Third Circuit pauses interstate gas pipeline over shoddy environmental review

New Jersey regulators fast-tracked the pipeline project without sufficient proof of compliance, a federal appeals panel found.PHILADELPHIA (CN) — A controversial interstate gas pipeline is back in limbo after a Third Circuit panel found its environmental certification does not pass muster Tuesday.“Today’s court ruling is a win for the waterways of New Jersey, the people who rely on them, and the rule of law,” Natural Resources Defense Council attorney Jackson Garrity said in a press release. “This pipeline would not only have destroyed wetlands across New Jersey, but also would tear up the sea floor of Raritan Bay.”“We took New Jersey to court to enforce the state’s water quality standards, and we won,” Garrity added.The Transcontinental Gas Pipeline Company, more commonly known as Transco, has for years attempted to expand its approximately 10,000-mile network of pipelines through the creation of the Northeast Supply Enhancement.This proposed pipeline extension would begin in Lancaster County, Pennsylvania, cutting under the Raritan Bay before reaching New York City and the Hudson Valley.Since its initial proposal, though, the extension has faced firm opposition from environmental rights organizations, as building it would require dredging a trench in the Raritan Bay, installing the pipeline and backfilling the trench — all of which would disturb sediments containing toxic chemicals including arsenic, mercury and byproducts of the pesticide DDT.Transco first submitted an application for water quality certification to the New Jersey Department of Environmental Protection in 2019; the agency denied it over scant details on environmental protections.Transco again applied in 2020, and again was denied by the agency — this time for lack of public need.In 2025, Transco applied a third time, providing nearly identical information as given in its prior two applications.Despite this, the New Jersey agency issued certification in November 2025, requiring Transco merely submit plans for monitoring and adaptive management before construction can begin.Environmental organizations National Resources Defense Council and New York-New Jersey Baywatch promptly sued the agency in appeals court, arguing the agency’s decision to certify was arbitrary and capricious.Following oral arguments between the parties in July, a Third Circuit appeals panel ultimately sided with the environmental organizations on two fronts.First, the panel ruled the agency could not justifiably defer project monitoring and adaptive management plans without requiring additional agency review.“There is a critical distinction between refining details under a mandatory approval process and leaving material compliance terms to plans that the agency need not approve before work begins,” wrote Senior U.S. Circuit Judge Jane R. Roth, a George H.W. Bush appointee.“Because material monitoring and response terms remained unresolved and no later NJDEP approval was required before dredging could begin, we conclude that NJDEP acted arbitrarily and capriciously in issuing the water quality certification,” Roth added.Additionally, the New Jersey agency failed to adequately explain its conclusion that Transco’s dredging would comply with state water quality standards, the appeals panel ruled.In particular, the panel described the agency’s contaminant review — limited to within 500 feet of the proposed dredging sites — its failure to connect planned turbidity monitoring to toxic-substance monitoring and its unsubstantiated claims that local shellfish populations would be unharmed as insufficient.“When an agency fails to adequately explain the basis for its decision, our ordinary course is to vacate and remand so the agency may exercise its delegated authority in the first instance,” Roth wrote.“On remand, NJDEP remains free to supplement its explanation, require additional submissions or analyses, issue a new or revised certification, or reach a different result,” Roth added. “We leave those specific choices to NJDEP.”U.S. Circuit Judge Cheryl Ann Krause, a Barack Obama appointee, and U.S. Circuit Judge Arianna J. Freeman, a Joe Biden appointee, joined Roth in her opinion.When asked for comment, Cherice Corley, spokesperson for Transco parent company Williams Companies, told Courthouse News that Williams Companies is reviewing the court’s decision.“The Northeast Supply Enhancement project remains critical to strengthening energy reliability and meeting the region’s growing energy demand,” Corley added.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads