ACCOMAC, Va. (Delmarva Now) -- Natural gas may not be a pipe dream for much longer in rural Somerset and Accomack counties.
A Baltimore-based private equity group is entering a critical new phase in its years-long campaign to build a $1.3 billion natural gas pipeline along the Delmarva Peninsula.
For the past four years, H4 Capital Partners' executives have largely been spending their energy behind the scenes, performing engineering work and stoking public and private interest in the 180-mile pipeline.
Now comes the make-or-break part: winning approval from a slew of state and federal regulators while winning over neighbors and interest groups within the project corridor.
Jerry Sanders, one of H4's partners, said the company's goal is to have gas flowing to Somerset and Accomack counties, which currently have no access to piped natural gas, by late 2021 or early 2022.
“One of the things we noticed is that the absence of natural gas is hindering overall economic development," Sanders said. “It also will result in less-expensive energy costs on the peninsula as well.”
U.S. natural gas production has zoomed to record levels in recent years amid technological advancements that have unlocked deep reserves of gas in Pennsylvania, West Virginia and Ohio. Advocates for natural gas say it's cleaner and cheaper than other fossil fuels and offers a bridge to a future in which renewable energy is more plentiful and reliable.
But critics say those gains come with a steep cost. The technology known as hydraulic fracturing, or fracking, has drawn strong opposition from environmental groups and others who say it threatens to contaminate groundwater.
In some instances, natural gas pipeline proposals have been met with Keystone XL-like resistance. Close to home on Delmarva, a December hearing in Richmond, Virginia, on the controversial $5 billion Atlantic Coast Pipeline attracted a strong cordon of police officers.
On Delmarva, H4's proposal has been greeted with enthusiasm by many in the business sector and wariness by environmental advocates.
The Delmarva Pipeline Company, H4's subsidiary, plans to connect to an existing natural gas pipeline in Cecil County, then head south through the Maryland portion of the peninsula. It would traverse eight of the Eastern Shore's nine counties, paralleling Route 13 for the portion south of Salisbury.
The pipeline would bring natural gas to the last three Maryland counties devoid of distribution lines: Kent, Queen Anne's and Somerset.
Wherever possible, the pipeline will following existing utility corridors to minimize disturbances to private property, Sanders said.
Salisbury is already home to a natural gas pipeline extending south from Delaware. Expanding that service to places such as Somerset and Accomack counties should boost their chances for attracting new employers, said Dave Ryan, head of Salisbury-Wicomico Economic Development.
The presence of a natural gas pipeline "allows me and others to check off a box for me and others looking to bring companies to the area," Ryan said.
Expanding natural gas infrastructure would create more than 100 jobs in Wicomico and Somerset counties by 2026, according to a 2016 Towson University study.
The pipeline will enable North Carolina-based Spectrum Energy to build a natural gas power plant in Denton in Caroline County, Sanders said. Spectrum said the project will create 350 jobs during construction and 25-30 permanent positions.
Benefits to Accomack County from the pipeline include an estimated 1,000 new jobs and $80,000 to $120,000 per year in local taxes and $10,000 per franchise fee, Sanders told Accomack's Board of Supervisors in 2013.
“We have supported it from day one," said Michael Mason,Accomack's county administrator. The pipeline is expected to create jobs, he added, “and then there’s the multiplier effect that would be happening.”
The pipe would initially measure 24 inches across at the north end before gradually narrowing to 8 inches near its terminus in Accomack County just south of the Perdue Farms plant, Sanders said.
His company presented its plans in January to the Eastern Shore of Maryland's legislative delegation. And it plans to begin the process for getting approval from the Federal Energy Regulatory Commission in a few months, he said.
One of the project's biggest challenges going forward, Sanders said, is maintaining good public relations with affected communities. He sought to distance his project from the contentious Keystone XL pipeline, pointing out two key differences between them:
- The Keystone pipeline carries fuel over the long haul, locking out local areas along most of its path from hooking into it.
- The pipeline out West transports oil while the Delmarva pipeline will move natural gas. “It is a gas, not a liquid," Sanders said. "So you don’t have leak-type issues.”
The project is likely to wind up in a lengthy permitting review in Maryland. Maps of the pipeline suggest it will have to cross several rivers that feed into the Chesapeake Bay, and it will encounter wetlands, said Maryland Department of the Environment spokesman Jay Apperson.
"MDE would encourage the project proponents to come in early and often for discussions of routes so that we can together do the best we can to avoid and minimize impacts to these important natural resources," Apperson said in a statement.
Sanders said his company plans to tunnel beneath rivers and wetlands to avoid such conflicts to the greatest extent possible.
Maryland records show that H4 first registered as a corporation last May. This is its first pipeline project, Sanders said. But he added that the project's team has dozens of years of experience in the energy industry.