Although Tazewell County produces the third highest amount of natural gas in the state — and a major gas pipeline runs right through the county — businesses and residents there have little access to it.
County officials have long dreamed of changing that, and as electric rates continue to increase across Southwest Virginia, they are finally hoping to move forward with plans to tap into the line.
“There’s a long history here of resources leaving our part of the state and we don’t really get a whole lot of benefit out of it,” said Tazewell County Administrator Eric Young. “If we could just tap into that line, then our businesses can get that advantage on the energy costs and hopefully keep and gain some jobs.”
In recent months, Young has spoken twice to Gov. Glenn Youngkin about the project. The first time was in a quick chat during a January trip to Richmond, and he brought it up again during the governor’s “listening tour,” which made a stop March 20 in Tazewell County.
Young told the governor that for a long time, low energy costs gave Southwest Virginia a competitive advantage when it came to economic development. But that is no longer the case due to escalating rates at Appalachian Power, he said. The utility serves 540,000 customers in western Virginia.
Young, who’s been the county administrator for six years and was county attorney for 12 years before that, said local officials have worked for more than a decade to give the county more access to natural gas, which is cheaper than electricity.
Currently, natural gas runs to Clinch Valley Medical Center in Richlands, and there is some residential service. But it’s not available in the western end of the county, where many of the county’s industries are located.
County officials want to work through a public-private partnership with Appalachian Natural Gas, which is owned by an Ohio company, has an Abingdon office and serves Buchanan, Carroll, Dickenson, Lee, Russell, Tazewell and Wise counties in Southwest Virginia. But they could never afford to make it happen.
Young asked the governor for help.
“What are the key components in order to make it happen so that we can begin to put together the puzzle pieces?” Youngkin asked during his visit to Southwest Virginia Community College.
The barrier, according to Young, is the required decompression station, which is expected to cost between $2.5 million and $3 million.
If the county could get some help from the state, it would likely seek federal money as well, probably from an Appalachian Regional Commission Power Grant, which is tied to coalfield regions, according to Young.
The distribution line to businesses would cost $7 million to $8 million and could be paid for by the gas company and the customers, he added.
“If we can get public funds to tap into this pipeline, we can use our own gas to save ourselves, including our current businesses and more businesses that would locate here for cheap energy,” Young later said. “It is quite ironic if you think about it.”
Infrastructure needs
Seven counties in far Southwest Virginia are responsible for all the natural gas produced in the state.
In 2022, the latest figures available, Buchanan County was the top producer, with 44.64 billion cubic feet, which represented half of the state’s production, according to Tarah Kesterson with the Virginia Department of Energy. Coming in second was Dickenson County, at 23.6% of the state’s total production, followed by Tazewell County, at 11.7%.
Russell County comes in fourth, followed by Wise, Lee and Scott counties.
“Tremendous volumes” of natural gas from these counties are pumped out of the ground and gathered through network collection lines, according to Young. The gas is then compressed and forced into a large pipeline, one of the largest in the Southeast, and it’s transported with gas from West Virginia and Pennsylvania into North Carolina and other locations across the South, he added.
“The gas in that pipeline is under incredible pressure, so they can get as much gas as possible through the line as fast as they can,” Young said.
In comparison, the gas lines that serve customers are tiny and can’t handle that intense pressure. A decompression station must be built and attached to the pipeline so the gas can be slowly released into the distribution lines.
“It’s like an exit ramp from the interstate,” Young explained.
There are only a few companies that build decompression stations and the work is dangerous, the county administrator said. The company that owns the pipeline can’t risk a mistake that would interrupt the flow of the gas and service down the line. There are also regulations from the Federal Energy Regulatory Commission and the Environmental Protection Agency to deal with.
“So, building a decompression facility is expensive. However, without it we cannot serve a single customer in the area,” he said.
Why natural gas, and why now?
Simply put, natural gas can be cheaper than electricity. Generally, it is two to three times more expensive to heat a home with electricity than natural gas, according to Nino Ripepi, an associate professor of mining and minerals engineering at Virginia Tech and director of the Virginia Center for Coal and Energy Research.
The current price of natural gas is at a 30-year low due to overproduction, he said. But prices can change quickly, and the price of natural gas can be volatile, he added.
Ripepi also noted that equipment that runs on natural gas is more costly than equipment that runs on electricity, so that should be factored into the price.
A new business could really take advantage of the lower price of gas because it could go in with equipment geared toward it. An established business, however, would likely have to spend a lot of money to retrofit equipment, he added.
Sen. Travis Hackworth, R-Tazewell County, is a big proponent of the project. He said some businesses have turned to propane, which is also more expensive than natural gas.
He said he used to use propane to heat water when he owned the Huddle House restaurant in Richlands. Gas is not only more affordable than its alternatives, it’s more efficient and hotter than electricity, he said.
Hackworth, Del. Will Morefield, R-Tazewell County, and other legislators have heard a lot recently about Appalachian Power’s rising costs from their constituents. Morefield has received hundreds of complaints about the rate increases — in fact, it’s easily the most complained-about issue during his 14 years as a state legislator, he said. On March 3, he issued a news release saying that something must be done.
Between 2007 and 2023, a report by the State Corporation Commission showed that Appalachian’s typical monthly residential bill increased $91, or 136.6%.
The latest hike took effect earlier this year and increased the average residential bill by $16 per month.
And there are possible additional rate increases coming. Appalachian Power is currently proposing to increase the average residential customer’s monthly bill by about another $10, or 5.1%.
The utility says it needs the money to cover the costs of restoring service after storms; increases in capital, material and labor costs; rising interest rates; and expenses associated with vegetation management.
And legislation from the recent session of the General Assembly could mean an additional increase. The bill will allow the state’s second-largest utility to seek permission from the SCC to charge customers for early development costs of small modular nuclear reactors, which are less powerful and less expensive versions of traditional nuclear reactors.
Although Appalachian Power officials have expressed an interest in SMRs, no plans for building one have been announced. No SMR has yet been built in the United States, although several states are working toward deploying them.
HB 1491 was approved by the House and Senate and sent to the governor for his signature. The governor sent the bill back with suggestions, which were accepted, and the legislation was returned to Youngkin.
A similar bill, SB 454, applied to Dominion, the state’s largest utility.
Appalachian Power is aware of Tazewell County’s effort to tap onto the natural gas transmission line, according to spokeswoman Teresa Hall. “Our employees work hard every day to manage costs and ease the burden on customers and communities,” she said. “The people and families we serve depend on us to provide the energy they need to carry out their daily lives at work and home.”
With climbing electric rates and inflation, Young feels an urgency to move forward with the project now. When it was first discussed more than a decade ago, the cost of building the decompression station was estimated at $700,000, he said.
The transmission line that runs through the county is owned by Enbridge, a diversified energy company headquartered in Calgary, Alberta, Canada.
The company owns and operates East Tennessee Natural Gas, a pipeline system in Tennessee, Southwest Virginia and North Carolina. The company has 1,525 miles of pipeline, according to Michael Barnes, a media relations manager for Enbridge who is based in Houston.
East Tennessee Natural Gas serves several local distribution companies and power generators and provides access to natural gas producers in the Appalachian region through multiple connections, including with other pipelines, Barnes said.
He added that Enbridge is aware of the county’s effort to connect to the pipeline and “welcomes the opportunity to meet with interested interconnecting parties at the appropriate time,” he said in an email response to questions.
Potential customers
Tazewell County’s plan would be to tap onto the line and provide natural gas to the western section of the county, where there are lots of potential industrial customers.
The decompression station would be built at Claypool Hill, where there are several industries. The line would then go down U.S. 19/460 to the Rogers Group rock quarry and Consolidated Steel, then on to the Wardell Industrial Park, and wind up in the area of Southwest Virginia Community College and the nearby site where a large salmon farm will be built.
Several of the businesses have been asking county officials for years to help them get natural gas, according to Young and Hackworth.
Scott Matney, vice president of operations for Consolidated Steel, said his company would welcome gas as part of its energy mix. The company, along with its nearby fabrication facility, employs nearly 150 workers, and it buys and processes steel. It would still need electricity for its steel operations because the equipment couldn’t be converted to use natural gas, but gas could help save money on heating and cooling, he said.
Pure Salmon, the company that is building the salmon farm near the Tazewell County-Russell County line, said it plans to truck propane in to meet its gas needs, but would change that if it could access natural gas.
Headquartered in Abu Dhabi, the global salmon farming and processing company said last month it expects to open in 2028 with more than 200 employees.
“If a natural gas pipeline were available, Pure Salmon would leverage it for the gas needs rather than trucking in propane. The company hopes this is something that can come to fruition,” a company representative said in an email.
Young and Hackworth both worry that the high electric rates are going to drive some of their industries out of business.
“One of Virginia’s heavy manufacturing regions is being put under considerable economic pressure by rising wages, rising interest rates and rising energy costs,” Young said. “Workers sit at home and worry about losing their jobs, while beneath their feet natural gas is being sucked out of the ground and sent elsewhere. One of the answers to our problem is just flowing away.”
What’s next?
During the recent session of the General Assembly, Hackworth filed a budget amendment for $250,000 from the general fund in fiscal year 2025 to pay for a study to explore tapping into the natural gas pipeline.
The study would detail the cost and identify potential customers, said Hackworth. Originally, the study was just for Tazewell County, but Sen. Todd Pillion, R-Washington County, added Russell County to the study. A new company is trucking in propane to use in its fabrication process and could really benefit from natural gas, the senator said.
The study was in the budget that the legislature sent to the governor, but on April 17 Youngkin and some key Democrats announced they would start over on the budget after weeks of wrangling.
A special session will be held May 13 to review a new spending plan, with a vote to follow.
Hackworth said he remains hopeful that the study will be approved.
If that happens, the results will be shared with legislators, and Hackworth plans to go back next year and ask for money to help build the decompression station. He’s hopeful the project can finally progress.
“This is very vital and critical,” he said. “If we could get this, it would be a real game-changer for Tazewell County.”
Staff writer Matt Busse contributed information to this story.