With Manchin’s Permitting Reform on Ice, Mountain Valley Pipeline Again Faces Uncertain Future

Senator Joe Manchin’s proposed permitting reform would have fast-tracked the troubled gas pipeline. The bill’s failure throws the project back into limbo.
With Manchin’s Permitting Reform on Ice, Mountain Valley Pipeline Again Faces Uncertain Future
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Sections of pipe for the Mountain Valley Pipeline. Franklin County, VA. Credit: Mountain Valley Watch

Sen. Joe Manchin (D-WV) pulled the plug on his permitting reform bill on Tuesday, ending what would have been a major overhaul of bedrock environmental laws that date back to the 1970s. The demise of Manchin’s bill also means that a long-distance fracked gas pipeline named in the proposed reform is once again facing long odds of moving forward.

Framed by Democratic leadership as a companion piece to the Inflation Reduction Act, and as a “dirty side deal” by activists, Senator Manchin’s permitting reform legislation sought to streamline the regulatory and legal process in order to speed up the construction of a variety of energy, minerals, and electric transmission infrastructure projects, both clean and dirty. It would have placed time limits on environmental reviews, shortened the window for legal challenges, curtailed the ability of states to use the Clean Water Act to reject projects, and created a list of vital energy projects in the national interest that would be prioritized.

One of the more controversial elements of Manchin’s package was the explicit greenlighting of the Mountain Valley pipeline (MVP), a long-distance pipeline that would carry fracked Marcellus shale gas from West Virginia through Virginia, with a possible extension into North Carolina.

The legislation attracted strange bedfellows. The American Clean Power Association, a lobbying group for renewable energy companies, supported it, arguing that it would speed up the deployment of solar and wind because it would lead to the construction of more long-distance transmission lines, clearing the way to connect more solar and wind to the electric grid. The bill also had the early backing of the American Petroleum Institute (API), and a draft of the bill from two months ago was stamped with API’s watermark, suggesting the oil industry’s heavy influence over the text.

But the effort to rewrite environmental laws was also fiercely opposed by a broad coalition of progressive Democrats and climate justice organizations. The bill “would represent the most significant loss of protections under the Clean Water Act and the National Environmental Policy Act in the modern history of America,” Sen. Bernie Sanders (D-VT) wrote in a letter to his colleagues on September 23.

Activists rallied in Washington, D.C., just hours before Manchin decided to pull his bill, which was tacked on to a stopgap funding bill to keep the federal government operating past September 30.

Mountain Valley Pipeline Approval Would Set a “Horrible Precedent”

The Mountain Valley pipeline has been bogged down in legal problems, delays, and ballooning costs for several years. Even though the pipeline had not cleared all the regulatory and legal hurdles, it began construction anyway. It was originally expected to be completed by 2018, but has been repeatedly pushed back by federal court decisions.

In the course of construction, the project has racked up more than 500 violations of permit conditions, environmental laws, and regulations, according to a recent report from Appalachian Voices, a regional group opposed to the project.

The original price tag was $3.7 billion, but that has since exploded to at least $6.6 billion. “The Mountain Valley Pipeline project is a financial debacle, and forcing through permits for the project will not change that basic fact,” Suzanne Mattei, an energy policy analyst with the Institute for Energy Economics and Financial Analysis (IEEFA), told DeSmog in an email.

The company claims that it is over 90 percent completed, but local activists say that figure overstates the progress of the project. The most technically complex sections of construction remain, and Appalachian Voices estimates that the project is only 55 percent complete.

As DeSmog reported last year, the pipeline needs to be constructed up and down steep slopes, and across hundreds of streams and rivers. In July 2021, a regional office of the U.S. Environmental Protection Agency that covers Virginia and West Virginia said that the project should not receive a key water permit because of “substantial concerns” about negative impacts on waterways from construction.

Little has changed since then, except that the project has been hit with several more legal setbacks, delaying it another year or more. Manchin has cited the protracted time it takes to build energy infrastructure as evidence of outdated environmental rules and need for the reforms he proposed.

In a highly unusual move, Manchin’s permitting reform went to great lengths to sidestep legal challenges to the pipeline and authorize the project. The bill would have required federal agencies to issue “all approval and permits necessary” for the construction of the project and then prevented any judicial review of those permits. It would have also shifted legal questions regarding the legislation out of the Court of Appeals for the Fourth Circuit — where MVP has repeatedly run into a brick wall — and into the D.C. Circuit Court, where it might receive more favorable treatment.  

“We’ve had the same three judges from the Fourth Circuit 10 times ruling against,” Manchin said in mid-September, referring to MVP’s legal setbacks, according to Bloomberg. “All we are asking for is a good shot at this.”

But critics say that the inability for the pipeline company to obtain permits is an indictment of the project, not state and federal environmental laws.

“The fact that legal and regulatory challenges are a barrier to project completion is not the fault of the environmental laws that protect people’s water and land, but rather the fault of MVP, LLC, who appears either unwilling or unable to comply with the regulations,” Appalachian Voices wrote in their recent report.

When producing the final text, Sen. Manchin’s staff consulted with Equitrans Midstream, one of the owners of the Mountain Valley pipeline, according to the Washington Post. Equitrans reportedly supported changing language to the Clean Water Act, although the Post said it was not clear who initially proposed the tweak.

The aggressive effort on behalf of Manchin to ram through the pipeline project ultimately alienated his Senate colleagues. In a big blow to Manchin’s efforts, Sen. Tim Kaine (D-VA), who is closer to the center of the political spectrum, came out forcefully against the legislation, citing the special treatment granted to MVP.

“The proposal is an effort by an energy consortium to rewrite rules of administrative and judicial process just for MVP because it is unhappy with the rulings of a single court,” Kaine said. “Allowing them to fundamentally change federal law to achieve their goal would surely encourage other wealthy people and companies to try the same. I won’t participate in opening that door to abuse and even corruption.”

Lacking enough votes, Manchin decided to throw in the towel, announcing on Tuesday that he asked Democratic leadership to withdraw the bill.

“Sen. Manchin’s legislation would have set a horrible precedent by circumventing normal process on behalf of a project that has repeatedly failed to meet longstanding environmental standards,” Appalachian Voices Executive Director Tom Cormons said in a statement.

Fate of MVP Uncertain

The demise of permitting reform puts MVP right back to where it was prior to this recent legislative push — a troubled project that is over budget and whose chances of completion are questionable. Equitrans Midstream saw its stock price plunge by more than 8 percent in early trading on September 28, the morning after news broke that Manchin caved.

“This proposal was a desperate Hail Mary pass by the pipeline’s developers, who know how many obstacles remain in their path,” Cormons said. “We will not stop fighting until this harmful project is stopped.”

In a securities filing from early this year, NextEra Energy, a partner in the Mountain Valley pipeline, wrote down the value of its stake in the project by $800 million, stating that it determined the project had a “very low probability” of ever being completed.  

Equitrans Midstream did not respond to a request for comment from DeSmog.

More broadly, the era of massive long-distance gas pipelines could be coming to an end. 

“The outlook for construction of new pipelines in the region is limited. Design and construction take years, and the period required for payoff of those costs may be 20 years or more,” Mattei said. “Given the fast-moving renewable energy sector’s competitiveness, such projects are looking less and less attractive.”

But that may not be the end of the story just yet. Manchin’s decision to scrap his permitting reform bill may be a tactical retreat rather than an admission of defeat. There are two year-end pieces of legislation generally thought of as “must-pass” bills — the National Defense Authorization Act and the omnibus government spending bill. Permitting reform could hitch a ride on those legislative vehicles, and Manchin and others have already hinted at that possibility.

Still, Manchin faces the same problem of cobbling together enough support. If he tweaks the bill in a more industry-friendly way, he will lose more Democratic backing. If he scraps some of the fossil fuel perks and focuses on clean energy, he will be unable to attract Republicans.

An analysis from Oil Change International estimates that the fossil fuel projects that could spring to life because of Manchin’s permitting reform could top 665 million metric tons of CO2 equivalent, five times more than the potential emissions savings that would result from more renewable energy projects that would have also benefited from the bill.

Appalachian communities celebrated the failure of Manchin’s legislation, but remain on guard. “Let the downfall of this bill be a lesson to Senator Manchin, his fossil fuel cronies, and allied politicians: we will no longer be sacrificed for your corrupt interests,” Russell Chisholm, an organizer with Protect Our Water, Heritage, Rights (POWHR), a coalition of Virginia and West Virginia activists, said in a statement. “We are united against all fossil fuel projects and we will ensure the livable and just future that we deserve. Join us or step aside.”

9/30/2022: This article has been updated to clarify that the proposed legislation would have prevented judicial review of MVP permits. 

With Manchin’s Permitting Reform on Ice, Mountain Valley Pipeline Again Faces Uncertain Future
Nick Cunningham is an independent journalist covering the oil and gas industry, climate change and international politics. He has been featured in Oilprice.com, The Fuse, YaleE360 and NACLA.

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