December 13, 2018 / 8:31 PM / 10 months ago

U.S. court vacates Atlantic Coast natgas pipe permit, Dominion to appeal

(Reuters) - A U.S. federal appeals court on Thursday dealt another blow to Dominion Energy Inc’s planned $6.5-$7.0 billion Atlantic Coast natural gas pipeline from West Virginia to North Carolina, vacating a permit that allows it to cross national forests and the Appalachian Trail.

Dominion said it would “immediately” appeal the court’s decision.

The U.S. Court of Appeals for the Fourth Circuit said the U.S. Forest Service “abdicated its responsibility to preserve national forest resources” when it issued the permit.

The court said the Forest Service had “serious environmental concerns that were suddenly, and mysteriously, assuaged in time to meet a private pipeline company’s deadlines.” It noted that the agency raised concerns about the project in 2016 and early 2017 but had a “change of course” in May 2017.

Dominion said the court decision “has now undermined the judgment of ... nearly every federal agency that has reviewed this project.”

The Fourth Circuit has overturned several permits for Atlantic Coast and another gas pipeline working its way across West Virginia and Virginia, EQM Midstream Partners LP’s Mountain Valley project, following challenges by environmental groups, like the Sierra Club.

“The Trump Administration’s efforts to streamline the pipeline permitting process has inadvertently hurt regulatory haste repeatedly continues to create legal problems,” analysts at Height Capital Markets in Washington, D.C., said in a report.

Height Capital Markets said the appeals court’s decision last week to stay the U.S. Fish and Wildlife Service’s Incidental Take Statement authorizing Atlantic Coast’s construction in areas inhabited by threatened or endangered species could push the project’s full in service date into the third quarter of 2020.

Dominion in November delayed the full in-service date for Atlantic Coast to the middle of 2020 from late 2019.

In response to the Dec. 7 court order, Dominion suspended all construction on the project and said the court stay was “not only unwarranted, but overly broad.”

The company said the Dec. 7 stay affected all 600 miles (966 kilometers) of the project, but issues covered in the case affected only four species and roughly 100 miles in West Virginia and Virginia.

The pipeline is designed to carry 1.5 billion cubic feet per day of gas from the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio to customers in the Southeast.

Atlantic Coast is a partnership between units of Dominion, Duke Energy Corp and Southern Co.

Reporting by Scott DiSavino; Editing by David Gregorio

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