When Dominion Energy announced plans for the Atlantic Coast Pipeline in 2014, West Virginia residents were told the project would bring thousands of jobs to the region and have an economic impact in the millions of dollars.
Work has been underway since 2017, but the project has faced repeated delays and construction stoppages due to legal challenges brought by environmental groups that oppose the building of the pipeline.
Dominion has stated its commitment to completing the more than 600-mile-long pipeline, but its future will depend on the outcome of a case before the U.S. Court of Appeals for the 4th Circuit.
At the beginning of May, the court will hear Dominion’s appeal of the decision to stay an important authorization previously issued by the U.S. Fish and Wildlife Service. The outcome could potentially force the company to reconsider the pipeline’s route, which could put the project further behind schedule and increase its overall budget.
The pipeline, intended to transport West Virginia-produced natural gas to customers in Virginia and North Carolina, was originally expected to be complete in mid-2020. Dominion now estimates the ACP will be operational by 2021 and says its budget is between $7 billion and $7.5 billion, more than a billion more than when the project was announced.
According to officials with Dominion, more than 4,500 skilled construction workers in West Virginia, Virginia, Pennsylvania and North Carolina have been laid off or have been subject to delayed hiring as a result of the project’s delays.
Delays also have put more than $4.5 billion in capital expenditures in West Virginia, Virginia and North Carolina in jeopardy and have risked the loss of more than $28.8 million in annual local property taxes the pipeline is estimated to generate once in service, according to the company.
Cephas Evans, director of legal affairs and business development for Ace Pipeline, an independent oil and gas company with a presence throughout the state, said his company was initially involved with the ACP’s Supply Header Project.
The Supply Header project includes approximately 37.5 miles of natural gas pipeline along existing pipeline rights of way and modifications to existing compression facilities in West Virginia and Pennsylvania.
At the peak of construction, the company was employing a team of more than 300 to work on the project, Evans said.
“The majority of which were West Virginians,” he said.
Now, with major ACP construction activities suspended, the company is down to just “30 or 40” workers, Evans said.
The bulk of the company’s layoffs occurred just before the Christmas holidays, Evans said.
“It has a huge impact,” he said. “For example, employees buy campers and rent a space in the area expecting two years of consistent work. Then they are put out of work with no paycheck, but they still have to pay rent or pay their camper mortgage every month.”
His company purchased more than $59 million worth of materials from West Virginia companies and paid its employees more than $25 million wages in 2018, Evans said.
It’s difficult for his company to make even short-term plans with all of the starts, stops and uncertainty surrounding the project’s future, Evans said.
“Going out and getting (another) big job to put all of these people to work really isn’t feasible because you can’t hop back off of it to get started on the Supply Header Project if it would get restarted,” he said. “So your hands are kind of tied in the sense.”
The majority of the environmental activism aimed at slowing or stopping the ACP seems to be based out of Virginia, Evans said.
“You don’t see it much in West Virginia,” he said. “It seems to me that it’s all (coming) from Virginia; we’re just seeing the collateral effect.”
Even if the 4th Circuit rules in the pipeline’s favor, it would take his company months to be able to ramp back up to where it was before, Evans said.
“At best, I think (it would take) 60 to 90 days for an opinion to issued by the 4th Circuit. So you’re looking at August or September, if you’re lucky. That’s if everything goes perfect,” he said.
Substantial progress could have been made on the project this summer if not for the delays, Evans said.
“We’re missing out on the prime months,” he said. “We’re going to miss out on the entire summer. It’s really been a beautiful spring with good working weather. It’s really a shame to drive up to your yard and just see iron stacked and sitting. There are a lot of employees who would love to be working on that equipment, would love to have a job right now.”
Evans pointed to West Virginia’s record tax revenue collections in 2018, which he said can largely be attributed to pipeline-related spending throughout the state.
“If they (lawmakers) didn’t account for this shutdown, then in the end of the late second quarter or third quarter of 2019, they are going to see a vast difference in the budget numbers,” he said. “I think the state as a whole will see this impact and really recognize how important these jobs were to our economy probably midway through 2019.”
Del. Patrick Martin, R-Lewis, who sits on the West Virginia House of Delegates Energy Committee, said he has heard from numerous Lewis County residents about their support for the ACP.
“Over the last few years since this has developed, we’ve heard a lot from our constituents about how important it is,” he said. “I think it’s very important for our constituents to keep reaching out; to keep in contact and tell us how important it is.”
Business owners in Lewis County have been particularly impacted since construction on the ACP was halted, Martin said.
“The businesses that were affected by this, beforehand they were overflowing with people,” he said. “Since the shutdown, it’s like a ghost town. These businesses are really struggling.”
Steve Sherrard, general manager of J.F. Allen Co., said his company made substantial investments into purchasing new equipment and hiring additional workers because of the ACP.
The company produces limestone aggregate and asphalt, Sherrard said.
“We start 2017-2018 delivering stone to these staging yards, pipe yards, access roads and campsites,” he said. “We found out (in) early 2018 that it was going to hard to do that with two primary (stone) crushers. So we went out and we bought in two more primary crushers; hired more miners. We brought in more equipment, worked with vendors, hired more independent trucking companies to help haul this aggregate.”
Everything was “going good” for the company until work on the ACP was suspended, Sherrard said.
“About the middle of December, when they shut the pipeline down, we had to send the crushers back, we had to lay miners off and we had to send independent haulers back,” he said. “There just wasn’t any work for them.”
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