The New Normal: Massive Infrastructure Cost Overruns
by James A. Bacon
When the Mountain Valley Pipeline was proposed in 2018, the estimated cost was $3.5 billion. When completed in June, the final cost was reported in a Federal Energy Regulatory Commission filing to be $9.6 billion — nearly three times as much.
A fraction of that increase can be attributed to inflation over the eight years the 303-mile natural gas pipeline was bitterly contested and bogged down by lawsuits and regulatory appeals. Management failures undoubtedly contributed — a portion of pipe near Roanoke burst under a pressure test, suggesting manufacturing flaws — and WV Broadcasting cites weather and labor issues.
But three times the cost? The sad reality is that it has become nearly impossible to build any large infrastructure project in the United States. Remember the Atlantic Coast Pipeline? Dominion Energy just gave up and took $1 billion+ in write-offs.
Now PJM, the regional electric transmission organization of which Virginia is a part, says someone needs to build a 765kw transmission line across Loudoun County to upgrade the electric grid in anticipation of unprecedented demand growth.
The proposed route would run across the Appalachian Trail and through Virginia’s Sweet Run State Park. Moreover, 150-foot-tall towers would wreck pristine rural viewsheds, upsetting affluent landowners in horse country.
Good luck with that.
How many years will it take to gain regulatory approval, how many endangered snails and salamanders and warbler nests will lie in the transmission line’s path, what concessions will the power-line operator have to make, and how much will costs increase?
Most of the projected electricity demand growth is tied to data centers to serve Artificial Intelligence applications. Don’t be surprised if residents along the 261-mile transmission-line route start touting apocalyptic scenarios in the hope of putting AI on trial. Insufficient electric power will throttle AI development, with unknowable consequences for every other sphere of human existence.
President-elect Trump says he wants to slash regulations. Politically, the job is easier said than done, especially if it requires changes in legislation. And, as much as I sympathize with his broader aims in the abstract, it is important to remember that environmental and landowner-rights considerations are not things to be trampled lightly.
I keep returning to the idea that society is getting increasingly complex with more moving and interacting parts than ever. The problem isn’t capitalism, as some contend, it’s complexity and the inevitability of tradeoffs, many of them unknowable until they manifest themselves. I will deem Americans lucky if the whole economic-social-political machinery of 21st-century life merely grinds slowly to a halt. But I fear that massive vulnerabilities are hidden within the complexity that could lead to collapse.
Whatever the future portends, soaring costs for massive infrastructure projects are the new normal.
