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How This Energy Company's Deep Influence Is Tainting Atlantic Coast Pipeline Approval Process
By Andy Rowell
There is a growing political scandal in Virginia regarding the ubiquitous influence of the state's largest energy company, Dominion Energy, and it's raising fundamental questions about the integrity of the governor's office and state regulators who will decide the fate of the proposed Atlantic Coast Pipeline.
Dominion's longstanding exercise of power and influence in Virginia is no secret—the company is the largest corporate donor to state candidates.
But a new report by the Public Accountability Initiative documents in one place the company's extensive, revolving door relationships with the very regulators charged with issuing permits for this controversial, $5 billion fracked-gas project.
The Atlantic Coast Pipeline is a joint venture of Dominion, Duke Energy and Southern Company, but Dominion is the leading owner and will operate the pipeline if it goes ahead.
The project, which would source fracked gas from West Virginia, plans to traverse the Allegheny Highlands bordering West Virginia and Virginia, cut a large swath through Virginia to the Hampton Roads area, and branch south into North Carolina.
The new report details how Dominion's influence penetrates every level of state government, from Department of Environmental Quality (DEQ) officials, through General Assembly members on both sides of the aisle, to the governor's mansion.
These relationships are fundamental to the fate of the pipeline.
While the Federal Energy Regulatory Commission (FERC) is expected to rubber stamp the pipeline's federal permit, states retain the right under the Clean Water Act to protect their water resources—the project will cross hundreds of water bodies in the state—and deny permits for such projects if they are deemed a threat.
The Cuomo Administration in New York State has recently denied two such permits for gas pipelines. In Virginia, Governor McAuliffe's Department of Environmental Quality has the authority to do the same, but both the governor and the regulators who report to him have shown far greater interest in smoothing Dominion's path through the regulatory system.
The report sheds light on possible reasons why.
Gov. McAuliffe, who stood with Dominion CEO Thomas Farrell in 2014 as he unveiled plans for the Atlantic Coast Pipeline, has received tens of thousands of dollars in political funding from Dominion. He received $35,000 from Dominion PAC shortly before his election in November 2013, and Dominion Virginia Power gave $50,000 to his inaugural committee shortly afterwards. More recently in 2016, Dominion PAC gave $25,000 to McAuliffe's PAC, Common Good VA, and Dominion CEO Tom Farrell gave $7,500.
The DEQ, the key agency charged with reviewing the pipeline's water quality permit, is mired in conflicting interests linked to Dominion. For example, the DEQ's longstanding director, David K. Paylor, received gifts from Dominion including a trip to the 2013 PGA Masters Tournament in Augusta, Georgia, and a $1,200 dinner for Paylor and nine of his associates.
In 2015, Dominion's philanthropic foundation donated $45,000 to the Alliance for the Chesapeake Bay, an organization whose Virginia chapter is headed by Nissa Dean, who sits on the Virginia DEQ's seven-member Water Control Board, which must sign off on the Atlantic Coast Pipeline's water permit.
DEQ's Water Permitting Division Director, Melanie Davenport, appears to have previously served as an attorney for Dominion, according to the report. Davenport also sits on the board of the Virginia Water Resources Research Center with Joe Tannery, who is Dominion's energy technology advisor.
Pamela Faggert, Dominion's chief environmental officer and senior vice president of sustainability, served for nearly eight years as director of the air division of the Virginia DEQ in the late eighties and early nineties. The pipeline also has to receive regulatory approval from the air division. Furthermore, Faggert has donated over $10,000 to Virginia politicians, including supporters of the ACP.
Given the extensive revolving door between Dominion and DEQ, it is perhaps no surprise that DEQ recently came under fierce criticism over relinquishing partial oversight of water quality permits related to the pipeline to the Army Corps of Engineers' national permitting system.
As one commentator noted last month, this means that Dominion can use the "corps' blanket permit, instead of having to get one for each river, stream and wetland the pipelines cross."
Greg Buppert, senior attorney for the Southern Environmental Law Center's Virginia office, has expressed concerns: "That process does not involve site-specific analyses and we have no confidence that the corps' permit will be sufficient for such a complex project across the state's steepest mountains."
Dominion is also used to getting its way with state legislators in Virginia. State politicians in Virginia and North Carolina "who have been publicly vocal about their support for the pipeline have been some of the biggest recipients of donations from its corporate backers," argued the report.
General Assembly leaders alone have received nearly $400,000 since 2007 from the company. Some of this money is redistributed by the leadership to less powerful elected officials, ensuring compliance with Dominion's agenda down the chain of command.
Five leading state representatives from Virginia, along with eleven elected officials from West Virginia and North Carolina who co-signed a letter to FERC declaring their support for the Atlantic Coast Pipeline, "rank among the highest recipients of donations from Dominion over the past decade."
Ultimately, when it comes to state authority over pipeline permits, the buck stops with the state's chief executive—currently McAuliffe—to ensure a fair and thorough review process that's free of polluter influence.
McAuliffe was recently labelled a climate hypocrite after announcing he was moving forward on the Paris agreement principles, but at the same time being a vociferous supporter of offshore drilling and fracked gas pipelines in Virginia.
As Oil Change International's own analysis has shown, the Atlantic Coast Pipeline alone would cause as much greenhouse gas pollution per year as 20 coal-fired power plants.
Chesapeake Climate Action Network director Mike Tidwell, argues: "It is, frankly, hypocrisy for the governor to support both Paris and violent drilling for oil and gas in and across the state. The best thing Gov. McAuliffe could do to support Paris and oppose Trump is to drop his tragic support for offshore oil drilling and for the Mountain Valley and Atlantic Coast Pipelines for fracked gas."
If you look up the word "Dominion" in the dictionary you will see the word derives from the Medieval Latin word "dominium" or "dominus" which means "lord or master." And true to its name, Dominion Energy certainly seems to be master of Virginia, no matter the cost to communities and the environment.
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