Building a pipeline

 By Nicholas Newman

Building a pipeline is not just about drawing a line on the map, and then sending a team to build an oil or gas pipeline. In fact, it is a lot more complicated than that, this is certainly the case, as Dominion Energy found out in designing the proposed route of the 564 mile Atlantic Coast Pipeline. This natural gas pipeline crosses the Eastern American states of West Virginia, Virginia and North Carolina, linking the Marcellus shale gas fields to the west of the Appalachian Mountains with Atlantic Coast cities such as Washington DC. Not only did they have to think about meeting the needs for cleaner electricity generation, but satisfy the growing demand for natural gas to heat homes and businesses, and promote consumer savings and economic growth. In addition, they had to minimize impacts of the proposed route on several environmental, historic and public land issues, through a series of investigative consultations and surveys, with all the relevant community group and public agencies at local, state and national level…

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Planning and building an oil or gas pipeline involves much more than drawing a line on the map and sending teams out to build it. It is a lot more complicated than that, as Virginia-based energy company Dominion Resources, discovered when planning the route for its proposed 564 mile (908 km) Atlantic Coast Pipeline. It found that it not only needed to gain regulatory and planning approval from various levels of Federal, State and county government but also to win over political and public opinion and overcome a complex array of market, environmental and geological issues.

Originally proposed in 2014, the Atlantic Coast Pipeline was a planned 3.5-ft (1.1-m), high-pressure pipe, with a capacity to ship 1.5 billion cubic feet a day of Marcellus and Utica shale gas to its 20 million customers living in the Eastern American states of West Virginia, Virginia and North Carolina. More specifically, the pipeline would start in Harrison County in the state of West Virginia, cross the Appalachian Mountains and supply gas power plants serving Atlantic Coast cities such as Charlotte in North Carolina, Richmond in Virginia and Washington D.C. Gas power-plant operators, some whom are also investors in the proposed Atlantic Coast Pipeline, have already signed power purchase agreements with Dominion Resources for most of the pipeline’s capacity, thereby assuring the pipeline’s commercial viability, reports newswire in March 2016.

Dominion Resources, one of the county’s leading power companies, expects construction of the $5 billion pipeline to begin in the second-half 2016, pending final regulatory approvals due in April from the US Government’s interstate regulatory agency Federal Energy Regulatory Commission (FERC). If all goes to plan, Dominion Resources expects the pipeline to come into full operation by the end of 2018.

Atlantic Coast Pipeline description

Case for the Atlantic Coast Pipeline

The economic case for constructing a new gas pipeline is to supply a new market for gas produced in the Marcellus and Utica fields of Pennsylvania and deliver it to power hungry customers in the mid-Atlantic coastal region. Both gas producers and regional power companies support the Atlantic Coast Pipeline. The proposed pipeline solves several problems: Firstly, it creates a new market for Marcellus gas producers seeking new markets for their product. Secondly, it creates a new source of gas to meet rising demand for heating provision and provides a new source of fuel for new gas power stations in the Atlantic Coastal region. Diane Leopold, President of Dominion Resources Inc., anticipates that, “the need for the pipeline will only grow as energy demand is expected to increase by 165 percent by 2035″ as reported in March 2016, by Virginia paper, The Daily Press.

Already, local power companies such as Dominion Resources and Duke Energy, have announced plans to shut their own local coal power stations and replace them with cleaner gas power. A particular case in point is Dominion Resources, which announced plans to invest $3.5-billion in new gas power generation, according to its website. Meanwhile, Virginia Natural Gas, the subsidiary of AGL Resources in Hampton Roads, states that it needs more natural gas in order to meet customer demand especially, during peak times in Chesapeake and Virginia Beach areas, two of Virginia’s most heavily populated cities. As for Piedmont Natural Gas, the Atlantic Coast Pipeline will provide access to abundant, low-cost natural gas, from a geographically diverse production region, and will help the company meet growing demand in its Carolina markets.

The macro-economic effect is also likely to be significant. According to a 2014 report from Chmura Economics & Analytics entitled, “The Economic Impact of the Atlantic Coast Pipeline in West Virginia, Virginia and North Carolina,” consumers and businesses in Virginia and North Carolina could save an estimated $377 million annually in lower energy costs. Consequently, thanks to the Atlantic Coast Pipeline, local governments could benefit to the tune of $30million a year from higher property taxes. It is not surprising therefore, that many local politicians support the project.

Winning over organized opposition

Yet, despite achieving broad political support for the Atlantic Coast Pipeline from Federal, state and local officials, including the governors of Virginia, West Virginia and North Carolina, there remain significant pockets of local opposition. Current opposition includes landowners, environmentalists and conservation groups like the local branches of the Sierra Club and the The Allegheny-Blue Ridge Alliance (ABRA). These groups are concerned about the potential damage to the predominantly rural and forested landscapes of the region, together with the development of renewables. In addition, concerns are being raised about the impact on several rare species including the Cow Knob Salamander, James spiny mussel, Indiana Bat, and Northern Long-Eared bat. Environmentalist groups in their “All Pain, No Gain” campaign last year raised almost a half-million dollars in contributions and in-kind service for an advertising and marketing campaign against the pipeline, according to co-chairs Nancy Sorrells of Augusta and Charlotte Rea of Nelson counties in Virginia.

More generalized concern was expressed as recently as February 2016, on conservation group Wild Virginia’s website, which raised fears for the integrity and quality of the local drinking water supply if construction went ahead causing additional silting to rivers and major watersheds. For example, the George Washington National Forest is the headwater for the James River, which supplies drinking water to over 4 million water users, including the world’s largest naval base at Norfolk Virginia. Similarly, Shenandoah Valley residents rely on mountain forest headwaters or wells for their drinking water.

Equally fearful is Misty Boos, Managing and Development Director, Wild Virginia, who says the Atlantic Coast Pipeline “represents a huge increase in gas infrastructure that will, in the long term, increase pressure to begin fracking in the George Washington National Forest.” The George Washington National Forest consists of some 1.8 million acres (7,300 km2) of forest, the largest public wilderness space in the Eastern United States, and is popular with hikers, mountain bikers and hunters. Indeed, the United States Forest Service has received over 5,000 comment letters, urging that requests by the pipeline developers to survey a route through the forest should be denied, reports Augusta Free Press January 2015.

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From such evidently public concern, attention is also being drawn to private interests. Many local landowners fear the effect on their property values and the application of “Eminent Domain.” A 2015 analysis from Key-Log Economics LLC in Charlottesville, estimates a $7.4 billion loss to property values, caused by interference to scenic vistas from the pipeline’s 125-ft (38-m) wide construction and 75-ft (23-m) wide permanent easement. Equally important is their fear of the application of Eminent Domain, which entitles pipeline builders and others with the power to confiscate private property for public use. Many landowners perceive eminent domain as a threat to their constitutional rights, and a threat to their pockets, fearing the loss of fair and reasonable compensation payments. Some landowners have gone to court, leading legal battles, mostly won by the pipeline’s promoters.

Others, like the environmentalist Sierra Club, oppose the pipeline on the grounds of its’ undermining investment in renewable energy such as rooftop solar as well as, currently planned or being developed, offshore wind farms along the Atlantic Coast. Dominion Resources’ “current energy plan, with its primary reliance on natural gas, would increase carbon pollution by more than 60 percent,” claims Glen Besa, President of Sierra Club’s Virginia Chapter.

The experience of planning the Atlantic Coast Pipeline has not been as simple as drawing a line on the map. It has turned out to be a complex business of reconciling, negotiating and conceding ground to many different stakeholders...

Responsiveness and adaptability in planning and building the pipeline

It was to be expected that overcoming the geological difficulties of establishing a viable route across the Appalachian Mountain chain, which reaches heights of around 6,684 feet (2,037 m), would prove challenging. Additionally, the planners had to avoid the numerous sinkholes and abandoned mine workings that plague the region.

Together there were countless environmental, historic and public land-use issues that needed to be resolved. Predictably, they would result in some redrawing of the proposed route; for instance reducing the impact of the pipeline on the environment of the rare Cheat Mountain Salamander. As well as minimizing the impact of where the pipeline crosses the 2,200 miles (3,500 km) Appalachian Trail, made famous by Bill Bryson’s book ‘A Walk in the Woods’ and recently released as a film, starring Nick Nolte and Robert Redford.

Likewise, at the pipeline’s proposed eastern end, the U.S. Fish and Wildlife Service requested a diversion to avoid crossing the 112,000 acres (450 km2) Great Dismal Swamp National Wildlife Refuge, which is popular with brown bears, beavers and raccoons. Another major concession has been designed to preserve intact the historical heritage of the Warminster Rural Historic District in Virginia, the home to one of the first European settlements in the region. Here Dominion plans to use horizontal directional drilling of a narrow tunnel underneath the surface, a technique often used in urban areas to install gas mains without the need for major disruptive roadworks.

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In addition, the pipeline’s promoters have conducted a series of multiple public consultations and surveys with relevant local community groups, landowners as well as tiers of public in order to determine a safe and acceptable route for the project, in the course of which the planned route was changed in several sections. Nevertheless, even at this late stage, the route has not yet been finalized for, according to Leopold: “access to the route for surveys and construction has been problematic. In the final version of the pipeline’s route, there are some 2,800 landowners along the entire length of the pipeline. To date, some 60 percent of landowners along the new proposed route have already granted access, and the company is actively pursuing the rest.” However, success may be around the corner — property owners who refuse access to Dominion’s contractors could face an uphill battle, and if past form is anything to go by, Dominion’s lawyers could win most disputed cases.

At the end of April, it is expected that the interstate pipelines regulator, the Federal Energy Regulatory Commission, will give its approval for construction. The experience of Dominion and its partners in conceiving and planning the Atlantic Coast Pipeline has not been as simple as drawing a line on the map. It has turned out to be a complex business of reconciling, negotiating and conceding ground to many different stakeholders.

about the author
Nicholas Newman
Freelance energy journalist and copywriter who regularly writes for AFRELEC, Economist, Energy World, EER, Petroleum Review, PGJ, E&P, Oil Review Africa, Oil Review Middle East. Shale Gas Guide.