Despite setbacks, Mountain Valley Pipeline inches forward

Published December 2, 2019 by Tim Thornton

The Mountain Valley Pipeline is three years behind schedule, $2 billion over budget and has lost four required permits it needs to continue construction. The 4^th U.S. Circuit Court of Appeals stopped work on the pipeline to review a lawsuit over one of those permits, and another suit over environmental violations ended with MVP paying a $2.15 million civil penalty.

Nevertheless, the proposed 303-mile, 42-inch natural gas pipeline, which would begin in northern West Virginia and cross Virginia’s Giles, Montgomery, Franklin and Pittsylvania counties, will likely be completed — eventually — according to analyst Roger Conrad, founder and editor of Conrad’s Utility Investor.

“The economics of the pipeline for the developers is still pretty good,” Conrad says. “The pipeline is primarily, like the Atlantic Coast Pipeline, to feed utilities. … Those are pretty solid customers to have.”

Those utilities are affiliated with some of the pipeline’s owners — NextEra Capital Holdings, Con Edison Transmission, WGL Midstream, EQM Midstream Partners and RGC Midstream. Pittsburgh-based natural gas limited partnership EQM is set to operate the pipeline.

The original cost estimate for the pipeline, which was supposed to begin service last year, was $3.5 billion. The most recent estimates have it opening in 2021 and costing up to $5.5 billion.

“The weak link of the MVP is probably EQM Midstream,” Conrad says. “It’s possible that if they were not able to keep up their end of funding it, that you’d see NextEra or one of the other partners step up and put more money in.”

Consolidated Edison capped its funding in November, and EQM, which reported a $10.5 million loss in the third quarter of 2019, plans to cover $86 million of the shortfall, increasing its investment in the pipeline to $2.7 billion.

Diana Christopulos, a member of the Appalachian Trail Conservancy President’s Leadership Council and president of the Blue Ridge Land Conservancy, questions the need for the MVP and has fought the pipeline for years. She admits the odds favor the MVP, but she doesn’t think its completion is inevitable.

“The question becomes how long do they want to keep throwing this money around and how long do the investors want to keep loaning them money?” she says. “It is death by a thousand cuts. You never know when you’ve got to the thousandth one because they’re little.”