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FERC Deals Major Setback for PennEast Pipeline

PennEast NJDEP application
Posted January 19, 2021

The Federal Energy Regulatory Commission today tabled its scheduled action on the PennEast pipeline’s application to construct the project in two phases after Commissioner Neal Chatterjee cited the concerns raised by the New Jersey Conservation Foundation and The Watershed Institute “that action on [the] amendment would run afoul of the Natural Gas Act’s prohibition on modifying or setting aside orders that are currently before the [D.C. Circuit] court.” Commissioner Chatterjee noted that he is still considering these arguments, assuring that he has “always tried to tread carefully to ensure the Commission does not run afoul of [the Natural Gas Act’s] prohibition [on modifying orders that are undergoing review in a circuit court].”

In 2018, FERC granted PennEast a Certificate of Public Convenience and Necessity giving the pipeline company initial approval for an interstate natural gas pipeline running through Pennsylvania and New Jersey. But when PennEast, a private party, tried to condemn New Jersey’s state protected resources, New Jersey defended its lands from seizure for this unneeded fossil fuel pipeline. The Third Circuit Court of Appeals backed the state’s action. More than a year later, PennEast went back to FERC, asking to expedite an amendment to its approval that would allow PennEast to split its project in two, so that it could build in Pennsylvania, regardless of the ultimate resolution of the New Jersey portion of the route.

The Natural Gas Act, which governs FERC’s authorization of interstate pipelines, bars FERC from modifying its orders while they are undergoing judicial review. Otherwise, pipelines could keep petitioning FERC to alter their pipeline projects as courts review the issues, leaving landowners and others affected by pipelines and unable to get any judicial input about the legality of the project’s terms. Because the D.C. Circuit Court of Appeals is holding the 2018 Certificate under exactly this type of review, New Jersey Conservation Foundation and The Watershed Institute argued that FERC cannot legally consider PennEast’s rushed application to amend its pipeline to be built in two phases.

“PennEast’s ill-conceived attempt to build their unneeded pipeline in two phases has been rightly stopped in its tracks,” said Tom Gilbert, Campaign Director for Energy, Climate and Natural Resources for the New Jersey Conservation Foundation. “The outgoing FERC Chairman was clearly trying to ram through a number of fossil gas projects before the change in Administration, but PennEast has fatal flaws that even FERC can’t ignore.”

“We raised strong legal arguments showing why the Commission shouldn’t consider PennEast’s application, and we are happy to see that the Commission is seriously considering those legal impediments to acting on this rushed application,” said Jennifer Danis, of counsel to Columbia Law Environmental Law Clinic, who represents the New Jersey Conservation Foundation and The Watershed Institute in this docket with assistance from third-year Columbia Law students, Jacob Elkin and Alyson Merlin.

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