Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

U.S. court says PennEast cannot condemn NJ state lands for pipeline

Published 2019-09-10, 10:51 a/m
© Reuters.  U.S. court says PennEast cannot condemn NJ state lands for pipeline
PEG
-
SO
-
ED
-
NG
-
ENB
-

By Scott DiSavino

Sept 10 (Reuters) - A U.S. appeals court on Tuesday barred PennEast Pipeline Co from using a federal law to seize properties controlled by the state of New Jersey in order to build a proposed $1 billion natural gas pipeline from Pennsylvania to New Jersey.

The U.S. Court of Appeals for the Third Circuit said in its decision that the U.S. Natural Gas Act does not allow companies to condemn state controlled land in federal court because states enjoy sovereign immunity from such actions under the Eleventh Amendment of the U.S. Constitution.

PennEast obtained approval from the U.S. Federal Energy Regulatory Commission to build the project in January 2018 and promptly sued in federal district 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, which opposes construction of the pipe, did not consent to PennEast's condemnation suits on 42 of the 131 properties it controls. The state holds possessory interests in two of the properties and non-possessory interests in the rest, most often 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 will deliver gas from the Marcellus shale formation in Pennsylvania to customers in Pennsylvania and New Jersey. U.S. District Court in New Jersey ruled in favor of PennEast and granted the company access to the properties. The state appealed that decision and the Court of Appeals on Tuesday vacated the district court's order.

Patricia Kornick, a spokeswoman for PennEast, said the company "will review the Third Circuit Court's opinion and determine what our next steps will be."

She said the company anticipates starting construction on the pipeline in 2020.

The companies seeking to build PennEast include units of New Jersey Resources Corp NJR.N (NJR), South Jersey Industries Inc SJI.N (SJI), Southern (NYSE:SO) Co SO.N , Enbridge Inc ENB.TO and UGI Corp UGI.N .

The companies with contracts to use the project include units of NJR, SJI, Southern, Public Service Enterprise Group (NYSE:PEG) Inc PEG.N and Consolidated Edison Inc (NYSE:ED) ED.N .

FACTBOX-U.S. new natural gas pipeline projects

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.