Manchin Side-Deal Text Lacks Mention of Mountain Valley Pipeline

A side deal between Sen. Joe Manchin and Senate Majority Leader Chuck Schumer focused on permitting overhaul doesn’t specifically cite the Mountain Valley Pipeline, according to draft legislative language obtained by Bloomberg.

The text appears to conflict with a one-page summary of the deal released this week, which pointed to federal approval of the long-delayed, 303-mile natural gas pipeline. Democratic leaders struck the deal in exchange for Manchin’s(D-W.Va.) crucial vote on the inflation reduction package of $370 billion in energy and climate spending.

The exclusion of the pipeline in the draft legislative text, dated July 19, suggests the project remains a late flashpoint amid fast-moving negotiations over what Democrats are willing to barter to win Manchin’s support for the climate package.

Photographer: Samuel Corum/Bloomberg

Sen. Joe Manchin, a Democrat from West Virginia, in Washington on Nov. 1, 2021.

Manchin told reporters Tuesday that the Mountain Valley pipeline “is the only thing we have in America that we can do within the next six months, and bring 2 billion cubic feet of gas into the marketplace. That’s going to help all of us.”

According to a summary of the senator’s agreement with Schumer, the agreement would “require the relevant agencies to take all necessary actions to permit the construction and operation of the Mountain Valley Pipeline and give the DC Circuit jurisdiction over any further litigation.” Such a provision would be highly unusual and spur more opposition, energy law experts said this week.

Read More: Mountain Valley Pipeline Shield in Manchin Deal Raises Hackles

But a July 19 draft bill text circulating among lobbyists and lawmakers doesn’t cite any specific, individual project by name. Rather, it is a broad framework aimed at streamlining the permitting process for pipelines and other energy projects under the National Environmental Policy Act.

A spokeswoman for Manchin, Sam Runyon, said the draft was “outdated and incomplete.” Runyon declined to share updated text.

Oil Groups Waiting

The document carries an “Draft – API” watermark. API could stand for the American Petroleum Institute, a powerful lobbying organization for the oil and gas industry.

API has had discussions with Manchin staff about the permitting overhaul, and the July 19 date of the document lines up with those discussions, Frank J. Macchiarola, the organization’s senior vice president of policy, economics and regulatory affairs, said in an interview. But API didn’t write or edit the document, Macchiarola said.

The draft bill text has about 80% of the provisions that will be in the final bill text, said a source familiar with the Senate negotiations who spoke on the condition of anonymity. There is every expectation that the Mountain Valley Pipeline provisions will be in the final bill text, he said.

Multiple sources who discussed the text under the condition of anonymity said the bill text was the most updated they had seen this week.

The pipeline developers were also waiting for final text.

“We have not yet seen an official draft of the proposed permitting reform legislation,” Natalie Cox, a spokeswoman for the pipeline’s lead partner, Equitrans Midstream Partners LP, said in a statement Wednesday.

The coalition of companies is seeking a four-year extension of its current permit from FERC through 2026. If that is approved, the group is eyeing the first quarter of 2023 to begin operations.

Manchin likely has a solid commitment from Democratic leaders on the Mountain Valley Pipeline provisions if the more recently dated bill summary indicates it — as “negotiation would appear to be over,” said Christi Tezak, managing director for ClearView Energy Partners, an independent research firm in Washington.

Political Calculus

Schumer has said he expects the Senate to vote this week or next on the energy and climate bill, while the permitting overhaul will be folded into a government funding package next month.

Tying the permitting overhaul legislation to the must-pass government funding package is a “pretty good political calculus” on the part of the Democratic leadership, said Kelly Johnson, a partner at Holland and Hart and a former senior counsel to the Senate Energy and Natural Resources Committee.

“If you think about the politics of September, no one wants to go into an election with a government shutdown,” said Johnson, who also worked at the Justice Department during the George W. Bush administration.

Johnson said that while a permitting overhaul bill could lose the support of some progressive Democrats, Manchin might be able to entice some Republicans to sign onto it, especially if it could benefit projects in their states. “I would be surprised if they can’t cut a deal,” she said.

Long-Delayed Pipeline

The pipeline, proposed to run through West Virginia, Virginia and a sliver of North Carolina, has had multiple permits repeatedly struck down since it was initially approved in 2017. It is now expected to cost more than $6 billion to complete, more than double the original cost estimate.

The bill text includes a provision imposing a two-year deadline on permitting reviews for major projects under NEPA, and one year for projects with less impact.

One bill provision nods to expediting the Mountain Valley Pipeline: The draft text includes a requirement that courts randomly assign appeals to different panels of judges “to avoid the appearance of favoritism or bias,” according to the text. The project’s developers have complained that the same panel of judges in the US Court of Appeals for the Fourth Circuit have repeatedly ruled against their federal permits.

Manchin estimated the pipeline would bring 2,500 jobs to West Virginia. “West Virginia is just like anybody else. If there’s a transition, just don’t leave us out,” he said.

Sen. Shelley Moore Capito (R-W.Va.) expressed skepticism Tuesday that Democrats would hold up their end of the bargain on enacting federal permitting overhaul.

The Republican said she didn’t understand why the Senate didn’t vote first on the permitting overhaul bill “as a guarantee” before considering the Inflation Reduction Act. She also said she would like to see “exact” legislative text that includes the Mountain Valley Pipeline.

To contact the reporters on this story: Daniel Moore in Washington at dmoore1@bloombergindustry.com; Kellie Lunney in Washington at klunney@bloombergindustry.com

To contact the editors responsible for this story: Anna Yukhananov at ayukhananov@bloombergindustry.com; Robin Meszoly at rmeszoly@bgov.com