Who is really paying for the Atlantic Coast Pipeline?

By Kevin Campbell
and April Keating
Mountaineer Voices for Change
& Mountain Lakes Preservation Alliance

Are you paying for the Atlantic Coast Pipeline? Even if you haven’t invested directly, your money may still be used to support it.
If you are a member at any of several banks, including CHASE, Wells Fargo, RBC, Barclays, Bank of America, Scotiabank, and Citi, you are invested (though you may not receive shareholder benefits) and you will be affected by this project if it is granted its certificate of approval from the Federal Energy Regulatory Commission (FERC). This could happen as early as this October, unless the regulating agencies responsible for permitting suddenly grow a conscience.
You see, the FERC guarantees up to a 14 percent rate of return on the infrastructure projects it approves. And here’s another piece to the puzzle: FERC is funded by the fees on the projects it permits. It can’t look too critically at these projects. It needs them to survive. Conflict of interest? We think so. So, how do these projects get funded? Banks, insurance companies, investors large and small put money into infrastructure projects like gas pipelines (and associated infrastructure – things like compressor stations, valve stations, feeder lines and storage fields). These investors need to see a return on their investment, so companies try hard to make the project look appealing, forecasting favorable returns in spite of downward market trends, even going as far as to tell local governments they will reap millions in tax revenues despite the fact that they have no hard data substantiating their claims.
Who is funding them? YOU are, because the debt incurred will essentially be financed by everyone on the grid. Allegheny Power and American Electric Power serve the state of West Virginia. They are part of the PJM Energy Grid System, so what they pay for, we pay for. And most of the power produced in WV is sold out of state already, anyway.
But there are more than two huge pipelines seeking approval through West Virginia. All told, there are six major (requiring federal/FERC approval) pipelines going through our state, and also a few (smaller but still large and dangerous) ones not regulated by FERC, such as Mountaineer Gas’s Eastern Panhandle Expansion Project, and the Mariner East 2, an NGL line (that’s Natural Gas Liquids) that passes through the northern panhandle and does not require FERC approval because NGL is exempt from both FERC and PHMSA regulations due to its being a liquids line. These are carrying ethanes, hexanes and butanes, very flammable and dangerous. An elementary school in Media, Pa. where the Mariner East 2 runs through has taken the hint, now offering emergency pipeline explosion drills.
Meanwhile, communities in West Virginia where they’ve laid the 36-inch Stonewall line still have no evacuation plan. The Stonewall pipeline has been sold twice since it was built, and is now owned by Detroit Edison. An inquiry to the Lewis County tax office could not produce any clear amount of severance taxes from this pipeline. Are these projects really doing our communities any good?
A report from the Institute for Energy Economics and Financial Analysis (IEEFA) by West Virginia native Kathy Kunkel and Tom Sanzillo, entitled “Risks associated with natural gas expansion in Appalachia,” notes:
• “Pipelines out of the Marcellus and Utica region are being overbuilt.  Overbuilding puts ratepayers at risk of paying for excess capacity, landowners at risk of sacrificing property to unnecessary projects, and investors at risk of loss if shipping contracts are not renewed and pipelines are underused.
• The Federal Energy Regulatory Commission facilitates overbuilding. The high rates of return on equity that FERC grants to pipeline companies (allowable rates of up to 14 percent), along with the lack of a comprehensive planning process for natural gas infrastructure, attracts more capital into pipeline development than is necessary.  FERC’s approach to assessing the need for such projects is insufficient.  
• The arguments for the Atlantic Coast Pipeline have not been adequately scrutinized. While the pipeline developers have asserted that some of the gas supplied is needed by Dominion Resources for its new Brunswick and Greensville natural gas plants, Dominion has told the Virginia State Corporation Commission that it can supply those plants through the existing Transco pipeline. The companies building these giant pipelines may continue to be harmed financially by weak natural gas prices and may not be a long-term, stable partner for these communities.”
According to a piece in Environmental Leader, fossil fuels are becoming increasingly risky investments: “More than 70 percent of the top oil and gas companies invested in by the 10 largest insurance groups and rated by Moody’s or S&P have been subject to some sort of credit downgrade in 2015 and 2016,” adding, “The insurance industry’s massive investments in fossil fuel companies — to the tune of $459 billion — represents a risky bet as demand for coal, oil and gas drops and renewable energy gains momentum, according to a Ceres report released yesterday.”
The value of natural gas will decline until the gas is exported, which will bring up the price. This is good news for companies like Dominion and EQT, but will be a slap in the face to consumers after the initial price drop fades. These pipelines will not create new demand in our state, nor will it serve any new customers here. Some reports say demand for gas has been flat and will decline as more renewable energy comes online. And a giant, flammable gas pipeline, being the safety hazard that it is, could have major negative effects on our community’s economic development.
The threats our communities face in terms of potential for leaks and explosion, water degradation, and economic contraction are not outweighed by a very large and powerful company’s wish to increase its profit margin. Dominion’s safety record isn’t the best, nor is their attitude toward those who won’t play along. They have sued and disrespected the wishes of numerous landowners who did not wish to allow them to survey on their property, dropping in for surveying while landowners were gone, and using eminent domain to intimidate and coerce them into selling. Dominion’s hostility toward their own employees was illustrated all too clearly by the outcome of the strike at Lightburn Station in September 2016. Workers striking for better wages and working conditions, locked out for an entire week, were humiliatingly forced to promise not to strike again till the following April, in return for not being locked out. Wow. What a deal. Higher natural gas prices help gas producers. Currently, all our storage fields are full to the brim. The supply glut has brought prices down. This is why they want these pipelines so badly. It isn’t to provide us with a lot of jobs. It is not to provide us with cheap gas. It is to take product from our region out of state and offshore to sell at market prices, higher on the world stage. The Draft Environmental Impact Statements on these pipelines, with figures from the companies themselves, estimate the number of permanent jobs to be 35 on MVP and 22 on ACP. And we know that the skilled jobs, the ones that pay well, are given to workers these companies bring along from site to site. It’s not cost-efficient to train and hire new workers in every county.
As it turns out, the only way to avoid paying for a pipeline, to be safe and secure in one’s environment, and to protect one’s energy investment, is to be off the grid – to be a power producer, not just a consumer. This is the definition of energy independence. And it’s easier to go solar than ever before. Prices, down 50 percent from just five years ago, are falling every day. It comes down to numbers, and in this day and age of speculation, investment, and economic forecasting, it pays to be very skeptical. With enough gas in storage (4047 billion cubic ft. right now) to last til 2030, a prepared consumer might ask, Is giving the gas companies what they want instead of building a sustainable future enough to offset certain climate chaos and potential loss of life, liberty, property – and water?
If you agree that we can do better for energy and jobs, join a group of citizens for a day of divestment from MVP this Saturday, July 8, in Bridgeport, at Huntington Bank HQ from 10 a.m.-noon, 1226 West Main Street, Bridgeport. There is a Facebook page for the event. And look for a similar action in Buckhannon in the coming weeks regarding Chase Bank and their backing of the Atlantic Coast Pipeline.