By Lindell John Kay
A planned interstate natural gas pipeline through Nash County may have run its course before any fuel has flowed.
In a case of bad news coming in threes, the Atlantic Coast Pipeline recently has been downgraded as an investment, taken the brunt of a scathing environmental report and got trounced in a federal lawsuit by a local farmer.
The now-struggling 600-mile pipeline project would carry natural gas from a fracking site in West Virginia to North Carolina.
Moody’s Investors Service has changed its rating of the pipeline project to credit negative due to the project’s latest increases in costs and delays in construction.
“As cost estimates continue to rise and as the completion date is pushed further out, Dominion’s path for financial improvement is starting to look more uncertain,” said Moody’s Vice President Ryan Wobbrock.
When investors begin to sour on big construction projects, the collapse comes into view, said Jim Warren, executive director of NC WARN, a Durham-based environmental watchdog group.
“This project is $3 billion over budget yet construction had barely begun when it’s been halted for many months,” Warren said. “My guess: 30 percent chance it’ll ever be completed.”
Emails to a pipeline spokesman weren’t returned by presstime.
A late-January report titled “The Vanishing Need for the Atlantic Coast Pipeline” contends that diminishing consumer demand and more affordable renewables have cast doubt on the overall feasibility and profitability of the pipeline.
There’s a growing risk that the pipeline won’t be able to recover costs from rate-paying customers, according to the report released by the pro-environmentalist Institute for Energy Economics and Financial Analysis and Oil Change International
“The demand outlook for gas has changed dramatically since the project’s inception and much of the original justification for the pipeline has evaporated,” said Cathy Kunkel, IEEFA energy analyst and co-author of the report.