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EPA signoff marks advance amid late permitting challenges for Mountain Valley Pipeline

Highlights

Corps action is next step for water crossing permit

Further legal challenges expected for permit

Washington — Mountain Valley Pipeline moved one step closer to having federal water crossing permits restored late last week when the US Environmental Protection Agency Friday found that changes backed by West Virginia were consistent with the Clean Water Act.

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The 300-mile, 2 Bcf/d natural gas pipeline project would transport Appalachia Basin-produced gas from West Virginia to Virginia and to markets in the Mid-Atlantic and Southeast. The project is more than 85% constructed, according to the developer, but has faced legal obstacles to completing work on several fronts.

The EPA action does not yet mean the project can resume suspended stream crossing work. The US Army Corps of Engineers would still need to approve West Virginia's proposed changes and reinstate the general permit, known as Nationwide Permit 12, and the Corps actions to do so are expected to face further challenge from environmentalists.

On top of that, there are also Endangered Species Act complications affecting some stream crossings. MVP late last week announced it was voluntarily suspending construction in some areas in habitats of endangered species; that move came several days after a lawsuit filed by environmental groups over Fish and Wildlife Service authorizations for the project.

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KEY MILESTONE

Nonetheless, several analysts, including ClearView Energy Partners, pointed to the EPA action as an important milestone toward resolving MVP's vacated water crossing permit.

Last year, the 4th US Circuit Court of Appeals vacated the general permit for stream and wetlands crossings for MVP, finding the Corps lacked authority to substitute its own conditions for those imposed by West Virginia. While the Corps had found the dry cut crossing method to be more environmentally protective, environmentalists argued the approach would violate state requirements that individual stream crossings be completed within a 72-hour time frame.

Helping to get the project back on track, West Virginia proposed to update several of its own conditions, including lifting the 72-hour requirement when the dry ditch method is used; allowing pipelines 36 inches in diameter to be covered by the general permit; and allowing temporary structures that could impede fish movement. Some of these changes would also clear obstacles for the neighboring 1.5 Bcf/d Atlantic Coast Pipeline, which would also move Appalachian gas to Mid-Atlantic markets.

The EPA, in a letter to the West Virginia Department of Environmental Protection Thursday, said it reviewed those changes and found each to be consistent with Section 401 of the Clean Water Act and that related discharges are unlikely to affect water quality in any other state. The EPA said it would defer to the state's determination.

The EPA action is also seen as a step forward for the ACP, for which the Corps had voluntarily suspended water crossing permits after the 4th Circuit ruling on MVP.

MID-2020 IN-SERVICE TARGET

Natalie Cox, a spokeswoman for MVP, said the project team is confident the few remaining permit issues will be resolved to allow MVP to meet the mid-2020 full in-service target. Concurrent with the EPA process, the Corps has been reviewing West Virginia's modifications and has conducted a public comment process that should conclude in the next few weeks, she said.

"MVP anticipates that [the Corps] will then be in a position to review and approve MVP's Nationwide Permit 12, at which time work within the limits of streams and water bodies will proceed," she said.

Signaling potential litigation ahead, environmentalists, in a comment to the Corps dated June 27, argued the Corps lacked authorization to incorporate the West Virginia changes into the general permit, because individual permits are required. By doing so, the Corps would be "unlawfully acting beyond the scope of its authority and would be setting itself up for further litigation," said the letter from Derek Teaney, counsel for Sierra Club and several other groups.

MVP is a joint venture of EQM Midstream Partners, NextEra Energy, Consolidated Edison, AltaGas and RGC Resources.

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

-- Edited by Bill Montgomery, newsdesk@spglobal.com