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Supreme Court Appoints Special Master in New Jersey v. Delaware LNG Dispute

The U.S. Supreme Court on Monday granted a request by the state of Delaware to appoint a special master in the border dispute case with New Jersey over the proposed siting of a liquefied natural gas (LNG) import terminal and berthing pier on the Delaware River.

The high court has granted attorney Ralph Lancaster broad authority to fix time and conditions for the filing of additional pleadings, direct subsequent proceedings, summon witnesses, issue subpoenas, take evidence and submit reports. Lancaster, a Harvard-educated lawyer, has served as special master to the Supreme Court twice before, in Virginia v. Maryland (2001-2003), which involved Virginia's attempt to place a water pipeline in the Potomac River inside Maryland's border, and in New Jersey v. Nevada, et al. (1987-1988), a dispute over the disposal of hazardous waste.

Delaware environmental officials last year rejected BP subsidiary Crown Landing LLC's application to build a 2,000-foot pier that would serve the proposed 1.2 Bcf/d LNG terminal in Logan Township, NJ, because Delaware environmental laws prohibit heavy industry and manufacturing inside the state's coastal zone.

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.

However, New Jersey, which favors construction of the terminal as a means of increasing gas supply to its residents and businesses, cited 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. The state has referred to a 1935 Supreme Court decision that recognized the 1905 agreement.

New Jersey asked the court last year to supplement the 1935 boundary decree to make clear that the 1905 compact gives it the right to control projects on its side of the river within the 12-mile circle, free of regulation by Delaware. The court, without comment, denied the motion to reopen the boundary decree but agreed to the state's second option, giving Delaware 30 days to respond to New Jersey's complaint (see Daily GPI, Nov. 30, 2005). Delaware responded and filed a motion for the appointment of a special master, which New Jersey opposed. New Jersey has asked the high court to render a decision in the court's latest term, which concludes at the end of June.

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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