Washington — Even with the change in presidential administrations, the US is supporting PennEast Pipeline's position in a Supreme Court case examining a private developer's ability to use eminent domain to seize properties in which a state has an interest.
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The continuation of the US Solicitor General's support that emerged toward the end of the Trump Administration could benefit the 116-mile, 1.1 Bcf/d project linking Marcellus Shale dry gas production with markets in Pennsylvania, New Jersey and New York.
The project has struggled with regulatory and litigation hurdles in New Jersey, which challenged the project's use of eminent domain and rejected water permits.
At issue before the Supreme Court is a 3rd US Circuit Court of Appeals judgment that found that because of state sovereign immunity, the private pipeline company lacked authority to pull the state of New Jersey into federal court for condemnation proceedings.
PennEast appealed the decision to the Supreme Court, with backing from other natural gas companies, which argued the ruling could enable states to block interstate gas pipelines and chill investments in infrastructure across the US.
US amicus brief
In a friend of the court brief filed March 8, Acting Solicitor General Elizabeth Prelogar argued that the 3rd Circuit lacked jurisdiction to determine whether the Natural Gas Act authorizes the pipeline company to condemn state property. The state should have raised its contention about the lack of authority before FERC and in the pending appeals court review of the commission's decisions, the brief said.
The US also argued that the "text, structure, history and purpose" of the NGA show it authorizes pipeline certificate holders to condemn all property needed to build a FERC-approved pipeline, "whether or not a state claims any interest in such property." On its face, the US argued, the authority extends to any property needed for the project, and the court cannot narrow that reach by inserting words Congress chose to omit.
It also argued that principles of state sovereign immunity do not require a different conclusion; it said Congress has long delegated the right of eminent domain to private actors.
Impact on FERC's role
In addition, the US brief warned of a potentially profound effect on FERC's ability to administer the interstate natural gas system, suggesting the 3rd Circuit decision would turn state conservation easements into "a sword against federally approved projects."
"Under the court of appeals' decision, all the state needs to preclude any FERC-approved project it opposes is a willing landowner along the route," the US wrote, adding the state could also use its own eminent domain powers if the landowner was unwilling.
Congress added the section of the NGA on eminent domain, it said, to prevent states from nullifying FERC's exercise of its exclusive jurisdiction to regulate the transport of gas in interstate commerce.
New Jersey, in arguing against Supreme Court review, had called warnings about implications of the 3rd Circuit ruling overstated, and said the unanimous circuit court judgment reflected the proper application of sovereign immunity law and statutory interpretation rules.
PennEast, in a statement March 10, welcomed the continued US support, which it said "underscores this case presents an issue that cuts across party lines."
The company said several factors potentially impact its anticipated in-service date. "Among those factors are approval from FERC on the phased approach and approval of the remaining permit applications from Pennsylvania regulators, as well as construction-related considerations," it said. "We anticipate placing the Phase One facilities in service in 2022 and Phase Two facilities in service in 2024."
Faced with the adverse 3rd Circuit ruling affecting the route in New Jersey, PennEast had sought permission from FERC to build the project in two phases (CP20-47), with the first in the friendlier regulatory terrain of Pennsylvania. That amendment application faces opposition from environmental groups and local interests at FERC.