The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Saturday, July 8, 1995                 TAG: 9507080388
SECTION: FRONT                    PAGE: A1   EDITION: FINAL 
SOURCE: BY KAREN WEINTRAUB, STAFF WRITER 
                                             LENGTH: Long  :  150 lines

FEDS TO APPROVE PIPELINE PERMIT

What does this do? The favorable review means that construction could begin as early as fall. North Carolina? State vows to renew court fight

For the third time in a dozen years, a federal agency has found that the Lake Gaston pipeline would have little or no environmental impact on the lake or any part of the Roanoke River.

The favorable review means construction on the pipeline could begin as early as this fall. But it does nothing to stop the promised flow of lawsuits from pipeline challengers North Carolina and Southside Virginia.

The Federal Energy Regulatory Commission, the final federal agency that must approve the pipeline, released a study Friday that concluded the project is the most economical and least damaging way for southeastern Virginia to get more drinking water.

Virginia Beach officials were ``elated'' Friday about the review, which suggests that when the commission meets on July 26, it will issue a permit to build the pipeline. The Beach and Chesapeake, a one-sixth partner in the project, have been hoping for the permit for 4 1/2 years.

``There is a God,'' Mayor Meyera E. Oberndorf shrieked when she heard the news. ``We knew we were right but it never makes it feel any less wonderful than when you actually have an agency that has been adamant about the environment confirm everything that we have known for the last 12 1/2 years.''

``That's about as strong a statement as you can get,'' U.S. Rep. Owen Pickett said Friday. ``It's very gratifying to see that here again, another federal agency has reviewed all the data applicable to the project and come to the same conclusion.''

The study says that water withdrawals by Virginia Beach and Chesapeake would not reduce the flow of the river significantly even during severe droughts.

It concludes that the pipeline ``is the best source for meeting Virginia Beach's and other municipalities' potable water needs.''

The pipeline is by far the cheapest option for water-users in Southeastern Virginia and would cause no more environmental damage than would the alternative water sources, according to the report.

To make up for any environmental damage caused by the project, the study suggests that any pipeline permit require: a small walleye spawning area, improved water management during striped bass spawning season, creation of 11.67 acres of wetlands mitigation and a cessation of construction if any archeological or historical resources are discovered.

If the Beach receives the permit, the injunction that has blocked construction of the pipeline since 1990 is likely to be lifted.

City Attorney Leslie L. Lilley said Friday that the city would be ready to begin construction almost immediately after the injunction is lifted to complete the 76-mile pipeline by the summer of 1998.

But North Carolina and Southside Virginia, still hope to break that schedule. The two have been fighting the pipeline since it was first proposed by Virginia Beach in 1982.

North Carolina and Virginia Beach officials have spent the past seven months trying to negotiate a peaceful end to the dispute before the regulatory commission's study was released.

North Carolina Gov. James B. Hunt Jr. pulled out of the negotiations Thursday, a week after the Virginia General Assembly and Gov. George F. Allen failed to cooperate to call a special session of the legislature to ratify the agreement.

Hunt threatened to renew legal action between the states, which had been put on hold during talks. A top North Carolina official repeated that threat Friday.

``This report is grossly inadequate, and it signals FERC's intent to move this project forward,'' Jonathan Howes, secretary of the North Carolina Department of Environment, Health and Natural Resources, said in a prepared statement. ``It does not provide us with the protection we need. We will take a number of strong additional steps in the coming days.''

Almost exactly a year ago, at North Carolina's urging, the regulatory commission reversed its position and decided to conduct a full environmental review of the pipeline.

Then, it was North Carolina officials who were ecstatic.

``FERC has some real credibility, resources and knowledge to conduct a study that will be impressive to all concerned,'' Attorney General Mike Easley said. ``I don't believe they begin with a bias one way or another. I don't think any stones will be left unturned.''

Under pressure from Virginia officials, the agency agreed to abbreviate the study, cutting what is usually a two- to five-year analysis down to one year.

It is the brevity of the regulatory commission's analysis that will probably be at the heart of North Carolina's legal argument.

Beach officials said the report's conclusions weaken North Carolina's main argument.

``Their opposition has been significantly undermined by this favorable (environmental impact statement) because it substantiates what we've been saying for years,'' Lilley said.

North Carolina already had acknowledged that the pipeline wouldn't have significant environmental impacts, Lilley and City Councilman Louis R. Jones said, when it agreed in settlement negotiations to take additional water for northeastern and north-central North Carolina.

Lilley said he hoped the study would help dispel some of the fears of Roanoke River basin residents who have worried that the pipeline would rob them of their water and, therefore, of their economic development.

But W. Ewell Barr, president of the Roanoke River Basin Association, a group of property and business owners, said Friday that he was not at all comforted.

``All I can say is that that draft gave me no comfort or satisfaction at all,'' Barr said, explaining he had seen a draft version released in January, not the full study. ``We urged FERC to do a very deep, very broad analysis of the impact of the withdrawal on the entire basin . . . Based on the draft they dismissed it with only passing comment.'' MEMO: COMPARING THE CHOICES

Lake Gaston Pipeline

Annual additional cost per Virginia Beach household: $47.

Environmental impact: comparable to other alternatives.

Reliable in droughts and technically feasible.

Ocean Water Desalination Plant

Annual additional cost per Virginia Beach household: $469

Environmental impact: comparable to pipeline.

Reliable in droughts but less technically feasible than the

pipeline.

Combination of Waste Water Recycling and Other Sources

Annual additional cost per Virginia Beach household: $181.

Environmental impact: comparable to pipeline.

Rated lower than other alternatives for technical feasibility and

reliability during drought.

No Action

Annual additional cost per Virginia Beach household: none.

Environmental impact: Raises public health and safety concerns and

also encourages lower-density development, which is more environmentally

taxing.

Unreliable because it would perpetuate the existing water shortage.

ILLUSTRATION: Color graphic

Virginia Beach told to:

1. Maintain water levels in Lake Gaston during the striped bass

season

2. Provide a spawning area for walleye where the pipeline would

tap the lake

3. Create 11.7 acres of wetloands to replace those that will be

damaged.

KEYWORDS: LAKE GASTON PIPELINE WATER SUPPLY PLAN ENVIRONMENTAL

IMPACT STATEMENT by CNB