Equitrans: White House Introduces Priorities to Move Permitting Efforts Forward

In a move that we think will help the Mountain Valley Pipeline’s chances, the Biden administration has introduced a list of energy permitting reform priorities as an effort to move the political conversation forward. The list of priorities may not include detailed substantial oil and gas permitting reform, as it was focused more on renewables. However, in the context of West Virginia Democratic Sen. Joe Manchin’s recent reintroduction of his proposal and other existing proposals from Republican Sens. Shelley Moore Capito of West Virginia and John Barrasso of Wyoming, we think it indicates the White House is seeking common ground. The common ground is likely to include a broader and more robust permitting bill that will include substantial oil and gas reforms. Separately, Biden senior advisor John Podesta has noted the administration’s support for Manchin’s proposal.

The administration’s list of priorities can also be considered a wish list, but it includes many helpful items. Examples include expediting transmission interconnection queues and incentivizing hydrogen and carbon dioxide infrastructure. While the statement was focused more on renewables and less on oil and gas efforts specifically, it did mention assigning set time frames for permitting decisions, expanded reviews that would allow environmental review work to be used for multiple projects, and a clarification that an analysis can be relied on for five years versus constantly being reevaluated.

We do not see any reason to change our $10.80 fair value estimate or narrow moat rating for Equitrans ETRN, which through a subsidiary is participating in the MVP joint venture and would operate the pipeline.