Court Vacates New Jersey’s Permit for $1 Billion Northeast Gas Pipeline

The U.S. Court of Appeals for the Third Circuit on Sep. 8 vacated New Jersey’s water quality certification for the $1 billion Northeast Supply Enhancement natural gas pipeline, ruling that the New Jersey Department of Environmental Protection failed to adequately demonstrate the project would comply with state water quality standards before issuing the permit. The decision sends the certification back to the agency for further review, creating another regulatory hurdle for one of the region’s largest natural gas infrastructure projects.

The proposed project, developed by Williams Companies through Transcontinental Gas Pipe Line Company, would expand an existing interstate natural gas system by adding a new pipeline beneath Raritan Bay to transport additional gas from Pennsylvania to New York. The appeals court found that the department improperly deferred key monitoring and corrective measures until after issuing the certification and did not sufficiently explain how dredging contaminated bay sediments would meet New Jersey’s environmental standards.

The ruling follows years of regulatory reversals. New Jersey denied the project’s certification in 2019 after concluding that the developer had not demonstrated compliance with water quality requirements and rejected another application in 2020 after New York denied a related permit. The department later approved a revised application in November 2025, prompting lawsuits from environmental organizations that argued unresolved concerns over contaminated sediments, monitoring requirements, and dredging impacts remained largely unchanged.

The court did not permanently block the pipeline, leaving the department free to conduct additional analysis and issue a revised certification if it can adequately support its findings. Williams Companies maintained that the decision does not undermine the project’s environmental case and continues to target a late-2027 completion while working with state regulators to address the court’s concerns.

The decision drew contrasting reactions across the energy sector. The Natural Resources Defense Council welcomed the ruling as an important safeguard for New Jersey waterways, arguing that stronger protections are needed before dredging can proceed in Raritan Bay. Meanwhile, the New Jersey Business & Industry Association described the decision as a procedural setback rather than a permanent rejection, emphasizing that the project remains eligible for further state review and continues to be viewed as an important investment in regional energy infrastructure.