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Pipeline Hack Puts North Carolina Industry on Guard

The Colonial Pipeline ransomware attack and resulting gas shortages across North Carolina show the need for more pipelines and gas storage, officials from the energy and petroleum industry told a state Senate committee.

(TNS) — The Colonial Pipeline ransomware attack and resulting gas shortages across North Carolina have shown the need for more pipelines and gas storage, officials from the energy and petroleum industry told a N.C. Senate committee on Tuesday.

"Some additional interstate pipeline supply would be a very good resiliency opportunity," Nelson Peeler, Duke Energy's senior vice president and chief transmission officer, told the Senate Committee on Agriculture, Energy and the Environment.

Tuesday's hearing was called to address North Carolina's energy supply, even as the state continues to feel the effects from the Colonial attack, which resulted in a statewide panic buying spree that at some points left about 75% of the state's gas stations without supply. The Colonial Pipeline facility, which actually has two tubes, is a major source of gasoline, diesel and jet fuel to North Carolina.

As of 10 a.m. Tuesday, 46% of North Carolina's gas stations did not have gas, according to GasBuddy's Patrick De Haan. That was down 5% from Monday's update.

"We should treat the fallout of the Colonial Pipeline attack as a warning and prepare accordingly," Sen. Brent Jackson, a Sampson County Republican who chairs the committee, said in his opening remarks.

Gov. Roy Cooper, a Democrat, has said that he wants to work with the federal government to protect North Carolina from similar attacks in the future, but also to help the state transition to electric vehicles, lowering its dependency on gasoline.

David McGowan, the executive director of the N.C. Petroleum Council and southern regional director for the American Petroleum Institute, said the Colonial Pipeline carries about 75% of North Carolina's liquid gas products. The Products (SE) Pipeline provides about 20% of the state's fuel, while the remainder comes in through terminals near the Port of Wilmington.

Industry representatives also told senators that North Carolina is totally dependent on a single pipeline, the Transco Pipeline, for its supply of natural gas.

"The number one vulnerability that we have is that we have service from a single interstate provider and that all of our supply and most of our storage is delivered through that pipeline," Rusty Harris, the general manager of gas operations for Dominion's Southeast Energy Group, said during the hearing.

A single natural gas pipeline

Harris added that the Transco pipeline is "very reliable" and has been in service since the 1950s. There are multiple pipelines on Transco's right of way, Harris added, but he stressed that the pipeline is one facility operated by one company.

"We are unique in that we have pretty much depended upon this single pipeline for gas in North Carolina," Harris said.

A pair of efforts to build new pipelines in North Carolina have faced stiff challenges in recent years. Dominion and Duke Energy last year canceled the Atlantic Coast Pipeline project that would have spanned much of Eastern North Carolina amid environmental concerns, legal challenges, mounting costs and prolonged delays.

Another pipeline, the MVP Southgate, would run from Chatham Virginia, entering North Carolina in Rockingham County and passing through Alamance County before ending near Graham.

The N.C. Department of Environmental Quality has twice denied water quality permits needed by the project, the last denial coming in late April after a federal circuit court sought clarification about the department's position. DEQ's denial came while the main segment of the Mountain Valley Pipeline remains mired in uncertainty.

"It does present some challenges for us because there aren't any other currently planned pipeline products under construction," Harris said.

Harris, of Dominion, said it would take about seven years to get a pipeline permitted and constructed, while it would take three to four years to get a liquified natural gas storage facility permitted and built. Dominion operates two such facilities in North Carolina, including one in Cary.

Duke Energy generates about 30% of its capacity on an average winter day using natural gas, Peeler said.

"The single pipeline to the Carolinas is certainly a vulnerability to the state not just for electric generation, but for industrial, commercial (and) home heating, as well," Peeler said. "And we support additional investment and diversity of infrastructure to provide additional paths for natural gas in the state."

Sen. Paul Newton, a Cabbarrus Republican and former N.C. state president of Duke Energy, honed in on the Transco pipeline having no additional allocation available and the potential importance of natural gas to future industrial development.

"With Transco being fully subscribed and the MVP Southgate permit having been denied, I get concerned that it's going to stunt the growth and strain the growth of North Carolina and affect its trajectory in terms of job creation," Newton said.

Pipeline safety

McGowan, of the American Petroleum Institute, called pipelines "by far the safest and most environmentally friendly way" of delivering natural gas.

Sen. DeAndrea Salvador, a Charlotte Democrat, asked McGowan about the Colonial Pipeline's spill of at least 1.2 million gallons of fuel last August in Huntersville's Oehler Nature Preserve.

"What are we doing to protect the pipeline infrastructure, particularly for me coming from Mecklenburg where several months ago we did have the pipeline spill?" Salvador asked.

McGowan said that pipeline operators fly along rights-of-way routinely to see if there are spills and use "rigorous system integrity programs" to try to find spills.

"While we recognize that zero incidents is our goal that we strive for, we know we're not there yet and we're going to continue to work and do everything we can to ensure that that's the goal we achieve," McGowan said.

© 2021 The News & Observer (Raleigh, N.C.). Distributed by Tribune Content Agency, LLC.