PennEast says court should invite FERC's view
Highlights pipe development in 3rd Circuit territory
PennEast Pipeline suggested there could be major impacts for interstate pipeline development in a prolific natural gas producing region, as it sought to convince a federal appeals court to reverse a ruling it called "profoundly wrong" and "profoundly consequential."
The 116-mile, 1.1 Bcf/d natural gas pipeline project faced a new legal obstacle September 10 when a three-judge panel of the 3rd US Circuit Court of Appeals found state sovereign immunity prevented the project from pulling New Jersey into federal court to condemn more than 40 properties in which the state has an interest. The pipeline would connect Marcellus Shale dry gas production to markets in Pennsylvania, New Jersey and New York.
The case is particularly important, PennEast said, because the 3rd Circuit has jurisdiction over one of the nation's most prolific gas-producing regions, and many interstate gas projects are proposed or under development there. No interstate natural gas pipeline of significant length can be built without crossing land in which a state claims an interest, PennEast told the court (PennEast Pipeline,19-1191).
INVITATION FOR FERC
In seeking rehearing, PennEast said the court should at a minimum invite the Federal Energy Regulatory Commission to provide its views. While the three-judge panel suggested the disruption from its ruling to the gas sector could be minimized if a federal agency brings condemnation actions, PennEast said the panel never asked FERC about the feasibility of that alternative, or sought the views of the federal agency charged with administering the Natural Gas Act.
As to the main legal questions, it told the court a condemnation action is "part and parcel" of the federal eminent domain authority that Congress delegated to certificate holders. "Suggesting that this long-established arrangement raises 11th Amendment difficulties is profoundly wrong," PennEast said.
TUG OF WAR AT FERC
The rehearing request comes as PennEast has asked FERC to issue an expedited declaratory order with its own "authoritative interpretation" that NGA condemnation authority applies to a property in which a state holds an interest (RP20-41). It also wants FERC to find that Congress delegated the federal government's exemptions from state sovereign immunity.
In comments on PennEast's pitch to the commission, state regulators, environmental groups and property rights advocates told FERC it lacks jurisdiction and would usurp the judiciary's role if it were to weigh in to help PennEast overcome the legal setback.
But trade groups representing pipeline companies and gas distributors have jumped in on PennEast's side, urging FERC to help maintain an 80-year-old practice surrounding eminent domain and avoid the potential for immediate disruption to infrastructure development connecting production to consumers.
