The development and construction by us or our joint ventures of pipeline and storage facilities and the optimization of such assets involve numerous construction, business, economic, competitive, regulatory, judicial, environmental, political and legal uncertainties that are beyond our control, require the expenditure of significant amounts of capital and expose us to risks. Those risks include, but are not limited to:
- physical construction conditions, such as topographical, or unknown or unanticipated geological, conditions and impediments;
- construction site access logistics;
- crew availability and productivity and ability to adhere to construction workforce drawdown plans;
- adverse weather conditions;
- project opposition, including delays caused by landowners, advocacy groups or activists opposed to our projects and/or the natural gas industry through lawsuits or intervention in regulatory proceedings;
- evolving regulatory or legal requirements and related impacts therefrom, including additional costs of compliance;
- the application of time of year or other regulatory restrictions affecting construction;
- failure to meet customer contractual requirements;
- environmental conditions;
- vandalism and acts of sabotage;
- the lack of available skilled labor, equipment and materials (or escalating costs in respect thereof, including as a result of inflation and/or tariffs);
- issues regarding availability of or access to connecting infrastructure; and
- the inability to obtain necessary rights-of-way or approvals and permits from regulatory agencies on a timely basis or at all (and maintain such rights-of-way, approvals and permits once obtained)
Risks inherent in the construction of these types of projects, such as unanticipated geological conditions, challenging terrain in certain of our construction areas and severe or continuous adverse weather conditions, have adversely affected, and in the future could adversely affect, project timing, completion and costs, as well as increase the risk of loss of human life, personal injuries, significant damage to property or environmental contamination. Most notably, certain of these risks have been realized in the construction of the MVP, including construction-related risks and adverse weather conditions, and such risks or other risks may be realized in the future which may further adversely affect the timing and/or cost of the MVP and MVP Southgate (defined in Note 11 to the Consolidated Financial Statements).
Given such risks and uncertainties, our midstream projects or those of our joint ventures may not be completed on schedule, within budgeted cost or at all. As a further example, public participation, including by pipeline infrastructure opponents, in the review and permitting process of projects, through litigation or otherwise, has previously introduced, and in the future could introduce, uncertainty and adversely affect project timing, completion and cost. Further, civil protests regarding environmental justice, environmental health and safety, and social issues or challenges in project permitting processes related to such issues, including proposed construction and location of infrastructure associated with fossil fuels, poses an increased risk and may lead to increased litigation, legislative and regulatory initiatives and review at federal, state, tribal and local levels of government or permitting delays that can prevent or delay the construction of such infrastructure and realization of associated revenues.
Additionally, construction expenditures on projects generally occur over an extended period, yet we will not receive revenues from, or realize any material increases in cash flow as a result of, the relevant project until it is placed into service. Moreover, our cash flow from a project may be delayed or may not meet our expectations, including as a result of taxes which could potentially be calculated based on excess expenditures, inclusive of maintenance, incurred during extended court-driven construction delays. Furthermore, we may construct facilities to capture anticipated future growth in production and/or demand in a region in which such growth does not materialize or is delayed beyond our expectations. As a result, new facilities may not be able to attract enough throughput to achieve our expected investment return. Such issues in respect of the construction of midstream assets could adversely affect our business, financial condition, results of operations, and cash flows.