party the House majority and give the Resistance against the American people more power to thwart our President in his attempts to clean up crime and corruption in Washington, D.C. If the Criminal Party can take the Senate or Presidency in 2020 they will be able to install their Marxist Utopia where all live lives of poverty; both economic and energy-wise. The ruling elite can then go back to their con game of using U.S. foreign aid money as an ATM machine for their friends and family (see Hunter Biden!)
      If only the Stupid Party would grow a pair (or a brain) and get down in the trenches and fight this war for civilization like they want to win! The Criminal Party is going pull out all the stops to win in 2020; including massive voter fraud like they practiced in 2018, recreating the Wu Who Flu hysteria to keep the country shut down or working with foreign actors to influence the election their way. I mean, these people have no qualms about killing Americans, look what they did to folks in nursing homes in DemoKKKrat states and look at how the inexpensive and safe ChiCom Virus prophylactic of HQC with zinc was suppressed or banned by their leaders! How many tens of thousands of Americans are dead due to intentional politicalization of a possible global pandemic? Thank God that this virus is not nearly as dangerous as the alarmists claimed!
      If you like freedom and prosperity, you can’t vote for the Party of Crooks and Crazies!

  16. The Atlantic Coast Pipeline isn’t the end of it folks. In today’s news:

    “Court Orders Shutdown of Dakota Access Oil Pipeline”
    https://www.usnews.com/news/national-news/articles/2020-07-06/court-orders-shutdown-of-dakota-access-oil-pipeline

    The article said the pipeline will be shut down for 13 months or more and will admittedly cause problems while it is down. With no pushback against the CAGW and wind and solar energy narratives, there is likely no end in sight for the war on the fossil fuel energy companies. With Biden in the White House and a Democrat-controlled EPA, things could get much worse.

  17. At least there is a trail to talk about in this case. In the western states the BLM permitting stall tactics resort to citing old wagon trail routes in the area to make an administrative case. Wagons once passed by long ago and that justifies the blocking or stalling of projects.

  18. I have a feeling that if you dig out the roots of this eco obstruction, you will find some business interest that will be destroyed by the new pipeline.

    From BLM to green energy it always seems to be a money scam.

  19. This was always an ambitious and expensive (Meaning riskier potential returns) pipeline over difficult terrain in luding a half mile tunnel thru the mountain over which the Appalachian trail runs (the SCOTUS win a few weeks ago). $8 billion for 600 miles. By comparison, keystone XL (Oil, not gas) is over 1100 miles at a cost of $7 billion.

    With all the environmental/judicial activism delays and costs added, the numbers just no longer worked. And Dominion then decided to exit the pipeline business altogether by selling to Warren Buffet.

    IF the activist climate changes (pun intended) Buffet can always restart later, especially if gas prices rise.

    • Building wind, solar, and more nuclear is strictly a public policy decision. Coal-fired generation is a pain in the butt operationally. Left to its own devices, the power market in the US would shift decisively towards gas-fired generation as the most profitable means of producing electricity while also complying with a variety of environmental and regulatory requirements. Warren Buffet knows this better than anyone.

  20. This is a great tragedy for the poorest counties in Central Virginia. A source of low cost, low polluting energy would have provided feedstock for manufacturing.
    Instead, limousine liberals want a “natural” retreat from government and other high paying jobs in overcrowded Northern Virginia.

  21. Hmmm…..
    “The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power companies serving 10 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.”
    How about a National Defense Energy Authority? Build big next generation nuclear plants on military bases and sell the excess into the commercial grid.

  22. Time to fight lawfare with lawsuits. First, fire everyone in the EPA and hire back only the ones that aren’t affiliated with environmental organizations and that don’t have close ties to them. Over the last 40 years the EPA has been infiltrated by environmentalist groups. Second, the energy companies (or the states who stand to lose revenue from future projects) need to counter-sue the organizations behind these these suits for damages equivalent to lost revenue ($ billions) for filing frivolous lawsuits and require them in the future to submit their own expensive, torturous studies showing that the extensive environmental impact statements submitted by energy companies aren’t sufficient according to the regulations already in place before they can even initiate a lawsuit. Let’s bankrupt every one of the Greenie Goons organizations or make it so prohibitively expensive for them to file these suits that they stop doing it.

    • Exactly. Time to turn their tactics on them. Make them play defense, and actually prove their unprovable claims.

  23. Personally I think Duke and Dominion’s lawsuit explanation is a smoke screen.

    The more likely explanation is both companies want to lower their debt to equity ratios and increase their liquidity in the face of an uncertain electricity market. Keep in mind that because of the Pandemic the EIA is forecasting a 5% decrease in overall demand for electricity for 2020… I think this may be optimistic; but, I digress.

    Both companies have (or had) substantial debt at the end of March 31, 2020. Duke’s debt to equity ratio was 1.25 and Dominion’s 1.14. In addition, in this uncertain market, both companies would benefit from increased liquidity. Duke’s quick ratio (a measure of liquidity) was 0.45 and Dominion’s 0.47 at the end of March.

    The bottom line. This deal allows Duke and Dominion to decrease their debt exposure, increase their access to ready cash, simplify their business model to concentrate on core functions (particularly with regards to operations versus capital expenditure) , and decrease head count. In turn Berkshire Hathaway Inc. (AKA Warren Buffet), who’s cash rich, gets an pretty nifty gas project at a good price.

    It’s a win/win for all. Duke & Dominion get rid of $5.7 billion in debt and get $4 billion in cash. Berkshire Hathaway gets a unfinished asset it can eventually take to market. And… both Duke and Dominion will likely profit from increased regional gas availability when Berkshire Hathaway completes the project.

    You can be darned sure Mr. Buffet approved the purchase with a firm eye on long term profit. So, I don’t see this announcement as a death of the pipeline project. It simply a new beginning with the new owner in a stronger cash position.

  24. I wish I could say that the pipeline crosses 600 miles of forward thinking land owners and wise communities who know that a pressure gas pipeline is a conflagration waiting to happen in their backyard or town, never defendable from the most trivial attacks by terrorists or vandals.

    But no… just greedy opportunists. Ambulances packed with lawyers screaming up and down the proposed corridor conducting an eBay-style auction of easement payola coordinated and destined to escalate — like the tale of the Frog and the Scorpion — to project insolvency.

    It’s worth a glance at the Germans’ insane hydrogen airship era. They were obviously imagining a world without a single wayward spark.

    It is hilarious to imagine if the era had continued right up to Hitler’s time and he launched his air offensives from bomb-dropping behemoths in the sky. Doom! How funny would be the fiery speeches of comic book indignation as they popped off one by one, perhaps from archers with longbows shooting flaming arrows. “What an ruthless enemy! Who could have foreseen this?” Hitler sputters. “Has anyone the simple decency to let us to conduct this war?”

    Yes, long haul gas pipelines strike me this way.. it’s that crazy. Conflagrations single or coordinated, failures that starve and spin down just-in-time natural gas electric grid generation plants perched at the far ends. In Winter of course. Darkness and cold! Who’da thunk it!

    Nuclear energy is the only thing left on the table.

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