FERC approval boosts outlook for Mountain Valley pipeline, but hurdles remain

The Federal Energy Regulatory Commission has approved Mountain Valley Pipeline's request to change water crossing methods in a decision that cleared one obstacle for the long-delayed natural gas pipeline project.

The commission's order April 8 amended the original Mountain Valley permit issued in October 2017 to allow the project developer to bore under wetlands and water bodies along more than 70 miles of the pipeline route instead of using the previously approved open-cut method (CP16-10, CP21-57).

"Mountain Valley's usage of trenchless waterbody crossings will result in fewer environmental impacts than the crossing method that the commission approved under the original certificate, meaning that today's order amending Mountain Valley's certificate will almost certainly represent an improvement over the status quo," FERC Commissioner Richard Glick and fellow Democratic Commissioner Allison Clements wrote in a concurring statement.

The 2-Bcf/d, 304-mile gas pipeline project is almost complete, but litigation and permitting challenges delayed work on the final pieces. The FERC authorization was conditional pending new approvals from the US Fish and Wildlife Service under the Endangered Species Act, forest crossing authorizations from the US Forest Service and US Bureau of Land Management, and a water crossing permit by the US Army Corps of Engineers.

Mountain Valley Pipeline proposed the alternative water crossing method in February 2021 after a court setback over stream crossing authorizations for the project. Clements and Glick said the April 8 approval did not authorize any route changes and would not affect any new landowners, "which helps to mitigate our longstanding concerns over the prospect of private property being condemned long before construction begins on a project that may never be fully approved."

FERC unanimously approved Mountain Valley's alternative water crossing method at a time when the commission's Democratic majority has faced criticism over the FERC approach to permitting natural gas infrastructure. The criticism from lawmakers and industry has intensified as Russia's invasion of Ukraine caused a surge in European demand for US gas.

'Important step'

The Mountain Valley developer described the FERC approval as a welcome development for the project that would connect Appalachian gas to downstream markets.

"This is another important step forward in MVP's project completion and, as a critical infrastructure project, is essential for our nation's energy security, reliability, and ability to transition to a lower-carbon future," spokesperson Natalie Cox said in an April 11 email.

Analysts at ClearView Energy Partners said the authorization was "very constructive to the project's outlook," though "hurdles remain."

"FERC's order does not put MVP back into the field with new construction authorizations, but we do think it represents substantial evidence of federal regulatory support for the project," ClearView analysts said in an April 9 note to clients.

Senator Joe Manchin, Democrat-West Virginia, chairman of the US Senate Energy and Natural Resources Committee, also praised the approval. Manchin was among the most vocal detractors of FERC Democrats' recent effort to overhaul the agency's policy for permitting natural gas infrastructure, which FERC on March 24 decided to suspend and revisit after seeking more public input.

Developers evaluate path forward

"MVP is a strategically important project for the energy and national security of our country and will play a critical role in our ability to support our European allies as they eliminate their use of Russian energy," Manchin said in a statement. He said there were "several additional steps" the administration could take to facilitate the completion of "this critical project."

Equitrans Midstream, which leads the joint venture developing Mountain Valley, disclosed a $1.9 billion impairment to its investment in the project in February and said it expected to miss a summer in-service date because of adverse court rulings. Executives of the company also said they could not provide an update on the timeline for bringing the project online or its overall cost.

"We continue to evaluate the best path forward for completing the MVP project and expect to provide updated project guidance once the full evaluation is complete," Cox said.