Forecasts for natural gas demand in the Mountain Valley Pipeline region have been revised and are substantially lower than projections that pipeline sponsors used as justification for the project.
Utilities that signed up to ship gas on the pipeline face a high risk that Mountain Valley will not provide their customers with less-expensive gas.
The risk that Mountain Valley Pipeline’s capacity will be underutilized has not yet been analyzed by the Federal Energy Regulatory Commission (FERC). FERC continues to use its outdated process for evaluating pipeline need that does not consider a rapidly changing domestic natural gas market or the risks associated with growing LNG exports on the domestic gas market.
The Mountain Valley Pipeline was proposed in 2014 as a 303-mile pipeline to transport natural gas from northern West Virginia to Pittsylvania County, Va. Seven years later, the project’s costs have increased by more than 60 percent. Developers now aim to have the project in service by late 2021, three years behind schedule. In the seven years since the project was first proposed, the rationale for the Mountain Valley Pipeline has largely disappeared. In this report, IEEFA finds:
This combination of factors increases the risk that Mountain Valley Pipeline’s capacity will be underutilized. This risk has not yet been analyzed by the Federal Energy Regulatory Commission (FERC), which has persisted in its outdated process for evaluating pipeline need that does not consider a rapidly changing domestic natural gas market or the risks associated with growing LNG exports on the domestic gas market. FERC has recently reopened a review of its pipeline policy. The vanishing need for the Mountain Valley Pipeline highlights the urgent need for reform of FERC policy and practices.