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Released June 07, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The U.S. Supreme Court could decide this month on a case that pits the powers of eminent domain against the sovereign immunity of states. More down to earth, the matter involves the future of the PennEast Pipeline project, which would move natural gas 116 miles from northeast Pennsylvania to western New Jersey.
With an estimated cost of about $1 billion, the 36-inch-wide pipeline would deliver more than 1 billion cubic feet (Bcf) per day of Marcellus shale gas from Luzerne County, in northeastern Pennsylvania, to Transco's pipeline interconnection near Pennington, New Jersey, according to one of the project's member companies, UGI Energy Services, a subsidiary of UGI Corporation (NYSE:UGI) (King of Prussia, Pennsylvania). Other backers include Southern Company (NYSE:SO) (Atlanta, Georgia) and Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta).
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline Project Database can click here for detailed reports on the PennEast project.
The Federal Energy Regulatory Commission (FERC) approved the project in 2018, and the proposed pipeline hasn't encountered substantial roadblocks in Pennsylvania.
However, opposition by state officials, environmentalists and residents is high in New Jersey. At issue is whether PennEast can use eminent domain to take 49 state-owned and state-controlled parcels of land in New Jersey that are needed for the project, according to National Public Radio's StateImpact Pennsylvania. New Jersey officials want to block the pipeline by stopping PennEast from acquiring those parcels.
PennEast won the first round in a lower court, but in 2019, the U.S. Court of Appeals for the Third Circuit said PennEast couldn't use eminent domain to take New Jersey state lands because the condemnation would interfere with the state's sovereign immunity as set in place by the 11th Amendment of the U.S. Constitution. New Jersey maintains the Constitution prohibits private entities such as PennEast Pipeline from using eminent domain powers to condemn state property, even though those powers are delegated by FERC.
PennEast was joined by the Biden administration (which is, ironically, siding with the earlier Trump administration) in seeking a reversal of the appeals court decision. The Supreme Court agreed to hear arguments in the case in April.
PennEast attorney Paul Clement told the Supreme Court that the Natural Gas Act of 1938 empowers FERC to "deputize" private gas pipeline companies to use eminent domain to acquire land for projects. He argued this includes land owned or controlled by states.
Jeremy Feigenbaum, New Jersey's state solicitor, argued that the U.S. government could itself bring eminent domain suits against states, but that non-consensual suits by private parties "against the states are never proper," according to SCOTUSblog.com.
The Supreme Court's decision could have big implications for future pipeline projects.
If New Jersey is allowed to use sovereign immunity to block the taking of the state-owned parcels by PennEast Pipeline, it "would be virtually impossible to build a pipeline that doesn't traverse a parcel that New Jersey doesn't claim to control," wrote The Wall Street Journal in an editorial. "The same is true in every state. Under New Jersey's argument, any state could block a FERC-approved pipeline simply by refusing to grant a developer access to property it claims to control."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
With an estimated cost of about $1 billion, the 36-inch-wide pipeline would deliver more than 1 billion cubic feet (Bcf) per day of Marcellus shale gas from Luzerne County, in northeastern Pennsylvania, to Transco's pipeline interconnection near Pennington, New Jersey, according to one of the project's member companies, UGI Energy Services, a subsidiary of UGI Corporation (NYSE:UGI) (King of Prussia, Pennsylvania). Other backers include Southern Company (NYSE:SO) (Atlanta, Georgia) and Enbridge Incorporated (NYSE:ENB) (Calgary, Alberta).
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline Project Database can click here for detailed reports on the PennEast project.
The Federal Energy Regulatory Commission (FERC) approved the project in 2018, and the proposed pipeline hasn't encountered substantial roadblocks in Pennsylvania.
However, opposition by state officials, environmentalists and residents is high in New Jersey. At issue is whether PennEast can use eminent domain to take 49 state-owned and state-controlled parcels of land in New Jersey that are needed for the project, according to National Public Radio's StateImpact Pennsylvania. New Jersey officials want to block the pipeline by stopping PennEast from acquiring those parcels.
PennEast won the first round in a lower court, but in 2019, the U.S. Court of Appeals for the Third Circuit said PennEast couldn't use eminent domain to take New Jersey state lands because the condemnation would interfere with the state's sovereign immunity as set in place by the 11th Amendment of the U.S. Constitution. New Jersey maintains the Constitution prohibits private entities such as PennEast Pipeline from using eminent domain powers to condemn state property, even though those powers are delegated by FERC.
PennEast was joined by the Biden administration (which is, ironically, siding with the earlier Trump administration) in seeking a reversal of the appeals court decision. The Supreme Court agreed to hear arguments in the case in April.
PennEast attorney Paul Clement told the Supreme Court that the Natural Gas Act of 1938 empowers FERC to "deputize" private gas pipeline companies to use eminent domain to acquire land for projects. He argued this includes land owned or controlled by states.
Jeremy Feigenbaum, New Jersey's state solicitor, argued that the U.S. government could itself bring eminent domain suits against states, but that non-consensual suits by private parties "against the states are never proper," according to SCOTUSblog.com.
The Supreme Court's decision could have big implications for future pipeline projects.
If New Jersey is allowed to use sovereign immunity to block the taking of the state-owned parcels by PennEast Pipeline, it "would be virtually impossible to build a pipeline that doesn't traverse a parcel that New Jersey doesn't claim to control," wrote The Wall Street Journal in an editorial. "The same is true in every state. Under New Jersey's argument, any state could block a FERC-approved pipeline simply by refusing to grant a developer access to property it claims to control."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
