Gas pipeline shrouded in mystery

The site in Charles City County where Chickahominy Power wants to build a power plant, using gas from a pipeline that would pass through Louisa County.

So far there are more questions than answers about a proposed natural gas pipeline that would cross Louisa County on its way to a power plant in Tidewater Virginia.

Balico LLC, the company that wants to build the pipeline, is the same one that received a state permit in 2018 to build the plant in Charles City County. Irfan Ali, Balico’s owner, told the Richmond Times-Dispatch this week that he does not need state approval for the pipeline, except for environmental permits.

But Greg Buppert, an attorney for Southern Environmental Law Center in Charlottesville, said Balico almost certainly will need backing from the State Corporation Commission [SCC].

“If a developer wants to use the power of eminent domain, they’ve got to go to the SCC for approval,” Buppert said. 

Given the project’s length – it would stretch from a connection point at the Transco pipeline in western Louisa to Charles City County – Balico is likely to encounter numerous landowners who won’t be supportive.

Joanna Hickman, who lives in Louisa County near Thomas Jefferson Elementary School, was among the property owners who received a letter from Balico earlier this month requesting permission to conduct survey work on their land.

“I just said, ‘No, no, no,’ and sent it back. I think it’s a bad idea,” said Hickman, who has 170 acres. “They’d have a lot of expense to go around me.”

Ali told the Times-Dispatch he and fellow investors wouldn’t seek eminent domain if landowners refuse to allow the pipeline on their property.

Buppert cited recent high-profile gas pipeline projects elsewhere in the state, including the Mountain Valley Pipeline in Southwest Virginia, as evidence of how disruptive they can be for landowners during construction.

In general a pipeline to be built entirely within Virginia would be regulated by the State Corporation Commission, while a line that crosses state lines is overseen by the Federal Energy Regulatory Commission. Local zoning authority is typically pre-empted, but not necessarily.

Even on an interstate pipeline, state government regulates compressor stations, which are often needed to move gas through a pipeline and release particulates and other pollutants into the air, Buppert said. An uproar over a compressor station proposed in a historical African American community in Buckingham County may have contributed to Dominion Energy’s decision in 2020 to cancel the Atlantic Coast Pipeline.

The state Department of Environmental Quality would have oversight of historical and environmental issues raised by the pipeline, said Ken Schrad, a spokesman for the SCC. 

Jeff Ferrel, Louisa County assistant administrator, said local officials don’t know enough about what’s being contemplated to say what permits would be required. But he said the county might have authority over a number of building and zoning permits, and he couldn’t rule out the county’s ability to deny aspects of a gas pipeline project via a conditional use permit or rezoning action.

While the SCC would probably determine the pipeline’s fate, the bar is set much lower for approval for a private investor like Balico LLC than it would be for a public utility such as Dominion Energy, Buppert said. A public utility gets more rigorous scrutiny because of the need to protect taxpayers, while the financial risk in this case is borne by the investors. 

What is most peculiar about the proposed pipeline, Buppert said, is the timing. The Virginia General Assembly passed legislation in 2020 that makes the future for fossil fuels such as natural gas more cloudy. The state passed the Clean Economy Act, which sets aggressive targets for phasing out fossil fuels in favor of renewable energy sources such as solar and wind. And the state joined the Regional Greenhouse Gas Initiative, a carbon-trading arrangement that involves several other states in the Mid-Atlantic and Northeast. Plants that release carbon into the atmosphere now have to pay for allowances that enable them to pollute.

However, Balico LLC is not trying to produce gas for consumption within Virginia, Buppert said. Instead, the investors want to sell gas on the regional wholesale market.

Moreover, the state set a target date of 2050 to phase out fossil fuels, so the proposed Charles City County gas plant could operate for at least 25 years.

The plant that received state approval in 2018 was one of two planned in majority-Black Charles City County, drawing outrage from many residents. One of the plants was recently canceled after investors determined the venture was not profitable. But the plant Balico LLC hopes to build, known as Chickahominy Power, remains on the table.

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