Report: Natural gas faces opposition in NC despite strengths

In an effort to lower emissions, North Carolina’s energy industry is tangled in red tape, as natural gas, which is essential for grid stability, faces mounting opposition from both political and environmental lobbyists. Permitting slowdowns, executive overreach, and vague environmental standards have undermined efforts to expand this critical energy source.

A study commissioned by the John Locke Foundation, Power Plays: How an Activist Bureaucracy Obstructs NC’s Energy Future, and What to Do About It, examines the bureaucratic obstructions that impede a zero-emissions future through natural gas and outlines policy solutions to address the issue. 

“Affordable, reliable power is an absolute necessity in today’s world,” Jon Sanders, author of the report and director of the Center for Food, Power and Life at the John Locke Foundation, told the Carolina Journal. “North Carolinians don’t need officials and bureaucrats playing ideological games with electricity and making it harder to access baseload power generation. This report shows how laws have been exploited and bent to prevent more natural gas supplies and power generation in North Carolina, even though natural gas is critical to affordable, reliable power.”

In 2021, the General Assembly passed HB 951, the Carbon Plan law, which requires a 70% reduction in carbon emissions by 2030 and carbon neutrality by 2050. The law also requires the path to carbon neutrality to be the least costly for the consumer while maintaining or increasing grid reliability. 

“The North Carolina Utilities Commission’s (NCUC) initial Carbon Plan, approved in 2022 after the passage of HB 951, also discussed natural gas as a ‘bridge’ fuel until sufficient zero-emissions resources ‘are available and can replace at scale what gas contributes to the system,’”  reads the report. “New natural gas facilities in the near term were declared in the Carbon Plan to be ‘essential to achieving the Interim Target [70% reduction of CO2 emissions], while maintaining or improving reliability, and doing so along a least cost path.’”

Despite coal emitting more carbon than other energy sources, it is a dependable electricity provider that supplies baseload power. “Baseload” is the continuous, uninterruptible demand for electricity on the grid — power that must be consistently available and cannot depend on intermittent sources, according to the report. To transition away from coal while maintaining grid reliability, the only viable alternatives for baseload generation are lower-emission natural gas plants or zero-emission nuclear power.

The long timelines required to permit and construct nuclear facilities make natural gas the most practical and cost-effective option for achieving carbon-neutral electricity in the near term. If the Carbon Plan is amended or repealed, North Carolina’s reliance on natural gas will likely increase even further.

“Natural gas is the reliable ‘fuel that keeps the lights on,’ and natural gas policy must reflect this reality,” according to the North American Electric Reliability Corporation’s (NERC) 2021 Long-Term Reliability Assessment.  

Despite this assessment, natural gas continues to face opposition from political and environmental lobbyists and executive overreach, which has taken advantage of loopholes or gaps in the law to limit access to natural gas, such as impeding pipeline projects and natural-gas plants. 

“North Carolina is currently served by only one interstate natural gas pipeline,” reads the report. “In June 2017, the Atlantic Coast Pipeline (ACP) partners, including Duke Energy, sought 401 WQC approval from the North Carolina Department of Environmental Quality (NCDEQ) under former Gov. Roy Cooper. The ACP needed approval by year’s end in 2017 in order to begin tree clearing or else it would have to wait another full year.” 

After a string of delays, the project finally received certification in late January 2018 — the same day a $57.8 million mitigation fund was announced under the governor’s control, according to the report. Just four days later, Duke Energy settled a dispute with solar facilities, with the outcome favoring the solar industry.

“An investigative report for the legislature found it reasonable to conclude that the governor had improperly used his authority and influence to bring about the mitigation fund and resolve the solar dispute. In 2020, citing ongoing delays and uncertainty, the ACP project was canceled.” 

The ACP was not the only pipeline to face obstruction; the Mountain Valley Pipeline (MVP) Southgate project faced similar 401 WQC denials from NCDEQ in 2020. According to the report, the MVP has “since come online,” but lacks certification. In 2023, the General Assembly instituted time limits or “shot clocks” for permitting actions and instituted statutory requirements for 401 WQCs. 

In addition, Cooper “used an executive order to create an ‘Environmental Justice (EJ) Mapping Tool’ and an ‘Environmental Justice Hub,’” according to the report. These tools would assist state regulators in using the EJ criterion to make permitting decisions. While EJ is not officially an evaluative criterion nor has it been objectively defined, nothing prohibits state agencies from using EJ in permitting decisions. 

The above are just a few examples of the impediments that natural gas currently faces. The report outlines several policy recommendations to the General Assembly that would improve the current laws for the benefit of North Carolinians. 

“The top recommendation would be to repeal the Carbon Plan entirely or at least its interim goal (70% reduction in CO2 emissions from electricity by 2030), because it is being elevated above affordability and reliability in Carbon Plan modeling, promoting expensive, unreliable renewable sources well above baseload sources like natural gas and nuclear,” said Sanders. “It also calls for passing an Only Pay for What You Get Act, which would protect reliability and affordability by changing utilities’ incentives so that they profit only from the reliable portions (capacity factors) of the new power facilities they build. Finally, it calls for forbidding the use of subjective standards like ‘environmental justice’ in state permitting decisions, maintaining a watchful eye over the implementation of successful reforms, and urging Congress to reform permitting.”