Mountain Valley Pipeline project confronts another reality check and is found wanting

The Mountain Valley Pipeline project is floundering. Once again, the reason is the failure of an agency to deal with reality. The 4th U.S. Circuit Court of Appeals has issued a new ruling that rejects a state environmental agency’s decision on the project, and the agency has no one to blame but itself.

IEEFA commented in August 2022 on a problematic willingness of some agencies to make assumptions, even when actual data contradicts them. IEEFA cited the assumption that a company would restore farmland disrupted by pipeline construction (despite evidence from multiple farmers whose land the company had not restored), and the reliance on EPA modeling to estimate methane emissions when study after study show measured methane pollution greatly in excess of what the EPA model would predict.

A third IEEFA example involved the Mountain Valley Pipeline project. The 4th Circuit Court last year rejected a decision by the U.S. Department of the Interior’s Bureau of Land Management to approve a national forest crossing because the agency relied solely on a model for potential construction effects on surface water quality. The court noted that real-world data gathered by another federal agency at a nearby site showed the pipeline’s construction had already increased turbidity at a level 10 times greater than the model predicted.

The circuit court decision issued on April 3 again calls for a recognition of facts. The West Virginia Department of Environmental Protection (DEP) relied on an assumption that the pipeline’s construction would not degrade water quality because the developer, Mountain Valley Pipeline LLC (MVP), would obey water quality protection requirements—even though MVP’s history of violations weighed strongly against such a notion. The court observed that MVP had violated the state’s Oil & Gas Construction General Permit (O&G CGP) 139 times in only two years. Also, DEP inspectors found MVP had committed at least 46 narrative water quality standards violations (criteria that a water body be free of certain conditions, such as sedimentation). The court noted the DEP took enforcement action for permit and water quality violations, with civil penalties against MVP totaling $569,678.

The court found the West Virginia DEP’s determination to be “arbitrary and capricious” for four reasons:

• It said the agency failed to provide a reasoned explanation as to why it believes MVP’s past permit violations will not continue.
• DEP failed to add provisions to the water quality certification to reduce the likelihood of future violations—explicitly, a requirement to comply with the O&G CGP and Storm Water Pollution Prevention Plan.
• It relied on the federal Environmental Protection Agency’s upland construction standards when the matter at issue was in-stream construction.
• DEP provided no adequate explanation of  why it did not require location-specific antidegradation review to ensure maintenance of water quality, relying only on its assumption that MVP would obey permitting programs not included as conditions of the certification.

Lurking behind all of this in another venue is the continued failure of the Federal Energy Regulatory Commission (FERC) to revisit the question of need for the Mountain Valley Pipeline. FERC has never analyzed the question of market need, relying only on the existence of shipping contracts, even though—as IEEFA has pointed out—four of the five shippers were corporate affiliates of the project’s sponsors.

In mid-2022, MVP requested an extension of time until late 2026 to complete construction of the project. FERC granted the extension but refused to revisit and update information on the question of the pipeline’s necessity. Continued issuance of construction deadline extensions without an updated analysis undermines the purpose of having the deadlines. When conditions change substantially, the basis for the original decision becomes obsolete.

Energy market conditions have changed significantly since the MVP pipeline project was first proposed in 2014. The U.S. Energy Information Administration (EIA) Annual Energy Outlook 2023, for example, predicts that domestic natural gas consumption used to generate electricity is likely to decrease by 2050, despite relatively stable growth over the last decade. Even the demand for U.S. gas exports is uncertain, given the global glut of liquified natural gas (LNG) that will likely develop in 2026 after a tidal wave of new LNG projects comes online in the United States, Qatar, Canada and elsewhere.

Agencies that ignore facts and fail to rigorously analyze projects place themselves at risk of having their decisions overturned. The Mountain Valley Pipeline project, despite years of bouncing around among agencies and courts, has not been subjected to a proper fact-based analysis. Until that happens, the permit appeals process is doing what it should—requiring agencies to issue their decisions based on facts and robust analysis.