By John Kruzel
WASHINGTON (Reuters) - The U.S. Supreme Court on Thursday removed an obstacle to completing the long-delayed Mountain Valley Pipeline, dealing a blow to environmental groups opposed to the West Virginia-to-Virginia pipeline led by energy company Equitrans Midstream (NYSE:ETRN).
The justices granted Mountain Valley Pipeline LLC's request to lift stays imposed by a lower court that had halted construction of a final short section of the 303-mile (488-km) natural gas pipeline. That section is a 3.5-mile (5.6-km) corridor through the federally owned Jefferson National Forest.
The $6.6 billion project has been tangled in numerous court fights since construction began in 2018. Mountain Valley is owned by units of Equitrans Midstream, the lead partner building the pipeline, as well as NextEra Energy (NYSE:NEE), Consolidated Edison (NYSE:ED), AltaGas (TSX:ALA) and RGC Resources, among others.
Shares of Equitrans rallied on the news, gaining 9.4% to $10.13 a share.
The Richmond, Virginia-based 4th U.S. Circuit Court of Appeals earlier this month had blocked construction of the final unfinished section while it reviewed the project's federal approvals.
The pipeline received authorization from the Federal Energy Regulatory Commission in June to restart construction. The pipeline is considered key to unlocking more gas supplies from Appalachia, the biggest shale gas-producing basin in the United States. It aims to deliver gas to existing pipelines and service other customers in the U.S. mid-Atlantic and Southeast regions.
Environmentalists have said that the project would harm soil and water quality in the forest and increase the use of natural gas, a leading fossil fuel and greenhouse gas emitter.
The project, which was initially projected to be finished by late 2018, is one of several pipelines that have been delayed or canceled amid regulatory and legal fights with environmental and local groups in recent years.
Approval of the Mountain Valley project was included in the debt limit deal struck in May between President Joe Biden, a Democrat, and House of Representatives Speaker Kevin McCarthy, a Republican. Its inclusion was championed by Democratic Senator Joe Manchin of West Virginia, a key vote in the Senate and one of the largest recipients in Congress of donations from fossil fuel companies.
Manchin, who filed a brief urging the justices to lift the construction delay, praised the court's action.
“The Supreme Court has spoken and this decision to let construction of the Mountain Valley Pipeline move forward again is the correct one," he said. "I am relieved that the highest court in the land has upheld the law Congress passed and the president signed.”
Mountain Valley told the justices in a filing that the 4th Circuit lacked authority to stay the construction because the debt deal approved by Congress had given final approval to the project and "expressly stripped all courts" of jurisdiction to review decisions by federal agencies over its approval.
The Biden administration filed a brief to the justices supporting the pipeline developers.
Environmental groups opposed to the project had argued that Congress exceeded its authority by enacting a law that "was tailored to mandate victory" for the pipeline developers and federal government.
Jared Margolis, a lawyer with the environmental rights organization Center for Biological Diversity that represented a slate of environmental groups in the case, expressed disappointment over the court's action, saying it "will cause harm to sensitive streams and imperiled wildlife from a disastrous project that should never have been built."