Court Ruling in Keystone XL Case Will Affect Other Major U.S. Pipelines
(Reuters) — The two biggest U.S. natural gas pipelines under construction are likely facing more delays after an appeals court ruling against the Army Corps of Engineers, analysts say.
The Trump Administration has aggressively pressed ahead with new pipeline construction, but several projects have run into roadblocks due to successful legal challenges charging that the administration is not applying careful regulatory scrutiny.
Last month, a Montana judge ruled the Army Corps authorized permits to cross streams without properly consulting other federal agencies on endangered species. Rather than limit its ruling to the Keystone XL crude pipeline case before the court, the Montana judge questioned the Army Corps' method of authorizing stream crossing under the entire National Permit 12 program.
The U.S. Ninth Circuit Court of Appeals on Thursday left that ruling in place, which will prevent Keystone and other pipelines from using the Army Corps' stream-crossing permit program.
It means the two biggest gas pipes under construction - Dominion Energy Inc's Atlantic Coast and EQM Midstream Partners LP's Mountain Valley - are likely to be delayed by several more months as legal battles continue.
Mountain Valley is not likely to start service until at least the second quarter of 2021, analysts at Height Capital Markets in Washington said on Friday.
"There are too many variables regarding the ... recent Ninth Circuit ruling to accurately determine the potential impact to Mountain Valley's schedule or budget at this time," said EQM spokeswoman Natalie Cox. The current in-service target for the $5.4 billion West Virginia-Virginia pipeline is still late 2020, she said.
Dominion said it was disappointed in the Ninth Circuit decision but still planned to complete the $8 billion Atlantic Coast from West Virginia to North Carolina in early 2022, so long as it can cut trees from November to March.
Height Capital analysts, however, said "Dominion will also likely need to push in-service for Atlantic Coast as this decision will impact (its) ability to clear trees."
The Trump Administration wants the court to overturn the Montana judge's ruling. But the case is not likely to be decided until early 2021, analysts said.
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