US FERC grants 2 Bcf/d Mountain Valley gas line four more years to complete work

The US Federal Energy Regulatory Commission acted unanimously to grant the Mountain Valley Pipeline a four-year extension of an October deadline to complete construction of the 304-mile, 2 Bcf/d natural gas pipeline, a decision that could help the delayed project's efforts to secure outstanding permits.

FERC first approved the pipeline, which would add an outlet for Appalachian Basin gas, in 2017, but it has faced multiple legal setbacks after environmental groups successfully challenged other federal agency permits in the 4th US Circuit Court of Appeals.

"We conclude that Mountain Valley has made a good faith effort to meet its deadline, but has encountered circumstances that prevented it from doing so," FERC said in a brief order (CP16-10) Aug. 23.

The commission recalled that it has previously found allowing more time for an applicant to obtain needed permits can be an appropriate basis for granting an extension. It noted legal challenges have affected the ability to get authorizations and permits from the US Forest Service, US Bureau of Land Management, US Army Corps of Engineers, US Fish and Wildlife Service, and the National Park Service.

"We consider it likely that, should Mountain Valley receive the required permits, those permits will undergo judicial review, which will take time to resolve," FERC said, explaining why it found it reasonable to grant another four years. "Commenters' arguments regarding the foreseeability of Mountain Valley's litigation delay are unpersuasive."

Acting over objections

The decision came despite objections from environmentalists, who filed thousands of comments and argued that new information and circumstances warranted further environmental study or denial. As the last in a series of long-haul greenfield pipelines pitched in the Northeast, the pipeline has become a rallying point for groups opposed to major gas infrastructure.

All five commissioners backed the order, although Commissioner James Danly, in a concurring statement, sought even greater clarity that FERC's final authorizing orders could not be relitigated.

Mountain Valley has said FERC's action on the construction deadline was needed to provide certainty about the project's central authorization as other agencies work on another round of permitting.

In an Aug. 24 statement, Mountain Valley welcomed the decision, and said it remained committed to working with federal and state regulators to secure permits, and to starting service in the second half of 2023.

In October 2020, FERC granted a previous request for a two-year extension to complete the mainline pipeline.

The more recent request drew high-profile attention, with Senate Energy and Natural Resource Chairman Joe Manchin, Democrat-West Virginia, urging FERC to grant the extra time. Business groups, including producers and local gas distribution companies, also argued the project would provide needed supplies and help keep prices down.

But environmental groups argued troubles with sedimentation and erosion during construction indicated the controls FERC relied upon in its original environmental review were inadequate. They also pointed to changed circumstances around climate targets and argued a nine-year aggregate timeline for construction was unprecedented.

Environmental groups immediately slammed FERC's decision and vowed to continue fighting the project along with federal legislation that may be forthcoming to support it.

Gillian Giannetti, senior attorney with the Natural Resources Defense Council, said FERC demonstrated a failure of leadership.

"The order is devoid of strong legal or factual analysis, fails to wrestle with the legitimate issues raised by commenters in the docket, and implicitly acknowledges the unprecedented nature of the [extension for four years] without in any way addressing why it is justified," she said in an interview.

David Sligh, conservation director for Wild Virginia, said FERC refused to acknowledge changes to the environment caused by the project or to base its decision on a rational assessment as to whether damage would continue.

"Apparently FERC has simply chosen to ignore the piles of evidence in the record of the harms MVP has wrought on the people and waters in its way. Wild Virginia's reviews of inspection reports by the Virginia [Department of Environmental Quality] and contract inspectors show well more than 600 instances when sediment was dumped onto lands outside the pipeline right-of-way."

Upcoming battles

The commission has yet to hear from the US District Court for the District of Columbia Circuit in a pending case challenging FERC's prior Mountain Valley extension that surfaced some similar arguments.

Separately, more than 650 environmental groups and other progressive organizations wrote to congressional leaders Aug. 24 opposing a deal on permitting legislation that would include language to support the Mountain Valley completion. An agreement to move on legislation was reached by Democratic leaders to secure Manchin's vote on the major climate and energy measures in the Inflation Reduction Act.

Analysts with Height said they believed the project is on pace to revise needed permits around the first quarter of 2023.

"[W]e believe that the unanimous decision in the face of strong environmental pressure shows momentum for the project," they said in an Aug. 24 note.

ClearView Energy Partners suggested FERC's action would also appear to allow the nomination process for FERC Chairman Richard Glick to move forward in the Senate for another term at the commission.