Ralph Northam's Racial Reckoning Could Spell Trouble for Pipe Project

(Bloomberg) -- Virginia Governor Ralph Northam’s racial reckoning could spell more trouble for Dominion Energy Inc.’s $7 billion-plus Atlantic Coast gas pipeline, with one of its facilities sited in an historically African American community.

While the 600-mile (966-kilometer) project is facing several setbacks, one element, a planned compressor station, is drawing particularly heated backlash for its proposed location in Union Hill, a community west of Richmond that was founded by freed slaves after the Civil War.

Environmental groups and social activists are hoping to capitalize on the attention generated by the state’s political turmoil to further their efforts to block the project. And now former U.S. Vice President and outspoken fossil fuel critic Al Gore is slated to attend an event on Tuesday meant to draw attention to environmental justice issues surrounding the project.

Pipelines, particularly those slated for the Northeast, are facing an unprecedented pushback as environmental groups find increasing success in court. In addition to Atlantic Coast and the similarly contentious Mountain Valley project, work on several pipelines that are planned to run through states including New York and New Jersey has yet to actually begin as key permits remain ensnared in lawsuits.

In media interviews, Northam has vowed to finish his term despite calls for his resignation after a page in his medical school yearbook surfaced showing a person in blackface and another in Ku Klux Klan robes. He’ll now focus on pursuing an agenda of racial reconciliation, he said.

Permit Review

“The national spotlight has been shone on Virginia,” Queen Zakia Shabazz, a coordinator of the Virginia Environmental Justice Collaborative, said by telephone. “This gives others the opportunity to be aware of the environmental injustices that are happening. It gives us a little bit more of a voice.”

Pipeline opponents will likely use Northam’s comments to compel him to intervene on issues surrounding the Atlantic Coast pipeline, Height Securities LLC analyst Katie Bays said in a note to clients last week.

That could include Northam ordering the state’s Department of Environmental Quality to review its decision last month to issue an air permit for the compressor station, she said. If the permit is revoked, the company could opt to site the station somewhere else, though that would risk hiking costs for a project that’s already seen its price tag balloon.

No one could be reached at Northam’s office for comment. Dominion didn’t respond to a request for comment.

Last August, the state’s Advisory Council on Environmental Justice urged Northam’s office to rescind water permits for both the Atlantic Coast and Mountain Valley pipelines. The Union Hill compressor station in particular “may have a disproportionate impact on this predominately African American community and could be perceived as exhibiting racism in siting, zoning and permitting decisions,” as well as public health risk, the letter said.

In addition to being loud, the compressor station would release emissions and add risk to the surrounding community in the case of an accident, said Rebecca Rubin, a former member of the Virginia Air Pollution Control Board. “Whenever contemplating environmental justice, the place you start is typically disproportionate impact: Will this community be impacted disproportionately?” she said.

“I would like to believe that with the world watching, now might be a good time for the Northam administration to revisit and reevaluate its prior conclusions,” Rubin said.

To contact the reporter on this story: Rachel Adams-Heard in Houston at radamsheard@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Joe Carroll

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