Washington — After a federal appeals court struck a general permit for West Virginia water crossings for the Mountain Valley Pipeline, the project developer said it expects to secure a new permit from the US Army Corps of Engineers early in 2019.
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An order Tuesday by the 4th US Circuit Court of Appeals struck the general permit for stream and water crossings that was in place for 160 miles of pipeline in West Virginia.
"[T]he MVP team is evaluating options to understand its ability to continue with construction activities that do not include stream and wetland crossings along this portion of the route," MVP said in a statement.
The approximately 300-mile pipeline is seen as a key conduit between Appalachian supplies and downstream markets, including LNG exports.
Environmentalists who prevailed in the case were quick to argue work must stop on the full route. "Because the MVP certificate from [FERC] specifies that all necessary permits must be in place before the project can proceed anywhere, MVP must also halt work along its entire route," Sierra Club said in a statement late Tuesday.
The case at issue involved a dispute over whether the US Army Corps of Engineers had authority to issue a general permit, known as Nationwide 12, rather than an individual stream-by-stream permit, for the pipeline in West Virginia. Sierra Club and other environmental groups argued the general permit failed to meet a state standard that all crossings must be able to be completed in within 72 hours. They argued the Corps improperly imposed one condition requiring the use of a "dry cut" method for constructing four river crossings in the state.
The court, in a brief order, concluded the Corps lacked authority to substitute the dry-cut method and vacated in its entirety the Corps' verification of the pipeline's compliance with the permit. It cited regulation stating that if any part of a project requires an individual permit, the nationwide permit does not apply. Each of the four river crossings using the method are expected to take four-to-six months to complete, the court said. A full opinion from the court is still pending.
A continued legal battle is likely over whether MVP has authority to use a general permit for the route, or must pursue an individual permit, which requires more extensive analysis of individual water crossings. Sierra Club has argued in September 13 comments to West Virginia regulators that it believes legal authority is lacking for the modification that would allow use of the general permit. RENEWED SETBACK
ClearView Energy Partners in an alert said it viewed the court action as a "major setback for the Corps and MVP." It predicted the environmental groups would return to FERC promptly with a renewed request to stop work, and suggested FERC would grant that within days in a manner similar to its August stop-work order, in this case, halting all incomplete water crossings.
Analysts with Height Capital Markets said the decision should renew construction restrictions throughout West Virginia. The short order appears to foreclose on the Corps' ability to modify West Virginia's special condition, "making a speedy resolution somewhat more challenging," they said. Nonetheless, MVP's extension of its in-service date to the fourth quarter of 2019 should be enough time for West Virginia or MVP to change the route to cross rivers using a horizontal directional drilling method, they said.
Washington Analysis said the language of the court order indicates that MVP will likely need a Clean Water Act Section 404 dredge and fill permit from both the Huntington and Norfolk district offices of the Corps. "This process will likely require an abbreviated notice-and-comment period (30 days of comment) and, all in, is unlikely to be concluded before [year-end] 2018 or early 2019," it added.
The latest setback comes after EQT Midstream Partners in late September boosted the expected cost of the project by about $1 billion to $4.6 billion. It said about half of the increase was due to extended periods of work stoppage during August that triggered ongoing contractual charges and schedule changes.
MVP in its statement pointed out the West Virginia Department of Environmental Protection has already proposed changes to the Clean Water Act Section 401 nationwide permit certification to clarify that the 72-hour limit does not apply to dry-cut crossings. A public comment on such changes closed in September, MVP said, adding it intends to apply for the new permit from the Corps and expects to secure it early in 2019.
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