A federal appeals court has rejected a challenge to the FERC certificate authorizing Transcontinental Gas Pipe Line Co. LLC’s (Transco) Garden State Expansion project, but it remanded part of the case to New Jersey regulators in a sharp display of how the courts are weighing federal and state responsibilities in permitting infrastructure projects as opposition increases.

Garden State was placed into service last March, months before the U.S. Court of Appeals for the Third Circuit reached its decision. Bordentown and Chesterfield townships in Burlington County, NJ, where part of the project is located, along with the Pinelands Preservation Alliance, argued that the Federal Energy Regulatory Commission failed to adequately consider the full scope of the 180 MMcf/d project. They charged that it should have been weighed along with others such as the Southern Reliability Link (SRL) and PennEast pipelines that are also planned to serve the region, and argued that the Commission erred in issuing a certificate before necessary state permits were issued. 

Petitioners also asked the court to review the New Jersey Department of Environmental Protection (NJDEP) decision to deny a request for an adjudicatory hearing on Garden State’s Section 401 water quality certification (WQC) issued under the federal Clean Water Act (CWA) and other state permits. The NJDEP denied the request after it determined that the state administrative hearing process is not applicable to interstate natural gas projects regulated by the Natural Gas Act (NGA).

The court disagreed, indicating the agency misunderstood the NGA when it denied the hearing. It found that the law does not preempt “regular progression of intra-agency review of a permitting decision” and remanded the matter to the NJDEP to reconsider a hearing and the challenges to its permits. While the process varies from state to state, the ruling leaves the door open for the possibility of exhaustive WQC reviews before an appeal can be heard.

It’s unclear how the NJDEP plans to handle the matter going forward. However, Transco spokesman Keith Isbell said “we do not expect that the outcome of any hearing will affect the service being rendered by the project.”

In a 103-page brief filed late last year by FERC urging the court to reject the challenge to its authorization, the Commission argued that it had satisfied all of its obligations to review Garden State. The appeals court agreed, saying that “FERC’s practice of issuing certificates that condition the start of construction on the receipt of the necessary state permits complies with the plain language of the CWA.”

It went further by saying FERC met its obligations in reviewing environmental impacts of the project, citing another case in saying that so long as the agency takes a “hard look” at those impacts a court can’t “substitute its judgement for that of the agency as to the environmental consequences of its actions.” 

The expansion upgraded Transco’s existing interstate system to move another 180 MMcf/d of natural gas from its mainline to the Trenton-Woodbury Lateral. The project included a new meter and regulating station, compressor station and electric substation along the lateral in Chesterfield. New Jersey Natural Gas Co. (NJNG) contracted for all the capacity to ease supply disruptions in its service area.

In anticipation of the additional capacity, NJNG proposed SRL, a 28-mile long pipeline to connect the Trenton-Woodbury lateral and further enhance the utility’s resilience to supply disruptions like those that were caused by Hurricane Sandy in 2012. That project has faced staunch opposition. And while it cleared the last major regulatory hurdle last year by gaining approval from the New Jersey Pinelands Commission, work has yet to start on the pipeline.

Transco first announced the Garden State Expansion in July 2014 and certificated the project in April 2016. The SRL project has been in the works for years now.