PennEast Pipeline Co. Suspends Condemnation Lawsuits in Northeast Penna.

PennEast was suing 70 property owners to build natural gas pipeline — But, this week it suddenly stopped, citing regulatory and legal hurdles

From an Article by Peter Hall, The Morning Call, August 10, 2021

On the heels of a legal victory that toppled a major obstacle, PennEast Pipeline Co. said it would halt the acquisition of property needed to build its planned 116-mile natural gas pipeline that would cut across the Lehigh Valley, saying the timeline for construction of the project is uncertain.

Attorney Tony Corby of Hershey said it was a surprise Monday when a company attorney said in a teleconference with a judge that PennEast would dismiss condemnation lawsuits in federal court to obtain the right of way to build the pipeline across private properties. Corby’s firm represents 18 of the more than 70 private property owners who have been sued in U.S. district courts in Pennsylvania for pipeline easements on their land.

A company spokesperson said Tuesday that while the project is critical in meeting the energy needs of southeastern Pennsylvania and New Jersey, there is uncertainty over the timing to resolve remaining legal and regulatory hurdles. The pipeline would connect the Marcellus Shale gas fields in Luzerne County with consumers, crossing Bucks, Carbon, Monroe and Northampton counties and terminating in Mercer County, New Jersey.

“PennEast believes it is not prudent to complete the acquisition of the rights of way in the pending actions in Pennsylvania, as it might not be necessary for some time,” spokesperson Pat Kornick said.

News of PennEast’s decision came as a relief for residents along the pipeline route, who have bitterly opposed its construction because of the environmental impacts and disruption of their property.

“On behalf of the landowners impacted by this pipeline, we are overjoyed at the news that PennEast will be withdrawing their eminent domain actions against us and that this cloud is lifted. We have waited for this news for seven long years,” said Linda Christman, president of Save Carbon County, a citizens group organized to oppose the PennEast pipeline.

Kornick said PennEast is in discussions with attorneys representing the affected landowners about dismissing the eminent domain actions in a way that would allow them to be restarted once the project receives the remaining approvals and the construction timeline becomes clear. Corby said that his firm is working to determine which landowners have already had land taken and those who would be entitled to fees for interim use of the property, delay damages and professional fees.

“For all the cases in which they have already acquired the easement rights, they’re probably not going to give that land back,” Corby said.

PennEast’s decision comes about a month after the company scored a victory for pipeline operators when the U.S. Supreme Court ruled that the federal government’s blessing to build the project gives it the power to seize state-owned land for the right of way. The Federal Energy Regulatory Commission granted PennEast a certificate of public convenience and necessity in 2018, clearing the project to move forward.

The company took New Jersey to court to seize farmland and environmentally sensitive areas the state had preserved through development easements. Although a federal judge blocked the action, the Supreme Court ruled in June in PennEast’s favor.

Chief Justice John Roberts wrote for the majority that when FERC issues a certificate of public convenience and necessity, federal law authorizes the certificate’s holder “to condemn all necessary rights-of-way, whether owned by private parties or States.”

Although the company planned to start construction of a 68-mile section of the pipeline ending in Bethlehem Township and said it would be operational this year, PennEast still must obtain approval from FERC to split the project into two phases. Other legal challenges were put on hold while the Supreme Court appeal was pending.

In a June 30 quarterly Securities and Exchange Commission filing, New Jersey Resources Corp. indicated a decline in the value of its equity investment in the project. New Jersey Resources, which has a 20% state in PennEast, is one of five member companies that also include UGI Energy Services.

Citing an analysis of the likely outcomes of regulatory and legal matters, their uncertain timelines, construction costs and the current environmental and political climate relating to interstate pipeline development, New Jersey Resources said it recorded a $92 million write-down in the value of its investment in the project.