May 16, 2021

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New Jersey’s Gas Pipeline Veto

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The Biden Administration is no fan of fossil fuels. But even it disagrees with New Jersey’s slick argument in a case the Supreme Court will hear Wednesday that the Constitution gives states a veto over interstate gas pipelines that trumps federal regulatory and judicial review.

At issue in PennEast Pipeline Co. v. New Jersey is a 116-mile pipeline between Pennsylvania and New Jersey. The Federal Energy Regulatory Commission (FERC) approved the pipeline after a two-year review that involved more than 200 meetings with public officials. Some 70 variations were made to the route during the review.

New Jersey sought to block the pipeline by invoking its sovereign immunity under the Eleventh Amendment to block the condemnation of 42 state parcels of land needed to build the pipeline.

Once FERC certifies a pipeline, the Natural Gas Act delegates the federal government’s eminent domain power to the pipeline company. Other federal laws delegate federal eminent domain power to private parties to build railroads and transmission lines, though many explicitly carve out state property. The Natural Gas Act has no such carve-out.

Yet New Jersey argues in the case now before the High Court that the Eleventh Amendment prohibits states from being sued by private parties in federal court. Ergo, PennEast Pipeline can’t use FERC’s eminent domain delegation to condemn state sovereign property in federal court.

But as the acting U.S. Solicitor General explains in a brief supporting PennEast, New Jersey is waging a “collateral attack” on FERC’s authority and the regulatory scheme Congress devised in the Natural Gas Act. New Jersey claims only partial ownership and control over 40 of the 42 parcels at issue.

It would be virtually impossible to build a pipeline that doesn’t traverse a parcel that New Jersey doesn’t claim to control. 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.

This was what Congress sought to prevent when it amended the Natural Gas Act in 1947 by delegating the federal government’s eminent domain power to pipeline companies. Congress’s eminent domain delegation was intended to stop states from interfering with interstate commerce.

But now New Jersey is seeking to block the pipeline to hamper fossil-fuel development in Pennsylvania. This is a direct assault on the Constitution’s Supremacy and Commerce clauses. The Constitution grants states some sovereign powers, but New Jersey is behaving as if it’s a separate sovereign nation.

Journal Editorial Report: Paul Gigot interviews environmentalist Bjorn Lomborg. Image: Christopher Furlong/Getty Images

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2021-04-26 18:37:00

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