Op-Ed

The Atlantic Coast Pipeline will not bring the jobs that it claims

Atlantic Coast Pipeline protesters arrested outside NC governor’s office after sit-in

Fifteen people were arrested Friday night outside Gov. Roy Cooper’s office after an all-day sit-in to protest the construction of the Atlantic Coast Pipeline. The group had started with about 30 people Friday morning in what organizers called the
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Fifteen people were arrested Friday night outside Gov. Roy Cooper’s office after an all-day sit-in to protest the construction of the Atlantic Coast Pipeline. The group had started with about 30 people Friday morning in what organizers called the

The North Carolina Department of Environmental Quality and Governor Cooper just capitulated to pressure and abdicated their responsibility to their state and to the people who elected Cooper. Governor Cooper and the NC DEQ relied on questionable data, provided by Dominion Energy, when they granted the Atlantic Coast Pipeline (ACP) one of its most coveted permits. It doesn’t take much to pull the curtain back on the economic projections conducted by the pipeline to realize its promises are a fantasy. And, yet, here we are. The analyses used to determine economic development rely solely on broad-sweeping assumptions that, once unpacked, do not hold water.

Southern Environmental Law Center debunked Dominion Energy’s claim that the pipeline will bring jobs to North Carolina. Dominion Energy’s claim that the pipeline will bring jobs relies on two major assumptions: that the pipeline will save money, and that these savings will go in their entirety to hiring new employees. The unsubstantiated claim of cost-savings, therefore, should be of the utmost importance to Cooper and DEQ when evaluating the benefits of the pipeline.

How will the new pipeline save businesses money? The cost-savings rely on predicting the future price of gas. Dominion Energy claims that they will be able to provide cheaper gas to North Carolinians than they would get without the proposed Atlantic Coast Pipeline. There are two major problems with this claim.

First of all, there’s no proof that gas coming out of the Atlantic Coast Pipeline would be any cheaper than gas coming out of the already existing pipelines that North Carolinians rely on every day. Secondly, this claim doesn’t mean that gas prices from the proposed ACP will be cheaper than they are today, just that these prices could be marginally cheaper than gas prices from current pipelines.

Let’s assume for argument’s sake that the gas from the ACP ends up being cheaper than the gas coming from pipelines that we already have. The next assumption is one that predicts how businesses will spend their savings. Dominion Energy claims that all businesses that “save” money will spend every saved penny on new hires, and will choose not to spend any of their savings on making capital investments, distributing cost-savings to shareholders, or other business costs that are not solely employee salaries.

How likely is this scenario? There was no analysis or surveys to evaluate the likelihood of this outcome. Furthermore, this in no way guarantees more jobs in struggling counties. Nevermind that the number of unemployed residents in six counties in Eastern North Carolina is over 13,000 people, which is more than 6 times the number of jobs that Dominion claims it will bring.

Instead of spending $6 billion on a new pipeline for gas that analysis shows we do not need, Duke could make much cheaper upgrades to current pipelines to meet growing demand. So why does Duke Energy want to build such expensive pipelines? Because their business model relies on a twisted incentive structure. Duke Energy is guaranteed a 15 percent rate of return on infrastructure projects. So, the more expensive these projects are, the more profits Duke Energy can distribute to shareholders paid for by captive ratepayers like you and me.

It is imperative that Cooper’s administration go back to the drawing board and fully evaluate claims that the pipeline will result in cost-savings, because this is the foundation for the claim the pipeline will bring jobs. Dominion Energy failed to publicly release the numbers used to conclude that the pipeline would save money. In fact, Dominion Energy just reversed course on this claim.

A spokesperson for Dominion Energy admitted that Dominion customers may end up paying between $1.6 billion and $2.36 billion more after the ACP is built, in testimony to Virginia. This points to an alarmingly inadequate evaluation of a multi-billion dollar pipeline that will cost ratepayers billions of dollars, could result in epic environmental disaster, and creates false hopes for struggling regions in North Carolina.

It is inexcusable and highly questionable that Cooper’s DEQ could throw away a clean energy future for North Carolina in exchange for a shoddy and weak claim by those who will benefit most from the fracked gas pipeline. Furthermore, Duke Energy has proven to North Carolina that they are reckless, untrustworthy and irresponsible given their history of toxic dumps and spills. This coupled with other realities of the pipeline’s cost make it certain that the cost of the pipeline would greatly exceed economic benefits, if there were any. This cost would be passed onto ratepayers and taxpayers (again) when Duke Energy is responsible for another spill.

Meanwhile, Duke Energy will be laughing all the way to the bank.

Kelly Garvy received her Masters in Environmental Economics and Policy from Duke University. She is the founder of KilltheBill.com, a state policy tracking website.

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