RICHMOND — The bitterly fought Atlantic Coast Pipeline has been canceled, but the two major utilities behind it, Virginia-based Dominion Energy and North Carolina-based Duke Energy, still have not decided what to do about the land they gained control over for the project, in some cases through eminent domain.
“There are a number of important issues that will need to be addressed in the coming months as we wind down the project,” Dominion spokesman Aaron Ruby wrote in an email. “As part of that process, we will be evaluating the best path forward for resolving existing easement agreements with ACP landowners.”
The uncertainty about the land’s future was also evident in a letter sent to all landowners along the proposed pipeline route last week and shared with The Virginia Mercury. In it, ACP representative Dan O’Brien states that the Atlantic Coast Pipeline “will be evaluating the best path forward to work with landowners having existing easement agreements.”
“Landowners will keep any compensation they have received as consideration for these easement agreements,” the letter continues.
Figuring out what to do with the lands placed under permanent easement for the 604-mile pipeline that was set to cross West Virginia, Virginia and North Carolina, with just over half in Virginia, may be one of the thorniest problems Dominion and Duke will face as they unwind the $8 billion project.
“It’s not incorrect to say there’s just a huge mess on ACP’s hands,” said Joshua Baker, a partner with Norfolk firm Waldo & Lyle, which focuses on eminent domain cases and has represented numerous landowners affected by the Atlantic Coast Pipeline
Since 1947, when Congress amended the Natural Gas Act to expand developers’ rights, pipeline companies have had the power of eminent domain: the ability to take private property for use or ownership, regardless of whether its owner wishes to sell, in return for “just compensation.”
The Atlantic Coast Pipeline entity drew on that power in acquiring permanent easements, also known as right-of-ways, for the pipeline over the past six years. Under these agreements the company left the land in private ownership but secured the right to build and operate the pipeline on it for at least the life of the project — even if the underlying property was sold.
Resistance to these takings was fierce, although largely futile. At the time of the pipeline’s cancellation, easements for 98% of the route had been secured, according to spokeswoman Ann Nallo.
Not all those agreements were alike, however. Varying levels of opposition along the route ultimately produced a patchwork of rights for Atlantic Coast, from the wide latitude granted under a generic agreement for an interstate pipeline to more restrictive terms that tied the easement specifically to the Atlantic Coast project or terminated the easement if the project wasn’t constructed within a certain period of time.
“There’s really easements out there of all kinds of stripes and variety,” said Baker.
What that means is that while some of the easements likely were terminated by the project’s cancellation, others will remain in limbo until the developers decide how to proceed.
“In large part, it’s going to be controlled by the language in the easement itself,” said Baker. “I think there’s a lot of folks who maybe didn’t have representation who signed Atlantic Coast Pipeline’s generic language, and they’re probably going to be stuck with the easement.”
Attorney Hank Howell III, of the Chesapeake-based Eminent Domain Litigation Group, which also has represented ACP landowners, said landowners potentially could petition the courts to terminate the easement, “but there’s transaction costs.”
Also unclear is what responsibilities the developers will have with regard to areas where trees have already been cleared or the land has been disturbed. ACP spokeswoman Nallo said the project team “is still reviewing the mileage to determine the exact needs for wind down/restoration” but should “have a clear path developed in the coming weeks.”
Some cases already tied up in the courts have now found themselves stalled. Attorney Steve Clarke, who is also a partner at Waldo and Lyle, said in an email that at a telephonic hearing for one case in the U.S. District Court for the Western District of Virginia on July 24, “ACP’s counsel couldn’t say what the company’s next steps were, but did agree that the trial was no longer necessary.”
That “led me to at least assume that ACP will be seeking to dismiss the case at some point,” he wrote.
Among the options now facing Atlantic Coast are for the company to retain the easements it already possesses, to handle them on a case-by-case basis or to relinquish their interest in them as a block.
The latter, said Howell, would be “a good public relations move” for Dominion.
“I hope that’s on the table,” he said. “I would think it would be.”
Both he and Baker said it’s unlikely the developers will try to pass on the easement rights to another venture that might be interested in building a pipeline along the same route because of the variety of agreements in place. Notably, Berkshire Hathaway did not acquire the Atlantic Coast Pipeline when it purchased Dominion’s natural gas storage and transmission business. The purchase and pipeline project’s cancellation were announced simultaneously on July 5.
“What would wind up happening, certainly as things expire over the next five years or so, [is] you’re going to have major holes, missing links in the linear length they would need to actually do such a project,” said Baker. “There’s probably not too much attraction to buying up a patchwork of easements that you couldn’t actually run a pipe from A to B on.”