Virginia Gov. Terry McAuliffe,left, leads applause during an announcement at the State Capitol in Richmond Tuesday, Sept. 2, 2014, of a major gas pipeline through parts of Virginia, West Virginia and North Carolina. (Bob Brown/AP)

Gov. Terry McAuliffe (D) on Tuesday unveiled plans for a 550-mile natural gas pipeline through three states, a proposal that won him kudos from the energy industry but criticism from environmental activists, who had considered him an ally.

A consortium of companies led by energy giant Dominion Resources will spend up to $5 billion to build the Atlantic Coast Pipeline in Virginia, West Virginia and North Carolina, which supporters said will initially create 8,800 jobs.

McAuliffe and other supporters of the Virginia pipeline said the infrastructure improvement will prevent spikes in energy bills during severe weather, lure heavy manufacturing to the state and give Virginia what McAuliffe called “direct access to the most affordable natural gas supply in the United States.”

As proposed, the Atlantic Coast Pipeline would bring natural gas to growing markets in Virginia and North Carolina. It would run through more than a dozen counties in Virginia, cutting a rural swath from Highland County in the northwest down through some of the most populous counties of Hampton Roads in the southeast. It would stretch about half the length of the controversial northern leg of the Keystone XL oil pipeline expansion, which would run 1,200 miles from Alberta, Canada, to the U.S. Gulf Coast.

“We’re talking jobs, economic development, and it’s good for the environment,” McAuliffe said, pointing to an image of green trees and grass that he said will cover the pipeline trench once it has been completed. “In addition, this will allow Dominion, who has coal plants that are 50, 60 years old, which they plan on shutting down — this is a lot less emissions. So what we’re doing today is great for the environment. . . . This is a win-win today for everybody.”

McAuliffe’s enthusiastic support for the pipeline comes with a political twist, which is that he won election last year with strong support from a coalition of environmental activists, including Tom Steyer, an anti-Keystone XL mega-donor. But McAuliffe also campaigned on a promise to create jobs and retain Virginia’s reputation as a business-friendly state.

Environmental issues are tricky for Virginia politicians, who must balance public concern about climate change with job losses in the southwest as coal-fired power plants close and the federal government considers more stringent regulations.

Environmental activists accused McAuliffe of hypocrisy for supporting the pipeline after he convened a commission on climate change this summer. Mike Tidwell, executive director of the Chesapeake Climate Action Network, said the pipeline will encourage more hydraulic fracturing, known as fracking, and increase methane emissions.

“This is the wrong project at the wrong time,” Tidwell said. “Instead of touting a massive investment in more communities destroyed by fracking wells, divided by pipelines, and wrecked by runaway climate change, [Dominion chief executive] Tom Farrell and Governor McAuliffe should be announcing a full-scale investment in Virginia’s vast and barely tapped clean-energy resources.”

Asked to reconcile the seemingly opposing constituencies, the governor said policy trumps politics. He said the project will create thousands of jobs, reduce energy costs for Virginians and speed the closing of aging coal plants. Another group that supported him last year — labor leaders — agreed.

“This new project and the real long- and short-term economic benefits it will bring fit perfectly with Governor McAuliffe’s plan to build a new Virginia economy,” said Doris Crouse-Mays, president of the Virginia AFL-CIO. “We look forward to working with him and these companies to help get the Atlantic Pipeline built safely and responsibly, and attract the next generation of Virginia job creators who will benefit from its operation here in Virginia.”

Glen Besa, director of the Virginia chapter of the Sierra Club, noted that the project must clear an extensive permitting and regulatory process.

“There are far more opportunities to create jobs and address climate change in Virginia through investments in energy efficiency, solar power and offshore wind,” Besa said. “Governor McAuliffe . . . leaves the environmental community and clean energy industry in doubt about the direction of this administration’s energy and climate policy.”

According to the announcement, Dominion Resources, EVP Distribution Operations, AGL Resources and Virginia Natural Gas will jointly build the pipeline.

After the six-year construction phase, about 217 jobs will be necessary to maintain the pipeline, said Christine Chmura, chief economist for Chmura Economics & Analytics in Richmond, who studied the project’s economic impact. She estimated it would generate $14.6 million annually in tax revenue for the state. No state money will be used.

Steyer’s political action committee NextGen Climate Action spent $1.6 million on McAuliffe’s gubernatorial bid last year — and millions more in TV ads intended to discredit Republican opponent Ken Cuccinelli II, Politico has reported. NextGen did not respond to messages seeking comment.

Republicans praised the pipeline and seemed to relish McAuliffe’s apparent break with Steyer and environmentalists, who tend to side with Democrats.

State House Speaker William J. Howell (R-Stafford) called natural gas an “abundant, clean and affordable resource” and highlighted McAuliffe’s support for a project opposed by many Democrats.

“This announcement is tremendous news for the Commonwealth of Virginia and represents a major step forward in our continued pursuit to harvest abundant natural resources in order to lower energy costs and create good-paying jobs,” Howell said, adding: “I also applaud Governor Terry McAuliffe for his enthusiastic support of this project, despite fierce opposition from many allies of his own party.”

Pat Mullins, chairman of the state GOP, said: “[Steyer] and other radical environmentalists flocked to McAuliffe because the Democrat parroted the right lines about energy, refused to stand up for Southwest Virginia coal jobs, and unlike his Republican opponent, refused to promise to oppose EPA overreach. Given the governor’s new-found interest in working with the energy sector, I’m forced to wonder if the environmental movement has a home in the Virginia Democrat Party anymore.”