American Oil and Gas Reporter - December 2018 - 47

SpecialReport: Natural Gas White Papers
variety of natural gas pipeline, oil
pipeline, and electric transmission projects
explains that:
"Without opining on whether the
Fourth Circuit case was properly decided
or whether compliance with the West
Virginia restriction is even feasible, the
court's decision underscores the importance of project developers not only securing all required permits but also ensuring that in the process all Is are dotted
and Ts are crossed such that the risk of a
setback on judicial review is minimized.
This has never been more important than
in these times with well-organized environmental and landowner opposition to
energy infrastructure development supporting fossil fuels."
In the meantime, arguably the most
significant assault facing the MVP project
is still outstanding. In the D.C. Circuit,
environmental groups are attacking the
FERC certification of the project as a
whole. So far, although the environmentalists have had success reversing permit
approvals in the Fourth Circuit, they
have not been as fortunate in the D.C.
Circuit. On Aug. 30, the court denied a
motion to stay pipeline construction
while it reviews this appeal. Thus, construction will continue as the D.C. Circuit
litigation moves forward. This is a positive
outcome for the MVP project, as it is
unknown how long it will take for this
litigation to resolve.
Overall, according to Bloomberg estimates, these various legal and regulatory
obstacles could delay the MVP project
for as long as a year, while increasing
cost estimates by almost an additional
$1 billion. Moreover, the longer the
project is delayed, the greater the risk
that shippers on the project may exercise
opt-out rights that shippers commonly
include in their agreements with pipeline
project developers.
Stymied In Courts
Notably, although these rulings on the
MVP project have sent periodic ripples
of concern through Wall Street and the
media, they are only the most recent examples of how East Coast pipeline projects
are being stymied in the courts.
For example, the Mariner East 1 and
Mariner East 2 pipeline project in Pennsylvania has made great strides toward
completion, but only after facing legal
turmoil of its own. The project is helmed

by Sunoco Pipeline LP, a subsidiary of
Energy Transfer Partners, LP.
According to the company, the Mariner
East project transports NGLs from the
Marcellus and Utica in western Pennsylvania, West Virginia and eastern Ohio to
destinations in Pennsylvania, including
Sunoco's Marcus Hook Industrial Complex on the Delaware River, where the
NGLs are processed, stored and distributed
to local, national and export markets.
The first phase of the project, Mariner
East 1, consisted of interstate and intrastate
propane and ethane service and commenced operations in the fourth quarter
of 2014 and the first quarter of 2016, respectively. The second phase, Mariner
East 2, was designed to expand total
take-away capacity to 345,000 bbl/d for
interstate and intrastate propane, ethane
and butane, and initially was expected
to commence operations in the third
quarter 2017.
However, this major project has hit
snags that have delayed the completion
of Mariner East 2. The Pennsylvania DEP
suspended completion on Jan. 3, 2018,
and fined Sunoco Logistics Partners in
relation to the project. Additionally, the
Pennsylvania Public Utility Commission
resolved in September a complaint regarding a shut-off valve that had held up
the pipeline.
Although the project is near completion,
it is still the subject of a class action in
the Eastern District of Pennsylvania. This
litigation, arising out of landowner claims
of property damage during the pipeline
construction, would not halt or affect
construction (March et. al. v. Sunoco
Pipeline LP et. al.).
Similarly, in September, environmental
groups brought Fourth Circuit challenges
to revised permits that the U.S. Department
of Interior granted to the proposed 600mile Atlantic Coast gas pipeline project.
This underground natural gas pipeline
will originate in West Virginia, travel through
Virginia with a lateral extending to Chesapeake, Va., and then continue south into
eastern North Carolina, ending in Robeson
County. The project, led by Dominion
Energy Inc., will service five of the largest
public utilities in the region: Dominion Energy, Duke Energy, Piedmont Natural Gas,
Virginia Natural Gas, and Public Service
Company of North Carolina.
Though each of these projects has
faced different legal and regulatory ob-

stacles, they all share the common thread
of assaults on projects practically from
their inception, in spite of the apparent
need for the end product.
The pattern also underscores a tension
between the current push from the Trump
administration to "fast track" the approval
of extensive infrastructure projects, and
taking the legal steps necessary to withstand the seemingly guaranteed court
challenges that such large-scale endeavors
are facing from environmentalist and
landowner groups alike.
Therefore, now more than ever, it is
vital for developers to buttress their permitting and project activities with careful
legal and regulatory planning, with the
assumption that litigation may be waiting
around the corner, regardless of public
or governmental support for a project. r
Editor's Note: The author acknowledges Juanita Greenfield for her research
assistance and Glenn Benson of BakerHostetler for contributing insight and expertise to the preceding article.

EMILY B.
THOMAS

Emily B. Thomas is counsel with
BakerHostetler, practicing out of the
firm's Denver and Philadelphia offices. A complex commercial litigator
in the energy industry, Thomas has extensive experience in trial and case
management in both arbitration and
traditional court trials. Thomas also
has experience in transactional work
for energy clients. Her practice concentrates on oil and gas production
and distribution projects, including
litigation, investigations, negotiations, transactions and community involvement. Thomas also assists clients
in emergency response after catastrophic events. She holds a B.A. in
English from Duke University and a
J.D. from the University of Pittsburgh
School of Law.
DECEMBER 2018 47

American Oil and Gas Reporter - December 2018

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