Virginia governor advocates pipeline development

Governor Terry McAuliffe reckons the two proposed pipelines in his state will “revolutionise” the Virginian economy.

Despite the politically sensitive nature of midstream pipeline development in the US, Governor Terry McAuliffe last week said that he supports the development of two proposed pipelines in his state.

McAuliffe said at the CG/LA Infrastructure 2015 North American Leadership forum that though his support for the Atlantic Coast and Mountain Valley pipelines has earned him the disdain of environmentalists, these projects could provide a major boon to some of Virginia's more vulnerable areas by creating an attractive, globally competitive advanced manufacturing hub within the southeastern US. 

“I have to take care of Virginia's southwest and south side. They lost coal, textile, furniture, tobacco-these areas have been devastated. How do you bring them back? You bring them back with advanced manufacturing,” McAuliffe said. 

The 1.5-billion cubic foot per day (bcf/d), 564-mile Atlantic Coast Pipeline is a proposed interstate natural gas pipeline under development by Dominion Generation, Duke Energy, Piedmont Natural Gas and AGL Resources through their joint venture vehicle Atlantic. The project is aimed at providing fuel to public utilities in Virginia and North Carolina. Surveying and route planning began in May 2014, and a formal application to develop the pipeline was submitted to the Federal Energy Regulatory Commission (FERC) last month and hopes to enter construction next year with an in-service target of late 2018. 

Anticipated total investment in the Atlantic Coast Pipeline is between $4.5 billion and $5 billion. The pipeline is expected to generate roughly $2.7 billion in total economic activity. 

A consortium of 31 environmental groups, including Chesapeake Climate Action Network and the Sierra Club, recently called development of new natural gas pipelines unnecessary in a state which already has about 3,000 miles of midstream pipelines, advocating for a comprehensive Programmatic Environmental Impact Statement of all new pipelines rather than individual project reviews. McAuliffe disagreed with their stance, saying that the 42-inch Atlantic Coast Pipeline is like a “superhighway” for natural gas. 

“You can take a spur off of it anywhere you want and start to build advanced manufacturing,” he argued. 

The 2-bcf/d 330-mile Mountain Valley Pipeline project is an EQT Corporation and NextEra US Gas Assets endeavour to connect Marcellus and Utica natural gas supply with southeastern markets. The joint venture was first announced in June 2014, and a Mountain Valley Pipeline LLC was announced three months later. In March 2015 WGL acquired a 7 percent ownership stake and Vega Midstream MVP acquired a 3 percent interest. Earlier this month Roanoke Gas announced acquisition of a 1 percent ownership interest. 

The total development cost of the Mountain Valley Pipeline is expected to reach between $3 billion and $3.5 billion. 

Two other midstream assets currently under development in the state include the Williams-led 2-bcf/d Appalachian Connector Pipeline and the Columbia Pipeline Group's 1.3-bcf/d WB XPress Project. 

McAuliffe said that all of Virginia's coal-fired power plants are currently in the process of being re-tooled to operate using natural gas in order to reduce carbon emissions in the state, which already boasts a 42 percent carbon-free energy portfolio due to its reliance on two active nuclear power assets.  

Though Virginia has traditionally been propped up economically by a huge federal presence – with 27 military installations including the largest US naval base, CIA headquarters and the Pentagon – this reliance on federal dollars has also proven to be a bane during these past two years of federal sequestration. 

That is why McAuliffe said that he has been aggressively pursuing economic and industrial diversification in his state. He believes that development of natural gas pipelines and the reliable, affordable and clean energy they will bring with them could create a globally competitive advanced manufacturing market.  

“When I ran for governor I talked about the most important thing I needed to do, grow and diversify our economy,” McAuliffe said. “I'm telling you, these pipelines will let us revolutionise. We'll have cheap energy, we'll have cleaner energy, and I can compete with anybody for an advanced manufacturing facility.” 

“You don't have to go to China anymore.”