The 3rd U.S. Circuit Court of Appeals has vacated a key New Jersey environmental permit needed for the proposed $1 billion Northeast Supply Enhancement (NESE) project, which would deliver natural gas from Pennsylvania to New York City via new pipelines beneath Raritan Bay.
In the decision Tuesday, the court said the New Jersey Department of Environmental Protection failed to adequately explain how the project would comply with the state’s water quality standards when DEP issued a Water Quality Certification last November.
“NJDEP’s decisional documents do not adequately explain its conclusion that Transco’s dredging will comply with New Jersey’s water quality standards,” Judge Jane Roth wrote in the unanimous court decision.
Although the ruling is a significant setback for the project, it does not permanently stop it. The three-judge panel remanded the case back to NJDEP and directed the agency to address several issues related to the effects of dredging and project monitoring requirements.
The lawsuit was brought by the Natural Resources Defense Council and other environmental groups against DEP. The Transcontinental Pipeline Co. LLC (Transco), a wholly owned subsidiary of the Williams Companies, intervened in the case to defend the DEP approval. NJBIA filed a brief supporting Transco’s position that the water quality certification should be upheld.
The NESE pipeline project is designed to expand Transco’s natural gas delivery system and provide additional gas supplies to the New York metropolitan area. The New Jersey portion of the project would include a new compressor station in Franklin Township, an onshore pipeline segment, approximately six miles of underwater pipeline beneath Raritan Bay, and 17 miles of underwater pipeline in New York waters.
Although the project does not serve New Jersey utility customers, the state would benefit economically from the construction phase of the project through jobs and tax revenue. According to the Williams Companies, the NESE project will provide $1.8 billion in economic development to Pennsylvania, New Jersey and New York, and create 2,000 well-paying jobs.
Environmental groups have challenged the water quality approvals issued by both the NJDEP and the New York Department of Environmental Conservation (NYDEC) with different outcomes in different judicial jurisdictions.
On Aug. 21, the 2nd U.S. Circuit Court of the Appeals upheld New York’s approval that gave the project its Clean Water Act Section 401 Water Quality Certification, finding that New York regulators had adequately explained their decision. Less than three weeks later, the 3rd U.S. Circuit Court of Appeals has now reached the opposite conclusion regarding the water quality certification issued by New Jersey regulators for the same project.
The court's ruling leaves NJDEP with several options. The agency can supplement its explanation, require Transco to provide additional information or analysis, issue a new or revised certification, or reach a different decision.
