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John Hood: Pipeline demise won’t halt natural gas

RALEIGH — The proposed natural-gas pipeline through Eastern North Carolina is dead. Long live natural gas!

Admittedly, there won’t be a coronation ceremony like there would be if a living monarch were replacing a deceased one. But when it comes to reliable, affordable, and environmentally friendly ways to power a 21st-century economy, natural gas is still king. Its reign will continue for many decades, despite the successful effort by left-wing activists to litigate the Atlantic Coast Pipeline to death.

Just to be clear: neither technical considerations nor changing customer demand did the pipeline in. The two utilities behind the project, North Carolina’s Duke Energy and Virginia’s Dominion Energy, made that very clear in their July 5 announcement.

“A series of legal challenges to the project’s federal and state permits has caused significant project cost increases and timing delays,” the companies stated. “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.”

As a result, Duke and Dominion could no longer make rational plans or take rational risks to construct the pipeline, which would have carried natural gas from West Virginia through Virginia and into North Carolina. The legal challenges had driven the cost of the project to at least $8 billion, up from the original $5 billion, and delayed its completion for several years.

Activist groups were jubilant. Generously funded by left-wing foundations and other donors, they had used every tactic at their disposal to destroy the project. They truly think that by obstructing the creation of natural-gas plants and pipelines, they will force North Carolina and other states to increase dramatically the share of power derived from wind, solar, and other “renewable” sources of energy.

But that’s impossible. Even if there are impressive breakthroughs in battery storage, it will remain uneconomical for the foreseeable future to replace coal-fired plants with renewables for “baseload generation” — for the level of power needed to serve basic needs when the sun isn’t shining and the wind isn’t blowing.

The cleanest practical alternative to coal for baseload generation would be nuclear, of course. Alas, many of the same activists who killed the Atlantic Coast Pipeline have waged political and legal war against nuclear power for decades.

So, instead, natural gas has largely filled the gap. North Carolina homes and businesses now derive about 30% of our electricity from gas, up from only 7% as recently as 2010. Coal now accounts for 29%, down from 56%.

By suing the Atlantic Coast Pipeline into oblivion, activists have simply increased the cost of delivering a necessary fuel. Moreover, because natural gas is also an essential element of some industrial processes, the pipeline would have given many Eastern North Carolina communities a new amenity to market to potential businesses. Now, thanks to the litigation, those economic-development opportunities have disappeared.

For decades, conservatives and other reformers have warned that a combination of unrealistic regulation and venue-shopping litigation has made it extremely difficult to build things — from new businesses and affordable housing to roads, dams, and other infrastructure. The demise of the Atlantic Coast Pipeline is a stark example of what we meant.

Consider the fate of so many North Carolina communities still struggling to replace the traditional industries that once anchored their labor markets, cultures, and tax base. Politicians, regulators, and litigators have gotten into the habit of telling them what they can’t do — what they can’t excavate, mine, log, harvest, manufacture, or process. What about becoming a bedroom community for a larger city? That earns another round of criticisms, for wanting more highways built, for seeking more “sprawl.”

Our towns can’t all host organic-farming cooperatives and windmill-powered data servers. The relevant markets are too small. At some point, those who wield coercive power over North Carolina’s communities have to adjust to practical realities. They have to be willing to allow some costs in order to get even-greater benefits.

They have to say yes to something.

John Hood is chairman of the John Locke Foundation.

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