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Natural Gas

US FERC halts work on full route of Mountain Valley natural gas pipeline after court ruling

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US FERC halts work on full route of Mountain Valley natural gas pipeline after court ruling

Washington — The US Federal Energy Regulatory Commission late Friday halted work on the full route of the 301-mile, 2 Bcf/d Mountain Valley Pipeline, in light of an appeals court ruling that struck the federal permits allowing the natural gas project to run through national forest land.

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The decision marks another hurdle for a project that would move West Virginia production to downstream markets in Transcontinental Pipe Line's Zone 5 near the Virginia-North Carolina border.

In a letter order Friday, Terry Turpin, director of FERC's Office of Energy Projects, said: "Allowing continued construction poses the risk of expending substantial resources and substantially disturbing the environment by constructing facilities that ultimately might have to be relocated or abandoned," should federal resource agencies need to authorize alternative routes.

The order responded to a July 27 decision by the 4th US Circuit Court of Appeals vacating US Bureau of Land Management and US Forest Service rights-of-way and temporary use permits that allowed the project to traverse about 3.6 miles of the Jefferson National Forest.

There is no reason to assume the federal agencies would not be able to comply with the court's remand instructions and reissue the rights-of-way, Turpin said. "However, commission staff cannot predict when these agencies may act or whether these agencies will ultimately approve the same route," he added.

Among several problems, the court found BLM ran afoul of the Mineral Leasing Act requirement that it favor routes using existing rights-of-way unless those alternatives were impractical.

The court also found the USFS failed to explain why it adopted findings in FERC's environmental impact statement even though USFS had previously disputed the percent efficacy of erosion barriers included in the document. Further, it found fault with changes to the forest management plan made to accommodate the right-of-way.

Mountain Valley is one of numerous pipeline projects targeting deliveries to Transco's mainline, including Atlantic Sunrise, WB XPress, and Atlantic Coast Pipeline. It is a joint venture of EQT Midstream Partners, NextEra Energy, WGL Midstream, Con Edison Transmission and RGC Midstream.

Natalie Cox, a spokeswoman for EQT, said the sponsor agreed with FERC that the BLM and USFS will be able to satisfy the court's requirements, and suggested the agencies will be able to work quickly to supplement their initial findings. In addition, she said EQT believed BLM was correct about the impracticality of route alternatives. Given that Mountain Valley has halted work in the national forest, she said "we respectfully disagree with the breadth" of FERC's order temporarily halting work on the pipeline.

FERC's letter order allowed an exception for work deemed needed by the land management agencies or required to stabilize the right-of-way and work areas.

Permits for the project have faced multiple legal challenges from environmental groups. As a result of one such challenge, a US Army Corps of Engineers stream and wetlands crossing permit was stayed in June, pending litigation.

"We have said all along that we can't trust polluting corporations to protect our water and we're relieved to see construction temporarily halted along the entire route of the MVP," Sierra Club Senior Attorney Nathan Matthews said in a statement. The group will continue to fight natural gas pipelines until construction is stopped permanently, he added.

Lead sponsor EQT Midstream Partners has previously said pipeline startup would be delayed from a 2018 start until next year.

--Maya Weber, maya.weber@spglobal.com

--Edited by Jonathan Dart, jonathan.dart@spglobal.com