In 2015, the New Jersey Conservation Foundation (NJCF) commissioned TGG to evaluate the economic impacts of the PennEast Pipeline. TGG’s Expert Report on the PennEast Pipeline Project Economic Impact Analysis for New Jersey and Pennsylvania evaluated the economic impact study (PennEast Pipeline Project Economic Impact Report and Analysis) prepared for the PennEast Pipeline Company.
This 120-mile, 36-inch diameter pipeline would transport up to one billion cubic feet of Marcellus shale (fracked) natural gas per day from Pennsylvania to New Jersey. The PennEast Analysis claimed that the pipeline project would have considerable economic benefits in both states. TGG’s report demonstrated that the PennEast Analysis significantly overstated the total jobs from designing and building the pipeline by approximately two thirds or more. Furthermore, TGG concluded that these jobs would be very short-term. Actual construction would occur over a one-year period with activity and jobs concentrated into only six months. Most of the employment impacts would take place during the same period. Actual construction jobs (direct onsite construction jobs) would last an average of five months and over 50% of these jobs would go to out-of-state workers.
The TGG Report, along with the TGG Report Summary (first submitted to NJCF on November 4, 2015) were then submitted by NJCF as expert evidence to the United States Federal Environmental Regulatory Commission (FERC) on November 7, 2015. The TGG Report and Summary were filed as an addendum to NJCF’s October 29, 2015 Comments, regarding the PennEast Pipeline Application. The TGG Report and Summary were resubmitted to the FERC by the same party on September 8, 2016.
FERC approved the project in January 2018, but construction of PennEast has not yet begun. The project has encountered significant resistance from the public, land owners, conservation groups, elected officials and various regulatory and government authorities – which has resulted in compounded delays in permitting and construction commencement.
Following FERC approval, the key hurdle for PennEast has come from the State of New Jersey. New Jersey blocked PennEast from seizing state-controlled land to build the pipeline. In September 2019, the United States Court of Appeals for the Third Circuit ruled that New Jersey could stop PennEast from seizing state land, overturning a lower federal court ruling. In early 2020, PennEast petitioned the Supreme Court of the United States (SCOTUS) to review the case. The question presented to the Court is: Whether the Natural Gas Act delegates to Federal Energy Regulatory Commission certificate-holders the authority to exercise the federal government’s eminent-domain power to condemn land in which a state claims an interest. In other words, does sovereign immunity prevent PennEast from exercising eminent-domain power (delegated by the FERC) to condemn state land?
On February 3, 2021, the Supreme Court granted PennEast’s petition and oral arguments were held April 28, 2021. The Court added the following question: Did the Court of Appeals properly exercise jurisdiction over this case?
This Supreme Court case has attracted significant attention from the oil and gas industry. Industry is concerned that letting the appeals court decision stand could give states effective veto over natural gas pipelines. States are concerned about sovereign immunity (conferred by the 11th Amendment), which shields states from lawsuits brought by private parties. The Court considered the interplay of eminent domain and sovereign immunity in a case that could have significant implications for future US pipeline development. In June 2021, SCOTUS ruled in favor of PennEast in a 5-4 decision.
Despite the favorable ruling, on September 27, 2021, PennEast announced it would stop developing the proposed pipeline due to regulatory challenges in New Jersey. PennEast officially terminated the project in December 2021. Environmental groups claimed victory and celebrated the end of the project.
