DEQ staff to investigators: We knew nothing about the governor’s deal with Dominion over Atlantic Coast Pipeline

The Atlantic Coast Pipeline would enter North Carolina in Garysburg, in Northampton County. Initial excavation started earlier this year, but stopped after a federal appeals court ruled the US Forest Service lacked authority to grant a right-of-way to cross the Appalachian Trail in Virginia. (File photo: Lisa Sorg)

Ten NC Department of Environmental Quality staff, including Assistant Secretary Sheila Holman, told investigators earlier this month that they did not communicate with the governor’s office in advance about a $57.8 million mitigation fund related to the controversial Atlantic Coast Pipeline.

Nor was there a quid pro quo involving a key water quality permit for the natural gas project and the fund, DEQ staff said.

DEQ posted the written statements and interview transcripts on the agency website ahead of Friday’s hearing held by the Joint Legislative Subcommittee on the ACP. The hearing starts at 10 a.m. in Room 643 of the Legislative Office Building.

A year ago Republican lawmakers hired Eagle Intel to probe  the timing of the mitigation fund, which was brokered by the governor’s office, and DEQ’s approval of the water quality permit, known as a 401.  The two events were announced within hours of each other on Jan. 26, 2018.

However, all of the staff interviewed by Eagle Intel said there were unaware of the mitigation fund until after the news media reported on it. Their statements are consistent with previous responses to lawmakers who questioned them in committee hearings.

The purpose of the fund, which was voluntary, was to help eastern North Carolina with economic development and renewable energy projects. If built, the 600-mile ACP would start at a fracked natural gas operation in West Virginia, route through Virginia and enter North Carolina in Northampton County. From there the pipeline would run 160 miles to the North Carolina-South Carolina border.

The ACP’s majority owners are Duke Energy and Dominion Energy.

While supported by several Chambers of Commerce along the route, the ACP has encountered vehement grassroots opposition. The $8 billion-plus project is on hold because of legal challenges in Virginia. After losing in a federal appeals court, the ACP owners appealed the case to the US Supreme Court, which has agreed to hear it. A date has not been scheduled.

Investigators asked DEQ staff why the permitting process was so protracted. Over more than five months, Division of Water Resources staff had repeatedly requested additional information from Dominion Energy. Standard department procedure allows 60 days for applicants to provide the information; after DEQ receives that information, if  the application is still incomplete, department officials ask for additional information and the 60-day clock restarts.

In her written statement, Holman said she was unaware of any “direction given to the Division of Water Resources to accelerate or delay their review and decision” on the permit certification.

Linda Culpepper, who had previously worked in the Division of Waste Management before becoming director of DWR, said the permitting process was not unusual and that there was no outside interference into the decision-making.

Environmental advocates and some lawmakers had questioned why DEQ had prepared both a denial letter and an approval letter to send to the division director.

Brian Wrenn was the hearing officer for the public hearings. He said that DWR staff drafts two versions. “We have beat up in the past … if we just bring a permit to be signed people have said that’s pre-decisional so we’ve started bringing both so we can say that we considered both options.”

Apart from the ACP’s geographical expanse, construction and operation of the pipeline would have “cumulative impacts” on water and air quality, forests, and endangered species habitats. The project would also run through low-income communities of color, including American Indian lands, presenting serious environmental justice issues.

Jay Zimmerman, the former DWR director, told investigators that during staff discussions about the 401 certification, there were questions about the ACP’s economic claims: “Does the pipeline really bring in the number of jobs it’s alleged to bring in, you know the amount of money it would bring in to the state.”

However, Zimmerman said the economic uncertainties fell outside the water quality certification process. “It was repeated a number of times to follow the rules,” Zimmerman said. “We need to be thorough, we need to be consistent with what we’ve done in other cases.”

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