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PennEast pipeline canceled after years of regulatory and legal delays

Seven years after its announcement, the PennEast pipeline was canceled following repeated regulatory and legal setbacks that increasingly complicated other natural gas infrastructure projects across the country.

PennEast scrapped the project on Monday following what it called “an in-depth assessment and discussion” among its five member companies. The project fought for years against landowners, environmental groups and the state of New Jersey. Despite a crucial victory for the pipeline over the summer, the developers ultimately said there were too many regulatory hurdles left, including the need for water quality certification in New Jersey. The state had previously refused the permit.

The project abandoned its multi-year efforts to condemn New Jersey-owned land last week. The decision came after the United States Supreme Court in June cleared a key obstacle on the way to completion of the project when it discovered that the pipeline could use eminent domain to secure the plots in question.

“We’re thrilled because this pipeline was never needed,” said attorney Jennifer Danis, who represents the New Jersey Conservation Foundation. The organization owns land that would have been on the PennEast Road. “It was destructive, it would have harmed the state’s wetlands and water quality, while committing New Jersey taxpayers to fossil fuel infrastructure that would last 50 to 80 years when there was an overabundance of capacity – no one has ever needed it to start. “

Danis said NGI’s daily shale that the State also played a decisive role in stopping the project. She said state officials “took to the mat” to fight the project because they knew there was “no business case for it.” Other groups such as the Delaware Riverkeeper Network (DRN), Berks Gas Truth, Environment New Jersey, and the New Jersey Sierra club have teamed up to resist PennEast.

“We knew we would get here eventually, it was only a matter of time,” said Maya van Rossum, leader of the DRN.

PennEast now joins a growing list of natural gas infrastructure projects, including the Constitution Pipeline and North Access Expansion Project in the Northeast, that have been canceled or have been unable to go through l ‘before.

“PennEast’s cancellation confirms the fact that it is nearly impossible to complete a new pipeline from northeastern Pennsylvania,” said Ryan Smith, analyst at East Daley Capital Inc.

PennEast was one of two new pipeline projects pending in the Appalachian Basin. The Mountain Valley pipeline has also faced stiff opposition and constant delays. Smith said NGI’s daily shale that rising gas prices and stronger international demand for liquefied natural gas are likely to significantly boost production in the basin in the years to come. With no additional pipeline capacity built, the company expects existing infrastructure and expansion projects to fill up quickly.

“This will again create serious constraints to take out of the region, and we expect the base in Appalachia to weaken considerably.”

The Interstate Natural Gas Association of America (INGAA) noted that about three-quarters of New Jersey residents depend on natural gas to heat their homes. The group said the sharp increases in natural gas prices in the Northeast in recent years demonstrate the need for more infrastructure to serve the region.

“The United States has abundant natural resources that can provide affordable energy for every American family, such as the Marcellus Shale, which is the second largest natural gas field in the world,” an INGAA spokesperson said. . “However, if we cannot get this gas to where it is needed because of the regulatory and legal challenges of those who simply impose higher energy bills on working families, we are effectively abandoning this strategic US asset. . “

The Marcellus Shale Coalition (MSC) added that the developers’ decision to abandon the project would also hurt the regional workforce.

“While this is a good day for extremist politicians and anti-energy activists, it is a terrible day for consumers, our regional construction trades and our US energy security,” MSC Chairman David Callahan said. .

The 120-mile, 1 Gcf / d system would have moved more gas from the Pennsylvania shale fields to the rest of the state and New Jersey. Given the setbacks, the developers had planned to move the project forward in two stages. The first section was to be brought online in Pennsylvania and the second in New Jersey, where about a third of the system would have been located in Hunterdon and Mercer counties.

“This is a disappointing move that highlights the need for a more streamlined and reasonable regulatory approach to pipeline development,” said Kurt Knaus, spokesperson for PA’s Energy Alliance. “Pennsylvania will now lose its share of what was supposed to be $ 1.2 billion in investment.”

It’s unclear exactly how much PennEast invested in the project, which was set to cost around $ 1 billion. The system was a joint venture of NJR Pipeline Co., SJI Midstream, Southern Company Gas, Enbridge Inc. and UGI Energy Services.

“I think this should send the signal that the days of trying to meet needs through these affiliate-supported pipelines should be over,” said Danis, who is also a senior researcher at the Sabin Center for Climate Change Law from Columbia Law School. She noted that PennEast’s decision also came after a federal appeals court earlier this year overturned Spire STL Pipeline LLC’s certificate, concluding that federal regulators had failed to properly consider the market’s needs for the project.

“No one wants to pay for infrastructure for 50 years when we know that to meet our climate goals, they don’t have that kind of life,” Danis said.

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