by Freeda Cathcart
Here is my submission to the Federal Energy Regulatory Commission (FERC) on the Atlantic Coast Pipeline’s request to renew its certification. It’s very long, so the following is a shorter excerpt:
In Dominion’s response to my question at this year’s shareholder meeting, the company claimed that it isn’t going to do an economic analysis for the Atlantic Coast Pipeline because the Hampton Roads area needs it. This is a puzzling claim, since methane is an accelerant of climate change and the Hampton Roads area is already experiencing severe repercussions from sea level rising and the recent increase of extreme storms. According to a June 14, 2020 Virginia Pilot article:
“Since 1960, Hampton Roads has seen more than a foot of sea level rise, according to tide gauge data from Norfolk’s Sewell’s Point. The rate of rise has been accelerating in recent years and is projected to become even steeper in the coming decades, according to a recent report by the Virginia Institute of Marine Science. The city is also seeing significant storms more often.”
The area that Dominion is claiming they need to serve might literally be underwater or close to it by the time the project is completed. It also looks like Virginia’s new wind farm reported in this June 29, 2020 Virginia Business article might blow away any necessity for the Atlantic Coast Pipeline. Solar farms also have a bright future in the Tidewater (Hampton Roads) region according to this November 12, 2019 Virginia Gazette article: “Pitched as a clean-energy alternative to fossil fuels, solar farms have been established in the Tidewater area to supply electricity to users ranging from a state university to Amazon.”
When Dominion’s CEO Tom Farrell claims that natural gas is needed when the wind isn’t blowing and the sun isn’t shining, it’s because he is ignoring the storage battery revolution that is bringing energy at a lower cost to utility customers. This July 11, 2019 Science article Giant batteries and cheap solar power are shoving fossil fuels off the grid:
“Goodnight #naturalgas, goodnight #coal, goodnight #nuclear,” Mark Jacobson, an atmospheric scientist at Stanford University in Palo Alto, California, tweeted after news of the deal surfaced late last month. “Because of growing economies of scale, prices for renewables and batteries keep coming down,” adds Jacobson, who has advised countries around the world on how to shift to 100% renewable electricity. As if on cue, last week a major U.S. coal company—West Virginia–based Revelation Energy LLC—filed for bankruptcy, the second in as many weeks.”
Since then there have been many articles in financial journals documenting the demise of the gas industry before the pandemic including the following:
- November 25, 2019 Oil Price: Why The Latest Shale Bust Is Different
- December 11, 2019 New York Times Natural Gas Boom Fizzles as a U.S. Glut Sinks Profits
- January 19, 2020 World Oil: America is awash with natural gas, and it’s about to get worse
- February 5, 2020 CME Group Natural Gas: The Bust Within the Boom
After the pandemic:
- April 30, 2019 CNBC News: Energy demand, hit by coronavirus crisis, is set to see record drop this year, IEA says
- May 11, 2020 New York Times: Natural Gas Exports Slow as Pandemic Reduces Global Demand
- May 22, 2020 Financial Times Boom to bust in the US shale heartlands
Considering the pandemic has dramatically slowed the U.S. economy and lowered the demand for energy, it would be reasonable to expect Dominion and Duke to conduct an economic analysis on whether the Atlantic Coast Pipeline is a viable project. Unfortunately Dominion has not acted responsibly in the past and has repeatedly ignored its shareholders and customers who have asked for an updated economic analysis for the ACP. In 2018, the Virginia State Corporation Commission (SCC) shocked the energy industry when it rejected Dominion’s Integrated Resource Plan for the first time. The SCC’s decision contained the following footnote:
“The record reflects that the Company did not include fuel transportation costs in the modeled costs of certain natural gas generation facilities. Tr. 610. For purposes of the corrected 2018 IRP, the Company should include a reasonable estimate of fuel transportation costs, including interruptible transportation, if applicable, associated with all natural gas generation facilities in addition to the fuel commodity costs.”
As an energy investor, it looks like ACP is on track to be another boondoggle that would hurt shareholders and customers.
It’s imperative for FERC to reject the renewal for the Atlantic Coast Pipeline. Too much has changed in recent years and too much is at stake for a simple renewal process. The Atlantic Coast Pipeline needs to be required to apply to FERC for a new certificate of necessity.
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