Mountain Valley Gas Pipeline (MVP)

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Mountain Valley Gas Pipeline (MVP) is a natural gas pipeline under construction that, if finished, would run from West Virginia to Virginia, United States.[1] As of May 2022, construction was still paused after being suspended in various forms beginning in 2019, and the pipeline is currently considered shelved.

Location

The pipeline is being constructed to run from Mobley, West Virginia, to Chatham, Virginia, United States.

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Project details

  • Operator: EQM Midstream Partners[2]
  • Owner: Mountain Valley Pipeline LLC[2][3]
  • Parent company: Equitrans Midstream (via EQM Midstream Partners)* [47%], NextEra Energy [31%], Con Edison [10%], WGL Midstream [10%], RGC Midstream [1%][4]
  • Capacity: 2000 million cubic feet per day[5]
  • Length: 303 miles[5]
  • Diameter: 42 inches[2]
  • Cost: US$6.6 billion*[6][7][8]
  • Status: Shelved**[5]
  • Start year: 2026[9]
    • Originally 2022, and later delayed to 2023[8][10]


*Equitrans Midstream owns EQM Midstream Partners and is recorded as the parent company. EQM Midstream Partners is identified as the operator and low-level owner in the Mountain Valley Pipeline LLC joint venture.[4]

*(The initial cost of the pipeline was estimated at US$3.7 billion when construction began in 2018.[7] It was later increased to US$5.8–6 billion[11], and to US$6.2 billion after that.[7] A of May 2022, it was estimated at US$6.6 billion.[8]

**(As of February 2022, the pipeline was noted as having been over 90% completed.[12] FERC argues this is closer to 55%.[13] As of May 2022, construction was still suspended on the pipeline, and it was considered shelved.[8][14] In June 2022, MVP's developers asked for a four-year extension, until 13 October 2026.[9]

Background

As proposed in 2014[9], the Mountain Valley Pipeline (MVP) project is a natural gas pipeline system that spans approximately 303 miles from northwestern West Virginia to southern Virginia. The MVP will be constructed and owned by Mountain Valley Pipeline, LLC, which is a joint venture of EQT Midstream Partners, LP; NextEra US Gas Assets, LLC; Con Edison Transmission, Inc.; WGL Midstream; and RGC Midstream, LLC. EQT Midstream Partners will operate the pipeline and own a significant interest in the joint venture. [1]

The gas is supplied from Marcellus and Utica shale production. The Mountain Valley Pipeline is expected to provide up to two million dekatherms per day of firm transmission capacity to markets in the Mid- and South Atlantic regions of the United States. The MVP will extend the Equitrans Transmission System in Wetzel County, West Virginia, to Transcontinental Gas Pipeline Company’s (Transco) Zone 5 compressor station 165 in Pittsylvania County, Virginia. As currently planned, the pipeline will be up to 42 inches in diameter and will require three compressor stations, with identified locations in Wetzel, Braxton, and Fayette counties of West Virginia. Mountain Valley Pipeline, LLC has reported that Virginia landowners along MVP's proposed pipeline route received what they believe to be scam survey access letters from an alleged entity named Mountains to Sea Pipeline Corp. [1]

In January 2018 two federal agencies took actions to allow the pipeline to cross streams and wetlands more than 500 times in Southwest Virginia and burrow under the Blue Ridge Parkway. In a key step forward for the Mountain Valley Pipeline, the U.S. Army Corps of Engineers issued a sweeping permit late last month that will allow the buried pipeline to make 383 stream crossings and 142 passes through wetlands in six Virginia counties. A separate decision by the National Park Service granted a right of way for the 42-inch diameter steel pipe to be laid under the Blue Ridge Parkway in Roanoke County. The latest approvals come near the end of a lengthy regulatory process. Opponents say the project will contaminate drinking water and destroy environmentally sensitive landscapes. Using the controversial process of eminent domain, Mountain Valley attempted to fource easements from about 300 property owners who object to the pipeline running through their land. A hearing is scheduled for Jan. 12 in U.S. District Court in Roanoke. Other landowners and conservation groups have filed two petitions with a federal appeals court, seeking to reverse a water quality certification issued by Virginia. Pipeline opponents contend that construction will dislodge sediment, perhaps containing harmful chemicals, that would then be washed downstream and make its way into public water supplies. The Army Corp of Engineers' permit is contingent on nine special conditions. Among them are requirements to limit to 75 feet the disturbance in a stream bed caused by construction and to restore the stream banks and wetlands to their original condition through re-seeding and stabilization. Plans call for the pipe to be buried 3 to 4 feet deep, using an open trench method as it approaches the parkway and conventional boring to pass under the scenic highway. [15]

The Appalachian Trail Conservancy reported that the proposed pipeline route would require the creation of a 125-foot swath up and down steep slopes in hazardous areas, which would destroy thousands of acres of pristine forest, visible for 60 miles away. Multiple iconic viewpoints in Virginia will be severely impacted, including Angels Rest, Kelly Knob, Rice Fields, and Dragons Tooth — some of the most visited and photographed locations on the entire Appalachian Trial. To accommodate the visual and environmental damage that would be caused by the Mountain Valley Pipeline, the U.S. Forest Service would also need to lower the Jefferson National Forest Management Plan standards for water quality, visual impacts and the removal of old-growth forest. Situated on land that is unstable, crossing over a known and active seismic zone, the risk of severe erosion, landslides and pipeline failure are extremely high. Such instability also poses a high likelihood of natural gas leaks, which could poison the surrounding environment and contaminate the drinking water used by nearby communities. The Appalachian Trail Conservancy also reported that many local communities benefit from tourism dollars provided by hikers and other visitors to the local wilderness areas which will be impacted by the pipeline route. Economic studies show the potential negative impacts the pipeline would have on the income and property values in the surrounding areas. [16]

In a letter to the Federal Energy Regulatory Commission (FERC), Kaine backed a position taken by more than 20 petitioners: that the commission should reconsider its decision allowing plans for the Mountain Valley Pipeline to go forward. When FERC voted 2-1 to approve both pipelines in October, there were just three members on what is normally a five-member commission. Calling the split votes “most unusual,” Kaine noted that 98 percent of FERC decisions in 2016 were unanimous. After FERC issues a final order on whether there is a public need for a proposed pipeline, anyone opposed to the decision has 30 days to file a petition seeking a rehearing and a stay of the order while the case is pending. More than 20 such petitions were filed by landowners. In December 2017 FERC issued a tolling order, which is neither a denial of the petitions nor a decision to promptly hold a rehearing. Instead, such an order continues the case indefinitely, often allowing construction to proceed but not providing an avenue for opponents to take legal action because there is no final order to appeal. [17]

As of May 2019, construction of the Mountain Valley Pipeline (MVP) has been suspended for all of the hundreds of proposed water crossings, but it has continued uninterrupted on land. MVP construction continues despite the fact that Attorney General Mark Herring has sued the developer and alleged more than 300 violations of Virginia’ environmental law, and despite the fact that the pipeline lacks the permits required by law.[18]

In August 2020, EQT Midstream Partners said that it was expecting to receive new approvals shortly from the U.S. Fish and Wildlife Service, the U.S. Federal Energy Regulatory Commission and the U.S. Army Corps of Engineers that will enable it to finish building the last 8% of the project, and thus allowing for the project's completion in early 2021. Originally estimated to cost US$3.5 billion, the project costs currently stand at US$5.4 billion and may go higher to US$5.7 billion as the promoters have faced extensive delays caused by regulatory and legal battles with environmental and local groups that found problems with federal permits issued by the Trump administration.[19] Despite the company's claims to have completed 92% of the pipeline construction, an August 2020 analysis by the AlleghenyBlue Ridge Alliance, using the company's own documentation, indicates that only 51% of the pipeline’s sections are fully constructed in Virginia. Moreover, the most difficult sections of the pipeline remain to be built.[20]

In November 2020, EQT Midstream Partners revised up its total project cost estimate to between US$5.8 billion and US$6 billion, and further pushed out its full in-service date to the second half of 2021.[11]

In January 2021, one of MVP's senior shareholders NextEra Energy posted a net loss of US$5 million for the fourth quarter of 2020, the company's first net loss since at least 2010, according to Reuters. The company attributed this to an impairment charge of US$1.2 billion on its investments in MVP, saying the project is facing "substantial delays in reaching commercial operation and increased costs associated with those delays."[21] Further delay in the project was expected following the latest vote in mid-January by the Federal Energy Regulatory Commission ending in deadlock over whether to allow the pipeline's developers to bore under streams for a segment of the project. The Financial Times reported NextEra's chief financial officer Rebecca Kujawa as saying that the large write-down incurred "does not change our commitment with our partners to put this project into service".[22]

In May 2021, EQT Midstream Partners said the pipeline's startup would be delayed to summer 2022 and increased the estimated cost to US$6.2 billion.[6] The delays were attributed to requests by environmental regulators in Virginia and West Virginia to extend the 120-day review period evaluating the pipeline's water quality certification. The pipeline developers are awaiting approval for a total of around 300 stream crossing permits from individual states and the US Army Corps of Engineers. These applications were submitted after a February 2021 decision by the pipeline developers to pull an approved permit allowing the pipeline to cross multiple water bodies under a single authorization. The single-permit authorization is stoking legal battles with environmental and local groups.

In December 2021, the pipeline received permission from the state of Virginia to cross about 150 streams and wetlands. Similar permits from the state of West Virginia were still pending.[23] In early January 2022, the stream-crossing permit from West Virginia was granted (a federal Clean Water Act Section 401 permit). Despite continued legal challenges, the route was reportedly 94% complete, with remaining work including water crossings in Virginia and West Virginia.[24]

In January 2022, the U.S. Court of Appeals vacated decisions by the U.S. Forest Service and Bureau of Land Management that would allow the pipeline to cross through the Jefferson National Forest.[25] In a second blow in February 2022, a federal appeals court invalidated an endangered species study on the grounds that a study required for the pipeline did not sufficiently consider the impacts on endangered fish species.[26]

In February 2022, NextEra Energy filed with the SEC stating that the "continued legal and regulatory challenges have resulted in a very low probability of pipeline completion" and was purportedly re-evaluating its role in the project. In the same filing, NextEra Energy was taking on a US$800 million impairment charge because of the project's many setbacks.[12] This came at a time when Thomas Karam, CEO of the project's lead partner EQT Midstream, said in contrast that EQT Midstream had "all hands on deck to find the right path forward for MVP."[7]

In March 2022, construction was halted on the project after losing the permits

In April 2022, the D.C. Circuit was set to hear oral arguments from FERC, in which it intended to defend its decision to allow continued construction of the Mountain Valley Pipeline in 2020 despite inadequate erosion and sediment controls, as argued by the Sierra Club, Appalachian Voices, and four other environmental groups.[27]

In May 2022, Equitrans told financial analysts in a conference call that after protracted court battles, it intended to seek new permits for the pipeline's construction.[8] The developer planned to restart construction in the spring or summer of 2023, and have it completed in about four months, by the end of 2023.[8]

In June 2022, the developers asked FERC for another four years to complete the project, requesting to be completed by 13 October 2026. The developers cited ongoing litigation that would put the project beyond the 13 October 2022 deadline for construction set in 2020 by FERC.[9]

In August 2022, the pipeline was considered resurrected as part of the Inflation Reduction Act (IRA), based on an agreement between West Virginia Senator Joe Manchin and Congressional Democracts.[28] There was no evidence that construction had begun again, however, and the pipeline is still currently considered shelved.

Expansion projects

Southgate Expansion Project

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  • Operator: EQT Midstream Partners (47%), NextEra Energy (31%), Con Edison (10%), WGL Midstream (10%), RGC Midstream (1%)[4]
  • Capacity: 300 MMcf/d[5]
  • Length: 117.5 km / 73 miles[5]
  • Diameter: 16-inches, 24-inches[5]
  • Cost: US$468 million[29]
  • Status: Proposed[30]
  • Start Year: 2023[31]

Southgate Expansion Project background

There is a proposed expansion project for the pipeline that would add 72 miles between Pittsylvania County, Virginia and Alamance County, North Carolina. It was expected to be complete by the fourth financial quarter of 2020.[32] According to the U.S.'s Energy Information Agency, the expansion project is known as the MVP Southgate Project, and is expected to start in 2020 with a length of 73 miles, a capacity of 300 million cubic feet per day, and a diameter of 16 and 24 inches.[5]

In June 2020, the U.S. Federal Energy Regulatory Commission (FERC) conditionally approved Mountain Valley Pipeline's request to extend into North Carolina.[30]

In August 2020, the North Carolina Department of Environmental Quality denied a permit for the pipeline extension. The North Carolina regulators cited the delays in the Mountain Valley project as a reason for not granting a permit for the North Carolina extension and also said that the extension could cause cause erosion, pollution and injury to fish and aquatic life. The pipeline company was given 60 days in which to file an appeal.[33]

As of May 2021, the expansion project had been approved, with construction beginning soon thereafter and operation slated for 2023.[31]

'Carbon bomb'

In a November 2020 briefing which describes MVP and the Southgate Expansion as a 'carbon bomb', Oil Change International calculated the potential annual greenhouse gas pollution from MVP and the expansion project to be 128.7 million metric tons, the equivalent of the annual emissions of more than 37 coal plants or 27.3 million passenger vehicles.[4]

Financing

Equitrans Midstream Corp, which owns EQT Midstream Partners, the driving force behind MVP, has said it will fund US$2.9 billion of MVP’s US$6 billion cost.[11] Oil Change International research has found that EQT Midstream Partners has received US$9.5 billion from commercial banks in corporate financing (bonds, an unsecured loan and increases to the company's revolving credit facility) between 2014 and June 2020. While these funds support more than just MVP, they represent enough to cover Equitrans Midstream Corp’s entire share of MVP’s costs. The top financiers of the company include: JPMorgan Chase(#1), Bank of America and subsidiary Merrill Lynch (#2), TD (#3), PNC (#4), Union Bank parent Mitsubishi UFJ (#5), Wells Fargo (#6), Citigroup (#9), and U.S. Bank (#10). Oil Change International noted that bank funding has continued to flow for EQT Midstream Partners despite major credit rating agencies assessing the company to be a speculative investment with long-term risk.[4]

Opposition

Groups actively engaged in opposing MVP include: Protect Our Heritage, Water, Rights (POWHR)[34], Ohio Valley Environmental Coalition [35], Appalachian Voices[36], Chesapeake Climate Action Network [37], Virginia Sierra Club[38], Appalachian Mountain Advocates[39], Blue Ridge Environmental Defense League[40], Wild Virginia[41], Appalachians Against Pipelines[42].

Articles and resources

References

  1. 1.0 1.1 1.2 Mountain Valley Gas Pipeline (MVP), Mountain Valley Pipeline, accessed January 2018
  2. 2.0 2.1 2.2 "Mountain Valley Pipeline (MVP) | Equitrans Midstream Corporation". www.equitransmidstream.com. Retrieved 2022-06-27.
  3. "Mountain Valley Pipeline Project". www.mountainvalleypipeline.info. Retrieved 2022-06-27.
  4. 4.0 4.1 4.2 4.3 4.4 New Money Behind the Mountain Valley Pipeline, Oil Change International, November 2020
  5. 5.0 5.1 5.2 5.3 5.4 5.5 5.6 Natural Gas Data, Pipeline Projects.XLS Energy Information Agency, accessed July 2020
  6. 6.0 6.1 "Mountain Valley natgas pipeline start delayed to summer 2022". Reuters. 2021-05-04. Retrieved 2021-12-10.
  7. 7.0 7.1 7.2 7.3 laurence.hammack@roanoke.com 540-981-3239, Laurence Hammack. "Mountain Valley facing 'greater uncertainty,' lead partner in pipeline project says". Roanoke Times. Retrieved 2022-02-23.
  8. 8.0 8.1 8.2 8.3 8.4 8.5 laurence.hammack@roanoke.com 540-981-3239, Laurence Hammack. "Another delay and cost increase announced for Mountain Valley Pipeline". Roanoke Times. Retrieved 2022-05-05.
  9. 9.0 9.1 9.2 9.3 laurence.hammack@roanoke.com 540-981-3239, Laurence Hammack. "Mountain Valley Pipeline asks for another four years to complete the project". Roanoke Times. Retrieved 2022-06-27.
  10. U.S. Appalachian gas pipeline projects go by the wayside, Reuters, Sep. 28, 2021
  11. 11.0 11.1 11.2 Equitrans Midstream Corp (ETRN) Q3 2020 Earnings Call Transcript, The Motley Fool, Nov. 3, 2020
  12. 12.0 12.1 "NextEra Rethinks Mountain Valley Pipeline, Takes $800 Million Charge". 2022-02-18. Retrieved 2022-02-23.
  13. "MVP Completion". Appalachian Voices. Retrieved 2022-04-08.
  14. laurence.hammack@roanoke.com 540-981-3239, Laurence Hammack. "With construction at a standstill, Mountain Valley Pipeline looks for solutions". Roanoke Times. Retrieved 2022-05-05.
  15. "Mountain Valley Pipeline moves forward after federal approvals" The Roanoke Times accessed January 2018
  16. "Mountain Valley PipelineA project that will have devastating impacts on the Appalachian Trail, the local drinking water, and the economy." Appalachian Trail Conservancy accessed January 2018
  17. "Sen. Kaine calls for rehearing of 2-1 decision approving Mountain Valley Pipeline" The Roanoke Times accessed January 2018
  18. Planned Pipelines, Pipeline News, accessed October 2018
  19. Scott DiSavino "Equitrans confirms early 2021 startup for Mountain Valley natural gas pipeline", Reuters, Aug. 4, 2020
  20. "Despite company claims, only a fraction of the Mountain Valley Pipeline is complete in Virginia", The Virginia Mercury, Aug. 8, 2020
  21. Shariq Khan, Scott DiSavino, "NextEra doubles down on renewables as energy transition gathers steam", Reuters, Jan. 26, 2021
  22. Gregory Meyer, "NextEra takes $1.2bn charge as pipeline project comes under pressure", Financial Times, Jan. 26, 2021
  23. "Mountain Valley pipeline gets Virginia water-crossing permits". Oil & Gas Journal. Retrieved 2021-12-26.
  24. "Mountain Valley pipeline gets WV water-crossing permit". Oil & Gas Journal. Retrieved 2022-01-05. Check date values in: |date= (help)
  25. "U.S. court vacates federal permit for WV-VA Mountain Valley natgas pipe". Reuters. 2022-01-25. Retrieved 2022-02-06.
  26. "Court dings Mountain Valley Pipeline again, this time over rare fish". Reuters. 2022-02-03. Retrieved 2022-02-06.
  27. "FERC Heads to Court to Defend Mountain Valley Pipeline Restart". news.bloomberglaw.com. Retrieved 2022-04-08.
  28. "https://news.oilandgaswatch.org/post/behind-the-climate-bill-the-high-price-of-manchins-pipeline-deal-in-appalachia". Retrieved 2022-08-19. External link in |title= (help)
  29. “Overview,” MVP Southgate, Mountain Valley Pipeline, LLC, accessed November 2020
  30. 30.0 30.1 "FERC clears way for MVP Pipeline extension into NC, Alamance County", Mebane Enterprise, June 22, 2020
  31. 31.0 31.1 Natural Gas: Pipelines, US Energy Information Administration, Jul. 27, 2021, accessed Sep. 1, 2021.
  32. "Yes Virginia, We Can Stop the Mountain Valley and Atlantic Coast Pipelines. Here’s How.", Blue Virginia, accessed May 2019
  33. Paul J. Gough, Mountain Valley Pipeline extension into North Carolina dealt blow, Pittsburgh Business Times, Aug. 11, 2020
  34. Protect Our Heritage, Water, Rights
  35. Ohio Valley Environmental Coalition
  36. Appalachian Voices, Mountain Valley Pipeline
  37. Chesapeake Climate Action Network, No New Pipelines in Virginia
  38. Sierra Club Virginia Chapter, Stop the Pipelines
  39. Appalachian Mountain Advocates, Fighting Proposed Pipelines
  40. Blue Ridge Environmental Defense League, Safeguard America’s Resources: Land, Air, Water And Energy
  41. Wild Virginia, Mountain Valley Pipeline
  42. Appalachians Against Pipelines

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