New Jersey Governor Phil Murphy tweeted on Oct. 11 that state environmental regulators denied a permit that PennEast Pipeline Co. needed to build its proposed $1 billion natural gas pipe from Pennsylvania to New Jersey.
The decision followed a ruling by a U.S. appeals court in September that barred PennEast from using federal law to seize properties controlled by New Jersey to build the project.
In his tweet, Murphy posted a letter from the New Jersey Department of Environmental Protection denying PennEast’s application for a Water Quality Certificate because the company “no longer has the legal authority to perform activities on 49 properties along the proposed pipeline” route after the court ruling.
“My administration fought and won in court to stop the proposed...pipeline. We are committed to transition New Jersey to 100% clean energy by 2050,” Murphy said.
PennEast obtained approval from the U.S. Federal Energy Regulatory Commission (FERC) to build the pipeline in January 2018 and promptly sued in federal court to use the federal government’s eminent domain power to gain access to 131 properties along the route in New Jersey under the U.S. Natural Gas Act.
New Jersey did not consent to PennEast’s condemnation suits on properties it controls. The state holds interests in most of the properties through easements requiring the land be preserved for recreational, conservation or agricultural use.
PennEast needs the land to build its 120-mile (190-km) pipeline, which is designed to deliver gas from the Marcellus shale formation in Pennsylvania to customers in Pennsylvania and New Jersey.
Patricia Kornick, a spokeswoman for PennEast, said the company “is confident the legal actions will be resolved favorably and the long-standing legal precedent under which FERC has operated ... will be upheld.”
The company has said it anticipates starting construction on the pipeline in 2020.
The companies seeking to build the PennEast pipeline include units of New Jersey Resources Corp. (NJR), South Jersey Industries Inc. (SJI), Southern Co., Enbridge Inc. and UGI Corp.
The companies with contracts to use the project include units of NJR, SJI, Southern, Public Service Enterprise Group Inc. and Consolidated Edison Inc.
PennEast is not the only gas pipeline facing state opposition in the U.S. Northeast. Two of Williams Cos Inc.’s proposed pipelines are facing state opposition, including Constitution in New York and Northeast Supply Enhancement in New Jersey.
Oilfield services companies will need to preserve capital and ride out the storm before they can expect to see an uptick in activity.
A U.S. Supreme Court decision recognizing about half of Oklahoma as Native American reservation land has implications for oil and gas development in the state, raising complex regulatory and tax questions.
Canceled pipelines and green ambitions could point to a declining role of oil and gas in the U.S. energy mix.