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Mountain Valley Pipeline faces stay in Endangered Species Act case

In a decision likely to delay construction of the Mountain Valley Pipeline LLC project for at least three months, a three-judge panel of the U.S. Court of Appeals for the 4th Circuit on Oct. 11 granted a stay in a case involving alleged violations of the Endangered Species Act.

The decision grants a motion filed by a coalition of environmental groups and stays the case pending completion of a review by the U.S. Fish and Wildlife Service of the existing biological opinion and incidental take statement for the project, which the agency issued in November 2017.

Under the 4th Circuit ruling, the federal Endangered Species Act case will be held in abeyance until Jan. 11, 2020, pending the completion of a re-consultation between the Fish and Wildlife Service, or FWS, and the Federal Energy Regulatory Commission. If the court is still not satisfied with the revised FWS documents, it could extend the stay further while the ligation is heard, possibly extending into the second quarter of 2020.

Mountain Valley Pipeline, or MVP, spokesperson Natalie Cox said the pipeline developers were disappointed with the decision to stay the proceedings.

"The actual impact of the stay is mitigated by the fact that the review of the [biological opinion] and [incidental take statement] has already commenced and this process, which was in progress prior to the court's decision, would lead to a timely review and reinstatement of all required approvals," Cox said in a statement Oct. 11.

Cox said the pipeline developers have long supported the additional FWS review process, "and we will cooperate with the federal agencies to resolve any new or outstanding issues."

Environmental groups cheered the ruling, saying the decision effectively stops all construction on the 300-mile project.

"MVP's dangerous pipeline project has already destroyed and degraded the habitat of endangered species along its route, not to mention the threat it poses to clean air and water," Sierra Club attorney Elly Benson said in an Oct. 11 statement. "That's why, time after time, we have said MVP should stop work on this pipeline."

The Oct. 11 decision came the same day that Virginia Attorney General Mark Herring announced that MVP had reached an agreement with the Commonwealth, under which the pipeline developers will pay a $2.15 million civil penalty to resolve outstanding environmental issues. MVP also agreed to submit to court-ordered compliance with environmental protections and impose additional layers of independent, third-party monitoring on the project, according to Herring's statement.

The stay ruling and the Virginia fine come just weeks after FERC dismissed some environmental concerns over the project.

In August, FERC found that MVP had properly addressed compliance issues raised by an environmental group that had alleged that the project developers had failed to follow conditions of its certificate authorizing pipeline.

In that decision, FERC staff formally declined the request by Wild Virginia, India Creek Watershed Association and Preserve Craig to suspend or revoke certificate authorization for the 300-mile, 2 Bcf/d natural gas pipeline project.

"This three-month delay does not impact our late 2020 in-service projection for MVP, particularly given that developers plan to stop work on the project over the winter," analysts with Height Securities wrote in an Oct. 14 note to investors. "However, this delay could last six to eight months if FERC and the Fish and Wildlife Service fail to satisfy the court through ongoing permit consultations."

Jim Magill 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.