Dominion, Duke exit pipeline project after years of delays

(Reuters) - Dominion Energy Inc and Duke Energy Corp said on Sunday they decided to abandon the $8 billion Atlantic Coast Pipeline project after a long delay to clear legal roadblocks almost doubled its estimated cost.

Despite a favorable ruling by the United States Supreme Court in June, the two companies said it was not enough to justify the project’s economic viability given the increased legal uncertainty and anticipated delays.

The court ruling, which granted the federal government authority to allow the natural gas pipeline to cross under the popular Appalachian Trail in rural Virginia, was a solution to only one of several hurdles facing the project.

“This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States,” the statement added, quoting Dominion Chief Executive Thomas Farrell and Duke CEO Lynn Good.

According to Dominion and Duke, the cost for the ACP project increased to $8 billion from the original estimate of $4.5 to $5.0 billion.

Last year, the Trump administration’s move to speed up major energy projects had backfired amid challenges by environmentalists and others who opposed three of the biggest U.S. pipelines, one of which was ACP.

Over the years, judges had halted construction on these projects, ruling that the administration granted permits without conducting adequate studies or providing enough alternatives to protect endangered species or national forests.

“VICTORY,” environmental group Southern Environmental Law Center (SELC) said. “SELC is relieved to see Duke and Dominion make the right decision to walk away from it,” said Greg Buppert, a senior attorney at SELC.

Michael Brune, executive director of the Sierra Club said that Duke and Dominion did not decide to cancel the project but that people and frontline organizations that led this fight for years “forced” them to walk away.

Sierra Club and SELC were two of the environmental groups that sued to stop the pipeline after the U.S. Forest Service gave the green light for the project to run through the George Washington National Forest.

“The well-funded, obstructionist environmental lobby has successfully killed the Atlantic Coast Pipeline,” U.S. Secretary of Energy Dan Brouillette said in a statement. The project would have lowered energy costs for consumers in North Carolina and Virginia, he said.

ACP was first announced in 2014 to tackle lack of energy supply across North Carolina and Virginia. Dominion expected to complete it in early 2022.

In a separate announcement on Sunday, Richmond-based Dominion said it agreed to sell its natural gas transmission and storage network for $4 billion to Berkshire Hathaway Inc’s energy unit.

Reporting by Maria Ponnezhath in Bengaluru; editing by Diane Craft