New Jersey’s Dangerous Pipeline Precedent Threatens State-Federal Balance of Power

The eternal tension between state and federal authority underpins the very founding of our country and Constitution, but rarely does it rise to the level of setting a dangerous precedent that threatens to upend the federal government’s power to regulate interstate commerce.

A recent federal appellate court decision involving the State of New Jersey and the PennEast Pipeline does just that, and it will take Supreme Court review to preserve the federal government’s clear authority over interstate commerce.

The Third Circuit Court of Appeals last year sided with the State of New Jersey, which refused to grant a right-of-way subject to federal eminent domain authority for PennEast, which will cross Pennsylvania and New Jersey.

PennEast asked the Supreme Court to review the decision, and Consumer Energy Alliance in March submitted a “friend of the court” amicus brief urging the court to do so, in order to protect consumers from unnecessarily costly energy policy choices made by political whim in one state that directly and materially impact the economies of adjacent states.

Fortunately, the Supreme Court appears to have taken notice, asking the state to submit its own arguments in response to PennEast’s filing in a sign that it may take up the case.

The 3rd Circuit’s decision ignores the plain text of the Natural Gas Act, 80 years of precedent and industry practice and amounts to a court sanctioning a game of state-sponsored keepaway. The ruling gives New Jersey and other states powers that were never intended under the NGA or the Commerce Clause of the Constitution. There is nothing in the law that allows the state to give itself veto power if an interstate pipeline project crosses or needs an easement on state land.

Allowing this decision to stand would endanger the very lifeblood of our economy – energy – by granting individual states the license to reject legitimate, federally approved critical infrastructure projects that benefit people in multiple states. These projects are certified by the federal government because they meet a public need – affordable, reliable access to energy for families, farmers and businesses.

If politically motivated states are granted this veto right, then the whims of the mob will be able to dictate policy and use one state’s decision to advance their narrow interests, and curtail the commercial ability of adjacent states and citizens.

Anti-energy activists already use a grab-bag strategy of staged protests, administrative delays and endless lawsuits that tax our justice system with stretched interpretations of clearly defined legal principles and regulations. All future energy projects that deliver benefits across state lines including wind, solar, oil, natural gas and nuclear – to name a few – could be impacted.

States should be consulted on matters involving state-owned lands, and indeed, on matters within their territory. The federal permitting process for energy infrastructure requires exhaustive consultations and full involvement by state agencies, such that United States energy and environmental regulations are seen as a global gold standard. In fact, our regulations are so rigorous that some industries are reluctant to invest here.

Yet the delineation between state and federal powers is clear under the Constitution, even if the implementation is often fraught and complex. But that situation has been deliberately aggravated by activists who take every opportunity to inflame it to meet their goals of disruption, delay and denial, abetted by political allies who are more interested in appealing to a narrow constituency than ensuring their citizens have affordable energy.

These are the same activists who slow projects and add billions in costs through endless litigation, much of it engaged in with the full knowledge that the sole mission is causing delay, then turn around and decry the spiraling costs.

None of this is fair to the approximately 39 million Americans living below the poverty line or those living on fixed incomes, who already spend too much of their disposable income on energy. The economic fallout of the COVID-19 crisis has already put 30 million more people into the ranks of the unemployed, and that trend shows no sign of slowing.

PennEast alone is expected to save New Jersey and Pennsylvania consumers more than $400 million through lower energy bills. Multiply that impact across the rest of America and the potential scope of economic harm from the 3rd Circuit decision becomes clear.

Serious times call for serious responses from our government and we hope the Supreme Court takes up this important case, and protects the longstanding federal authority over interstate commerce.

American families and businesses need no more uncertainty and only the Supreme Court can provide the necessary clarity and ensure that no individual state can impede our access to essential services like energy.

Brydon Ross is vice president of state affairs for Consumer Energy Alliance, a U.S. consumer advocate supporting affordable, reliable energy for working families, seniors and businesses across the country.

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