Does NC need natural gas from Mountain Valley Pipeline? How it impacts the climate fight

Utilities in North Carolina say natural gas from a proposed pipeline is necessary to maintain their supplies, while opponents of the project argue its completion could undermine the state’s transition to clean energy.

The owners of MVP Southgate have asked the Federal Energy Regulatory Commission to give them until mid-2026 to complete the 73.7-mile pipeline extension of the Mountain Valley Pipeline from southern Virginia to a point southeast of Graham in Alamance County. The pipeline could bring as much as 375 million cubic feet of gas to the state daily, enough to heat about 2.25 million homes.

Dominion, which has an agreement to use 300 million cubic feet of gas, and Duke Energy have both argued the pipeline is necessary to meet growing demand for natural gas in North Carolina. But pipeline opponents argue the state doesn’t need more natural gas and that the ongoing transition to solar and wind makes building fossil fuel infrastructure unnecessarily risky.

“We do not need to be building more fossil fuels to get to a renewable future. It’s here, and it’s now and that’s what our energy choices should be,” Caroline Hansley, a North Carolina-based organizer with the Sierra Club’s Beyond Dirty Fuels campaign.

Duke Energy officials told FERC that future isn’t here just yet. But they believe gas from MVP Southgate is a necessary “bridge fuel” to reach it.

In his letter expressing support for MVP Southgate, Nelson Peeler, Duke’s senior vice president for transmission and fuel strategy and policy, told FERC that additional natural gas from Appalachia’s Marcellus and Utica shales would help keep power from the company’s North Carolina utilities affordable and reliable.

“Southgate will further enable coal plant retirements, allow integration of more renewable energy resources in a reliable manner, and address growing demand for incremental natural gas supply in the Carolinas, all of which will result in lower prices and cleaner energy while supporting economic development,” Jennifer Sharpe, a Duke spokeswoman, told The News & Observer in an email.

Sharpe did not say whether Duke is negotiating for the 75 million cubic feet of capacity that remains available in MVP Southgate’s initial stage, but did say the company would take advantage of any opportunity to add more gas.

Need for natural gas?

MVP Southgate’s completion long seemed unlikely, in part because permitting troubles and environmental woes left construction of the Mountain Valley Pipeline’s main stem from West Virginia to southern Virginia in question. The N.C. Department of Environmental Quality cited that doubt as a key reason for previously denying MVP Southgate’s water quality certifications.

But the debt ceiling legislation passed earlier this year declared completion of the main pipeline “in the national interest,” calling for the approval of all federal permits and limiting judicial review.

The 4th Circuit U.S. Court of Appeals has since temporarily blocked construction of the mainline, resulting in MVP’s owners asking the U.S. Supreme Court for an emergency ruling.

In a letter submitted late Friday, 51 of the N.C. General Assembly’s 62 Democrats called for FERC to deny the Southgate extension. They pointed to the mainline’s uncertainty, but also contended MVP hasn’t proven North Carolina needs the natural gas.

“There is no need for the gas MVP is is proposing to transport. Years worth of evidence points to how the developers overstated the demand for gas, and upgrades to existing infrastructure show increased available capacity substantiates the lack of market need for the MVP,” the letter said.

In contrast, industry representatives like the North Carolina Chamber and Republican officials like State Treasurer Dale Folwell, have told FERC the pipeline is critical for North Carolina’s economic development and safety.

Right now, the Transco pipeline is the only one bringing natural gas to North Carolina, and it does not have any remaining capacity.

Gary Salamido, the Chamber’s president and CEO, warned what would happen if Transco suffered a disruption.

“Local economies would sputter to a stop, jobs would be impacted, and an immeasurable degree of economic opportunity would be lost,” Salamido wrote. “A natural gas supply disruption could become critical, especially during an extreme weather event.”

Supplying gas-fired power plants?

Natural gas is a key part of Duke’s efforts to meet the state-mandated goals of a 70% reduction from 2005 carbon dioxide emissions levels by 2030 and net zero by 2050, a stance that alarms many environmental advocates.

House Bill 951, the bipartisan agreement that set those goals, only requires Duke to slash carbon dioxide emissions, not other greenhouse gases like methane. Duke’s stance is that it needs natural gas-fired power plants in the near-term to provide reliable power while wind and solar — and battery storage — scale up.

Sharpe wrote that any new gas plants Duke builds would also be built to burn hydrogen, helping the utility reach the net-zero goal.

But others say bringing more natural gas to North Carolina via MVP Southgate would result in unnecessary, climate-warming emissions.

Methane, the main component in natural gas, is a potent, albeit comparatively short-term, greenhouse gas. Scientists have increasingly argued that limiting methane emissions is key to stemming climate change.

“If MVP Southgate were to be built, it would undermine our climate goals as a state and actually hinder us from becoming more carbon neutral at a time when we need to be moving towards renewable energy,” Hansley said.

Tale of two pipelines

Energy analysts like Alex Gafford of East Daley Analytics say projects like MVP Southgate play an important role in any success of the Mountain Valley Pipeline’s main stem.

MVP is limited on where it can send gas, Gafford said, because Transco is full. Those limitations mean the mainline can only carry about 35% of its capacity, Gafford wrote earlier this year.

“MVP cannot run full given current constraints on Transco without additional egress provided by a project like MVP Southgate,” Gafford told The N&O via email.

MVP Southgate officials have said they can expand the project from 375 million to as much as 900 million cubic feet of gas, depending on demand.

Right now, most of North Carolina’s natural gas comes from northeastern Pennsylvania. MVP Southgate would supply gas from West Virginia and southwestern Pennsylvania, Gafford wrote.

“Utilities have more options,” Gafford wrote.

East Daley’s analysts also anticipate that additional supply from MVP and MVP Southgate would ease peak prices when energy usage is highest in the summer and winter. Basically, there would be more gas available to meet demand when people crank up their air conditioners or need more energy to keep their homes warm.

Duke subsidiary Piedmont Natural Gas is the sole customer of a proposed Transco expansion that would bring an additional 423 million cubic feet of gas to North Carolina along the existing pipeline. On July 17, Transco’s owners asked FERC to grant the project a key approval.

“Time is of the essence in order to meet Piedmont’s reliability needs for the 2024-25 winter heating season,” wrote Alan Armstrong, the president and CEO of Williams, Transco’s owner.

Dominion agreement with MVP

Dominion Energy has an agreement in place to obtain 300 million cubic feet of gas from MVP Southgate each day for 20 years once the pipeline is completed.

Assuming an average North Carolina residential customer uses about 5,000 cubic feet of gas each month, that is enough to supply nearly 1.8 million homes. Put another way, Dominion’s portion of MVP Southgate would provide about 89% of the total natural gas consumed by all N.C. industrial users in 2022.

Dominion has 600,000 natural gas customers in North Carolina and has added more than 100,000 in the last decade, a company told FERC. Building the pipeline would limit price swings and add resilience to the state’s energy supply, the official wrote.

“Every day more residents in the region are using natural gas for their homes and businesses. MVP Southgate is a potential solution to allow us to meet these growing needs and reliably serve our customers,” Persida Montanez, a Dominion spokeswoman, told The N&O in an email.

If FERC approves the construction extension, MVP Southgate would still need to obtain several critical permits before beginning construction. Those include an air quality permit for its Virginia compressor station, U.S. Army Corps of Engineers stream crossing permits and the North Carolina water quality certification.

DEQ has weighed in on previous FERC processes for MVP Southgate, arguing at least twice that the project will bring excessive natural gas to North Carolina.

It is unclear if that remains DEQ’s stance. An agency spokeswoman did not respond Friday to a request for comment.

In late June, Gov. Roy Cooper told The N&O that he has “concerns” about MVP Southgate potentially resulting in sunk costs for North Carolinians as the energy transition continues. He also noted DEQ’s role.

“Obviously this is a permitting thing,” Cooper said, “and I would hope the Department of Environmental Quality, when and if the time came, would very studiously look carefully at those permits.”

On Monday, Cooper sent FERC a letter formally requesting that the commission deny MVP Southgate’s extension. In it, he argued that MVP Southgate is not necessary to provide fuel to new natural gas-fired power plants, pointing to HB 951.

Due to that legislation, Cooper wrote, “Any newly constructed natural gas fueled electricity generation units will be forced to retire before the end of their useful lives, leading to sunk costs that will be charged to North Carolina’s ratepayers.”

Cooper also pointed to proposed Environmental Protection Agency rules that would require new gas-fired power plants to either use both gas and hydrogen to generate power, or to capture carbon emissions.

“This will inherently reduce the demand for natural gas as an electricity generation fuel source and represents a fundamental change to the Commission’s rationale for granting MVP Southgate a certificate of public convenience and necessity,” Cooper wrote.

This story was produced with financial support from 1Earth Fund, in partnership with Journalism Funding Partners, as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.