PennEast Pipeline LLC suffered a potentially huge setback when a federal court yesterday denied the company’s bid to rehear a case involving its attempt to condemn state-owned lands for its 120-mile project.
The ruling by the United States Court of Appeals for the Third Circuit narrows the options for the company in its five-year quest to build the $1 billion pipeline from Luzerne County, PA, to Mercer County.
A terse turndown
The one-paragraph decision by the court rejected a petition for rehearing by PennEast, leaving the company with fewer alternatives: appealing the case to the U.S. Supreme Court or reconfiguring the pipeline’s route to avoid some 40 state-owned properties or lands previously preserved for agriculture, recreation or conservation.
In even more unlikely scenarios, the company and industry could push for changes to the Natural Gas Act or ask the Federal Energy Regulatory Commission to give private companies the authority to condemn state-owned lands. In its original September decision, the court ruled PennEast lacked legal authority to seize state lands.
“I think this kills the project,’’ said William Potter, a lawyer who works on energy issues. “The Supreme Court will never get into this natural gas-thicket.’’
PennEast said it is “evaluating all of its options in light of this recent development,’’ according to Pat Kornick, a spokeswoman for the company. “The PennEast member companies remain committed to the project,’’ she said.
Facing a colder winter?
PennEast and its backers say the project will deliver cheap natural gas from the Marcellus Shale areas of Pennsylvania to the metropolitan area, lowering winter heating costs for customers, as well as the cost of producing electricity. Natural gas supplies the winter-heating needs of up to 85% of homes and businesses in New Jersey,
The project, however, has led to widespread opposition in both states, mostly among environmentalists who want New Jersey to end its reliance on fossil fuels.
“This common-sense ruling takes New Jersey a step closer to permanently stopping a gas pipeline we don’t need,’’ said Tom Gilbert, campaign director for the New Jersey Conservation Foundation and ReThink Energy NJ. “Now, let’s get past the gas industry’s last-ditch efforts to prop up fossil fuels and instead keep moving down the path to clean, safe, affordable renewable energy like wind and solar.’’
Tim Duggan, an attorney representing private landowners fighting PennEast’s efforts to condemn their properties, called the court’s latest ruling a “huge deal.’’ He does not see how PennEast can reroute the pipeline around the 40 state properties, some of which include large areas of preserved farmland.
The continuing controversy over access to lands along the route of the pipeline has become a major stumbling block for the company, causing the New Jersey Department of Environmental Protection to deem incomplete PennEast’s permit application for key water-quality permits.