Pipeline Prospects: Questioning the Need

Aug 2, 2017

Pipeline infrastructure in the Hampton Roads area is stretched thin and in need of a solution to keep the lights on in area homes and businesses.
Credit www.hamptonroadsairtours.com

Dominion Energy claims the Atlantic Coast Pipeline is urgently needed to accommodate growing demand for natural gas. Without it, the company warns Virginia’s economy will suffer. Pipeline opponents say that’s not the case.

For much of the 20th century, industry sounded a little different than it does today.  Walk in to a typical modern workplace and it’s often quiet enough to hear keyboards clicking - just one reason why demand for electricity in this country is down, according to Thomas Hadwin, a retired utility company executive.

“Our pumps, our equipment and appliances have gotten more efficient, and also we have all these new technologies – solar, wind and energy efficiency in buildings – all of those are reducing the need for electricity.”

And that, he says, has put large energy companies in a bind.

“The utility holding companies like Dominion Energy, Duke Energy, the Southern Company are finding that their utility subsidiaries are not growing in revenue, so they’re seeking other sources of revenues to keep their stock price up.” 

The Federal Energy Regulatory Commission will allow Dominion to earn a profit of 15% on the Atlantic Coast Pipeline – whether it’s needed or not, so Hadwin says it’ll be great for shareholders.

That’s not what Dominion is saying.  Spokesman Aaron Ruby insists this is a project that will be good for its customers and essential for the economy.  Solar power isn’t reliable, he says, so we need gas to supply power on cloudy days and at night, and there isn’t sufficient capacity in existing pipelines.

“The pipeline infrastructure is stretched so thin in Hampton Roads that in recent winters Virginia Natural Gas has had to shut off service to more than 100 major industrial customers just to be able to have enough gas to keep people’s homes warm and keep hospitals running. So if we don’t get new pipeline infrastructure feeding into Hampton Roads, they’re not going to be able to grow economically.  They’re not going to be able to attract new industries, particularly advanced manufacturing.”

Hampton Roads aside, Thomas Hadwin says Dominion is mistaken when it claim s there’s no more room in the pipelines we already have.

"If we don't get new pipeline infrastructure feeding into Hampton Roads, they're not going to be able to grow economically. They're not going to be able to attract new industries, particularly advanced manufacturing."

“That is not born out by Department of Energy Studies.  It’s not born out by independent consultant studies.”

And in the case of Hampton Roads, he argues, there’s a much easier way to supply gas. Build connectors or smaller pipelines in existing rights-of-way to link coastal communities with existing lines.

“One existing right-of-way is on the Columbia Gas system. That is the pipeline that serves Virginia Natural Gas right now. It’s the one that’s close to capacity, but you could put a new pipeline along that same right-of-way with a lot less disruption, a lot less expense and just building that pipeline, Virginia Natural Gas customers would pay a whole lot less for transportation using that pipeline than they would pay for transporting gas over the ACP.”

He adds that as utility-scale batteries get better, we may not need gas or other fossil fuels to back up solar production, and conservation in areas now asking for more natural gas could reduce demand.

“Naval Air Station Oceana near Virginia Beach, for example, just refitted over a hundred buildings, and they’re now saving over six million dollars a year on their energy costs.  This could be done throughout Southeast Virginia, not just for federal installations but for hospitals, for government buildings, for universities, and that is the largest single category of job creation in the United States.  Over 2 million people are working in the energy efficiency industry right now.”

That’s why the Sierra Club wants the state’s Corporation Commission or SCC to require energy saving measure by Dominion. 

“Dominion is near the bottom if not at the very bottom of regulated utilities around the country in its energy efficiency savings.”

Ivy Main is Conservation Chair for the Virginia chapter of the Sierra Club. She hopes the SCC will signal federal regulators that it does not intend to make rate payers pick up the tab for an unnecessary pipeline.

“The SCC does care about keeping electricity rates down.  That’s its mandate, and it does a pretty good job with that.  The ACP is going to be bad for rate payers.  It is going to drive up electricity rates, and it’s going to commit us to natural gas, even when competing forms of electricity get cheaper.”

But Dominion’s Aaron Ruby says rates will actually go down when gas starts flowing from the Marcellus Shale fields in West Virginia.

“We’ve traditionally been supplied by Gulf Coast natural gas, which is significantly more expensive than the natural gas from the nearby Appalachian region that the Atlantic Coast Pipeline will be transporting.”

Whatever the case, many people believe there’s no stopping pipelines backed by powerful corporations, politicians, labor and business leaders, but in our next report, we’ll look at some potential road blocks for the ACP.