Mountain Valley Pipeline Faces More Setbacks
After two more legal setbacks, builder Equitrans said that the in-service date for the Mountain Valley Pipeline was again being postponed, and this time a new date was not given.
The 303-mile long transmission pipeline is being built from West Virginia into Virginia to feed 2 billion cubic feet per day of natural gas from the Marcellus and Utica basins in Appalachia to the southern Atlantic states. The Mountain Valley pipeline is partly owned by Southpointe-based Equitrans, in a joint venture with four other companies.
But the project has faced numerous delays due to legal and regulatory challenges, and the cost has risen from about $3 billion to $6.3 billion while construction has taken years longer than anticipated. The developer had hoped to complete the pipeline and put it into service this summer.
Equitrans said in a news release that the project team planned to review the information in the Jan. 25 and Feb. 2 decisions by the U.S. Fourth Circuit Court of Appeals vacating environmental opinion issued by the U.S. Forest Service and Bureau of Land Management regarding a crossing in Jefferson National Forest in Virginia, and that “we remain committed to completing the MVP project.” The pipeline developer earlier this week asked the court for rehearings on the decisions.
In its 2021 annual results report, Equitrans said, “MVP JV continues to review these recent decisions and evaluate the possible paths forward, which include working with the relevant federal agencies and the consideration of potential legal appeals. As a result, Equitrans is not able to provide an update regarding the in-service timing and overall cost for the project, except that Equitrans is no longer targeting a summer 2022 in-service date.”
“This was the second time the Court issued judicial opinions that overruled the extensive federal regulatory review process undertaken by USFS, BLM and (U.S Fish and Water Service). The Court’s decisions, which do not reflect traditional judicial deference, create greater uncertainty in our ability to bring this critical infrastructure project to completion, despite total project work being roughly 94% complete. We remain committed to completing the project and are actively engaging with federal agencies, legal counsel and our partners to evaluate the best path forward,” said Thomas F. Karam, Equitrans chairman and chief executive officer. He said an update will be provided after discussions with the agencies and the project’s partners.
The company also said it took a $1.9 billion impairment charge in the fourth quarter due to the legal challenges and delay in bringing the project online.
In addition, the company said due to the “regulatory and legal environment for pipeline construction,” it is re-evaluating the MVP Southgate, an extension that would carry the pipeline into North Carolina.
Pipelines are seen as critical by Appalachian natural gas producers to allow them to send gas to other markets and expand operations. However, they have often faced opposition from conservation and other groups, and several large projects have been canceled. As the Russia-Ukraine crisis has exacerbated an energy crunch in Europe, Appalachian natural gas producers have been vocal about the need to reduce the regulatory and legal process so that more gas can be shipped by pipeline and converted into liquefied natural gas (LNG) that can be exported to help meet the supply that has been supplied by pipeline from Russia.