With the Mountain Valley Pipeline (MVP) project clearing some major legal hurdles in recent weeks and construction resuming, it’s increasingly likely that Appalachian gas producers will soon have 2 Bcf/d of new capacity to take away , potentially by the end of 2023. However, the degree to which the pipeline will translate into increased production from the supply basin and better access to supply for gas-thirsty premium markets in the Southeast will largely depend on the availability of transport capacity downstream of MVP. As such, the race is on to expand pipeline capacity from the pipeline’s termination point at Station 165 on the Williams Transco pipeline in southern Virginia, not only to deal with the impending influx of supply of MVP, but also to move this gas to Virginia’s growing demand centers. and the Carolinas. MVP’s lead developer, Equitrans Midstream, hopes to build an extension to the main line, the MVP Southgate project, while Transco has designs of its own to capture downstream customers. In today’s RBN blog, we provide an update on MVP and the various expansion projects in the works to move the new supply available to market.
We’ll start with the latest developments on MVP, which, along with growing demand for gas-fired generation in the Mid-Atlantic and Southeast, is the impetus for the other midstream projects we’ll discuss today. The biggest news of all, of course, is that the long-sought-after pipeline looks like it’s finally happening. It took one “Act of Congress” already decision of the country’s highest court—promised by the chief justice, no less—but it seems increasingly likely that MVP will end. We’ve chronicled MVP’s long, long journey in the years since it was proposed (most recently in It will come back in circles). It received its certificate from the Federal Energy Regulatory Commission (FERC) in 2017, and construction began in early 2018. But as the project waded through the permit jungle, we saw the issuance of permit after permit, only to be challenged by environmental groups and struck down by a United States Court of Appeals, specifically the Fourth Circuit Court.
However, just as the Fourth Circuit reversed a third set of permits earlier this year, Congress stepped in by ratifying an MVP clause as part of the “debt ceiling bill,” also known as Sec. 324 of the Fiscal Responsibility Act of 2023 (FRA), which ordered the authorization and initial termination of MVP. To cover its bases, the provision also stripped the Fourth Circuit of jurisdiction, barred any further challenges to state and federal permits, and, for those who wanted to challenge the FRA provision, restricted jurisdiction to the Circuit Court of d.c. The bill was signed into law on June 3 and MVP resumed construction. However, in early July, the Fourth Circuit again upheld key permits and halted construction on the project, pending review of several petitions challenging the permits and the constitutionality of FRA Section 324. This time, with the FRA behind them, Equitrans/MVP filed an emergency appeal to the Supreme Court, which ruled in MVP’s favor, upholding the Fourth Circuit’s decisions and allowing MVP to resume construction. On the same day Chief Justice John Roberts issued the decision, the lower court heard oral arguments and later dismissed petitions for review, ending seven years of legal wrangling with environmental groups.
