The Mountain Valley Pipeline (MVP) will spend a while longer on its regulatory treadmill after the U.S. Court of Appeals for the Fourth Circuit vacated a key permit issued by West Virginia regulators.
The latest ruling, handed down by the Fourth Circuit on Monday, marks yet another setback for the 303-mile, 2 million Dth/d Appalachia-to-Southeast natural gas conduit, which first received FERC sign-off in 2017.
The court sided with a coalition of environmental groups challenging the permit issued to MVP by the West Virginia Department of Environmental Protection (DEP) under Section 401 of the federal Clean Water Act.
Unlike a similar permit issued by regulators in neighboring Virginia, West Virginia’s sign-off on the embattled MVP did not withstand the Fourth Circuit’s scrutiny. The court cited a series of “oversights” that led it to find the West Virginia DEP’s decision to approve the project was “arbitrary and capricious.”
Among a list of issues cited by the court, state regulators did not “sufficiently address” previous violations of water quality standards found by department inspectors during MVP’s construction in West Virginia.
The West Virginia DEP “failed to provide a reasoned explanation as to why it believes MVP’s past permit violations will not continue to occur going forward,” the ruling said.
No ‘Reasoned Basis’
Regulators also did not go far enough to require compliance with state-level construction permits, and they did not “provide a reasoned basis” for applying upland construction standards from the Environmental Protection Agency to a review of in-stream construction.
Lastly, regulators should have conducted “location-specific antidegradation review” before determining the project would comply with applicable water quality standards, the court found.
MVP’s developers are “disappointed” by the latest Fourth Circuit decision and remain committed to seeing the project across the finish line, spokesperson Natalie Cox told NGI.
“We appreciate the diligent efforts of the West Virginia DEP and will continue to work with the agency on a path forward to completing this critical infrastructure project safely and responsibly,” Cox said. “MVP has undergone unprecedented environmental review, and it is being built to higher environmental standards than any similar project that has ever been built in West Virginia or Virginia.
“With total project work nearly 94 percent complete, Mountain Valley remains committed to working collaboratively with state and federal regulators to finish the remaining work and help ensure Americans have greater access to cleaner, reliable and more affordable domestic energy.”
Project backers are continuing to target a late 2023 in-service date, according to Cox.
With the West Virginia Section 401 permit vacated, the U.S. Army Corps of Engineers will not be able to issue a federal discharge permit to MVP under Clean Water Act (CWA) Section 404, according to analysts at ClearView Energy Partners LLC. The Army Corps permit had been scheduled to be issued this month.
The Fourth Circuit could have opted to remand the West Virginia permit while leaving it in place, the ClearView analysts said. “However, consistent with what appears to be a very hard line on agency permit review execution from this set of judges, the court has vacated the permit,” they told clients in a note.
The end result could be more delays for MVP, slated to enter service in the second half of this year.
Without the CWA permits, “we do not expect the Federal Energy Regulatory Commission to allow MVP to resume construction, even if the pipeline secures its other outstanding permits,” the ClearView analysts said. “...Therefore, we do not think MVP will hit its 2023 year-end in-serve target date. We think this ruling means that the project has likely been delayed about a year.”
MVP is a joint venture of EQM Midstream Partners LP, NextEra Capital Holdings Inc., Con Edison Transmission Inc., WGL Midstream, and RGC Midstream LLC.
