The Mountain Valley Provision—Impacts and Implications for the Market and the Future

The political theater that recently played out related to the US debt ceiling may have illustrated the chaos that polarization has brought to Washington, but it showed one other thing as well: even when it does not have much to do with the matter at hand—as in defaulting on the national debt—there's actually an appetite for federal permitting reform on both sides of the aisle. The Fiscal Responsibility Act (FRA) addressed some immediate priorities relating to infrastructure— including changes to the review process under the National Environmental Policy Act (NEPA). But then, surprising many in the natural gas industry, as well as many of the industry's critics, the FRA actually ordered the regulatory permitting of the long-delayed, controversial Mountain Valley Pipeline (MVP). For over five years, MVP has been in various stages of regulatory limbo, having received a certificate from the Federal Energy Regulatory Commission (FERC) years ago but continually failing to secure the other federal permits necessary for completion. That failure was generally not the result of actions of the agencies involved, but rather of successful efforts by project opponents to gain appellate court reversals of the agency actions approving the pipeline. The MVP saga has proven that even an “act of congress” does not necessarily end the drama. Well after the passage of the FRA, the Fourth Circuit U.S. Court of Appeals, which had been the dominant forum for most of the previous stoppages, issued a stay of the construction under a U.S. Forest Service permit that MVP had already received. The outcome of that action is unknown at the time of publication, but presages the ongoing legal arm-wrestling that will likely surround the FRA provision and the project.