Facing legal and regulatory obstacles to wrapping up construction of its 303-mile, 2-Bcf/d natural gas pipeline project, Mountain Valley Pipeline LLC will revamp its approach to permitting and seek an individual water crossing permit from the U.S. Army Corps of Engineers and a new amendment at the Federal Energy Regulatory Commission.
The new round of permitting confirmed that there are challenges to the company's late-2021 target for bringing into service the pipeline project connecting Appalachian Shale gas to mid-Atlantic markets, several analysts said. Mountain Valley asserted that the new approach would instead help it meet its budget and schedule.
In November 2020, the U.S. Court of Appeals for the 4th Circuit issued a stay of Mountain Valley's water-crossing authorizations under the general permit known as Nationwide Permit 12. On Jan. 19, the developer's proposed certificate amendment, which would have allowed the use of conventional bore methods for some water crossings along 77 miles of the pipeline route, stalled on a 2-2 vote at FERC. It was opposed by Democrat Richard Glick, who is now FERC chairman, and Democratic Commissioner Allison Clements.
In a Jan. 26 letter to FERC, Mountain Valley said it will withdraw its existing application for the certificate amendment at FERC (CP21-12). Instead, it planned to seek a "comprehensive review of all outstanding water body and wetland crossings by contemporaneously submitting new permit and certificate amendment applications to the Corps and FERC, respectively."
A new application to three Army Corps districts, covering the route in West Virginia and Virginia, will seek an individual permit to use open cut methods for some water bodies and wetlands under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act. A new amendment application at FERC will encompass the areas not covered by the individual permit and will seek to change to trenchless, rather than open cut, crossing methods.
"Mountain Valley believes these concurrent and comprehensive submissions will allow the Corps and FERC to coordinate their respective technical and environmental reviews of the proposed project changes efficiently and avoid unnecessary duplication of effort," Mountain Valley said in the letter. It suggested that the timing and resources for reviews would be minimized because the submissions will describe mostly minor changes and previously considered environmental impacts.
Mountain Valley also will seek water-quality certifications under Clean Water Act Section 401 in West Virginia and Virginia.
Josh Price, a senior analyst with Height, said the move by Mountain Valley to apply for Section 404 permits for remaining Virginia and West Virginia crossings is "in line with our [first half of 2022] in-service target for the pipeline."
"Since the election of Joe Biden and the 4th Circuit stay on the project's [Nationwide Permit 12] authorization in November, we've maintained that individual stream-crossing permits from the ... Corps is the only viable path forward for the project," Price said in an email.
Gary Kruse of LawIQ, a firm that analyzes the legal and regulatory aspects of the energy industry, agreed the change in course means "this year is not in the cards" for bringing the project into service. His assessment was based on the time generally needed to get through the Corps districts' permitting. In addition, the states have the right to take up to a year from the time an application is submitted for a Section 401 review, potentially reaching out to February 2022, he said.
"I would be highly surprised if Virginia, in the political environment in that state, would take less time than close to one year," Kruse said.
But if Mountain Valley can gain permits from the Biden administration, it would have a better chance of overcoming its biggest hurdle, the 4th Circuit, which proved skeptical of Trump administration permits, he said.
Mountain Valley spokesperson Natalie Cox said Mountain Valley pipeline has all necessary permits, with the exception of the Nationwide Permit 12, which is currently under the stay.
"With MVP's total project work roughly 92% complete, we believe this decision is the most-efficient path to satisfying objections, completing remaining work in an environmentally responsible and protective manner, and keeping within our current budget and schedule," she said in an email.
At FERC's January open meeting, orders that supported the commission's prior decisions allowing the project to resume construction lacked the votes to advance, as did a decision on the amendment allowing alternative water crossings for 77 miles. Glick pointed to a need for the developer to have all permits in hand for the entire route before returning to construction.
"The reason the commission doesn't authorize construction in the absence of a permit is that it makes no sense to enable a developer to begin digging up land and laying down the pipe when it may be that the subsequent permits are never obtained, or route changes might be required," Glick said at the time.
Environmental groups had argued that further study of impacts associated with conventional bore crossings was needed prior to FERC approval of the amendment.
Maya Weber is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.