News: Quick Takes

Cooper pipeline deal includes ‘discretionary’ fund outside budget process

(CJ photo by Kari Travis)
(CJ photo by Kari Travis)

Editor’s note: This story was updated several times January 26 after initial publication.

UPDATED 2:55 p.m. Joseph Coletti, a senior fellow at the John Locke Foundation and former program budget analyst at the state Office of State Budget Management, provided the following statement:

“The $57.8 million payment from the Atlantic Coast Pipeline, Dominion Power, and Duke Energy is clearly the quid for the Department of Environmental Quality’s quo of approving water permits for the pipeline. The dictionary defines something like this as bribery or extortion. The payment was made under threat to move the project forward.

“The structure of the deal seems designed to skirt the constitutional requirement for the General Assembly to approve the raising and spending of funds. An escrow account approved by the governor with expenditures tied to the governor’s wishes is surely not in keeping with the spirit of the law or the constitution.”

Read the Memorandum of Understanding between the utilities and the governor’s office here.

UPDATED, 2:35 p.m. The agreement between DEQ and the Atlantic Coast Pipeline operators includes a $57.8 million payment by the companies to an “Escrow Account” chosen by the governor. The Memorandum of Understanding between the parties says the money will be used to mitigate environmental impacts of the pipeline; for economic development projects in the affected counties; and for renewable energy projects in the affected counties. This fund may operate outside normal legislative budgeting functions. Carolina Journal will continue updating the story as events warrant.

The state Department of Environmental Quality issued a vital water permit Friday advancing the Atlantic Coast Pipeline project, but environmentalists immediately criticized Gov. Roy Cooper for signing off on the approval.

The 604-mile pipeline and compressor stations will carry natural gas from West Virginia to southeastern regions of Virginia and eight counties in North Carolina, ending just shy of the South Carolina border. The 401 water quality certification is required because the project has the potential to impact wetlands, buffers, or waterways.

“DEQ left no stone unturned in our exhaustive eight-month review of every aspect of the 401 application,” said DEQ Secretary Michael Regan.

“Our job doesn’t end with the granting of the permit, but continues as we hold the company accountable to live up to its commitments,” Regan said. “Our efforts have resulted in a carefully crafted permit that includes increased environmental protections, while giving us the tools we need to continue close oversight of this project as it moves forward.”

Advocates and adversaries of the pipeline have sought Cooper’s support. “We’re disappointed by [Gov.] Roy Cooper’s approval of this fracked gas pipeline water permit, which makes his commitment to clean energy harder to fulfill. Fracked gas is just another fossil fuel that threatens our water, our health, and our climate,” said Michael Brune, executive director of the California-based Sierra Club.

Brune warned in a news release that the environmental group has filed four lawsuits over the pipeline, including one against Virginia’s approval of a similar 401 permit, and will continue its fight.

“Regardless of the rhetoric coming from fracked gas companies today, the Atlantic Coast Pipeline will continue to encounter massive opposition at every turn,” Brune said. “Duke Energy and Dominion Power can spend millions on their PR campaigns attempting to convince the public they’re pushing clean energy, but the truth remains that fracked gas and this pipeline are a direct threat to the climate and to communities.”

Senate Leader Phil Berger, R-Rockingham, lauded DEQ’s action. “I’ve supported the Atlantic Coast Pipeline from the start, and while approval took longer than it should have, I appreciate [Governor] Cooper finally standing up to the far-left environmentalists and permitting this job-creating project,” Berger said in a written statement.

“This new pipeline will allow North Carolina to reap the benefits of the fossil fuel-driven energy revolution that is powering America’s economic growth,” Berger said. “I sincerely hope this signals a new willingness by [Governor] Cooper to reject the radical, anti-business elements that dominate today’s Democratic Party, and work with Republicans on pro-growth economic policies that will create jobs in North Carolina.”

The Federal Energy Regulatory Commission is the lead regulatory agency for natural gas pipeline projects. It approved the Atlantic Coast Pipeline in October, but more state permits are needed before the pipeline construction can start.

Those include an air quality permit for a compressor station in Northampton County; two general stormwater permits in Nash and Cumberland counties; an individual stormwater permit for a contractors’ work yard in Cumberland County; and approval of the erosion and sediment control plan for the northern segment of the pipeline’s North Carolina route. The erosion and sediment control plan for the southern segment was approved in December.

The project also must obtain a permit from the U.S. Army Corps of Engineers for stream and wetland impacts.

CJ Editor-in-Chief Rick Henderson provided additional reporting for this story.