Mountain Valley Pipeline Project (MVP) Now Under Federal Criminal Investigation

by Duane Nichols on February 20, 2019

Steep terrain also an erosion issue

Federal criminal investigation of Mountain Valley Pipeline now underway

From an Article by Laurence Hammack, Roanoke Times, February 15, 2019

The Mountain Valley Pipeline is under criminal investigation into possible violations of the Clean Water Act and other federal laws, one of the companies building the project has confirmed.

EQM Midstream Partners, the lead company in the joint venture, made the disclosure in an annual report filed Thursday with the U.S. Securities and Exchange Commission. EQM Midstream was formerly EQT Midstream.

Since construction of the buried natural gas pipeline through Southwest Virginia started last year, crews have repeatedly run afoul of regulations meant to keep muddy runoff from contaminating nearby streams and rivers.

Although Mountain Valley has been named in enforcement actions brought by the Virginia Department of Environmental Quality, and in a lawsuit filed by Attorney General Mark Herring, this week’s filing is the first confirmation of a criminal investigation.

On January 7th, EQM received a letter from the U.S. attorney’s office in Roanoke stating that it and the Environmental Protection Agency were looking into criminal and civil violations related to pipeline construction, according to the SEC filing.

About a month later, a grand jury subpoena was issued “requesting certain documents related to the MVP from August 1, 2018 to the present,” EQM reported in the filing.

“The MVP Joint Venture is complying with the letter and subpoena but cannot predict whether any action will ultimately be brought by the U.S. Attorney’s Office or what the outcome of such an action would be,” it said.

Last month, two attorneys told The Roanoke Times that they had asked the EPA in November to investigate what they called “a substantial body of evidence” gathered by Preserve Bent Mountain, an organization they represent.

Photographs and other documentation from construction sites indicate that work in streams and wetlands continued well past Oct. 5, 2018, when a permit for such activity was suspended by the U.S. Army Corps of Engineers, Charlie Williams and Tom Bondurant said at the time. It was not clear Friday if their request prompted the investigation mentioned by EQM in its SEC filing.

Chainsaw crews began cutting trees in February 2018, clearing a 125-foot wide swath for the 303-mile pipeline through West Virginia and Southwest Virginia. By spring, heavy equipment had moved in to grade land along steep mountainsides and dig trenches for the 42-inch diameter steel pipe.

Herring’s lawsuit, filed on behalf of VA-DEQ and the State Water Control Board, alleges more than 300 violations of erosion and sediment control measures, beginning as early as May 2018. The criminal probe appears to be focused on events that began later in what is expected to be a two-year construction period for the $4.6 billion project.

In their January letter to Mountain Valley, federal prosecutors directed the five companies that comprise the joint venture — along with their contractors, suppliers and other entities involved with construction — to preserve any relevant documents dating back to September 1st. The grand jury subpoena, which came a month later, was for documents going back to August 1st.

Environmental groups and other pipeline opponents were saying last summer that the worst environmental damage was yet to come, when Mountain Valley would begin blasting bedrock and digging trenches along the bottoms of streams to bury the pipe.

A lawsuit filed by the Sierra Club and others challenged a permit issued by the Army Corps of Engineers that allowed stream crossings in West Virginia. The 4th U.S. Circuit Court of Appeals vacated the permit October 2, 2018. Based on that ruling, a second Army Corps permit that covered Southwest Virginia was suspended three days later.

If Mountain Valley continued to work in streams and wetlands after losing its authorization from the Army Corps, that could constitute a criminal violation, Bondurant, a former federal prosecutor, said earlier.

Publicly traded companies are required by law to report any legal proceedings that might affect their operations to the SEC, which is responsible for protecting investors and maintaining public trust in U.S. markets.

In past filings, EQM has documented a number of lawsuits, most of them filed by environmental groups against regulatory agencies that granted permits or certifications to Mountain Valley.Thursday’s filing marked the first time a criminal investigation was mentioned.

On the same day, executives with EQM held a teleconference to discuss 2018 year-end results with financial analysts. They talked about the loss of several permits due to legal challenges, but did not bring up the criminal investigation.

Despite all the regulatory and legal difficulties to date, company officials said the project is still on schedule to be completed by the end of the year, when it will begin to transport natural gas to customers in the Mid-Atlantic and Southeastern regions of the country.

{ 1 comment… read it below or add one }

Maya Weber February 20, 2019 at 10:43 am

DC Circuit knocks down green groups’ challenge to FERC order on MVP gas pipeline

From an Article by Maya Weber, S & P Global (Platts) News Service, February 19, 2019

Summary: **Reliance on affiliate contracts ‘reasonably explained; **GHG considerations upheld; **Eminent domain challenges rebuffed

The DC US Circuit Court of Appeals tossed aside a host of environmental groups’ objections to the Federal Energy Regulatory Commission’s natural gas pipeline reviews, in a case involving the 300-mile, 2 Bcf/d Mountain Valley Pipeline.

The quick-turnaround ruling by a three-judge panel is mostly welcome news for the industry, as the court nixed several arguments recurring in multiple challenges to pipelines being built to move Appalachian gas to market. As an unpublished decision, the ruling has limited impact in other circuits, but sheds light on the thinking of the critical DC panel.

The ruling backed FERC’s reliance on precedent agreements with project affiliates to demonstrate the need for the project and upheld the use of eminent domain even before all permits are in place.

FERC “reasonably explained” that an affiliated shipper’s need for new capacity and its obligation to pay for service are not lessened just because the shipper is affiliated with the project sponsor, the court said (Appalachian Voices, et al., v FERC, 17-1271).


On greenhouse gas considerations, a major matter now dividing FERC commissioners, the court also backed the agency’s approach.

The DC Circuit found FERC satisfied the court’s recent mandate in a decision involving the Sabal Trail pipeline by providing an upper bound estimate of emissions resulting from end-use combustion and by giving several reasons why the petitioners’ preferred metric, the Social Cost of Carbon tool, is not an appropriate tool to assess the significance of climate change impacts. “That is all that is required for National Environmental Policy Act,” the ruling said.

“Not only do petitioners offer no alternative to the Social Cost of Carbon tool for assessing the incremental climate change impacts of downstream [GHG] emissions, but their opening brief also fails to address several of the reasons FERC gave for rejecting the Social Cost of Carbon tool,” it added.

While that helps MVP, FERC midyear last year pulled back from including in its environmental reports such upper bound estimates for downstream emissions, except in cases where the end use of the gas was clear.


William Scherman, a partner with Gibson, Dunn & Crutcher, called the ruling a “good win for the FERC” and said the court is giving a lot of deference to FERC on the GHG issue given that the agency explained its reasoning. He and others found it significant that the panel issued an unpublished decision quickly after the January 28 oral argument. “The panel thought the outcome was quite clear cut and they weren’t breaking any new ground,” he said.

Several analysts saw some downside risks for other projects, however.

There is some risk of successful challenges in cases where the majority at FERC stopped short of calculating a maximum burn GHG estimate and doing a qualitative assessment of impacts, said Gary Kruse of LawIQ, suggesting nine or 10 projects may fall into that category.

“[T]he outcomes may not be as rosy for the two cases that are ahead at the DC Circuit — Dominion New Market and Broad Run, where the commission declined to quantify the GHG emissions for these projects,” added Christi Tezak, of ClearView Energy Partners.

On the other hand, Kruse suggested the decision may put to rest legal debate over whether FERC must use the Social Cost of Carbon, as environmentalists have argued.

The 300-mile MVP pipeline would send about 2 Bcf/d of Appalachian Shale gas to Mid-Atlantic markets. Much of the project is under construction, although some portions have been held up by litigation, including national forest crossings and water crossings. Virginia has also decided to hold hearings on whether to reconsider the water quality certification for the project.


Leave a Comment

Previous post:

Next post: