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Mountain Valley Pipeline to Restart Construction following FERC Approval

After a stop-work order in October 2019 halted construction of the Mountain Valley natural gas pipeline (MVP), the Federal Energy Regulatory Commission has partially lifted its ban. The roughly 303-mile long pipeline system traverses West Virginia into Virginia, to feed gas supplies from the Marcellus and Utica basins to the southern Atlantic states.

The Mountain Valley pipeline is owned by a conglomeration of energy companies, namely NextEra Energy Inc., Consolidated Edison Inc., AtlasGas Ltd., and RGC Resources Inc., but is operated by EQM Midstream Partners LP.

The October 2019 order was a result of pending permits necessary for the project’s completion by the U.S. Fish and Wildlife Service (FWS) related to the disruption of endangered and threatened species on the pipeline’s route, which were being litigated in federal appeals court. The order allowed for only “restoration and stabilization of the right-of-way and work areas.” Now, a year later, FERC has lifted its order, allowing EQM to continue its construction of the pipeline in totality, except for a 25-mile exclusion zone where FWS permits are necessary due to the pipeline crossing water bodies.

In the request to FERC, Mountain Valley argued that the project had received all necessary federal permits to continue work outside of the 25-mile exclusion zone, and that stalling the project any longer would actually bring harm to the environment and landowners. In the letter, the developer also requests a decision from FERC “by September 25, 2020, so that Mountain Valley can maximize final restoration and complete as many activities as possible before winter.”

Though work can resume, it is still not known whether the MVP will receive the permits in question. This has led opponents of the pipeline to question FERC’s decision, arguing that it is improper to allow a pipeline to be built without all necessary permits being obtained.

Criticism also came from within FERC itself, with Commissioner Richard Glick stating that FERC is to “balance the full panoply of factors that bear on the public interest, not just the desire to complete the pipeline in the shortest time possible”.

Though work has begun, it is still up to the courts to determine if the last of the necessary authorizations to complete the pipeline will be issued. Original estimates for the pipeline placed a $3.5 billion price tag on the operation, with completion before 2019. More recent estimates the real price to be somewhere between $5.4 and $5.7 billion, with a completion date somewhere in mid-to-late 2021.

With the recent announcement that the owners of the Atlantic Coast Pipeline were canceling the project after significant opposition, the MVP would be the largest new transmission line to carry Appalachian gas to southern states, which would represent an economic opportunity for gas producers in this region.

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