Joe Biden’s First Energy Casualty - The Wall Street Journal

boonoor.blogspot.com

By

The Editorial Board

• Biography
• @WSJopinion
• WSJOpinion

July 6, 2020 7:01 pm ET

Signs that mark the route of the Atlantic Coast Pipeline in Deerfield, Va., Feb. 8, 2018.

Photo: Steve Helber/Associated Press

Joe Biden is currently cruising to the White House, and this weekend we saw an early economic consequence when Dominion Energy and Duke Energy pulled the plug on the Atlantic Coast Pipeline (ACP). The companies blamed legal and regulatory uncertainty, and the winners are America’s energy competitors weakened by the U.S. shale boom that is now under political threat.

Hydraulic shale fracturing has unleashed a surge of natural gas and oil and made the U.S. the world’s leading producer. At the same time U.S. carbon emissions have fallen as utilities replace coal with cleaner-burning natural gas. Liberals once supported natural gas but now want to exorcise all fossil fuels.

One obstacle: voters. The left has failed to stop fossil fuel production via the political process, so their strategy has been to strangle oil and gas projects with legal challenges that raise capital costs and create so much uncertainty that companies give up. This happened with the ACP and may soon to other projects.

***

Natural gas production in Appalachia has exploded eight-fold since 2011, but prices have been depressed because there are too few pipelines to carry the supply glut to market. Duke and Dominion devised the 600-mile ACP in 2014 to transport natural gas from West Virginia through Virginia and North Carolina, but were waylaid in court. A 7-2 Supreme Court majority cleared one roadblock last month, but Dominion and Duke say a nationwide injunction in April by federal Judge Brian Morris in Montana against the Keystone XL pipeline has created new headaches.

Didn’t President Trump finally deliver Keystone from Barack Obama’s regulatory purgatory? He did. But green groups threw up a last-ditch lawsuit by challenging a nationwide permit the U.S. Army Corps of Engineers issued in 2017. The Clean Water Act authorizes the Corps to issue five-year general nationwide permits for de minimis discharges into waterways caused by the construction of pipelines and transmission lines.

Yet Judge Morris declared that the Corps unlawfully issued the permit without first consulting other agencies about its endangered species impact. Numerous federal reviews have found Keystone doesn’t threaten any endangered species. In other words, the judge called an erroneous foot fault on match point. The kicker is that the judge enjoined the nationwide permit only as it applies to oil and natural gas pipelines, so other utility construction like transmission lines carrying wind power can proceed.

The American Petroleum Institute estimates the judge’s injunction will affect 75 pipelines. The Justice Department has asked the Supreme Court to stay Judge Morris’s nationwide injunction as the Ninth Circuit Court of Appeals reviews the case, but Dominion and Duke concluded that their odds of completing the steeple-chase are lousy. They didn’t mention Mr. Biden, but you can bet his big lead in the polls was on their mind.

“Unfortunately, the inability to predict with confidence the outcome of the project’s permits and the potential for additional incremental delays associated with continued legal challenges, means that committing millions of dollars of additional investment for tree-felling and subsequent ramp up for full construction is no longer a prudent use of shareholder capital,” Dominion and Duke said.

They add: “These lawsuits and decisions have sought to dramatically rewrite decades of permitting and legal precedent including as implemented by presidential administrations of both political parties,” raising the cost to $8 billion from an original estimate of $4.5-$5 billion and causing at least a “nearly three-and-a-half-year delay with uncertainty remaining.”

Federal Judge James Boasberg on Monday created more risk by ordering the Dakota Access pipeline, which has been transporting oil for three years, to shut down until the government completes another detailed environmental review by which time Mr. Biden could be President and will probably pull the plug. Mr. Biden has promised to revoke Keystone’s permit and is hostile to shale drilling generally.

***

Twenty or so U.S. oil and gas companies have filed for bankruptcy this year as the pandemic has reduced energy demand. The carnage is elating liberals as well as Vladimir Putin and Middle Eastern emirs eager to replace U.S. gas in global markets. Russia and Iran are the world’s leading natural gas producers after the U.S.

Tens of thousands of jobs are at risk in fossil-fuel production and gas-using industries like steel and chemicals. Americans would also pay more for energy. Virginia’s Corporation Commission in 2018 estimated that Dominion’s offshore wind farm would cost 11.5 times more than a new natural gas plant and 26 times more than energy on the open market. The left’s climate obsession is already misallocating capital and damaging growth, and ACP is the portent of uncreative destruction to come.

Wonder Land: After months of the pandemic, protests and failing progressive leadership, many are going to move out of U.S. centers. Images: Getty Images Composite: Mark Kelly

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Let's block ads! (Why?)

"first" - Google News
July 07, 2020 at 06:08AM
https://ift.tt/3f0W6SO

Joe Biden’s First Energy Casualty - The Wall Street Journal
"first" - Google News
https://ift.tt/2QqCv4E
https://ift.tt/3bWWEYd

Bagikan Berita Ini