Date: 07/13/2023
Author: Mr. X
Congress recently passed legislation ordering permits issued for the Mountain Valley Pipeline built in Virginia and West Virginia. However, as we all know in the American system, anything important comes under the purview of random judges, not elected representatives.
The 4th Circuit Court of Appeals has issued a stay halting construction of the pipeline. The pipeline provision was an important part of the recent bipartisan bill to raise the debt ceiling. It seemed to be further evidence of the all-encompassing power of West Virginia Democratic Senator Joe Manchin. The last of the Blue Dogs has managed to use his power to follow Robert Byrd’s Mountain State tradition of getting as much political pork as possible.
The fact that Senator Manchin is one of the most vulnerable Democrats going into the next election cycle (President Donald Trump won West Virginia by about 42 points in 2016 and about 39 points in 2020) was obviously a major factor. He needs to show that he can deliver for his constituents while giving his party just enough that they don’t declare war on him.
Naturally, Senator Machin was outraged by the ruling. “The law passed by Congress & signed by POTUS is clear – the 4th Circuit no longer has jurisdiction over MVP’s construction permits,” he tweeted. “This new order halting construction is unlawful, & regardless of your position on MVP, it should alarm every American when a court ignores the law.”
RIPPED STRAIGHT FROM THE HEADLINES… NOW MORE IMPORTANT THAN EVER
DON’T MISS THIS ABSOLUTELY CRITICAL PRESENTATION
Equitrans Midstream Corp (ETRN) surged when the debt deal was passed a few months ago, but was down from $9.19 a share at close Monday to $8.42 in extended trading later that day. It’s been recovering slightly in recent days and was up 1.37% yesterday, closing at $8.86.
The Sierra Club was one of the victorious plantiffs in this case. It accused Congress of an “end run around the courts” and taunted that the MVP is a “sinking ship.”
That is doubtful. It is highly likely that this will be reviewed by the Supreme Court. It is a straightforward constitutional question. Congress very specifically removed the court’s jurisdiction on this issue. The usual political coalitions also don’t apply here. President Joe Biden’s Justice Department has backed the pipeline. The conservative majority on the Supreme Court will probably not side with environmentalists if the case gets that far.
Equitrans has said it will “continue to evaluate all legal options, which include filing emergency appeals to the U.S. Supreme Court.” Unfortunately, that also means another delay for construction. ETRN will suffer in the short-term either way.
Still, investors may want to look for a pullback in the coming days as long as ETRN keeps its options open. It would be absurd for the company not to appeal, and if the high court hears it, it is likely to win. Senator Joe Manchin had better hope it does. As it stands, his relatively unpopular decision in West Virginia to side with President Biden was far nothing. A Republican challenging him for the Senate, especially with Donald Trump probably at the top of the ballot, will almost certainly take advantage.
Mr. X is an investment analyst working in the Washington DC area who specializes in the intersection of business and public policy. After fifteen years working in politics, he writes on a classified basis for RogueInvesting.com to bring you news on what those with power are debating, planning, and doing
