Equitrans: Appeals Court Again Blocks Mountain Valley Pipeline Project

The U.S. Court of Appeals for the 4th Circuit has halted the Mountain Valley Pipeline, or MVP, yet again. In a one-sentence ruling, the panel on July 10 ordered the project to halt construction while the court reviews a request by environmental groups challenging the Biden administration’s approval of the pipeline. The ruling is perhaps more surprising as the Fiscal Responsibility Act, signed into law in June, had specifically removed the 4th Circuit’s jurisdiction over the MVP project. Equitrans ETRN commented that the court ruled before receiving a full briefing from the federal government and the pipeline. An emergency appeal to the U.S. Supreme Court is now possible, but the delays introduced by the ruling now threaten a 2023 start-up state for the MVP. The timing of the decision seems unusual, as the U.S. Supreme Court just wrapped up its calendar and won’t resume work until October 2023 under a normal schedule.

For the time being, we are maintaining our $15 per share fair value estimate, our 2023 start-up date, and our narrow moat rating for Equitrans. The political condemnation of this ruling from the legislation’s backers, including Sen. Joe Manchin, D-W.Va., was swift, raising the chances of a speedy resolution. Aside from the matter of jurisdiction, as the legislation specifies that MVP issues should be handed by the U.S. Court of Appeals for the District of Columbia, any appeal to the U.S. Supreme Court would likely focus on the legality of the legislation itself and its congressional approval, versus any MVP-specific issues. While we are not lawyers, we doubt the U.S. Supreme Court wants to overrule legislation that was voted into law by Congress.