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Supreme Court Backs PennEast Pipeline in NJ Challenge

08/13/2021

Supreme Court Backs PennEast Pipeline

The U.S. Supreme Court on June 29 ruled in favor of a consortium of energy companies including Enbridge Inc. seeking to seize land owned by New Jersey to build a federally approved natural gas pipeline despite the state's objections, though hurdles remain for the $1 billion project.

The 5-4 ruling, authored by conservative Chief Justice John Roberts, handed a victory to PennEast Pipeline Co. LLC, a joint venture seeking to build the 116-mile (187-km) pipeline from Pennsylvania to New Jersey. The justices overturned a lower court ruling in favor of New Jersey's government.

The decision enables interstate pipelines to move forward with efforts to seize state-owned lands without a state's consent as long as federal regulators have approved the project. But New Jersey Attorney General Gurbir Grewal said the ruling does not bring an end to the state's fight against the PennEast project.

PennEast wants the land to build a pipeline designed to deliver 1.1 Bcf/d of gas—enough to supply about 5 million homes—from the Marcellus shale formation in Pennsylvania to customers in Pennsylvania and New Jersey.

The court ruled that a 1938 U.S. law called the Natural Gas Act that lets private energy companies seize “necessary” parcels of land for a project if they have obtained a certificate from the Federal Energy Regulatory Commission (FERC) can be applied to state-owned land. The law effectively gives private companies the power of eminent domain in which government entities can take property in return for compensation.

FERC in 2018 approved PennEast's request to build the pipeline. The company then sued to gain access to properties along the route. New Jersey did not consent to PennEast's seizure of properties that the state owns or in which it has an interest.

After a federal judge approved the property seizure, the Philadelphia-based 3rd U.S. Circuit Court of Appeals ruled in 2019 that PennEast could not use federal eminent domain to condemn land controlled by the state, prompting the appeal to the Supreme Court.

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