NJ Delaware Bay LNG Project Denied by Supreme Court

According to the U.S. Supreme Court, the states of Delaware and New Jersey share jurisdiction over certain aspects of commerce on Delaware Bay. As result, the proposed construction and operation of a liquefied natural gas (LNG) import facility on the New Jersey shore of Delaware Bay has been denied. With Delaware opposing the facility and refusing to grant permission to build, the case ultimately went to court, culminating in Monday’s Supreme Court decision. The 6 to 2 vote, referencing the 1905 Interstate Compact, affirmed that that Delaware has the right to veto the project.

In 2005, New Jersey filed suit against Delaware directly in the Supreme Court, arguing that the shoreline owner has the right to build wharves and piers to support other plans. At issue was the proposed LNG plant plan, put forward by Crown Landing LLC, a subsidiary of BP. New Jersey would have authorized construction and operation of the liquefied natural gas (LNG) import facility on the New Jersey shore of Delaware Bay. The Delaware Department of Natural Resources and Environmental Control refused permission for the piers to be built, setting the stage for Monday’s decision.

The specter of a 4-4 tie initially loomed large, owing to the fact that Justice Stephen G. Breyer did not participate because he owns BP stock, did not materialize. A tie would have been sticky, but in the end, the 6-2 vote ended any discussion of that possibility. More than 40 such projects are in the planning, permitting and/or building stage all over North America. The increased domestic demand for natural gas has sparked a flurry of LNG activity along the U.S. coastline.

Typically, projects on the U.S. West and East Coasts face long fights with local residents and environmental activists, while similar projects usually -- but not always -- fair better along the Gulf Coast. The Broadwater plan, a floating storage facility in Long Island Sound that could provide the tri-state metropolitan region with billions of cubic feet of natural gas, has met with particularly stiff political and environmental opposition. Local decisions on whether or not to approve such a facility are also pending. In New York, like California, Delaware, Maine and New Jersey, one rule for the permitting of LNG marine terminals is holding firm: “With LNG, all politics are local.” - MarEx

MarEx Readers can read about the case by clicking: HERE.

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