Taken together, the federal court rulings suggest a permitting and approval process that was hasty and, possibly, misguided.
“They all have the same narrative,” said D.J. Gerken, a lawyer in the SELC’s Asheville, N.C., office who has argued some of the cases. “Atlantic was very arrogant in the selection of this route . . . and counted on bullying these agencies to get it through.”
The pipeline is planned to carry fracked natural gas through rugged mountain terrain and several national forests from West Virginia through central Virginia and into North Carolina. Investors still seem confident the project will move ahead, but Dominion Energy — the company spearheading the pipeline — has lately complained of painful consequences from the delays.
“We’ve been forced to lay-off or delay hiring more than 4,500 construction workers on the project,” Aaron Ruby, a Dominion spokesman, said via email. “We’re confident we will ultimately prevail in the courts and be able to resume construction, but that won’t undo the hardship many working families are going through during the holiday season.”
In a report to investors last month, Dominion said delays had increased the cost of the project from $6.5 billion to $7 billion and pushed its completion date from late next year into the middle of 2020.
The natural gas industry website Marcellus Drilling News blamed the delays on “a myriad of frivolous lawsuits from Big Green groups” and said the slowdown “means everyone will now pay more. Thanks Big Green.”
As natural gas projects are facing challenges nationwide, the U.S. Chamber of Commerce issued a report claiming that “the anti-energy ‘Keep it in the Ground’ (KIITG) movement has prevented at least $91.9 billion in domestic economic activity.” It said delays on the Atlantic Coast Pipeline in particular had cost $2.3 billion in lost economic impact, based on projected construction costs, total job estimates and potential sales of natural gas.
None of the setbacks seems to have hurt Dominion’s bottom line. Early in December, the company’s board of directors increased the stock dividend by 10 percent.
But lawyers for the SELC — representing a number of environmental groups, including the Virginia chapter of the Sierra Club, the Virginia Wilderness Committee and Defenders of Wildlife — say the blows against the project are significant.
“The Atlantic Coast Pipeline is in serious jeopardy,” SELC lawyer Gregory Buppert said on Dec. 19, when Virginia’s Air Pollution Control Board delayed — for the second time — a vote on a permit for a gas compressor station that is crucial for the pipeline.
All three legal challenges mounted so far have been heard by judges with the U.S. Court of Appeals for the Fourth Circuit.
In each case, the judges ruled against the pipeline:
● In May, judges rejected a permit issued by the U.S. Fish and Wildlife Service aimed at regulating the pipeline’s impact on endangered species. They ruled that the federal agency had failed to set required limits on how much the pipeline could harm five types of creatures.
“[T]he limits set by the agency are so indeterminate that they undermine the . . . enforcement and monitoring function under the Endangered Species Act,” the judges wrote.
The Fish and Wildlife Service reissued the permits shortly after the ruling, but the SELC challenged the new permits as also flawed. Judges from the Fourth Circuit issued a stay of the new permits until they could be reviewed, and that action is pending.
● In August, the same judges also tossed out a permit issued by the National Park Service for the pipeline to cross the Blue Ridge Parkway. They found that the Park Service “does not explain how the pipeline crossing is not inconsistent with the purposes of the Parkway and the overall National Park System,” and said the permit was “arbitrary and capricious.”
That permit also was reissued and then challenged by the SELC, and the judges suspended it, pending review.
● On Dec. 13, a panel of judges from the Fourth Circuit vacated permits from the U.S. Forest Service that allowed the pipeline to cross two national forests and the Appalachian Trail. The judges were particularly harsh, finding that Forest Service staffers had raised serious questions about the permits but then made a sharp, unexplained turnaround and approved them. The court called the decision “mysterious.”
Buppert, of the SELC, said the explanation was that the Trump administration put pressure on the agency, citing emails that showed appointees pressuring staff to stick to Dominion’s timeline.
The judges threw out the agency’s claim that it had reviewed alternative routes, and found that the Forest Service had no authority to permit the crossing of the Appalachian Trail. Instead, the National Park Service has jurisdiction — but has said it cannot act and that Congress would have to step in.
That, Gerken said, leaves the pipeline with no approved way to cross the Appalachian Trail. “They’re going to have to go back to the drawing board,” he said.
Ruby, the Dominion spokesman, said the pipeline builders are appealing the decision to the full Fourth Circuit. He said the company also is exploring the possibility of legislation in Congress.
With all those permits currently vacated, the pipeline had to stop all construction activity. Very little has actually been built, and none in Virginia, though some tree-clearing began earlier this year.
Meanwhile, the SELC is gearing up for what could be its biggest case, challenging the Federal Energy Regulatory Commission on the fundamental permit for the entire project.
The lawyers argue that there is no market justification for the pipeline. Dominion and one of its partners, Duke Energy, submitted evidence of market demand that Gerken said amounted to letters from their own subsidiaries saying that they would buy the gas.
He noted that earlier this month, Virginia’s State Corporation Commission rejected Dominion’s routinely submitted estimate of future demand, saying it was inflated. “Those demand projections are what support their arguments that they need more power plants, which is their basis for building the pipeline,” Gerkin said.
The case will get underway sometime early next year.
An earlier version of this story cited a report by the U.S. Chamber of Commerce that found delays on the Atlantic Coast Pipeline had cost $2.3 billion in lost economic impact, without noting the methodology used to calculate that estimate. This story has been updated to include the methodology.