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U.S. Supreme Court Ruling Clears the Way Forward for PennEast Pipeline

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The U.S. Supreme Court ruled 5-4 on June 29 to allow the PennEast Pipeline to move forward. The decision overturned a lower-court ruling that prevented the project from using eminent domain to build a 120-mile, 36-in. natural gas pipeline through New Jersey.

The Supreme Court began hearing oral arguments in the case of PennEast Pipeline Co. vs. New Jersey on April 28. The $1.1 billion pipeline would carry 1 billion cubic feet per day (Bcf/d) of gas produced in the Marcellus shale region to serve customers in the Northeast United States. Originating in northeastern Pennsylvania and terminating at Transco’s pipeline interconnection near Pennington, New Jersey, approximately one-third of the route is located in New Jersey.

RELATED: PennEast Supreme Court Case Looms Large for Future of Pipelines

The Federal Energy Regulatory Commission (FERC) approved the project in January 2018. However, the state of New Jersey opposed the project, and the Philadelphia-based U.S. Court of Appeals for the Third Circuit ruled in 2019 that PennEast could not use federal eminent domain to seize land needed for the construction of the pipeline.

Anthony Cox, chair of the PennEast board of managers, said the Supreme Court decision overturned a “misguided” ruling by the Third Circuit court and protects consumers.

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“We are pleased that the Supreme Court kept intact more than seven decades of legal precedent for the families and businesses who benefit from more affordable, reliable energy,” Cox said. “This decision is about more than just the PennEast project. It protects consumers who rely on infrastructure projects, found to be in the public benefit after thorough scientific and environmental reviews, from being denied access to much-needed energy by narrow state political interests. PennEast understood that New Jersey brought this case for political purposes, but energy crises in recent years in California, Texas and New England have clearly demonstrated why interstate natural gas infrastructure is so vital for our way of life, public safety and enabling clean energy goals.”

Consumer Energy Alliance (CEA) president David Holt said the Supreme Court ruling reversed a lower-court decision that placed the political and ideological motivations of the state of New Jersey over the needs of consumers there and in neighboring states, calling the decision a “massive victory” for families and small businesses in the region.

“This decision is monumental because it is about something far more important than a single pipeline,” Holt said. “The Supreme Court has affirmed the federal government’s power to regulate interstate commerce, one of the few explicit authorities it is given in the Constitution.”

The CEA filed a friend of the court amicus brief in March 2020 urging the Supreme Court to reverse the Third Circuit decision.  

“The framers, early in our history, understood that it would be very easy for individual states to place their needs and political motivations above those of neighboring states and the greater national good if left unchecked,” Holt added. “That’s exactly what would have happened had the state of New Jersey’s spurious and legally unsound attempt to block PennEast if it had been left unchallenged.”

Holt also applauded the President Joe Biden and his administration for supporting the project in a March 8 brief filed by the U.S. Depart of Justice, which argued that the National Gas Act authorized PennEast to condemn state-owned properties for the purpose of building the pipeline.

“Along with the Supreme Court ruling, we are equally pleased that the Biden Administration placed national concerns above partisan ones in asking the court to overturn the Third Circuit decision,” Holt said. “For far too long, consumers in the region have been saddled with high energy prices, largely because of state-level obstruction and activism that disregards common sense, science and concern for costs for ordinary people and businesses.”

RELATED: For or Against Pipelines: No Clear-Cut Answer in Biden Administration

Holt added that he hoped the Supreme Court’s decision would spur more pipeline projects to be built.

“This case is equally a vindication of a pipeline project that has already met and exceeded America’s stringent environmental regulations,” Holt said. “We hope this decision will create more opportunities for environmentally responsible infrastructure projects like PennEast to move forward, putting our skilled union tradespeople to work and reducing costs for communities who face high energy bills.”

Interstate Natural Gas Association of America (INGAA) president and CEO Amy Andryszak said the Supreme Court ruling upholds the Natural Gas Act.  

“We are pleased with the U.S. Supreme Court’s decision today to overturn the Third Circuit Court’s decision,” Andryszak said. “The court’s ruling upholds the Natural Gas Act’s delegation to certificate holders of the power to acquire any rights-of-way necessary to construct vital natural gas infrastructure projects like the PennEast Pipeline, including land in which a State holds an interest. As the Court acknowledges, the Natural Gas Act has made possible the growth of our nation’s pipeline infrastructure to serve communities across our country.”

Andryszak added that projects like the PennEast Pipeline are critical to climate goals in the United States.

“Our nation’s interstate natural gas pipelines make up a vast and critical transportation network, moving approximately one-third of the energy consumed in the United States,” Andryszak said. “In order to continue to harness the benefits of natural gas to achieve our energy and climate goals, we need a predictable regulatory framework that allows improvements and additions to our country’s interstate natural gas transmission infrastructure.”

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