The $6.6bn Mountain Valley natural gas pipeline can have up to four more years to secure new federal permits and begin service, the US Federal Energy Regulatory Commission (FERC) said in an order Tuesday.
US midstream company Equitrans Midstream is aiming to finish the pipeline by the second half of 2023. But the 2 Bcf/d (57mn m³/d) pipeline now has until 13 October 2026 to start service, offering more time to resolve any potential permitting issues that could lead to further delays.
The 300-mile (483km) pipeline was initially set to begin service by the end of 2018 and cost $3.5bn, but permitting delays have repeatedly held up construction and increased costs. FERC said an extension was warranted because the pipeline's developers made a "good faith effort" to start service on time yet faced delays that were out of its control.
The pipeline, if completed, would boost takeaway capacity in the Appalachian area where natural gas prices that this month have traded at a nearly $1/mmBtu discount to the Henry Hub benchmark. The additional supply from the pipeline would help to ease domestic natural gas prices that over the last year have doubled to $9/mmBtu, industry officials say.
The Mountain Valley Pipeline could benefit from an yet-to-be-released permitting bill that US senator Joe Manchin (D-West Virginia) is attempting to enact by the end of next month, potentially by including it as part of a must-pass bill to keep the federal government funded after 30 September.
Manchin has said the permitting bill, which Democratic leaders pledged to support as part of negotiations around a new climate law, would ensure the approval of the Mountain Valley Pipeline. But the permitting bill still faces a tricky path to enactment and winning the required 60 votes in the US Senate to avoid a filibuster.
The permitting bill faces opposition not just from progressive Democrats, who worry it would fast-track fossil fuel infrastructure, but also Republicans who are reluctant to reward Manchin after he voted for the climate law. Many environmental groups also oppose the permitting bill, despite expectations it could also support wind and solar projects.
"All this legislation will do is weaken environmental protections that are needed to protect communities, wildlife, and our public lands and waters from the devastation of toxic fossil fuel projects," the Center for Biological Diversity and hundreds of other environmental groups wrote to congressional leaders today.
