(Bloomberg) — A $1 billion project to haul natural gas from Pennsylvania to New Jersey has become the latest casualty of opposition to pipelines across the U.S.
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PennEast Pipeline Co., a joint venture of five companies including Southern Co. and Enbridge Inc., halted development on the proposed 116-mile (187-kilometer) conduit after failing to receive water quality certification and other wetland permits for the New Jersey section.
“The PennEast partners, following extensive evaluation and discussion, recently determined further development of the project no longer is supported,” PennEast said in an emailed statement. “Accordingly, PennEast has ceased all further development of the project.”
The decision adds to a series of gas pipeline projects being scrapped amid fierce opposition from environmental groups pushing for a faster transition away from fossil fuels and an increasingly burdensome approval process. It also comes at a time of growing concerns about energy reliability amid the transition to cleaner alternatives, with prices for natural gas surging because of tighter supplies.
In 2020 alone, Dominion Energy Inc. and Duke Energy Corp. srapped plans for their $8 billion Atlantic Coast natural gas project along the U.S. East Coast, and Williams Cos. abandoned its Constitution gas pipeline and its Northeast Supply Enhancement plan. Completion of the Mountain Valley Pipeline, a 303-mile conduit spanning from northwestern West Virginia to southern Virginia, has been pushed into 2022 due to permitting delays.
Limited pipeline capacity makes it harder to bring gas from shale fields in Appalachia, where producers including EQT Corp. are faced with price discounts for the gas they sell. Meanwhile, costumers in regions like New England have to overpay for the heating and power-generating fuel because of tight supplies.
The decision on PennEast pipeline comes despite a June Supreme Court ruling that gas pipeline projects with federal approval can seize state-owned land, and support from the Federal Energy Regulatory Commission. The pipeline would carry as much as 1.1 billion cubic feet of natural gas per day, enough to serve 4.7 million homes, from northeastern Pennsylvania to a Transco’s pipeline interconnection in New Jersey.
The project has “encountered significant legal and regulatory obstacles and we no longer believe the project can be efficiently completed,” Enbridge said in a separate emailed statement, adding the project was designed to help deliver “much-needed” gas in New Jersey and Southeastern Pennsylvania. The company said it will continue to serve the region through its Texas Eastern Transmission pipeline.
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