Dive Brief:

• The Federal Energy Regulatory Commission (FERC) on Friday ordered a stop to construction of the 300-mile Mountain Valley Pipeline after a federal appeals court threw out permits that allowed the project to build through less than four miles of national forest land.

• On July 27, the 4th US Circuit Court of Appeals reversed permits granted by the Bureau of Land Management and US Forest Service in response to a challenge from environmental groups. FERC stopped construction because the decision may mean the project will have to be rerouted, it wrote in a letter to the developers.

• FERC last week also separately denied requests to review its initial approval of the project, but warned in its stop-work order that Mountain Valley "may need to revise substantial portions of the project route across non-federal lands, possibly requiring further authorizations and environmental review."

Dive Insight:

The 2 bcf/day Mountain Valley Pipeline has been a flashpoint for debates over how FERC considers environmental impacts and market need for pipelines in its approval process.

FERC approved the project proposed by EQT Corp. in October of last year, sparking rehearing requests from more than a dozen environmental organizations who said FERC did not properly account for the impacts of climate change and environmental degradation along the construction route.

FERC upheld its original approval in a 3-2 decision this June, leaving opponents to challenge the project in court. Late last month, they notched their biggest victory to date when the 4th Circuit tossed permits granted by federal agencies to build the pipeline through 3.6 miles of the Jefferson National Forest.

BLM and the Forest Service did not adequately study the pipeline’s crossing through the forest, the court ruled.

FERC on Friday warned that the ruling may mean that the company may have to relive at least part of that approval process. Depending on the court’s action, the pipeline may need to draw a new route, so the commission stopped work on the existing line to prevent the construction of assets that "ultimately might have to be relocated or abandoned."

"There is no reason to believe that the Forest Service or the Army Corps of Engineers, as the land managing agencies, or the BLM, as the federal rights-of-way grantor, will not be able to comply with the Court’s instructions and to ultimately issue new right-of-way grants that satisfy the Court’s requirements," FERC wrote. "However, Commission staff cannot predict when these agencies may act or whether these agencies will ultimately approve the same route."

Environmental groups cheered the decision, while EQT said in a statement that it disagreed with the stop-work order but would work with federal authorities to finish the project.

EQT is a joint venture of pipeline companies that includes affiliates of NextEra Energy and Consolidated Edison. The company says it expects to finish Mountain Valley in the first quarter of next year, but Reuters reports the new delay could push that date back to the end of 2019.