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Two New Jersey lawmakers ask FERC for hold on PennEast gas line work after 3rd Circuit setback

Highlights

Seek to avert eminent domain use while route questions remain

Legal battles over 116-mile, 1.1 Bcf/d gas project

PennEast asks FERC for favorable interpretation to aid court fight

Washington — Following an appeals court ruling that put the PennEast natural gas pipeline route in question, two members of Congress from New Jersey want the Federal Energy Regulatory Commission to issue a stop-work order for all land-clearing and construction activities on the project.

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The 116-mile, 1.1 Bcf/d project would connect Marcellus Shale dry gas production to markets in Pennsylvania, New Jersey, and New York, potentially easing price spikes during high-demand periods. It is not yet under construction, as some outstanding permits remain.

But in a new hurdle, the 3rd US Circuit Court of Appeals in September found that because of state sovereign immunity, the pipeline could not go forward with lower court condemnation proceedings against 40 properties owned at least in part by New Jersey.

Now two Democratic US representatives from New Jersey -- Tom Malinowski and Bonnie Watson Coleman -- want FERC, which authorized the project in January 2018 and has power to let construction begin, to put on the brakes.

They wrote FERC Wednesday seeking a stop-work order, saying PennEast will need to revise the route to avoid New Jersey state lands in Hunterdon and Mercer counties in New Jersey.

The stop-work order is needed, the lawmakers argued, to ensure eminent domain isn't used against private citizens unnecessarily, they wrote.

FERC PULLED IN BOTH DIRECTIONS

Patricia Kornick, a spokeswoman for PennEast, noted that no construction is currently underway, "so it is unclear what land clearing or construction they are referencing."

"PennEast is confident the legal actions will be resolved favorably and the long-standing legal precedent, under which FERC has operated to bring needed, clean, reliable, and affordable energy to consumers will be upheld," she said.

PennEast recently pressed FERC to help it overcome the 3rd Circuit ruling. The pipeline company asked FERC to quickly provide its own "authoritative interpretation" that Natural Gas Act condemnation authority applies to a property in which a state holds an interest, as well as that Congress delegated the federal government's exemptions from claims of state sovereign immunity.

PennEast's pitch is expected to garner support from pipeline companies, who fear the court ruling will stymie efficient pipeline development, but to draw strong opposition from conservation and property rights advocates, who contend the company is asking an independent agency to stray beyond its powers to contradict the 3rd Circuit's legal reasoning about questions of constitutional authorities and congressional delegation.

The lawmakers, for their part, told FERC they were making the stop-work request so that "[i]n the event that the current route is deemed no longer valid and PennEast has to make substantial revisions to its connecting segments, we do not want landowners and surrounding communities to be subjected to tree-clearing and loss of property for a pipeline that can no longer be built along the FERC-authorized route."

NEW DETERMINATION

Amanda Osborne, a spokeswoman for Malinowski, said that "knowing that FERC can issue notices to proceed at any time, our intention with this letter was to make sure FERC does not allow damage to our New Jersey lands and does not authorize PennEast to proceed." She said FERC could consider the certificate to be invalid because the route is uncertain. The lawmakers asked for the block on land-clearing and construction-related activities until PennEast submits a new route for FERC a new National Environmental Policy Act review, and a new determination is made of whether the project is in the public interest.

Megan Gibson, staff attorney with the Niskanen Center, which has argued on behalf of landowners, said that while construction is not yet underway, it would not be bad for FERC to issue a stop-work order to draw a bright line blocking any work beyond surveying at this point.

Some permits for the project are still outstanding, such as the Delaware River Basin Commission docket and the New Jersey water-quality certification. Maya van Rossum of Delaware Riverkeeper Network said that while DBRC has said there can be no tree clearing within the Delaware Basin before DBRC acts, her group lacks such assurances for the part of the project traversing the Susquehanna River watershed in Pennsylvania.

-- Maya Weber, maya.weber@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com