Recent Studies Question the Economic Benefit of Pipelines

By Elizabeth E. Payne

New studies raise challenges about the financial harm of two natural gas pipeline projects proposed for West Virginia, Virginia and North Carolina — the Mountain Valley and Atlantic Coast Pipelines.

A study released in May by Key-Log Economics LLC estimated that the Mountain Valley Pipeline would cost local communities more than $8 billion. The study was commissioned by The POWHR Coalition (Protect Our Water, Heritage, Rights), an alliance of citizen groups from eight Virginia and West Virginia counties along the pipeline’s proposed route.

The study’s authors calculated one-time and annual costs to the eight-county region from lost property values and taxes, and decreased natural beauty and quality-of-life that would result in fewer people moving to or visiting the area.

According to the U.S. Energy Information Administration, the capacity to generate power from natural gas is expanding rapidly, particularly around major shale plays. In the mid-Atlantic, Virginia is projected to have the greatest increase in capacity over the next two years.

In another study, the Institute for Energy Economics and Financial Analysis concluded that pipelines from the Marcellus and Utica shale beneath Ohio, New York, Pennsylvania and West Virginia — the source for both proposed pipelines — are being overbuilt.

The study also concludes that the Federal Energy Regulatory Commission “facilitates [this] overbuilding” and that much of the cost of construction would likely be passed on to ratepayers.

“None of the economic interests within the natural gas industry have any incentive to seriously consider whether alternatives to natural gas — energy efficiency, renewable energy or other forms of power generation — may be cheaper,” write the authors of the report.

Environmental advocates and homeowners along the routes continue to voice concerns about the harm the pipelines are likely to cause if constructed. Most recently, the Blue Ridge Parkway Foundation announced its opposition to the construction of both pipelines, each of which are projected to cross the parkway. And the Board of Supervisors of Augusta County, Va., also asked FERC to reject the current route of the Atlantic Coast Pipeline.