Tom Shepstone
Shepstone Management Company, Inc.

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The U.S. Supreme Court has officially granted PennEast Pipeline a review of its case against the State of New Jersey unjust actions.

PennEast Pipeline announced some extremely good news yesterday; the United States Supreme Court is officially taking its case against Phil Murphy’s Garden State Goons. The Goons tried to argue no pipeline has the right to condemn even so much as a farmland easement to place unobtrusive but critical natural gas infrastructure under the corn. It’s a ridiculous stand, but this case has also been elevated in importance by the approaching FERC disaster that is the Biden Administration. The new FERC is, unless the Supreme Court steps in, going to effectively halt all pipeline construction over issues no one ever imagined under existing law.

Would you notice the pipeline but for the marker, or would you just appreciate the view?

Here’s the statement from PennEast:

Tony Cox, Chair of the Board of Managers of the PennEast Pipeline Company, released the following statement upon the Supreme Court of the United States granting the petition for certiorari in PennEast Pipeline Company LLC v New Jersey (No. 19-1039):

“Today’s decision by the U.S. Supreme Court granting the petition for certiorari in the PennEast Pipeline case is a major step forward in upholding Congress’ clear charge to the Federal Energy Regulatory Commission (FERC) to ensure the availability of affordable domestic energy, delivered safely and reliably via natural gas infrastructure. Federally approved pipeline projects undergo an extensive review process, and support jobs, reliable energy systems, a cleaner environment, and lower energy bills, which together, benefit our region’s families and businesses.

“Congress passed the Natural Gas Act specifically to avoid state and local vetoes of interstate projects found by federal regulators to be in the public need and benefit. The misguided Third Circuit ruling in fall 2019 turned nearly 80 years of federal government interpretation and industry practice on their heads. In its written response before the U.S. Supreme Court last spring, the State of New Jersey even agreed that the U.S. Constitution allows the federal government to condemn state property and took issue only with whether it can delegate that authority to a private party.

“Eighteen business, labor and consumer advocacy organizations filing amicus briefs in support of the PennEast petition demonstrate the importance of reversing the Third Circuit decision. We remain hopeful that after hearing full arguments this term, the U.S. Supreme Court will agree that the Third Circuit’s decision was profoundly wrong.

“Finally, there are several factors potentially impacting the anticipated in-service date such as approval from FERC on the phased approach, approval of the remaining permit applications from Pennsylvania regulators, and construction-related considerations. At this time, we anticipate placing the Phase One facilities in service in 2022. We anticipate placing the Phase Two facilities in service in 2024, though there may be a shift to the anticipated timeline depending on a number of factors.”

“We continue to work with all regulators to move the project forward, and meet the well-established needs of our customers.”

As I stated in an earlier post, “it’s very difficult to get the U.S. Supreme Court to take any case, but New Jersey’s egregious action was “a stupid pipeline trick, as I explained here and it needs to be smashed.” The main issue, of course, has to do with the legal supremacy of the Federal government vis-a-vis the states on matters of vital national importance. Can one state be allowed to halt much needed infrastructure by another or to frustrate interstate commerce for the sake of green political posturing by Phil Pander Bear Murphy?

There is also a theoretically secondary, but to me crucial political issue as I wrote earlier and wish to continue to emphasize because I think it’s so important and is not gotten quite the attention it deserves in previous proceedings:

And, the abuse of easement law must get greater attention. These agricultural and conservation easements were never intended to interfere with interstate commerce or with natural gas pipeline infrastructure. The idea a pipeline is incompatible with agriculture is false on its face as a thousand pictures of farmland above pipelines being plowed will demonstrate and every pipeline is a wildlife bonanza for deer, turkeys and the Golden Winged Warbler.

There are three aspects of the easement abuse that must addressed. First..how can the donation or sale of an easement to a state by a single landowner possibly be allowed to stand in the way of a pipeline? There are a dozen reasons why this cannot be allowed to stand, beginning with the fact an easement is a negative declaration, not land ownership per se.

Secondly, if the easement was donated, there was undoubtedly Federal tax benefits involved and they were surely of greater value than those from the state. So, why should the state be able to assert their interest in not building a pipeline is greater than the Federal interests in building that same pipeline as expressed in the Natural Gas Act? Moreover, the state program description specifically says “The sale of development rights does not make farmland public property.”

Thirdly…if the landowner wants the pipeline, the state does not want it and there is nothing in the easement with respect to pipelines, the latter is effectively condemning additional interests in the property without paying additional compensation for those interests. The landowner would get compensated for any damages to their land, if any, by pipeline construction, but who is compensating that same landowner for the loss of the value of having a pipeline that might pay royalties or serve a business with gas? The state is robbing such a landowner.

I sincerely hopes the Supreme Court addresses some of these issues as well. If it does not, we will never see the end to these sorts of shenanigans from the Garden State Goons and their ilk in other mad-hatter states.