Trump-Backed Pipeline Into New York Blocked by Court

A federal appeals court blocked the Northeast Supply Enhancement natural gas pipeline project into New York City. (Victor J. Blue/Bloomberg)

Key Points

• The Third Circuit Court of Appeals vacated New Jersey’s water quality permits for the project, leaving the pipeline in limbo.
• Williams Companies was building the pipeline, which was expected to cost around $1 billion and be completed by next year.
• NESE’s approval followed a political tug-of-war involving President Donald Trump and New York Gov. Kathy Hochul.

A federal appeals court has blocked a controversial pipeline project into New York City that was backed by President Donald Trump, adding a new wrinkle to a complicated political saga.

The natural gas pipeline, known as the Northeast Supply Enhancement project, or NESE, was already being built by Williams Companies , one of the country’s largest natural gas infrastructure firms.

It was expected to run from the natural gas fields of Northeastern Pennsylvania through New Jersey and under Lower New York Harbor into New York City. Its approval by regulators in New Jersey and New York, who had previously disapproved of the pipeline for environmental reasons, was seen as a win for the Trump administration.

NESE’s approval followed a political tug of war involving Trump and New York Gov. Kathy Hochul. The Trump administration had forced work to stop on a seemingly unrelated offshore wind farm in New York, only lifting the stoppage after Trump met with Hochul and she opened the door to the new pipeline being built, as long as it passed regulatory muster.

Hochul denied any deal was made, but state agencies did indeed approve the pipeline, overturning their prior qualms about it.

On Tuesday, the Third Circuit Court of Appeals sent everyone back to the drawing board. The court vacated New Jersey’s water quality permits, saying the state didn’t adequately justify the permit approval and didn’t give the public enough chance to comment. That leaves the project in limbo.

Williams did not have an immediate comment on the decision. Its stock was down 0.4% in early trading on Wednesday. The company had said on its latest earnings call that construction had begun and the project was trending on time and on budget. It was expected to be complete by next year and cost around $1 billion.

The White House didn’t have an immediate comment on the court ruling. The Natural Resources Defense Council, which brought the suit against New Jersey, celebrated the ruling as “a win for the waterways of New Jersey, the people who rely on them, and the rule of law.”

Write to Avi Salzman at avi.salzman@barrons.com

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