Judge panel tells New Jersey to re-examine permit for NESE gas pipeline

A natural-gas pipeline upgrade project for the downstate region faces additional scrutiny after a federal appeals court this week told New Jersey’s environmental regulators to re-examine the water-quality permit they greenlit last year following a lawsuit by environmental groups challenging the approval.

The decision by a three-judge panel of the Third U.S. Circuit Court of Appeals in Philadelphia means New Jersey regulators who granted a water-quality permit for the $1 billion-plus Northeast Supply Enhancement, or NESE, project must revisit their approval to address a list of the judges’ concerns.

"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," the decision states.

Representatives for the NESE project, which promises to increase natural gas supply to the Long Island region by 13% following its scheduled completion next year, said the decision isn’t expected to change when the pipeline goes online.

Williams Companies, which is building the pipeline, said it was working "promptly with state regulatory officials to address the court's findings and remain committed to advancing" the project.

"At this time, we do not expect the decision to adversely affect project construction or the anticipated in-service timeline," Williams spokesperson Cherice Corley wrote in an email.

Jackson Garrity, an attorney for the Natural Resources Defense Council, the environmental group that brought the lawsuit with others, in a statement called the court’s ruling "a win for the waterways of New Jersey, the people who rely on them, and the rule of law."

The pipeline, NRDC said, "would not only have destroyed wetlands across New Jersey, but also would tear up the sea floor of Raritan Bay." Garrity said New Jersey regulators' approval of the water-quality permit "failed to address key water quality concerns that the public has been raising for years. We took New Jersey to court to enforce the state’s water quality standards, and we won."

The judges said the New Jersey Department of Environmental Protection "remains free to supplement its explanation, require additional submissions or analyses, issue a new or revised certification, or reach a different result."

The project has already broken ground and was slated to start larger-scale construction this year. It’s uncertain how much, if at all, the court’s Tuesday decision could slow down the progress. National Grid is banking on the project's expected infusion of cheaper fracked gas from Pennsylvania next year.

Long Island gas customers would see an average monthly bill increase of $7.50 to pay for NESE, National Grid has said, though they also will benefit from cheaper natural gas, the company said.

National Grid spokesperson Wendy Frigeria noted there’s a "demonstrated need for additional natural gas infrastructure to ensure reliable delivery of energy to our customers on Long Island and in New York City." She said NESE has been "thoroughly evaluated by multiple regulatory proceedings, and its need has been well established, including by the New York Public Service Commission."

Frigeria said National Grid expects the New Jersey DEP to "resolve these [permitting] deficiencies promptly."

The pipeline’s water-quality permits had twice been rejected by New Jersey regulators, as they had been in New York, before last year’s approval. U.S. Interior Secretary Doug Burgum in a 2025 social media post suggested New York’s "willingness" to approve natural gas infrastructure followed his agreement to release the Empire Wind farm from a Trump-imposed stop-work order.

The court ruling took issue with New Jersey’s permit approval, writing, "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."

Among the reasons for their finding were the judges’ concerns about impacts on shellfish, including surf clams. The New Jersey environmental agency maintained that the project would not "result in [the] destruction, condemnation or contamination of surf clam habitat," but the NRDC in its complaint pointed out that a state Marine Resources Administration memo "made no such finding," and the judges agreed with NRDC.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.