One of President Joe Biden’s first acts on Inauguration Day was a shot across the bow of the oil and gas pipeline industry. By signing an executive order on Jan. 20 to cancel the Presidential Permit for the Keystone XL pipeline, the new administration seemed to signal its oppositional stance against the industry.
However, in recent weeks that stance doesn’t seem so rigid.
Another controversial pipeline has been in the news recently when the U.S. Supreme Court decided on Feb. 3 to hear the appeal of the PennEast Pipeline Co. regarding the use of eminent domain for a 120-mile natural gas pipeline in New Jersey. The project would bring product from the Marcellus Shale region in Pennsylvania to underserved markets in the Northeast.
The project owner is seeking to overturn a 2019 federal appeals court decision that ruled against PennEast using eminent domain to seize land owned by New Jersey for constructing the pipeline.
Instead of throwing up a road block, the Biden administration instead threw its support behind the $1 billion project. On March 8, the U.S. Department of Justice filed a brief arguing that the National Gas Act authorized PennEast to condemn state-owned properties for the purpose of building the pipeline, a viewpoint shared by the Trump administration, which urged the Supreme Court in December 2020 to overturn the lower court decision.
Furthermore, the Justice Department stated in the brief that the certificate of public convenience and necessity issued by the Federal Energy Regulatory Commission (FERC) is only reviewable by the federal appeals court on direct review, not by a ruling.
The Biden administration’s stance on the PennEast pipeline is a major win for the industry, but it muddies the waters when it comes to other projects’ prospects.
So, which is it, is the Biden administration for or against pipelines? With this latest action on the PennEast project, it’s not as clear as perhaps the industry first thought.
What is clear is that the pipeline industry can’t just pack up its ball and go home. Industry stakeholders must continue to work with state and federal legislators to build support for oil and gas pipeline projects and educate the public about the benefits and safety of this essential infrastructure.
There may not be certainty in the industry, but there is some hope that other pipeline projects may be able to proceed.