PennEast and the Natural Gas Act
This week, the U.S. Supreme Court ruled in favor of the PennEast Pipeline, asserting the legal authority of the Natural Gas Act, which was passed by Congress to regulate the natural gas delivery system.
So, what is this all about?
The PennEast Pipeline is a pipeline under construction that will bring natural gas to communities across Pennsylvania and New Jersey. Once completed, the 36-inch pipeline could provide affordable, reliable and safe energy via a delivery system of approximately 1 billion cubic feet (Bcf) of natural gas per day – enough to serve the equivalent of more than 4.7 million homes.
What brought us to the Supreme Court comes on the heels of a lower court’s decision that a developer could not use eminent domain to obtain a right-of-way on land in which a state holds an interest. , in this case, the state of New Jersey.
However, under the Natural Gas Act, an interstate pipeline needs a certificate of public convenience and necessity from the Federal Energy Regulatory Commission, and once a project receives a certificate it has eminent domain authority, which PennEast Pipeline received. On June 29, 2021, the Supreme Court of the United States issued an opinion that held that the Natural Gas Act §717f(h) authorizes certificate holders to condemn all necessary rights-of-way, whether owned by private parties or state governments.
As AGA’s President and CEO Karen Harbert notes, “In enacting the Natural Gas Act, Congress sought to ensure reliable consumer access to natural gas supply at affordable prices. Our interstate energy infrastructure transcends any one individual state and customers need access to an adequate supply of natural gas to meet their energy needs.”
The Court’s ruling isn’t the only hurdle for new pipelines. All natural gas pipelines are required to undergo stringent environmental and economic reviews.
Delivering natural gas to more homes and businesses across the United States has numerous benefits for both homeowners and their communities. For residential customers, homeowners can save on average $879 per year when using natural gas to cook, heat their homes and wash their clothes. Not to mention the environmental benefits — the use of natural gas has been one of the primary reasons power sector emissions have decreased to 27-year lows, even as natural gas utilities add on average 663,000 customers per year. Our interstate energy infrastructure transcends any one individual state and customers need access to an adequate supply of natural gas to meet their energy needs. The Supreme Court’s decision helps ensure that current and future projects can obtain needed rights-of-way and local distribution companies can meet their obligation to safely and reliably serve customers.