Mountain Valley Pain

This Week's Trend In Brief:

• Nearly eight year since Mountain Valley Pipeline’s (MVP) initial application with FERC, in June Congress passed legislation seemingly giving final approval to the pipeline and limiting judicial review of any permits or authorizations.  

   

• Yet despite a literal act of Congress, last week a federal court in Richmond halted construction on the pipeline at the request of a coalition of environmental activists, potentially causing MVP to miss a crucial construction timeline, and likely setting up a second appearance before the U.S. Supreme Court. 

   

• The halt is only the most recent hurdle MVP has faced, as the project has contended with years of legal challenges and activism, resulting in construction of the pipeline system ballooning by billions of dollars and running years behind schedule.  

   

• As the embattled pipeline continues to face challenges and uncertainty, it has become a posterchild for why it is so important for developers to fully assess their risk before launching a project, and acting on the results of that assessment to build the key policymaker and stakeholder relationships to overcome increasingly sophisticated opposition before it has the upper hand. 

Digging Deeper:

 
On June 3, President Biden signed the Fiscal Responsibility Act, which included language approving MVP’s outstanding permits and authorizations and limiting judicial review of the project. Nearly eight years after MVP was proposed in October 2015, and nearly six years since FERC issued a Certificate of Public Convenience and Necessity, Congress passed legislation that “ratifies and approves all authorizations, permits, verifications, extensions, biological opinions, incidental take statements, and any other approvals or orders issued pursuant to Federal law necessary for the construction and initial operation at full capacity of the Mountain Valley Pipeline.” The legislation also included language stating “no court shall have jurisdiction to review” these permits and authorizations.  
 
Despite this literal act of Congress, last week a federal appeals court halted construction on the project at the request of a coalition of environmental activists, leading MVP to seek redress from the U.S. Supreme Court for a second time in the hopes of avoiding further delays ahead of a crucial construction deadline. Last week the U.S. Court of Appeals for the Fourth Circuit released a pair of rulings granting a stay on construction of MVP, despite the fact that “Congress had moved jurisdiction over the pipeline last month from the court in Richmond, where environmentalists have found some success in their decade-long fight, to the U.S. Court of Appeals for the District of Columbia Circuit.” The petitioners demanding the stay included a coalition of national and local environmental activist groups comprising the Sierra Club, Center for Biological Diversity, the Wilderness Society, and numerous local and regional groups, all represented by the Southern Environmental Law Center. MVP has asked the U.S. Supreme Court to overturn this lower court ruling, but on Monday the Supreme Court asked the Justice Department to weigh in on MVP’s request by July 25, “just one day before the company’s self-described deadline to begin construction or risk delaying completion of the line until spring 2024.” 
 
The appeals court’s stay is only the latest in a long line of hurdles MVP has faced resulting in ballooning costs and timelines for the project. Following MVP’s initial application with FERC in October 2015, MVP has faced a “raft of legal challenges and regulatory hurdles,” and nearly a decade of opposition from activists. These challenges prevented construction from beginning until 2018, led to proposed route changes, and have resulted in an estimated total project cost of $6.6 billion, billions of dollars over budget and years behind schedule.  
 
MVP’s years of challenges and uncertainty have made it the poster child for frustrations and uncertainty regarding energy permitting, and a prime example of why it is crucial for energy developers to have a playbook to anticipate and counter opposition before announcing a project. MVP has been described by prominent MVP backer and U.S. Senator Joe Manchin (D-WV) and others “as a poster child for what they see as the nation’s inefficient energy permitting system.” MVP’s plight also serves as lesson for other energy developers. Because of this inefficient permitting system, and professional activists’ ability to exploit it, it is more important than ever for firms to arm themselves with actionable intelligence in order to avoid delays and disruptions.  
 
To learn how you can avoid delays and disruptions for critical energy infrastructure, download Delve’s proven playbook for navigating regulatory and advocacy challenges. 

Trends in Energy is your weekly look at key trends affecting the energy industry, brought to you by the competitive intelligence experts at Delve. As the political and regulatory landscape continues to shift, reach out to learn how our insights can help you navigate these challenges.