The PennEast natural gas pipeline from Pennsylvania to New Jersey added a new chapter to its long controversial story, with the U.S. Supreme Court’s 5-4 ruling on June 29 that its developer can condemn N.J. state-owned land to build the 116-mile, $1-billion project.

New Jersey has opposed that action by PennEast Pipeline Co., in court battles since 2017, arguing that Federal Energy Regulatory Commission construction approval does not also confer federal eminent domain power to the company. 

The high court disagreed, reversing a 2019 appeals court decision as well, in saying that the federal government can constitutionally convey to pipeline developers the authority to condemn state property. Chief Justice John Roberts wrote the opinion with Justices Stephen Breyer, Samuel Alito, Sonia Sotomayer and Brett Kavanaugh agreeing.

Justice Amy Coney Barrett wrote a dissenting opinion, which other justices joined, including Justice Neil Gorsuch, who wrote a separate dissent on a narrow issue. The court did not rule on the merits of the project.

Nonconsenting states “surrendered their immunity from federal eminent domain power when they ratified the Constitution,” the majority opinion says. “Because the Natural Gas Act delegates federal eminent domain power to private parties, [they] can initiate condemnation proceedings, including against state owned property.”

Coney Barrett’s dissent says the majority argument “has no textual, structural, or historical support.” She said the High Court has “repeatedly held that the Constitution's Commerce Clause does not permit Congress to "circumvent state sovereign immunity.”

She said that the majority opinion was one of “pragmatic concern.” Siding with New Jersey would “thwart” federal policy and states could hold up construction of pipelines indefinitely, she wrote.

A Penn East official said in a statement that the ruling “protects consumers who rely on infrastructure projects — found to be in the public benefit after thorough scientific and environmental reviews.” 

But New Jersey Attorney General Gurbir S. Grewal noted “other ongoing legal challenges to this proposed pipeline, which is unnecessary and would be destructive to New Jersey lands.”

House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-NJ) said the ruling sets a dangerous precedent.

“I am determined to work with my colleagues to do everything in our power to preserve this important state right,” he said. “States like New Jersey should be able to retain their right to do what they wish with the lands they own, and no private actor, including pipeline companies, should be able to usurp that right.”

A U.S. Justice Dept filing earlier this year in the case further fanned the controversy when it advocated for broad federal powers and narrowed states' rights, despite previous Biden Administration actions related to pipeline projects and fossil fuel energy.

Paul Clement, an attorney for PennEast, told the court in April oral arguments that the developer would alter the project route if the justices ruled against it.

The decision enables PennEast, a consortium that includes Southern Co., New Jersey Resources Corp., South Jersey Industries, Spectra Energy Partners and UGI Corp. to proceed with lawsuits to seize more than 40 properties.

The decision "upholds the Natural Gas Act’s delegation to certificate holders of the power to acquire any rights-of-way necessary to construct vital natural gas infrastructure projects," said Amy Andryszak, president and CEO of the Interstate Natural Gas Association of America.

"We are pleased by the result and are looking forward to getting to work,” said Greg Lalevee, business manager of operating engineers' union Local 825 in Springfield, N.J.

The ruling is likely to revive a similar sovereign immunity challenge over the Eastern Panhandle Expansion Project in Maryland that has been on hold in the 4th U.S. Circuit Court of Appeals, a sector observer told E&E News.

But the project is still facing numerous legal and regulatory hurdles, including environmental approvals from the U.S. Army Corp of Engineers, the Delaware River Basin Commission and the state Dept. of Environmental Protection, says Tom Gilbert, campaign director for New Jersey Conservation Foundation and ReThink Energy NJ. The latter has twice denied project permits.

"This project cannot move forward without a New Jersey authorization finding that it could be built consistent with Clean Water Act laws – which are designed to protect waters and wetlands against destructive projects like PennEast," said Jennifer Danis, senior fellow at the Columbia University Sabin Center for Climate Change Law and of counsel to Morningside Heights Legal Services at the university law school. "While it's outrageous that the court sidestepped decades of sovereign immunity jurisprudence, the Murphy administration went to the mat trying to guard its public and stewarded conservation lands."

More "consequential" will be another recent federal court decision ordering FERC to review its overall approval process for interstate oil and gas pipelines, she said.