The U.S. Supreme Court has agreed to hear PennEast Pipeline Co. LLC’s case against New Jersey, which has stopped the natural gas project from condemning state-owned land.
The high court on Wednesday granted PennEast’s petition in a win for the project, which has been under development for more than five years.
The pipeline is one of the last major greenfield infrastructure projects still pending to move Appalachian Basin natural gas to other markets. The 120-mile system would move 1 Bcf/d into New Jersey and parts of Pennsylvania. About one-third of PennEast would be built in New Jersey’s Hunterdon and Mercer counties.
PennEast petitioned the high court in early 2020 to review the U.S. Court of Appeals for the Third Circuit’s ruling. The circuit court ruled that a FERC certificate issued under the Natural Gas Act (NGA) does not allow a private company to use eminent domain to seize state-owned land. The circuit court’s decision has prevented PennEast from condemning 42 parcels in New Jersey that it needs to acquire to move forward. Certificates issued by the Federal Energy Regulatory Commission under the NGA generally allow private operators to take property by eminent domain.
The project’s backers said Wednesday the high court’s decision to hear the case is a “major step forward in upholding Congress’ clear charge to FERC to ensure the availability of affordable domestic energy, delivered safely and reliably via natural gas infrastructure.”
PennEast obtained FERC approval in January 2018 and sued New Jersey to condemn the land. The state then sought to dismiss the complaint for lack of jurisdiction, citing the Eleventh Amendment of the U.S. Constitution, which recognizes that states have sovereign immunity from lawsuits by private parties in federal court.
The industry has raised a red flag, arguing the case has nationwide implications as no interstate pipeline of any significant length could be built without crossing land where a state claims an interest.
“Congress passed the NGA specifically to avoid state and local vetoes of interstate projects found by federal regulators to be in the public need and benefit,” PennEast said Wednesday. “The misguided Third Circuit ruling in fall 2019 turned nearly 80 years of federal government interpretation and industry practice on their heads.”
FERC last year sided with PennEast and found in a declaratory order that the project may condemn state-owned land as a certificate holder with the power of eminent domain. In December, as President Trump’s time in office was coming to an end, then acting Solicitor General Jeffrey B. Wall also weighed in at the request of the Supreme Court and said PennEast’s FERC certificate “expressly” allowed it to exercise eminent domain to build the pipeline.
Environmental groups continue their opposition. Delaware Riverkeeper Network’s Maya van Rossum, who runs the group that is a leading opponent, alluded to the fact that the path forward could be more difficult under the Biden administration.
“I doubt the current administration would put the rights of a fossil fuel company before the rights of the states,” she said. “We need our highest court to reaffirm to fossil fuel companies that they do not have the ability to trample over the rights of the state to protect its natural resources for the benefit of its communities.”
Facing ongoing delays, PennEast last year proposed a way to bring the pipeline online in two phases, with the first section to be completed in Pennsylvania and the second in New Jersey. The plan has not yet been approved by FERC.
PennEast also needs its remaining permit applications to be approved by Pennsylvania regulators before the first phase could go forward. The project’s backers said Wednesday targeted in-service for phase one is next year, while phase two facilities are expected to come online in 2024.
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