Energy supply is essential to port success

Published October 11, 2019 by Bryan K. Stephens

The business prospects for Virginia only seem to improve. Home to the Pentagon, elite academic institutions, and now Amazon’s East Coast HQ2 headquarters, there seems to be no limit to what America’s Top State for Business can achieve. However, there is one aspect to business development that often goes unnoticed by the public, but is crucial to meeting economic growth projections for the state: energy supplies.

In September, Virginia Business magazine took an in-depth look at the expansion plans for the Port of Virginia, highlighting the $2 billion in investment that it has driven across the commonwealth and a vision for its continued growth. But what was noticeably absent from the conversation was the energy supply — primarily natural gas — that is needed to power Virginia’s ports.

As part of terminal expansions taking place at the Port of Virginia, 86 electric-powered cranes have been purchased to replace what would otherwise be diesel operations. This is a more sustainable option for the port and for the surrounding communities, but it also will increase demand on the existing power grid. This is on top of the fact that the International Maritime Organization has ordered more stringent emissions requirements on shipping lines, making natural gas a more attractive fuel option.

A reliable and affordable supply of natural gas is necessary to meet this demand, powering the port of today, and also to keep pace with projected growth that will bring more jobs and economic opportunity to the state. But a main solution to this challenge — the Atlantic Coast Pipeline — continues to be sidelined by legal red tape, which casts a shadow over an otherwise bright future for our ports.

The Atlantic Coast Pipeline (ACP) is a 600-mile natural gas pipeline slated to run from the shale plays of West Virginia through Virginia and into eastern North Carolina. The pipeline was developed in part to alleviate our reliance on the only significant interstate transmission line to supply the region. During storms or other events that demand more-than-usual amounts of energy, this pipeline can become constrained, which not only causes the price of natural gas to spike dramatically, but also can put operations for large customers (like ports) into question.

We have all experienced power outages at some point, and some are long enough for us to start worrying about our freezer stockpiles. Suppliers to the Port of Virginia have made major investments in cold-storage: Michigan-based Lineage Logistics, a supplier to the Port of Virginia, has invested in a $60 million cold-storage warehouse for large cargo in Portsmouth and Rockingham County-based InterChange Cold Storage LLC opened a similar, $41.6 million facility in Mount Crawford in September. You can imagine how critical a reliable source of energy is to these facilities in particular. Millions, if not billions, of dollars in damage could be done if natural gas were to be curtailed.

And the reason for such damaging curtailments would be … legal barriers? This hardly seems to be a system that is working for the economic prosperity of the broader Virginia community.

The ACP is necessary infrastructure that would ensure our business growth is met with the energy necessary to keep it going. Some natural gas suppliers in the state have been unable to offer service to new large natural gas users due to limited pipeline capacity. If we, as business and job generators, are holding up our end of the bargain in bringing opportunity to Virginia, it is up to our elected officials to plan ahead and ensure we can operate safely, well into the future.

There are options before our federal legislators to advance construction of the ACP. Not only is the pipeline critical to the port community, it will serve our brothers and sisters manning 11 military bases and installations along its path. While powering these sites may not be as exciting as a new port expansion or wind turbine construction, one can’t happen without the other.

Bryan K. Stephens is President & CEO of the Hampton Roads Chamber.