A US appeals court on Tuesday vacated a New Jersey environmental permit for a proposed natural gas pipeline, finding the state regulator had acted arbitrarily in approving the project without demonstrating compliance with water quality standards.
The Third Circuit Court of Appeals ruled that the New Jersey Department of Environmental Protection had deferred key monitoring and adaptive-management requirements until after granting the project's water quality certification.
The court also found that the agency had failed to explain how the project would meet state water quality requirements, including those related to toxic contaminants and potential impacts on shellfish.
The ruling removes a key state approval needed to construct the Northeast Supply Enhancement pipeline through New Jersey state waters.
The proposed project includes a roughly 23-mile segment running from Pennsylvania through Middlesex and Monmouth counties in New Jersey and onward to New York City. A portion would be constructed beneath Raritan Bay and New York-New Jersey Harbor.
Environmental groups, including the Natural Resources Defense Council, challenged NJDEP's decision, arguing that dredging for the underwater pipeline could disturb sediments containing contaminants including mercury, PCBs, and copper.
The project also calls for a compressor station near the Trap Rock Quarry in Franklin Township, New Jersey, which environmental groups say could threaten wetlands and habitat for endangered species.
NJDEP had rejected the project's water quality certification in 2019, citing insufficient information to establish compliance with state standards and concerns over contaminants including 4,4'-DDE.
The company later submitted additional modeling and monitoring plans, but NJDEP again rejected certification in 2020 after New York State rejected a corresponding application.
After New York's approval in 2025, NJDEP granted water quality certification for the New Jersey portion of the project, subject to conditions that included later submission of finalized monitoring and adaptive-management plans.
The Third Circuit said those plans involved material issues that should have been resolved before certification and that NJDEP had not required its approval before dredging could begin.
The court granted petitions brought by environmental groups, vacated the certification and sent the matter back to NJDEP for further proceedings.
The ruling does not by itself permanently prevent the pipeline project from moving forward, but NJDEP will have to reconsider the certification in light of the court's findings.
The project has faced years of regulatory and environmental opposition as its developers have sought to expand interstate natural gas infrastructure serving the New York metropolitan area.