Daily Blog

Bring It On Home - Southeast Gas Midstream Expansions Heat Up As MVP Regains Traction

With the Mountain Valley Pipeline (MVP) project clearing some major legal hurdles in recent weeks and construction resuming, it’s become increasingly likely that Appalachian gas producers will soon have 2 Bcf/d of new takeaway capacity, potentially as early as late 2023. However, the degree to which the pipeline will translate into higher production from the supply basin and improved supply access for the gas-thirsty, premium markets in the Southeast will largely depend on the availability of transportation capacity downstream of MVP. As such, the race is on to expand pipeline capacity from the pipe’s termination point at Williams’s Transco Pipeline Station 165 in southern Virginia, not only to deal with the impending influx of supply from MVP but also to move that gas to growing demand centers in Virginia and the Carolinas. MVP’s lead developer, Equitrans Midstream, is hoping to build an extension to the mainline — the MVP Southgate project — while Transco has designs of its own for capturing downstream customers. In today’s RBN blog, we provide an update on MVP and the various expansion projects in the works to move newly available supply to market.

We’ll start with the latest developments on MVP, which, along with the growing gas-fired generation demand 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 pipeline looks like it is finally happening. It took an “Act of Congress” and a decision from the highest court in the land — handed down by the Chief Justice, no less — but it’s looking more and more like MVP will be completed. We have chronicled MVP’s long, long journey in the years since it was proposed (most recently in Will It Go Round 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 wandered through the permitting jungle, we saw permit after permit issued, only to be challenged by environmental groups and yanked away by a U.S. Court of Appeals, namely the Fourth Circuit Court.

However, just as a third set of permits were reversed by the Fourth Circuit earlier this year, Congress swooped in by ratifying an MVP clause as part of the “debt ceiling bill,” aka Section 324 of the Fiscal Responsibility Act of 2023 (FRA), which mandated the permitting and initial completion of MVP. To cover its bases, the provision also stripped the Fourth Circuit of jurisdiction, prohibited any further challenges to the state and federal permits, and, for those wanting to challenge the FRA provision itself, it restricted jurisdiction to the DC Circuit Court. The bill was signed into law June 3 and MVP resumed construction. However, in early July, the Fourth Circuit once again stayed key permits and halted construction of the project, pending review of several petitions challenging the permits and the constitutionality of Section 324 of the FRA. This time, with the FRA behind it, Equitrans/MVP made an emergency appeal to the Supreme Court, which ruled in favor of MVP, staying the Fourth Circuit decisions and allowing MVP to resume construction. The same day that Chief Justice John Roberts issued the decision, the lower court heard oral arguments, and later dismissed the petitions for review, ending seven years of legal wrangling with environmental groups.

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