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Supreme Court Agrees to Decide State Border Dispute Over Crown Landing LNG Terminal

The U.S. Supreme Court on Monday agreed to decide a boundary dispute brought by New Jersey against Delaware over BP's plans to cite a 1.2 Bcf/d liquefied natural gas (LNG) import terminal on the New Jersey side of the Delaware River in Logan Township, Gloucester County (see Daily GPI, Aug. 4).

New Jersey and Delaware have disputed their boundary almost from the beginning of statehood. The states have generally agreed that their borders extended to the middle of the main shipping channel along the entire length of the Delaware River except for the lower river that falls within a 12-mile radius from the New Castle, DE, courthouse.

Within this 12-mile radius, which happens to include the site where BP's proposed LNG terminal would be located, Delaware has claimed that its boundary extended to the low-water mark on the New Jersey shoreline based on a "deed of feoffment and lease" granted on Aug. 24, 1682 by the Duke of York to William Penn.

Based on this longstanding claim, Delaware's environmental regulators issued an order in March rejecting BP's plan to build a 2,000-foot offloading pier at the LNG terminal site that would serve the facility. Delaware's environmental secretary said his state's environmental laws prohibit heavy industry and manufacturing inside the state's coastal zone.

However, New Jersey favors construction of the terminal as a means of increasing gas supply to residential, commercial and industrial consumers. New Jersey Acting Governor Richard J. Codey said the governor of Delaware rejected New Jersey's efforts to "settle this amicably."

"The plain fact is that the state of Delaware does not have jurisdiction over any projects on New Jersey's shoreline," Codey said earlier this year regarding the dispute. "Delaware has never controlled development on our shore, and will not start doing so now."

New Jersey Attorney General Peter C. Harvey took the case to the high court in July, charging that Delaware violated a 1905 compact between the two states that gives the Garden State control over water access and structures, such as piers, built along its side of the river, even if they extend across the state border. Harvey cited a 1935 Supreme Court decision that recognized the 1905 agreement.

New Jersey has asked the court to affirm the state's exclusive regulatory jurisdiction over development on its side of the Delaware River. Specifically, it called on the court to supplement the 1935 boundary decree to make clear that the 1905 compact gives New Jersey the right to control projects on its side of the river within the 12-mile circle, free of regulation by Delaware. New Jersey asked the high court to render a decision in the court's latest term, which concludes at the end of June 2006.

The Supreme Court, without comment on Monday, denied the motion to reopen the 1935 boundary decree but agreed to the state's second option, giving Delaware 30 days to respond to New Jersey's complaint. The case is New Jersey v. Delaware, Case No. 134, Original.

"We are very pleased that the U.S. Supreme Court has decided to take this case, as we requested, in order to resolve this important issue regarding New Jersey's exclusive jurisdiction over development along its shoreline of the Delaware River under the state's 1905 Compact with Delaware," Harvey said in a statement.

BP's $500 million LNG project would occupy about 40 acres on a 175-acre site adjacent to the Delaware River. It would including about 480,000 cubic meters of storage capacity and pipeline interconnections to Texas Eastern, Columbia Gas and Transcontinental Gas Pipe Line. The proposed import terminal would have a peak sendout capability of 1.4 Bcf/d and is targeted for service in 2009.

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