PennEast confirms cancellation of $1 billion pipeline project to FERC

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PennEast Pipeline Company has confirmed to federal officials that the member companies have stopped all further development of the $1 billion pipeline project.

In a letter to Federal Energy Regulatory Commission (FERC), Jeffrey England, the PennEast Pipeline project manager, said member companies determined that further development could not move forward due to the challenges in acquiring certain permits needed for construction to begin such as a water quality permit and other wetlands permits for the New Jersey portion of the project.

Confirming to the federal agency what had been previously stated in September about the project being canceled due to legal and regulatory hurdles.

Before September’s announcement on the canceling of the pipeline, PennEast had suspended efforts to condemn state-owned land in New Jersey for the proposed project. The company also previously halted the condemnation of land for the portion of the project in Pennsylvania in 2021.

The letter provided to FERC on Nov. 30 was in response to a request from the federal agency for a status report and statement on whether PennEast still planned to construct the pipeline.

“On February 20, 2020, the FERC granted PennEast Pipeline Company, LLC (PennEast) an extension of time to complete construction and make the PennEast Pipeline Project available for service by Jan. 19, 2022,” wrote Rich McGuire, director Division of Gas-Environment and Engineering. “Commission staff has become aware of conflicting statements in press reports and court filings regarding whether PennEast plans to continue developing the project.”

Had PennEast moved forward with the project municipalities in Mercer County, such as Hopewell Township, would have been impacted by the pipeline project.

In June, PennEast had received welcome news when the U.S. Supreme Court in a 5-4 decision had ruled that the PennEast Pipeline project can proceed with condemning New Jersey state-owned land for the company’s $1 billion pipeline project.

The decision by the court overturned a 2019 Third Circuit Court of Appeals decision, which denied the condemning of more than 42 parcels of New Jersey state-owned land for the company’s pipeline project.

The construction of the 116-mile long natural gas pipeline would have been from Pennsylvania into New Jersey. If the pipeline project were to be constructed, its construction would have occurred in Mercer County.

The New Jersey portion of the pipeline accounted for about one-third of the total project. Phase One of the pipeline project would have consisted of 68 miles of pipeline in Pennsylvania. Phase Two would have finished the remaining route in Pennsylvania and New Jersey.

The project has faced pushback from local residents, environmental organizations and the state.

“Today’s acknowledgement from PennEast that it’s project is dead puts to rest any speculation that the company is still seeking to build the pipeline. It also confirms that this unneeded project will not take our lands, pollute our waters or undermine our transition to a clean energy future,” said Tom Gilbert, campaign director, New Jersey Conservation Foundation and ReThink Energy NJ. “This pipeline was never necessary and PennEast’s efforts to sell its solution in search of a problem have failed.”

PennEast faced several setbacks in the New Jersey portion of the pipeline.

In November 2019, the company made the decision to appeal its federal appeals case to the U.S. Supreme Court (SCOTUS).

The decision came in light of a November ruling by Third Circuit Court of Appeals, denying PennEast’s request to rehear a case concerning the condemning of 42 parcels of New Jersey state-owned land for PennEast’s pipeline project.

Due to that denial and opinion by the third circuit, the New Jersey Department of Environmental Protection also denied the company’s Freshwater Wetlands Permit application siting that PennEast’s application could not be “administratively complete” because of the circuit’s decision.

SCOTUS would rule in PennEast’s favor, but the company still had to secure permits from entities such as the New Jersey Department of Environmental Protection, the U.S. Army Corp of Engineers, and the Delaware River Basin Commission.

The company then halted the condemning of land in Pennsylvania and New Jersey, before making the decision to cancel the project.