MVP Presses Ahead But Agrees to Stop Some Work
As we discussed in MVP and ACP – Similar Projects, Similar Problems, Different Paths , EQM’s Mountain Valley Pipeline (MVP) project is pushing forward with construction in the face of problems similar to those facing Dominion’s Atlantic Coast Pipeline (ACP) project. One difference had been that MVP’s Biological Opinion and Incidental Take Statement (BO/ITS) had not previously been appealed to the courts, as was ACP’s. That difference came to an end on August 12 when Sierra Club and others filed an appeal with the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit) seeking to have the U.S. Fish and Wildlife Service’s (FWS) BO/ITS vacated. On August 21, these same parties requested the court to order a stay of construction.
MVP and the federal government have responded to the stay request and the government asked the court to hold the entire case in abeyance until January 2020. A response by Sierra Club to that abeyance request is due tomorrow.
As discussed below, because MVP has completed substantial portions of the pipeline through creative approaches in the face of prior challenges, we do not see the most recent legal action by the projects’ opponents as a major roadblock. However, substantial risks remain to the prospect of MVP being in-service by its revised date of mid-2020.
Making Good Progress on Construction
In its most recent progress report, MVP showed that it has made substantial progress, at least in West Virginia, over the last five weeks. We look at two key areas: welding of the pipeline (a leading indicator of the amount of pipeline that has been completed) and tying in and backfilling (which shows how much of the right of way is ready for restoration). In both of these areas, the rate of completion has improved substantially. Five of the nine construction segments, or spreads, have 100% of the pipeline welded. Final restoration across the project remains well below the 80% that FERC typically expects before authorizing a pipeline to go into service. However, even the environmental groups do not typically oppose continuation of final restoration because that is the most effective means for limiting silt-laden storm runoff, which is usually a major environmental concern about construction projects.
MVP Progress in Welding
MVP Progress in Backfilling & Tying-In
Section 404 Permit
This progress is impressive given that the project is working without a currently effective Section 404 permit from the U.S. Army Corps of Engineers (USACE). Such a permit is required for work in and around wetlands and waterbodies, including streams and rivers. The following chart shows just how many of these types of features the project had to cross in each of the nine spreads.
MVP had relied on the USACE’s Nationwide Permit 12 (NWP12) for its Section 404 authority across the entire project. But in November 2018, the Fourth Circuit vacated the USACE’s verification of the project under NWP12 in West Virginia, which led the USACE to withdraw its verifications in Virginia as well. Without a valid NWP12, MVP could generally work only in upland areas. MVP pressed ahead in those upland areas but also found a creative way to allow some crossing work to continue without the NWP12. They sought and received variances from FERC to modify the method for crossing some wetlands and waterbodies from an open cut, which would require a valid 404 permit, to either a conventional bore or direct pipe method. Under MVP’s reading of the law, it convinced FERC that such methods for crossing non-navigable waters and wetlands do not require a valid 404 permit. FERC has approved this modified work method for approximately 50 wetlands and waterbodies. While that is not a high number, most of these have been concentrated in the West Virginia spreads (A, B, C, D, E and F) which has allowed those spreads to reach almost 95% of being totally welded at this point, while the spreads in Virginia are only 63% welded.
Sierra Club Comes After the BO/ITS, But MVP Mounts a Strong Defense
The BO/ITS that was issued to ACP has been vacated twice by the Fourth Circuit, but the one issued to MVP had never been appealed, even though there were common endangered species, including the Indiana bat, in both. Despite the fact that the Fourth Circuit has twice found that the FWS’s nearly identical analysis for the Indiana bat was deficient in the ACP BO/ITS, no group ever appealed the MVP decision until August 12, when the Sierra Club and others filed an appeal. On August 19, these same groups asked the court to stay further construction of the project pending that appeal. But MVP, likely anticipating such an appeal, had been working with FERC and the FWS since the first decision vacating the ACP BO/ITS and had a procedural response in place that has allowed it to mount a solid defense against the challenge and, in particular, the stay request.
The government and MVP noted that MVP’s BO/ITS was issued in November 2017, and that MVP has been constructing the project over those 21 months, which has included hundreds of miles of felling trees, and clearing, grading, and trenching the right-of-way. Throughout all of this activity, the environmental groups have sat on the sidelines and chosen not to challenge the BO/ITS even though they challenged ACP’s twice. At this late date, these environmental groups are asking the court to impose a stay on the basis that the continued construction will cause irreparable harm to the species covered by the BO/ITS.
MVP and the government make clear in their responses that, while the environmental groups have been on the sidelines, MVP and the agencies have been working diligently to address the issues raised in the ACP case. Their efforts have resulted in a “voluntary” stop work on certain activities, which FERC then converted to a mandated stop work that can only be lifted by FERC once it completes a reinitiated endangered species consultation with the FWS.
The arguments by MVP and the government against the stay are compelling for two additional reasons. First, they both have argued that the complaint is not about the existing BO/ITS because FERC and the FWS are currently consulting about revising that document. Second, they both argue that the environmental groups are actually challenging the scope of FERC’s stop work order. According to MVP and the agencies, any such appeal does not belong in the Fourth Circuit, but lies either at FERC, in the federal district courts, or in the Third Circuit or DC Circuit.
Fourth Circuit Could Still Impose a Stay
The Fourth Circuit has been a wild card in the litigation brought before it concerning both MVP and ACP. The court could impose a stay that is broader than the FERC stop work in either the activities that it prohibits or the amount of the project to which it applies. But the scope of the FERC stop work seems to be well designed to make a stay unnecessary. Because of the advanced state of construction discussed above, if the FERC stop work remains in place or if the court issues a stay that broadens it only slightly, we do not believe such a development would greatly impair the project.
To protect the two bat species identified in the BO/ITS, the FERC stop work prohibits further tree clearing, but MVP has stated that only 500 feet of tree clearing needs to be done and the typical tree clearing window would extend through early next year once it reopens this fall. To protect the Roanoke logperch and the recently listed candy darter, the stop work also restricts certain “land-disturbing” activities within any watershed area draining to a stream or river segment that is known or assumed to contain Roanoke logperch, the candy darter, or proposed critical habitat for the candy darter. These areas include:
- Mileposts 107.5 to 122.5 (Spread D, which is 100% welded and almost 80% backfilled);
- Mileposts 196.3 to 201.8 (Spread G, which has the lowest progress of all spreads); and
- Mileposts 218.6 to 293.3 (Spread G, H and I, Virginia-based spreads).
The restricted activities include:
- ground clearing, grading, compacting, or filling activity to construct new or upgrade existing access roads;
- grading or trenching activity; and
- land disturbing activity or instream disturbances associated with stream crossings.
The progress on Spreads G and H has been the most limited of all nine spreads. If the Fourth Circuit does not grant a stay, or grants a stay that does not prohibit backfilling and restoration work, MVP would likely be able to complete most of spreads A through F by the end of this year, as shown in the chart below.
MVP Progress in Backfilling & Tying-In Forecast (Aggregate Average Speed)
What This Means for MVP’s In-Service Date
Based on all of this, we do not see either this voluntary stop work or the possibility of a stay substantially impacting MVP’s ability to meet its revised in-service date of mid-2020. The major hurdles for the project remain the re-issuance of the NWP12 by the USACE and finding a method for crossing the Appalachian Trail as we discussed in MVP and ACP – Similar Projects, Similar Problems, Different Paths . Once those issues, which are the critical path issues, are resolved, it looks like MVP will be poised to quickly complete its construction. But we still don’t see the Appalachian Trail issue being resolved before mid-2020, and so an in-service date of late 2020 seems to be more realistic.
If you would like to discuss the strategies that MVP has deployed in greater detail or would like to further explore the roadblocks it faces as it seeks to go into service by the middle of 2020, please let us know.
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