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Dominion Reaches Critical Point on Atlantic Gas Pipeline at Supreme Court


By Greg Stohr

(Bloomberg) The fate of Dominion Energy Inc.’s planned $8 billion Atlantic Coast Pipeline will be tested Monday, as the U.S. Supreme Court hears arguments on a crucial permit that would let the natural-gas line cross under the Appalachian Trail.

Dominion and President Donald Trump’s administration are asking the high court to jump-start the long-delayed project after a federal appeals court threw out the permit issued by the U.S. Forest Service.

The case combines legal issues about federal agency jurisdiction with big stakes for the natural-gas industry and the environment. The court’s ruling, due by June, could have far-reaching implications for pipelines seeking to cross the Appalachian Trail, which stretches from Maine to Georgia.

A ruling in Dominion’s favor would eliminate the biggest obstacle to the 600-mile (965 kilometer) pipeline, which would carry as much as 1.5 billion cubic feet of gas per day from the Marcellus shale basin in West Virginia to customers in North Carolina and Virginia.

Dominion, which is developing the pipeline with Duke Energy Corp., says it expects to begin construction by mid-year and complete it by the end of 2021. That, however, presumes a victory at the Supreme Court and successful resolution of other issues, including a pending review of the impact on endangered species.

Read More: Pipe Developer Makes Unusual Plea to U.S. for $5 Billion Project

“The Supreme Court case is critical for the project, but it’s not a silver bullet for construction across the Appalachian Trail,” said Brandon Barnes, an analyst at Bloomberg Intelligence.

The case will also affect EQM Midstream Partners LP’s Mountain Valley gas pipeline from West Virginia to Virginia. Mountain Valley told the Supreme Court in December that the appeals court ruling forced a halt to its project, which is 90% complete at a cost of more than $4.3 billion.

Natural Gas Pipelines in Limbo

The 4th U.S. Circuit Court of Appeals said the Forest Service lacked authority to issue the Atlantic Coast permit because the Appalachian Trail is controlled by the National Park Service. The U.S. Mineral Leasing Act says the Forest Service doesn’t have jurisdiction over “lands in the National Park System.”

Dominion and the Trump administration contend that while the National Park Service manages the Appalachian Trail, the underlying land is part of a national forest — putting it within the Forest Service’s jurisdiction.

They say the appeals court ruling would create something Congress never intended: a massive barrier separating consumers on the eastern seaboard from inland energy resources.

“The logic of the 4th Circuit’s decision is to create a 2,200-mile barrier to pipeline rights-of-way, with enormous consequences for economic development and settled ways of government administration,” Atlantic Coast argued in court papers.

The environmental groups challenging the permit, led by the Cowpasture River Preservation Association, say advocates of the pipeline must get Congress to change the law if they want permission to cross the trail.

“This case is not about whether the pipeline is a good idea,” the environmental groups argued. “It is about the statutory protection Congress has afforded to land in the National Park System, including the iconic Appalachian Trail.”

Longest Trail

The trail, completed in 1937, is the world’s longest hiking-only footpath, according to the Appalachian Trail Conservancy, which works to protect and maintain it.

Atlantic Coast says more than 50 pipelines already cross the trail, some of them on Forest Service land. But the environmental groups say none of those were authorized under similar circumstances. Some are on state or private land, while others predate the 1968 congressional designation of the Appalachian Trail.

The case is to some degree a proxy for a broader fight over the nation’s energy policy. Business groups are backing the pipeline, as are unions that would benefit from the thousands of jobs it would create. Local property owners are joining environmental advocates in seeking to block the project.

Earlier: Court Spikes Virginia Gas Pipe Permit That Critics Say Is Racist

The Appalachian region, which includes the Marcellus shale basin, is practically drowning in natural gas. Pipelines like Atlantic Coast have been proposed as a way to shuttle fuel out of gas fields and toward demand centers in the southeastern U.S., where it can be used for heating and cooking as well as to generate electricity.

Opponents question the need for new gas infrastructure, pointing to slowing demand in the years since the project was announced in 2014. Environmental groups say natural gas pipelines further America’s dependence on fossil fuels at a time when climate change demands a complete shift to renewable sources of energy.

The Atlantic Coast Pipeline would include a 0.1-mile segment crossing 700 feet below the trail at a spot known as Reed’s Gap about 35 miles west of Charlottesville, Virginia. The exit and entry points wouldn’t be visible from the trail, according to pipeline supporters.

The cases are United States Forest Service v. Cowpasture River Preservation Association, 18-1584, and Atlantic Coast Pipeline v. Cowpasture River Preservation Association, 18-1587.



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