PennFuture Blog

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Supreme Court Ruled Natural Gas Companies Can Condemn State-Owned Land

by Emily Rollins, Legal Intern

The U.S. Supreme Court recently dealt a severe blow in an ongoing fight to prevent PennEast, a private natural gas company, from building a 116 mile natural gas pipeline from the Marcellus Shale region in Pennsylvania into New Jersey.

The proposed pipeline is planned to start in Luzerne County, Pennsylvania, and end in Mercer County, New Jersey. In a divided 5-4 opinion, the Court overturned the 3rd Circuit’s decision and held that PennEast has the authority to condemn land owned by the State of New Jersey for the purposes of building the pipeline under the Natural Gas Act. 

The authority derives from a certificate issued by the Federal Energy Regulatory Commission (FERC) to PennEast essentially certifying that the construction of the pipeline is a public convenience and necessity. Section 717f(h) of the Natural Gas Act authorizes holders of this FERC certificate to exercise the power of federal eminent domain to condemn any private or State owned right-of-way required to build the “necessary” pipelines if they cannot secure the right-of-way through contract and negotiated compensation. 

The issues argued in the 3rd Circuit and the Supreme Court turned on complicated constitutional questions of state sovereign immunity. According to the Supreme Court, condemnation proceedings by PennEast against New Jersey do not violate state sovereign immunity because the states consented to federal eminent domain power (including condemnation proceedings) when they ratified the Constitution, and long established precedent allows the Federal Government to delegate this power to private parties. In reaching this decision, Chief Justice Roberts references the “humble beginnings” of the Nation’s interstate pipeline system in central Indiana, and its development into a system spanning hundreds of thousands of miles thanks to Section 717f(h) of the Natural Gas Act. 

PennEast seeks to condemn 131 properties in New Jersey. The state of New Jersey has an ownership interest in forty-two of these properties, including many which are preserved for open space, conservation, or farmland. Additionally, the pipeline is planned to cross at least 31 streams designated as “Category One” by the New Jersey Department of Environmental Protection that meet drinking water needs and provide critical habitat to wildlife. 

Habitat and clean drinking water degradation aside, the $1 billion dollar investment is a step backwards in achieving the country’s goal of reaching net-zero greenhouse gas emissions by 2050. Stranger still, a financial supporter of the PennEast pipeline, South Jersey Industries (SJI), has recently announced that it plans to be carbon neutral by 2040. Realistically speaking, the global consensus on the threat of climate change and the strengthened focus on renewable, clean energy is influencing future energy markets and demand. No amount of job creation or greenwashing by its financial backers will change the fact that the PennEast pipeline will be competing in a market faced with a decreasing demand for natural gas. 

In an effort to continue to move forward at all costs, PennEast decided to break the pipeline project into two phases after regulatory and legal delays so that it could begin building in the areas where it has already gained approval, despite the fact that a number of permits and approvals are still outstanding. Phase 1 would be 68 miles and begin from the Marcellus Shale region in Pennsylvania into Bethlehem Township. Phase 2 would continue through Bucks County and across the Delaware River ending in Mercer County, New Jersey. PennFuture has previously argued that PennEast, especially in this new phased approach, is a pipeline to nowhere, and that allowing for the construction of the pipeline at this time would result in permanent and unnecessary degradation of our lands and waters.

However, the fight is not over yet. Resistance against the pipeline’s construction has been on-going for seven years and there is still pending litigation. There are challenges related to FERC’s issuance of the certificate of public necessity that were stayed while the Supreme Court evaluated the case, and they will resume now. PennEast also needs to obtain several permits from the Army Corps of Engineers, the Delaware River Basin Commission, and both the Pennsylvania and New Jersey DEPs to go forward with the project. The Pennsylvania DEP provides information on the pipeline status in Pennsylvania, including all of the application and permit materials and information on past and upcoming public hearings. 

The DEP has not yet approved the required Chapter 102 (Erosion and Sediment Control) and Chapter 105 (Dam Safety and Waterway Management) permits for the Phase 1 portion of the proposed pipeline, and we continue to oppose this destructive and unnecessary pipeline in PA. Take action against this harmful project by urging the DEP to deny these permits for the PennEast Pipeline. Become a PennFuture member today to stay updated and informed on all the important PennEast pipeline news and opportunities for public engagement!

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