Federal energy regulators last week approved a three-year extension for Mountain Valley Pipeline to build a planned 75-mile offshoot of its main natural gas pipeline that would run from Pittsylvania County to North Carolina.

The Federal Energy Regulatory Commission gave Mountain Valley until June 18, 2026 to complete the Southgate extension, despite complaints that the project would cause air and water pollution and is not necessary.

Progress on the Southgate extension has been tied to Mountain Valley’s progress on the 303-mile mainline that will deliver natural gas from the Utica shale fields in West Virginia into Pittsylvania. When FERC approved the offshoot in 2020, it made that approval conditional on Mountain Valley receiving the necessary permits for the mainline.

For a while, that left Southgate mostly dormant as the larger pipeline struggled to overcome a series of lawsuits and repeated court rulings against its completion. But in June, the federal Fiscal Responsibility Act fast-tracked completion on the mainline by including a provision that mandated approval of the environmental permits tied up in lawsuits and prevented any further litigation against it.

In June, Mountain Valley argued to FERC that the Fiscal Responsibility Act satisfied the requirements of the commission’s conditional approval of the Southgate project. In issuing the recent extension, the commission said Mountain Valley hadn’t acted in bad faith by concentrating on the mainline in lieu of the extension.

What has been done on the Southgate extension?

Not much. Construction on the project has not started.

Before construction on the extension can start, FERC needs to issue a notice to proceed after confirming the project has received all state and federal permits it needs. Two state permits, an air permit from Virginia and a water permit from North Carolina, are still outstanding.

Virginia previously rejected an air permit sought by the company to build the Lambert compressor station in Pittsylvania County, which would repressurise gas from the mainline in order to send it the rest of the way into Rockingham and Alamance counties in North Carolina. 

The compressor station was proposed to go near Chatham. The State Air Pollution Control Board rejected the air permit in December 2021 on the grounds that it didn’t meet the “fair treatment” requirements of the state’s 2020 Environmental Justice Act. The board noted that 32% of the population surrounding the site were Black, while Black people made up 20% of the state’s population.

The rejection led to 2022 legislation that transferred permit approval authority from the air board to the Virginia Department of Environmental Quality.

North Carolina has denied Southgate a necessary water permit twice, citing “unnecessary and avoidable impacts to surface waters and riparian buffers.” 

Everything it wasn’t able to get before: The Virginia and North Carolina permits, as well as a federal permit from the U.S. Army Corps of Engineers required for projects that release dredged or fill material into waterways.

Shawn Day, a spokesperson for the project, said, “At the appropriate time, Mountain Valley intends to pursue all necessary permits and authorizations to complete construction of the MVP Southgate project.”

What else needs to be done?

Mountain Valley needs to consult with the U.S. Fish and Wildlife Service to see if Southgate will have any impacts on the long-eared and tri-colored bats, which have been listed as endangered since the initial approval.

An earlier environmental analysis found the project was not likely to adversely affect bat species, but the addition of the new species requires a second look.

FERC said last week it could revisit the project’s broader environmental analysis prior to allowing Mountain Valley to start construction if U.S. Fish and Wildlife determines there would be an adverse impact.

The company will also need to reopen eminent domain proceedings in North Carolina if it continues to pursue private lands for the project. The company withdrew from those proceedings in 2022, and the one-year deadline to resume the cases has passed.

Hundreds of millions and to be determined.

The project’s website lists a price tag of $480 million, including $68 directly spent in Virginia and $113 directly spent in North Carolina. 

As for timing, Day, the project’s spokesperson, said: “There is no update or estimate for construction start or in-service dates available at this time.”

Some local and environmental groups have opposed Southgate because of the pollution the compressor station would produce and because they say the need for natural gas is diminishing as concerns over climate change mount and the country moves toward renewables.

The Pittsylvania branch of the NAACP argued Mountain Valley has done “nothing” since the air permit denial in December 2021 to address the findings of the Virginia air board.

Virginia regulatory board denies Mountain Valley Pipeline compressor station permit

“If approved, MVP’s compressor station would operate near our home,” wrote NAACP branch member Anderson Jones in a letter to FERC. “Our 57-acre loblolly tree farm has been in my family for almost a century. Our farm and the Lambert site are zoned for agriculture, not industry. We want to protect our home and our heritage for our children and our grandchildren.”

Other arguments have focused on concerns over greenhouse gas emissions, the primary driver of climate change. 

In a letter signed by Democratic U.S. Reps. Jennifer McClellan and Bobby Scott of Virginia, 22 members of Congress told FERC that “if built, this pipeline would lock homes and businesses in the Southeast into the long-term use of natural gas during a critical moment in which we must transition away from fossil fuels to avoid the worst impacts of climate change.”

What are the arguments for the project?

Supporters say the project is needed for economic growth and that natural gas is still a backbone of the U.S. energy industry.

Mountain Valley Pipeline has estimated the project could produce $10.4 million in tax revenue during construction and about $4.6 million in continued tax revenue during operation. The project could employ up to 570 people in Virginia and another 1,130 in North Carolina.

Virginia Gov. Glenn Youngkin has argued natural gas is a “bridge fuel” needed for reliability as the state works to decarbonize its grid by midcentury.

“In general, it is my position that a healthy natural gas supply and delivery system benefits all Virginians,” Youngkin wrote in a letter to FERC supporting the project extension.

Barry DuVal, president and CEO of the Virginia Chamber of Commerce, said that by increasing the gas supply, the project “will likely result in cleaner, more efficient power generation and will help ensure that Virginia lowers its already competitive electric rates, a factor considered by businesses looking to relocate to Virginia.  Further, this transformative project could encourage the development of additional energy infrastructure, which could advance business development and long-term economic growth in the region.”