The future of the Transcontinental Gas Pipeline Line Co. LLC (Transco) Northeast Supply Enhancement Project (NESE), which has faced repeated regulatory setbacks, is again unclear after the company pulled its application for water permits in New Jersey.

The project, fully subscribed by National Grid, has been pulled into a bitter fight between New York Gov. Andrew Cuomo’s administration and the utility about whether there’s a lack of supplies to serve New York City.  New Jersey and New York each have already denied permits for NESE.

Transco parent Williams has taken “the administrative step” of withdrawing the permits in New Jersey, said spokesperson Laura Creekmur. “We are evaluating next steps with our customer and all appropriate regulatory agencies,”

Cuomo has resisted the NESE project and other natural gas infrastructure, claiming the pipelines aren’t needed to meet the state’s energy needs. National Grid had imposed a moratorium on new gas service in Brooklyn, Long Island and Queens, citing the inability to get NESE approved. After a faceoff with the governor’s office, the utility in late November said it would end the moratorium and find ways to serve demand over the next two years.

The New Jersey Department of Environmental Protection (NJDEP) notified Transco days later in a letter confirming that its applications had been withdrawn. The agency also told the company that “there are statutory and regulatory deficiencies associated with the withdrawn applications that must be resolved to the department’s satisfaction,” including demonstrating a compelling public need and finding an alternative access road for a compressor station.

The NJDEP rejected NESE’s application for a water quality certification, coastal wetland, flood hazard area and waterfront development permits in June, inviting Transco to reapply, which it did.

NESE is designed to create 400 MMcf/d of incremental firm capacity to meet demand in New York City. The expansion would include 10 miles of pipe in Pennsylvania, three miles in New Jersey and 23 miles of pipe that would stretch into offshore New Jersey and New York in addition to the compressor station in New Jersey and more horsepower at an existing station in Pennsylvania.

Cuomo and New Jersey Gov. Phil Murphy have resisted fossil fuels in favor of alternative energy and conservation programs. Under an agreement with New York, National Grid said it would enhance demand response, strengthen energy efficiency programs and increase reliance on portable compressed natural gas. The utility also has agreed to present options to meet New York’s long-term supply needs in the coming months.