Dominion, Duke cancel Atlantic Coast pipeline

The developers of the $8bn Atlantic Coast pipeline are pulling out of the project, after years of permitting delays drove up construction costs for the 600-mile natural gas pipeline by billions of dollars and threatened its economic viability.

Project developers Dominion Energy and Duke Energy said today that recent legal issues related to the loss of a streamlined water permit, named NWP-12, created an "unacceptable layer of uncertainty and anticipated delays." A federal judge in Montana threw out that permit across the US as part of an unrelated legal challenge to the 830,000 b/d Keystone XL crude pipeline.

The proposed 1.4 Bcf/d (40mn m³/d) Atlantic Coast pipeline, which received federal approval in 2017, would have transported Appalachian shale gas from West Virginia to market areas in Virginia and North Carolina. But the project was heavily opposed by environmentalists and landowners, whose successful lawsuits contributed to the cost of the project increasing to $8bn from an original estimate of $5bn.

The US Supreme Court last month removed a major obstacle for the pipeline, when it reversed a lower court ruling that blocked the pipeline from crossing under the Appalachian hiking trail. But the pipeline still needed permits related to endangered species and air emissions, water permits and easements to cross through national forests.

President Donald Trump's administration, along with Keystone XL developer TC Energy, have asked the Supreme Court to put a stay on the ruling throwing out NWP-12 until they exhaust appeals challenging the lower court ruling. But Dominion and Duke said that even if their request succeeded, the project still would be subject to too much uncertainty to justify spending millions of dollars on tree felling and to resume construction work that has been on hold since 2018.

The companies developing the Atlantic Coast pipeline have already spent $3.6bn, according to an earnings presentation in May. Dominion owns 53pc of the project and Duke owns 47pc of the project. The cancelation of the project comes after US midstream company Williams earlier this year canceled the nearly $1bn Constitution pipeline in New York, in part because of permitting delays.

By Chris Knight