Week Ending December 14, 2018

ACP Halts All Construction After Court Stay; Decision in Virginia Delayed

This Article Appears as Published in Foster Report No 3228
ACP Halts All Construction After Court Stay; Decision in Virginia Delayed

The on and off construction of the Atlantic Coast Pipeline (ACP) project has been stopped once again after a court halted implementation of the U.S. Fish and Wildlife Service’s permit for the pipeline. The U.S. Court of Appeals for the Fourth Circuit on December 7 granted a motion from environmental groups to stay FWS’ Incidental Take Statement and Biological Opinion, which was revised in September.

ACP stopped construction on the entire 600-mile project, except for stand-down activities needed for safety and to protect the environment, the pipeline told FERC in a December 7 filing.

The developers stopped work until they receive clarification from the court on the scope of the stay, said Aaron Ruby of Dominion Energy, spokesman for ACP. “We strongly disagree with the court’s decision. We believe the stay is unwarranted and overly broad, so we have filed a motion for emergency clarification,” Ruby said.

ACP received another blow from the Fourth Circuit in a December 13 ruling that vacated a permit from the U.S. Forest Service that authorized ACP to build its pipeline through parts of the George Washington and Monongahela National Forests, and across the Appalachian Trail. The court found that the Forest Service decision to grant the special use permit violated the National Forest Management Act and the National Environmental Policy Act (NEPA) by acquiescing to the pipeline route after raising objections earlier in the project review stages.

During the draft environmental impact statement (EIS) comment period, the Forest Service raised concerns about the ACP path and consideration of alternative routes that avoided the national forests. But on the same day that FERC issued its final EIS, the Forest Service released its record of decision that adopted the final EIS path through the forests, without explaining its change of position from comments on the draft EIS, the court said.

The Fourth Circuit noted that the chain of events surrounding the Forest Service adoption of its decision violated NEPA by failing to take a hard look at the environmental consequences of the ACP project. It ruled that adopting the unchanged alternatives analysis in the final EIS was arbitrary and capricious. The court vacated the Forest Service decision and remanded for further proceedings.

ACP disagrees with the Fourth Circuit decision, which was issued by a three-judge panel that included Chief Judge Roger Gregory and was written by Judge Stephanie Thacker, and is immediately appealing it to the full court, Ruby said December 14.

The court’s decision is at odds with the consensus of the National Park Service, the Department of the Interior, the Department of Agriculture and the Forest Service that the Forest Service has the full legal authority to approve ACP’s route across the Appalachian Trail, Ruby said. For decades, 56 other oil and natural gas pipelines have operated across the trail and the court’s ruling brings into question whether those pipelines can remain in place, he said.

“With this decision, the Fourth Circuit has now undermined the judgment of the dedicated, career professionals at nearly every federal agency that has reviewed this project,” Ruby said.

Regarding the FWS, Dominion and other ACP owners do not believe there is a basis for the court to stay the entire Biological Opinion from FWS since the issues involve a much narrower scope of the project, covering four species over roughly 100 miles in West Virginia and Virginia. “We will have more clarity on the scope of the court’s stay and its impact on the project when the court responds to our motion,” Ruby said, adding that project owners believe FWS addressed the issues raised by the court and the environmental groups when it revised the Biological Opinion and Incidental Take Statement in September.

ACP has taken extraordinary care to protect sensitive species at issue in the case. “We will vigorously defend the agency’s re-authorizations and the measures we’ve taken to protect the species in oral arguments before the court early next year,” Ruby said.

An earlier ruling by the Fourth Circuit was among the decisions that prompted ACP to halt construction during the summer. The court said FWS failed to meet its obligations regarding an Incidental Take Statement that authorized ACP to construct its project with possible impact – or taking – of threatened or endangered species. The agency did not set numeric limits on the taking of five species and failed to comply with requirements for using habitat as a surrogate for a numeric limit, the court ruled.

Most of the 2017 Biological Opinion from FWS was unaffected by the court’s ruling, but the revised Incidental Take Statement addressed the court’s concern or updated the Biological Opinion to ensure that the agency uses the best available scientific and commercial information, FWS said September 11. FERC staff granted authority to resume construction in September after FWS revised the statement.

The latest action from the court casts serious doubt about whether the pipeline will be built, asserted Kelly Martin, director of the Beyond Dirty Fuels campaign at Sierra Club. Sierra Club, along with Virginia Wilderness Committee and Defenders of Wildlife, were the petitioners who sought a stay of the FWS Biological Opinion and Incidental Take Statement.

Martin said Sierra Club will keep up its legal campaign against ACP “until it is permanently stopped because it makes no sense to deepen our dependency on the dirty fossil fuels that threaten our health and communities.”

Ruby of ACP said public utilities are depending on the pipeline to help them generate cleaner electricity at a more affordable cost. Delaying the project will only force consumers and businesses to pay higher energy costs and slow down the transition to cleaner energy, he said.

ACP is facing other challenges, including the U.S. Army Corps of Engineers suspending permits for water crossing construction after a different Fourth Circuit ruling and a pending decision from the Virginia Air Pollution Control Board on the Buckingham Compressor Station near the Union Hill area of Buckingham County. The Air Pollution Control Board was scheduled to make a decision December 10 after delaying a ruling in November when it heard from parties on environmental justice, socioeconomic issues, and other factors. The decision was postponed to December 19 due to a snow storm around Richmond, Virginia, on December 9.

“We’re confident that after considering all the facts and the strong public record in support of the permit, the board will approve it,” Ruby said.

The Union Hill area of Buckingham County is a rural region with low income and a majority African American community, with some residents opposed to the compressor station and others supporting it. ACP and the compressor station have made headlines after Virginia Governor Ralph Northam in November replaced two members of the Air Pollution Control Board who posed tough questions to pipeline applicants ACP and Mountain Valley Pipeline at different hearings. The members have terms that expired in June of 2018, and groups questioned the timing and motive of Northam’s move, just ahead of the vote on the compressor station.

About 300 miles of the ACP and related Supply Header project is in Virginia. It is being developed by Dominion, Duke Energy, Piedmont Natural Gas, and Southern Company Gas to move about 1.5 Bcf/d from Harrison County, West Virginia, to parts of Virginia and North Carolina. It has precedent agreements with six shippers, five of which are affiliated with project owners. The owners have been working with the FWS, Army Corps and the National Park Service to resolve issues mentioned by FERC and the Fourth Circuit in earlier decisions.

ACP owners have increased their cost estimate for the project to a range of $6.5 to $7 billion from a previous range of $6 billion to $6.5 billion due to weather effects on construction, permitting delays and legal challenges. They also pushed back the planned in-service schedule to allow a phased-in approach, instead of the full project beginning service in late 2019. The phased-in approach involves service beginning in late 2019 for some key segments and mid-year 2020 for the remaining segments. The Supply Header project retains an expected service start in 2019.

By Tom Tiernan TTiernan@fosterreport.com

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