Now that the White House has appointed two new members to the Federal Energy Regulatory Commission the way is clear for approval of two proposed pipelines here in Virginia, but a new report from Oil Change International suggests the agency should go slow.
Oil Change International is a research group that looks at the full cost of fossil fuels and advocates for adoption of clean energy sources like solar and wind. With support from the Sierra Club and Public Citizen, it issued a 33-page report explaining why the nation doesn’t need more pipelines. Author Lorne Stockman says, for example, that utilities are wrong when they predict demand for electricity from gas burning power plants will rise.
“Demand for electricity is flattening. It’s been flattening over the last few years, and there are many projections that it’s going down.”
Dominion Energy disagrees. Spokesman Aaron Ruby says demand would grow in Hampton Roads, for example, if companies could get gas.
“The one missing piece for their economic growth is energy infrastructure – specifically pipelines to be able to bring the natural gas into the region that you need to support advanced manufacturing and other energy-intensive industries.”
And, like coal he says, gas is a cheap and reliable choice to back-up solar power on days when the sun doesn’t shine.
“Natural gas is the fuel that electric utilities all across the country are using to replace their older coal-fired units.”
To prove there will be strong demand, pipeline companies like Atlantic Coast produce signed contracts, but Stockman says those contracts are with its sister company – Dominion Power Delivery.
“Companies sign deals between affiliates of themselves, so you have a parent company, and in this case a utility on the one hand and the company they’ve set up to develop the pipeline on the other.”
So it's a very sweet deal for the pipeline developers. It's a way for utilities to diversify and guarantee profits into the future.
And, finally, Oil Change points to the fact that the federal government allows companies to earn a 14% rate of return on pipeline construction – a number established back in 1997.
“Now at the time it didn’t seem so excessive, because interest rates were much higher. The prime rate that banks were loaning companies was more like 7, 8, 9 percent back then.”
Today, interest rates are half that number, and pipelines are hugely profitable and popular with energy companies. This year alone, the nation could see another 2,400 miles of pipe. Stock holders will make money, and Oil Change contends electric company customers will pay the bill.
“So it’s a very sweet deal for the pipeline developers. It’s a way for utilities to diversify and guarantee profits into the future.”
This view is confirmed by Spencer Phillips, a Charlottesville consultant and professor of economics at the University of Maryland. He says the Federal Energy Regulatory Commission, which must approve all new pipelines, doesn’t do its own calculations. Instead, it okays these projects based on numbers provided by pipeline builders.
“The benefits that are purported to come from the pipelines are based on estimation methods that are woefully inadequate. The underlying model of how regional economies work is very outdated. The most charitable thing you can say about it is it’s sloppy work.”
And he agrees with the Oil Change report. High rates of return may be an incentive for overbuilding.
"And the results will be pipelines that are sitting out there on the landscape 10-20 years from now with not enough gas to go through to make it worthwhile. In the meantime, a lot of people are going to be giving up property value, they’re going to be giving up businesses that they’ve built to take advantage of the beauties of these landscapes.”
That’s why Oil Change wants the Federal Energy Regulatory Commission to call time out.
“We are asking FERC to halt all new certification for gas pipelines – to put a pause on the process for the Atlantic Coast Pipeline, for the Mountain Valley Pipeline, to initiate a process of looking at the future demand for gas.”
And, Stockman says, states should weigh-in, going before FERC to oppose unnecessary pipelines that could mean higher energy costs for consumers.
Opponents of the two projects were encouraged last week when West Virginia pulled its permit for the Mountain Valley Pipeline and North Carolina put off its decision on the ACP. Still the fight is not over, and some have been training to physically resist construction.
About a hundred people met on a large piece of land in Nelson County for a direct action boot camp.
“I like to start this workshop off with a quote from Sun Tzu and The Art of War: “If you know the enemy and know yourself, you need not fear the result of 100 battles.”
They came from Richmond and Roanoke, Blacksburg and Charlottesville to network and to prepare for future fights against pipelines. Few wanted to give their names.
“These are scary times.”
That’s Richard Averitt, who along with his wife and other family members bought 235 acres here – hoping to build an eco-lodge.
“I have traveled thousands of miles to see places less beautiful than Nelson County. We have beautiful rolling hills. We have an incredible culture that honors the land of food and spirits and wines. People come here to sit out in this place and revel in it the way that they do Napa and Sonoma.”
One year later, they learned that Dominion and Duke Energy had other ideas for their property.
“The center line for the pipeline is plotted to come through Spruce Creek, and then cut right through this place where you and I are standing now.”
So they helped form a coalition of people who oppose pipeline construction.
“I’ve hiked the Appalachian Trail, and I’ve canoed from Jamestown to the Maury River, from Blacksburg to Mobile, and I have come to believe that I’m a steward of this precious land.”
“The original pipeline route ran through a piece of property that I live on. It has since moved onto other people’s property, but what made it wrong on my land makes it wrong on their land as well.”
“I’m here because my family is greatly involved in the whole fight against the pipeline. It affects our livelihood, it affects our way of life what I’m going to be able to pass on to my children.”
“We know that climate change is real. We know that a lot of the impacts are from these fossil fuel industries.”
“I’m a woman in my 30's and have had to reconsider having children because I’m very concerned about what’s coming with climate change.”
“I’m here because my family is greatly involved in the whole fight against the pipeline. It affects our livelihood, it affects our way of life and what I’m going to be able to pass on to my children.”
“I’m opposed to the pipeline and will do practically anything to prevent it from happening.”
Like climbing a very tall tree to keep construction crews from cutting them down.
The weekend campers learned to climb long ropes that dangled from branches 50 feet above the forest floor and they took a tutorial on scouting rugged terrain for markings left by surveyors.
They trained to be medics and were instructed on coping with tear gas and other chemical irritants. There was discussion of risks and rights – what the law has to say, for example, about protesters hoping to keep their identity secret.
“In Virginia we have a mask law. It’s a felony if you wear a mask.”
They know we've made very legitimate claims in that lawsuit, and they're worried about the ramifications of that.
The group was encouraged by news of permit delays in neighboring states and hopeful about a pending lawsuit filed by Richard Averitt and 50 other landowners who argue the Federal Energy Regulatory Commission can’t empower for-profit companies like Dominion to seize private land.
“I actually believe more than ever that we will win. Certainly the power dynamics are not in our favor, but we have something they don’t have – passion, and we have right and justice on our side. Right after we filed our lawsuit, Dominion turned around and within two days asked for expedited approval of their pipeline. They know we’ve made very legitimate claims in that lawsuit, and they’re worried about the ramifications of that.”
While participants knew they might not be able to stop bulldozers from beginning work on pipelines they hope to delay it long enough for suits to make their way through federal courts.
