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New Jersey Files Another Challenge to PennEast Pipeline

In yet another unique move, New Jersey has petitioned a federal court to review FERC’s certificate order authorizing the PennEast Pipeline as part of a multipronged effort to stop the natural gas project from advancing.

State Attorney General Gurbir Grewal filed the petition for the New Jersey Department of Environmental Protection (NJDEP) on Monday challenging the certificate that the Federal Energy Regulatory Commission issued in January. The petition comes after the state filed a rehearing request in February with FERC and a motion to stay the project’s authority to condemn properties pending the outcome of its rehearing.  FERC’s deputy secretary tolled the request days later to give the Commission more time to consider it. 

In its rehearing request, NJDEP argued that FERC’s environmental review of PennEast failed to meet National Environmental Policy Act standards. It later argued that the deputy secretary did not have the authority to toll its rehearing request. As a result, Grewal wrote in the petition for review with the U.S. Court of Appeals for the District of Columbia Circuit that FERC has effectively denied the request after failing to act on it within 30 days as is required by law.

The state claims FERC’s order authorizing the project is “arbitrary and capricious.”

The authorization, the state said in its petition, “relied on insufficient data about environmental resources, improperly relied on PennEast’s contracts with its affiliates to demonstrate public need; improperly conflated mitigation with minimization or avoidance of environmental impacts; failed to conduct an appropriate alternatives analysis and improperly attempts to usurp New Jersey’s delegated federal level jurisdiction” under the Clean Water Act (CWA).

The DC Circuit filing is not the first time New Jersey has filed a legal challenge against the project. In March, Grewal in a filing with the U.S. District Court for the District of New Jersey attempted to stop the project from condemning more than 20 parcels of state-owned open space and farmland that were acquired through preservation programs.

In New York, state regulators have denied key approvals for several natural gas pipelines, and the industry has taken the state to court and argued before FERC as a result. While it’s less common for a state to challenge FERC’s authority over interstate gas pipelines in particular, overall it’s not a rarity.

“States do not infrequently challenge FERC decisions in appellate courts, particularly when a state feels that FERC’s analysis in an order was not sound,” said attorney Richard Drom, who practices before the Commission at Washington, DC-based Eckert Seamans Cherin & Mellott. “The New Jersey attorney general action is not that unusual.”

New Jersey has also not issued key approvals for the project, like a CWA Section 401 water quality certification (WQC), for example. PennEast would move more than 1 Bcf/d of shale gas from northeast Pennsylvania to New Jersey. About one-third of the 120-mile pipeline would be in New Jersey. Pennsylvania issued a WQC for the project last year.

The project is still targeting a 2019 in-service date. Spokeswoman Patricia Kornick said Tuesday the company remains confident in FERC’s environmental review and said the Commission’s approval would ultimately be upheld in court.

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