Energy groups applaud Supreme Court decision to review PennEast case

The U.S. Supreme Court announced this week it will hear arguments in the PennEast Pipeline’s eminent domain case against the state of New Jersey, drawing praise from several energy organizations, including the Consumer Energy Alliance (CEA) and the Interstate Natural Gas Association of America (INGAA).

The PennEast Pipeline is a 120-mile underground line that would ship Marcellus Shale gas from Northeast Pennsylvania across the Delaware River to New Jersey. The project, once completed, would provide much-needed affordable natural gas to residents.

New Jersey disagreed with PennEast’s vision, wanting to block the project from 44 state-controlled parcels of land in the state and arguing that seizing the land, particularly as a private company, through court action is unconstitutional.

“This is a major step toward settling whether states can arbitrarily override settled and established federal laws that govern energy infrastructure and more importantly, interstate commerce,” CEA President David Holt said. “That principle has served our nation well in easing the constant tension between states and the federal government, and ensuring that no single state can put its interests above those of its neighbors or the country.”

In 2019, the Third Circuit Court of Appeals in Philadelphia reversed a lower court’s decision approving the progression of the pipeline, claiming that condemning public land violates the 11th amendment, which gives sovereign immunity to states, protecting them from private lawsuits.

PennEast appealed the decision, filing a petition of certiorari with the Supreme Court. The company argues that it had been granted eminent domain authority by the Federal Energy Regulatory Commission (FERC).

INGAA President and CEO Amy Andryszak called the Supreme Court’s decision “a positive step.” Both INGAA and CEA were organizations involved in the filing of an amicus brief on behalf of the PennEast appeal.

“Congress passed the Natural Gas Act specifically to avoid state and local vetoes of interstate projects found by federal regulators to be in the public need and benefit,” said Tony Cox, chair of the board of managers of the PennEast Pipeline Company. “The misguided Third Circuit ruling in fall 2019 turned nearly 80 years of federal government interpretation and industry practice on their heads.”

FERC, PennEast said, is charged by Congress to ensure the availability of affordable domestic energy, delivered safely and reliably through a natural gas infrastructure that undergoes an extensive review process.

“The PennEast case is a prime example of how overtly ideological decisions at the state level can hurt the needs of families, small businesses and seniors,” Holt said. “People across the Mid-Atlantic and Northeast have for too long been hit with high energy prices in large part because of state-level obstructionism, driven by activist agendas instead of common sense, science and concern over energy cost for ordinary people and businesses.”

Holt continued, stating that a Supreme Court decision in PennEast’s favor will help create more opportunities for environmentally responsible infrastructure projects that will aid in the revival of the country’s post-COVID economy, put skilled union tradespeople to work, and reduce costs for pandemic-impacted communities.

Optimistic about the future of the pipeline, Cox said PennEast expects placing the project’s Phase One facilities in service in 2022 and Phase Two facilities in 2024. He acknowledged several factors that could shift the company’s anticipated timeline, including FERC approval on the phased approach, approval of remaining permit applications from Pennsylvania regulators, and construction-related considerations.

“Eighteen business, labor and consumer advocacy organizations filing amicus briefs in support of the PennEast petition demonstrate the importance of reversing the Third Circuit decision,” Cox said. “We remain hopeful that after hearing full arguments this term, the U.S. Supreme Court will agree that the Third Circuit’s decision was profoundly wrong.”

Debra Flax

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