The beleaguered PennEast Pipeline got a lift on Thursday from FERC, which granted a petition for declaratory order by finding the project may condemn state-owned land as a certificate holder with the power of eminent domain.
PennEast, which filed the petition in October, called the order “encouraging news.” The decision would better position the project to petition the U.S. Supreme Court for review of an adverse ruling from the U.S. Court of Appeals for the Third Circuit that stopped it from seizing land in New Jersey, said PennEast spokesperson Patricia Kornick.
The Federal Energy Regulatory Commission found that eminent domain authority under the Natural Gas Act (NGA) applies to state land. FERC also ruled that Congress delegated such authority to certificate holders and not the Commission itself.
PennEast obtained FERC approval and received a certificate of public convenience and necessity in 2018. However, New Jersey has prevented the pipeline’s sponsors from seizing 42 parcels of state-owned land that it claims are preserved for recreational, conservation and agricultural uses. The project’s backers sued to condemn the land.
The Third Circuit concluded that the Eleventh Amendment of the U.S. Constitution bars a certificate holder from bringing an action in federal court under the NGA to seize property in which a state or its agencies hold an interest. The court ruled that New Jersey’s sovereign immunity wasn’t revoked by the project’s certificate and also found that the federal government’s exemption from sovereign immunity was not delegated to PennEast.
While FERC did not address the broader Constitutional issue of sovereign immunity, ClearView Energy Partners LLC said the order is at least likely to expedite the Supreme Court’s review if it chooses to hear the case.
PennEast requested an extension last week to file its Supreme Court petition pending FERC’s order.
“In agreeing with PennEast, the Commission reiterated that vital infrastructure should not be disrupted by parochial interests after having been found by expert federal regulators to be in the broad public interest and environmentally safe,” Kornick said on Thursday.
PennEast has been in the works for about five years, but it has yet to receive a water quality certificate and other permits in New Jersey, which along with environmental groups has largely opposed the project. New Jersey Sierra Club director Jeff Tittel called FERC’s decision “an outrageous interference in the legal process.”
The project would move more than 1 Bcf/d of Appalachian gas to markets in Pennsylvania and New Jersey. About one-third of the pipeline would be in New Jersey’s Hunterdon and Mercer counties.