The U.S. Court of Appeals for the Fourth Circuit on Wednesday lifted a stay of Mountain Valley Pipeline LLC’s (MVP) water crossing permit in West Virginia, providing further good news for sponsors recently beset by unfavorable decisions handed down by the court.

The Fourth Circuit granted a motion filed by the U.S. Army Corps of Engineers to lift a stay of the Nationwide Permit 12 (NWP 12) it issued. The Army Corps issues the NWP 12, which allows contractors to trench through streams and rivers, under Section 404 of the Clean Water Act.

In June, the Fourth Circuit granted a motion to stay MVP’s NWP 12 pending a ruling on a legal challenge brought by the Sierra Club and other groups. The environmental groups had challenged the validity of MVP’s NWP 12, arguing that the project could not meet a special condition in West Virginia requiring all stream crossings be constructed within 72 hours.

After voluntarily suspending and then reinstating the NWP 12 with modifications relating to four river crossings, the Army Corps told the Fourth Circuit in a July 11 motion that it had addressed the permit’s deficiencies and asked for the stay to be lifted.

“Upon consideration of submissions relative to the government’s motion to lift the stay, the court grants the motion,” the Fourth Circuit ruled Wednesday.

The order comes as FERC has effectively lifted a sweeping stop work order imposed on the 303-mile, 2 Bcf/d project that attempted to address the Fourth Circuit’s decision to vacate separate federal approvals from the U.S. Forest Service and Bureau of Land Management (BLM) covering a proposed crossing of the Jefferson National Forest along the Virginia/West Virginia border.

With the orders issued by the Federal Energy Regulatory Commission and the circuit court, “MVP is now able to return approximately 1,000 workers who have been suspended from their duties on the project,” the operator said Thursday. “As we continue with safe and responsible construction activities along the vast majority of the route, we will coordinate with the agencies to address the court's concerns with the federal land permits. We appreciate the collaborative and concerted efforts by all state and federal agencies and look forward to the in-service of this important infrastructure project.”

Hurdles Remain

The recent setbacks led MVP to delay the target start-up date from early 2019 to 4Q2019, and the project is still not out of the regulatory woods, so to speak.

“The first hurdle to the project’s completion is the prohibition on work on the 3.6 miles of the route through the Jefferson Forest until both the Forest Service and the BLM address the Fourth Circuit’s ruling with revised permits,” ClearView Energy Partners LLC told clients Thursday. “...As long as the FERC controls the construction authorization -- that is, absent any court order enjoining FERC construction orders pursuant to the certificate -- work could restart at FERC’s discretion even if project opponents take issue with the revised documents and seek judicial review.”

Meanwhile, MVP also faces threats from stay requests filed with the U.S. Court of Appeals for the D.C. Circuit.

“Prior to the D.C. Circuit’s August 2017 vacatur of the permits for Sabal Trail and related projects, we would routinely assign very low (less than 5%) odds that stays and/or construction injunctions would be granted,” Washington, DC-based ClearView wrote. “Now, we think it appropriate to assign 40-45% odds to the possibility that the D.C. Circuit -- given the vacatur precedent in the Sabal Trail case -- could grant these stays.”

A FERC Divided

Another potential complication is  FERC, as commissioners appear divided on MVP. Democrats Richard Glick and Cheryl LaFleur penned dissenting opinions on the project’s certificate order and an order denying rehearing requests. In an unusual move, Glick and LaFleur issued a joint statement Wednesday opposing FERC’s delegated order to allow construction to resume along most of MVP’s route.

“We have significant concerns with today’s decision to allow construction to resume while required right-of-way and temporary use permits remain outstanding,” Glick and LaFleur said. “...In the future, when a court remands or vacates a required federal authorization...we believe the decision regarding whether and how to proceed with the pipeline should be made by the Commission rather than its staff.”

FERC Chairman Kevin McIntyre went on Twitter to counter his colleagues and voice his support for continuing construction on MVP to “avoid long-term adverse erosion and sedimentation impacts. “For more than 15 years,” directors of FERC’s Office of Energy Projects “have been using delegated authority to stop and resume construction under a succession of FERC chairmen, all of whom have experience addressing complex pipeline issues,” McIntyre tweeted.

“In the case of MVP, BLM confirmed the approved route and I am confident that our federal partners, with whom we are in close consultation, will address any outstanding sedimentation analysis issues for the 3.5-mile crossing on federal land. Delaying restoration of approximately 150 miles of cleared land would be unnecessary and environmentally irresponsible.”

The once largely apolitical Commission has seemed anything but in recent months, just as the departure of Robert Powelson leaves the agency’s leadership divided evenly along party lines.

“It is difficult to overstate how deeply out of character this series of events is” for FERC, which is “frequently one of the most nonpartisan and fact-oriented federal agencies,” analysts with Height Capital Markets said in a research note Thursday. “It is a very public display of the political pressure on FERC and the Democratic minority’s willingness to push back on the Republican leadership.”

While MVP may have received a favorable decision from FERC this week, “in the longer-term we think energy infrastructure faces an increasingly difficult and partisan road at FERC,” Height said.

MVP, a joint venture of EQT Midstream Partners LP, NextEra US Gas Assets LLC, Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC, is designed to deliver Marcellus and Utica shale gas to markets in the Southeast and Mid-Atlantic via an interconnect with the Transcontinental Gas Pipe Line in southwestern Virginia.