Dive brief:
- The opening of the Mountain Valley Pipeline has been delayed until next year and its price tag has risen again from $6.6 billion to $7.2 billion, according to a recent filing by the project’s owner. The 303-mile-long methane pipeline is scheduled to be completed in the first quarter of 2024, Equitrans Midstream Corp. said in a report to the Stock Exchange and Securities Commission.
- When the project was first announced in 2014, it was expected to cost around $3.5 billion and be completed by the end of 2018, but has since experienced a series of delays. A joint venture consisting of Equitrans Midstream, NextEra Energy, Consolidated Edison, AltaGas and RGC Resources is building the controversial pipeline.
- Equitrans Midstream Corp. said in its SEC report that “unforeseen factors have substantially affected the pace of construction and account for more than half of the increase in estimated project costs.”
Diving knowledge:
The Mountain Valley pipeline project has been stalled by regulatory hurdles and numerous lawsuits over the years. Environmental groups have argued it will disrupt forests, waterways and endangered species, and represents an investment in fossil fuel infrastructure at a time when the country needs to shift to renewable energy to prevent the impacts of change climatic
However, litigation against the bill has subsided since Congress included the language in its own May debt ceiling deal limit judicial review and order federal regulators to grant all permits within weeks. In July, a federal appeals court ordered a halt to work on a 3-mile section of Virginia’s Jefferson National Forest while it reviewed a challenge from environmental groups, but later that month the The Supreme Court gave a victory to the developers which allowed construction to resume.
However, the project is still stalled due to difficulty in finding contractors, difficult terrain and other factors.
“The ramp-up of the MVP contractor workforce has been slower and more difficult than expected, due to multiple teams opting out of work on the project based on the history of outages construction related to the courts and the inability to recruit teams with necessary and sufficient experience.”, according to the file.
The cost increase is attributable to factors including “certain financial arrangements with contractors, labor and fuel inflation and enhanced safety and security measures.” He also cited “challenging terrain and geology” to explain the higher price and delays.
Earlier this month, Equitrans reached an agreement with the federal Pipeline and Hazardous Materials Safety Administration expediting online inspections and cathodic protection surveys, Reuters reported. When completed, the underground line will run from northern West Virginia to central Virginia, where it will connect with the Transco pipeline.
