Partners in the PennEast Pipeline project have ceased development of the 116-mile, 1.1 Bcf/d natural gas pipeline, pointing to a continued lack of water and wetland permits in New Jersey.
In a statement Sept. 27, PennEast said that following extensive evaluation and discussion, the partners recently determined "further development of the project is no longer supported."
The project would have linked Marcellus Shale dry gas production with markets in Pennsylvania, New Jersey and New York.
"Although PennEast received a certificate of public convenience and necessity from [the Federal Energy Regulatory Commission] to construct the proposed pipeline and obtained some required permits, PennEast has not received certain permits, including a water quality certification and other wetlands permits under Section 401 of the Clean Water Act for the New Jersey portion of the project," PennEast said in a statement.
Partners in the project include Enbridge, NJR Pipeline, SJI Midstream, Southern Company Gas and UGI Energy Services.
The project in June won a significant legal victory when the US Supreme Court sided with the pipeline to find that the federal government could delegate to private pipeline companies the authority to condemn rights-of-way on land in which a state has an interest. A September 2019 decision by the 3rd US Circuit Court of Appeals had put the future of the pipeline route into question by blocking PennEast from condemning lands in which New Jersey had a stake.
Despite that legal victory, the project faced other regulatory hurdles in New Jersey, and still needed important water and wetland authorizations from the state.
In addition, PennEast was not seeing quick action at FERC on its proposed amendment to its certificate that would allow it to build the project in two phases (CP20-47), with the first in the friendlier regulatory terrain of Pennsylvania.
Already, this summer, four of the PennEast pipeline partners said they had written down their investments in the project due to ongoing legal and regulatory challenges. While they said they continued to believe the project was needed to meet Northeast energy demand, they conceded ongoing challenges put timing, regulatory milestones and startup in question.
The project faced strong opposition from environmental groups and landowners in New Jersey, amid a continued challenging environment for major pipeline expansions in the US Northeast.
Enbridge, in an Sept. 27 email to S&P Global Platts, said it and its partners had decided not to pursue the project "despite the sustained need for additional access to natural gas in the region." Enbridge noted the project "encountered significant legal and regulatory obstacles and we no longer believe the project can be efficiently completed."
"Enbridge's Texas Eastern Transmission pipeline continues to deliver vital sources of energy to Pennsylvania and New Jersey and is well-positioned to meet the growing need for reliable, affordable natural gas," the company said.