Importance of the Mountain Valley Pipeline Southgate Extension to North Carolina

Thanks for joining us this Saturday. We hope you enjoyed some down time during what’s usually a slow holiday week.
 
Last September, we wrote about North Carolina’s reliance on a single natural gas pipeline for its entire supply – a circumstance that’s rather unique, especially for a state of our size.
 
The Atlantic Coast Pipeline would have remedied our lack of energy supply redundancy, but that project was scrapped years ago after protracted litigation and delays.
 
Another option, the Mountain Valley Pipeline (MVP) and its proposed Southgate extension into North Carolina, seemed at that time on the verge of suffering a similar fate.
 
But the landscape changed in the past two months, largely due to the force of will of one man: West Virginia Sen. Joe Manchin, a Democrat.
 
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“I am proud to announce that we have finally secured the completion of the Mountain Valley Pipeline and have done so with broad, bipartisan support,” Manchin announced on June 1.
 
The “mainline” portion of the MVP will deliver natural gas from the Marcellus and Utica shales into southern Virginia. There, an extension called MVP-Southgate would jut into North Carolina, offering the state a second natural gas pipeline.
 
Even a temporary shutdown of the Transco pipeline, which now carries nearly all of North Carolina’s natural gas supply, would prompt “immediate disruption not just to our electric generation, but also our local distribution companies providing gas for industrial purposes or for homes,” Duke Energy Senior Vice President Nelson Peeler told a legislative committee in 2021.
 
Manchin made his victory announcement because, after a yearlong effort, he finally delivered an act of Congress to halt the environmental litigation plaguing the project and to approve all federal permits. The second-to-last page of the debt ceiling legislation President Joe Biden signed into law reads:
 
Congress hereby ratifies and approves all authorizations, permits, verifications, extensions, biological opinions, incidental take statements, and any other approvals or orders issued pursuant to Federal law necessary for the construction and initial operation at full capacity of the Mountain Valley Pipeline… Notwithstanding any other provision of law, no court shall have jurisdiction to review any action [approving the project].
 
Just last week, the U.S. Army Corps of Engineers approved the final permit for the mainline portion of the MVP. Construction will resume imminently, and natural gas may flow through the pipeline by year’s end.
 
In a few paragraphs, Congress swept away a decade’s worth of lawsuits and dozens of multiyear permitting reviews. Manchin secured the provision in exchange for his critical vote last year to pass the so-called Inflation Reduction Act, a critical piece of Biden’s domestic agenda.
 
Manchin’s machinations may have a major impact on North Carolina. The proposed MVP-Southgate extension would deliver natural gas across the Virginia border into Rockingham County and terminate in Alamance County, solidifying the energy supply redundancy North Carolina needs.
 
For the past several years, North Carolina’s Department of Environmental Quality used the mainline delays as a crutch to withhold permits for the Southgate extension. “In the face of the significant uncertainty surrounding MVP’s Mainline project,” DEQ wrote in 2021, “authorizing the water quality impacts from MVP’s Southgate Project would be inconsistent with the avoidance and minimization requirements in North Carolina’s” regulations.
 
DEQ’s maneuvering around the project also indirectly led to the state Senate’s first and only formal rejection of a gubernatorial cabinet secretary nomination. At her 2021 confirmation hearing, Cooper’s nominee to lead DEQ, Dionne Delli-Gatti, said she was unaware of the state’s natural gas energy strategy and had only a cursory knowledge of MVP-Southgate. Two days later, DEQ issued its permit denial.
 
In explaining the Senate’s rejection of Delli-Gatti’s confirmation, Sen. Norm Sanderson said, “Ms. Delli-Gatti could not articulate the Cooper Administration’s natural gas strategy, which she would presumably lead or at least be heavily involved in, nor was she informed about a major pipeline that her own agency rejected 48 hours later. Given the importance of this issue, that’s disqualifying.”
 
With the mainline project now back on track, MVP on June 15 asked the Federal Energy Regulatory Commission to extend until 2026 the timeframe for MVP-Southgate to be completed. Manchin’s legislation, then, will soon put renewed pressure on North Carolina’s environmental regulators to approve the pipeline.
 
Manchin’s provision reaches beyond just the Mountain Valley Pipeline. It also amends the permit review process for all major infrastructure projects. The measure designates just one federal agency to have final authority on environmental reviews, and requires conclusion of those reviews within two years. Right now, multiple federal agencies manage their own separate review processes for the same project, which can linger on for more than four years.
 
The new law also restricts environmental reviews to studying “reasonable foreseeable” impacts, rather than the sweeping, long-term potential impacts analyzed now.
 
Policymakers have pledged to continue working on permitting reform. They may well usher in an end to the era of yearslong litigation and bureaucracy that has muddled infrastructure projects for decades.