The nearly complete, 304-mile Mountain Valley natural gas pipeline project hit a new snag when a federal court on April 3 rejected a water quality permit for construction that had been issued by the West Virginia Dept. of Environmental Protection.

The unanimous decision by a Richmond., Va., three-judge appeals court panel found “arbitrary and capricious” the state agency’s conclusion that “in-stream construction would be conducted in a manner which will not violate state water standards.” 

West Virginia was authorized to issue the permit under the federal Clean Water Act for the $6.2-billion pipeline, which would carry gas from the state's Marcellus Shale region through Virginia to southeastern U.S. markets.

Construction began in 2018 on the 42-in.-dia line, of which nearly 200 miles is in West Virginia. Work has been on hold since 2021 and cannot restart until the state agency reconsiders the permit.

The approval has four problems, the federal court said. It did not address Mountain Valley’s past violation history and did not include conditions requiring compliance with the construction general permit or stormwater prevention plans. It also did not adequately explain why requirements for some location-specific reviews were absent or justify its reliance on the U.S. Environmental Protection Agency “upland” construction general permit.

However, the same appellate court upheld in March a Virginia water permit needed for stream crossings there, despite opponents' contention that the state did not properly review the project's water quality impact.

Pipeline owner Equitrans Midstream, said in a statement that it will continue to work collaboratively with state and federal regulators to finish the project—which it said was 94% complete. CEO Thomas Karam had told investors on a February earnings call that he hoped construction would finish in 2023,

“MVP has undergone unprecedented environmental review, as it is being built to higher environmental standards than any similar project that has ever been built in West Virginia or Virginia,” the company said in its statement..

Environmental groups and landowners asked the court to vacate the permit in 2022, citing 139 state stormwater permit violations and multiple state water quality standard violations that resulted in $550,000 in fines against the project.

“We know that MVP can’t be trusted to comply with the most basic standards of reasonable conduct,” Patrick Grenter, director of the Sierra Club Dirty Fuels Campaign, said in a statement.

West Virginia Sen. Joe Manchin found the court’s decision “infuriating,” noting the project has been through three rounds of water quality permitting. 

Federal permit reform legislation he introduced last year included a mandate to complete the Mountain Valley project and to exempt its permits from judicial scrutiny, but that bill failed in the Senate.

Ten Republicans in the House of Representatives also backed an amendment to that chamber's just passed energy and permit reform bill to guarantee the pipeline is "constructed expeditiously," but the legislation, as written, is not likely to gain Senate approval.