Justices' Pipeline Ruling Is a Close Call for Gas Industry

06 August 2021
By Dr. Laura T. W. Olive

NERA Associate Director Dr. Laura T. W. Olive was published in Law360, reacting to the 29 June 2021 US Supreme Court ruling in PennEast Pipeline Co. LLC v. New Jersey. The Court confirmed that under the Natural Gas Act and its Section 7(c) pipeline certification process, the Federal Energy Regulatory Commission can confer on pipeline companies the ability to invoke eminent domain on private and public land.

Dr. Olive’s article rebuts a Law360 guest article that posited, "industrywide, the decision may not have much of an impact." The authors' views on the Supreme Court's decision—decided by a one-vote margin—ignore the long-standing institutions that make the competitive US natural gas market possible.

The opposite ruling would have upset 80 years of industry and regulatory experience, increasing uncertainty for not only natural gas pipeline projects but also other interstate infrastructure projects requiring federal approval. The PennEast case demonstrates that the extremely successful US interstate natural gas pipeline system may be more vulnerable than we would have believed before this decision.