MVP dealt yet another blow to the Fourth Circuit as reissued logging permits are rescinded
Dealing a blow to Mountain Valley Pipeline LLC’s (MVP) expectations for a speedy conclusion to the long regulatory saga, a federal court has once again struck down the crucial permit for the natural gas line crossing of the National Forest of Jefferson.
The United States Court of Appeals for the Fourth Circuit on Tuesday overturned and returned key permits issued to MVP by the U.S. Forest Service and Bureau of Land Management (BLM) to allow the 303-mile, Dth 2 million pipeline /d to traverse a 3.5 mile stretch of national forest land along the Virginia/West Virginia border.
Partially siding with a coalition of environmental groups challenging the project, the Fourth Circuit found that federal agencies erred in disregarding data showing the project’s erosion impacts and allowing ” prematurely” the conventional drilling method for four stream crossings in the national forest. The agencies also failed to comply with a 2012 forest planning rule, the court found.
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In an order explaining the court’s decision, Circuit Judge Stephanie Thacker criticized the agencies for failing to consider water quality monitoring data from the US Geological Survey (USGS) showing the impacts of pipeline construction 15 miles outside the Jefferson National Forest.
“USGS data showed water turbidity values that were 20% higher downstream of pipeline construction than upstream – a significant difference from the 2.1% increase in sedimentation predicted by hydrological analyzes for the Roanoke River,” Thacker wrote.
With respect to stream crossings, the agencies should have waited for FERC to complete an environmental analysis of MVP’s plans to switch to a conventional drilling method for stream crossings, the court said.
Even though the Federal Energy Regulatory Commission has approved “use of the conventional drilling method for stream crossings inside the Jefferson National Forest, the Forest Service and BLM, in deciding whether to approve whether or not the pipeline route on these lands, would surely benefit from FERC’s environmental analysis advice on using the conventional drilling method for other stream crossings outside of the Jefferson National Forest” , wrote Thacker.
“As a result, the Forest Service and BLM incorrectly approved the use of the conventional drilling method for the four streams in the Jefferson National Forest without first considering FERC’s analysis. .”
The latest lawsuit marks the second time the Fourth Circuit has revoked MVP’s federal permit for its planned route through National Forest Lands. Previous approvals were rescinded in July 2018. A revised permit was issued after the Forest Service concluded a supplemental environmental review in late 2020.
Analysts have characterized the Fourth Circuit’s latest decision as a clear setback for MVP, who first received his FERC certificate in 2017 but has been hampered by legal and regulatory setbacks that have dragged out the construction process.
Project sponsors, including EQM Midstream Partners, which plans to operate the pipeline, said MVP is nearly 94% complete, with more than half of the right-of-way fully restored. Even so, for project developers, MVP’s go-live date remains hopelessly elusive.
“In our view, these permits needed to be upheld on appeal for MVP to complete construction as planned,” analysts at ClearView Energy Partners LLC told clients. “This now appears off the table given the need for agencies to review the evidence presented by petitioners more substantially.”
Similarly, Wood Mackenzie analyst Colette Breshears estimated that the start of the service would likely slip until 2023 on the latest developments.
“This delay follows increased drilling activity and promising pricing in the Appalachian Basin that indicated strong year-over-year production growth to fill new capacity,” Breshears said.
MVP is a joint venture of EQM Midstream, NextEra Capital Holdings Inc., Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC. The pipeline is designed to transport Marcellus and Utica shale gas from West Virginia to an interconnection with the Transcontinental Gas Pipeline in southwestern Virginia.