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(Reuters) – U.S. energy company Duke Energy Corp (NYSE:DUK) said Monday it took a $1.6-billion after-tax charge in the second quarter for the cancellation of the Atlantic Coast natural gas pipeline from West Virginia to North Carolina.
Atlantic Coast was the most expensive U.S. gas pipeline under construction when Duke and partner Dominion Energy Inc exited the $8-billion project in July due to regulatory uncertainty following years of delays and billions of dollars of cost overruns.
Dominion already took a $2.8 billion charge related to the cancellation.
Atlantic Coast is just one of several U.S. oil and gas pipelines mired in legal and regulatory battles with local and environmental groups that have found problems with U.S. permits issued by Trump administration agencies.
When Dominion, which led the Atlantic Coast project, started work on the 600-mile (966-km) pipe in the spring of 2018, the company estimated it would cost $6.0-$6.5 billion and be completed in late 2019.
Weeks before canceling the project, however, Dominion said it could finish the project in early 2022 only if it received new federal permits soon that would survive court challenges.
In addition to regulatory delays, Atlantic Coast was also hurt by a short-term hit to gas demand from coronavirus and a longer-term hit from growing consumer interest in cleaner energy.
Even though gas is the cleanest fossil fuel and is considered to be the perfect bridge from dirty coal to clean renewables, it still produces carbon.
Duke said its five-year, $56-billion capital plan remains intact despite a reduction in sales and an increase in costs to keep employees safe from the virus.
“We have clear line of sight to critical infrastructure investments to improve the energy grid and generate cleaner energy – which support our 2050 net-zero carbon emissions target,” said Duke Chief Executive Lynn Good.
