The Federal Energy Regulatory Commission will defend allowing the Mountain Valley Pipeline to continue some construction, despite allegations the agency failed to consider the project’s necessity, in oral arguments before the D.C. Circuit on Thursday.
Environmental groups took FERC to court after it granted the pipeline’s request in 2020 to resume work on parts of the project where it has valid permits. FERC said it didn’t need to complete additional environmental review, because it wasn’t making substantial changes to the project proposal.
The commission said pipeline construction and restoration was in the best interest of the environment and landowners. Even though some permits were later invalidated, the commission was still empowered to allow construction generally, the agency told the U.S. Court of Appeals for the D.C. Circuit.
The Sierra Club, Appalachian Voices, and four other environmental groups told the court that the pipeline’s erosion and sediment controls were “proven woefully inadequate in practice.” FERC’s approval violated a requirement that MVP have all federal authorizations in place before starting construction, the groups argue.
In addition to allowing MVP to continue construction, FERC granted a two-year extension to complete the project. The pipeline company “diligently pursued its necessary permits” before starting construction and did so even after some permits were tossed, the agency says. MVP’s five-year timeline to complete construction follows other infrastructure projects approved by the commission, according to the agency.
The environmental groups argue FERC ignored evidence showing the pipeline is no longer needed. The entity that holds the majority of the capacity contracts says it wants to get out of the contracts, the groups say.
Three shippers who contracted to use the pipeline say they still need the project, FERC argues. The shipper contracting for the greatest share also said the same, according to the agency.
“No shipper, potential customer, or state regulatory commission filed comments claiming otherwise,” FERC says.
Mountain Valley Pipeline, Equitrans, and other entities that intervened in the case say the need for the project “has grown since cancellation of the Atlantic Coast Pipeline.”
‘Business as Usual’?
Carolyn Elefant, an attorney with her own energy practice who started her career at FERC, told Bloomberg Law that a decision in favor of FERC would be “business as usual.” But a ruling in the Sierra Club’s favor “could be very significant.”
“Companies that embark on a project would need to be very confident that they could finish within two years, since if circumstances were to change, they might not be able to get an extension,” she said.
Elefant said that she doesn’t think a ruling for the petitioners would cause problems for a pipelines for which there is bona fide need. But for “marginal pipelines” like MVP, where “the bulk of subscribers were affiliates and need was arguably manufactured, there could be more hurdles,” Elefant said.
A ruling in the agency’s favor would be a win for the pipeline after several weeks of legal setbacks. The U.S. Court of Appeals for the Fourth Circuit tossed the federal government’s approval of a route through Jefferson National Forest in Virginia and West Virginia in January. The court later rejected the U.S. Fish and Wildlife Service’s finding that the entire project wouldn’t risk protected species.
The full court rejected petitions for review of those decisions filed by the pipeline.
Mountain Valley Pipeline representatives declined to comment ahead of the argument. The environmental groups didn’t respond to a request for comment.
Benjamin Luckett, of Appalachian Mountain Advocates, will argue on behalf of the environmental groups. FERC attorney Matthew Estes will argue on behalf of the agency. Jeremy Marwell of Vinson & Elkins LLP will argue on behalf of Mountain Valley Pipeline.
Chief Judge Sri Srinivasan and Judges Patricia A. Millett and Robert L. Wilkins will be on the panel.
The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.
The case is Sierra Club v. FERC, D.C. Cir., No. 21-01040, 4/7/22.