News: CJ Exclusives

Virginia, N.C. pipeline deals differ greatly

Virginia agreement says all money will go to environmental protection; N.C's deal allows governor to spend on economic development and green energy

Image from Wikipedia
Image from Wikipedia

On its face, the agreement between the Atlantic Coast Pipeline and the Commonwealth of Virginia looks similar to the deal the pipeline operators signed with Gov. Roy Cooper. Both allow the pipeline to cross private and public property in each state and deliver natural gas to communities along the way, so long as the ACP follows federal and state environmental laws. Both involve payments of nearly $58 million.

Leslie Hartz, a vice president of Dominion Energy, one of the pipeline’s partners, signed both documents.

But the similarities largely end there. The Virginia agreement says ACP will pay to “mitigate” any environmental impacts from the pipeline’s construction and operation. It spells out in detail the share of money addressing forest conservation and water quality (including wildlife protections). The agreement is between the pipeline operators and the state. Secretary of Natural Resources Molly Ward signed the document for the Commonwealth of Virginia. (Read the Virginia agreement here.)

In contrast, the North Carolina deal merely states the money will go into an escrow account, and the governor “has the authority to direct the disbursement of funds contemplated in this Memorandum of Understanding … on behalf of the state of North Carolina.” The money can go toward mitigation, but also for economic development and renewable energy projects — uses having nothing to do with environmental protection. The details will be spelled out in an executive order once the pipeline gets final approval by federal and state officials. The deal is between the pipeline operators and the governor of North Carolina. Cooper attorney William McKinney signed North Carolina’s memorandum. (Read the North Carolina agreement here.)

The 600-mile pipeline will originate in West Virginia. A spokesman for the ACP said the West Virginia agreement has not been finalized.

North Carolina’s unusual arrangement drew the attention of Lt. Gov. Dan Forest, a Republican who’s expected to challenge Democrat Cooper if the governor seeks a second term in 2020.

Forest calls the deal with Cooper a slush fund and questioned its legality. In an email to Carolina Journal, Forest said:

While I support the construction of the Atlantic Coast Pipeline, the agreement Roy Cooper made with the builders is suspect at best. The builders of the Atlantic Coast Pipeline should have been required to mitigate any environmental damage caused in the building of the pipeline, but the money to do so should not be placed in a $57.8 million slush fund under the sole control of the governor. There is a proper way to handle things that remove even the appearance of impropriety when it comes to state government permitting, but setting aside a slush fund to be spent at the discretion of the governor by executive order is not the way.

Former state Supreme Court justice Bob Orr said the discretionary fund raises constitutional questions.

“I would refer you to Article 5, Section 7 of the [state] constitution, which says no money shall be drawn from the state treasury but in consequence of appropriations made by law, and an accurate account of the receipts and expenditures published,” Orr said.  

“If it’s money the state has a claim to, why isn’t it going to the treasury through the proper process?” Orr asked. “I think that’s the $64,000 question: Is it state money?”

CJ has requested all documents and correspondence related to the pipeline deal from the Department of Environmental Quality. DEQ officials have acknowledged the request and say they will comply with it.

Cooper’s office has not responded to multiple requests for comment.

Executive Editor Don Carrington and Associate Editor Dan Way provided additional reporting for this story.

  • Thela Ginjeet

    Sound’s like Ray’s own private little cookie jar he can dip into anytime he needs to dispense a political favor.

    His cronies always scream about transparency, accountability, and democracy…except when they don’t.