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Manchin Side-Deal Seeks to Advance Mountain Valley Pipeline

·4 min read

(Bloomberg) -- A $6.6 billion US natural gas pipeline project that’s been repeatedly stalled over environmental approvals may get fast-track approval under a side-deal reached between Senate Majority Leader Chuck Schumer and Senator Joe Manchin.

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The agreement would see Congress move forward on separate permitting reform legislation with the blessing of House Speaker Nancy Pelosi and the White House.

According to a summary of the accord, a copy of which was obtained by Bloomberg, relevant agencies would be required “to take all necessary actions to permit the construction and operation of the Mountain Valley Pipeline and give the DC Circuit jurisdiction over any further litigation.”

Construction on the 303-mile (488-kilometer) Mountain Valley Pipeline, which crosses Manchin’s home state of West Virginia, has stalled after a federal court in January rejected a permit to cross a national forest following a challenge by environmentalists.

The project is years behind schedule and its budget has more than doubled. Its completion would provide drillers in the gas-rich Appalachian Basin with much-needed takeaway capacity.

But Mountain Valley has become a controversial and high-profile project, emblematic of the kind of infrastructure touted by the energy industry but that climate change activists say locks in future consumption of fossil fuels. Similar proposed pipelines from Dominion Energy Inc., Duke Energy Corp. and Williams Cos. have been scrapped amid fierce opposition from environmental groups.

“As more details of this deal emerge, we will rigorously analyze its impacts and oppose any attempt at silencing communities in the name of ‘cutting red tape,’” Abigail Dillen, president of Earthjustice, an environmental law non-profit group, said in a statement.

Senator Shelley Moore Capito, a Republican from West Virginia who’s skeptical of the deal, is demanding to see actual legislative language. “If Democrats have agreed to pass strong permitting reform, then they should release exact legislative text -- not a framework -- for consideration and enactment before the Senate considers their partisan reckless tax-and-spending spree bill,” Capito said in an emailed statement.

Shares of Equitrans Midstream Corp., which operates Mountain Valley, rose 8.6% as of 8:45 a.m. in pre-market trading in New York.

Schumer has said the permitting deal would move separately from the tax and climate agreement with Manchin. The deal also puts a two-year time limit on environmental reviews for large projects and one year for smaller ones.

The accord could benefit clean energy projects, too. The approval of long-sought transmission lines needed to bring power from far-flung renewable projects would be expedited as well, according to the summary. It would grant the Energy Department the authority to issue a national interest determination, giving the Federal Energy Regulatory Commission the authority to issue a construction permit.

Under the agreement, the president would be able to designate a list of at least 25 “high-priority energy infrastructure projects” for which permitting would be prioritized, according to the summary. A “balanced-list” of projects would be required, covering areas such as critical minerals, nuclear, hydrogen, fossil fuels, electric transmission, renewables, and carbon capture, sequestration, storage, and removal.

The deal also aims to expedite Clean Water Act permits needed for pipelines and other projects. Some states such as New York have denied water quality certifications for some energy projects, effectively thwarting pipelines.

The permitting side deal was key for Schumer to get Manchin on board with $370 billion in climate and energy spending paid for with corporate tax increases. But there’s no guarantee the effort, which will need Republican votes to pass, will succeed.

Past congresses and multiple presidents have tried to streamline permitting of energy and infrastructure projects -- with mixed results.

Congress created a program to coordinate interagency reviews of projects and make the permitting process more transparent as part of a highway bill in December 2015. Two years ago, former President Donald Trump issued an executive order directing agencies to hasten their reviews. And in 2011, former President Barack Obama directed agencies to expedite reviews for some high-priority infrastructure projects, with the scrutiny to be completed in just 18 months.

But short-circuited environmental analysis in the name of speed has been challenged in court and found to fall short of requirements under the National Environmental Policy Act. Major transportation and energy projects often undergo two layers of analysis under the law, with reports subject to public comment over many months.

And Biden is actively strengthening those NEPA reviews that had been undercut by Trump -- to the consternation of some renewable developers as well as oil companies. The bolstered environmental analysis of major energy and infrastructure projects could complicate Manchin’s goal of permitting speed.

Schumer said the permitting bill would be attached to a Sept. 30 must-pass annual spending bill needed to keep the government open. The permitting changes aren’t eligible for the fast-track process Democrats are using for climate spending to bypass a Republican filibuster because permitting isn’t considered a fiscal bill.

(Updates with comments from environmental group, Republican senator in seventh, eighth paragraphs)

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