A federal appeals court has vacated a key New Jersey water permit for the $1 billion Northeast Supply Enhancement, or NESE, natural gas pipeline, ruling that state regulators failed to adequately explain why the project complies with New Jersey water quality standards.
The U.S. Court of Appeals for the Third Circuit sent the permit back to the New Jersey Department of Environmental Protection, which had approved the project in November 2025 after rejecting earlier versions in 2019 and 2020.
The dispute centers largely on the pipeline’s underwater route through Raritan Bay. Environmental groups have argued that dredging needed for construction could disturb contaminated sediment and damage marine habitats. NRDC and other groups challenged the state’s approval, arguing that NJDEP had not sufficiently explained its reversal from earlier denials.
The court agreed that the agency’s explanation was inadequate. In its ruling, the panel found that NJDEP had not sufficiently demonstrated how dredging plans would satisfy state water quality requirements.
The NESE project would carry about 0.4 billion cubic feet of natural gas per day from Pennsylvania through New Jersey and into New York. The project includes roughly six miles of pipeline beneath Raritan Bay and additional offshore infrastructure extending toward New York.
Williams had previously canceled the project after years of permitting disputes but revived it after the Trump administration returned to office and federal and state approvals were reconsidered. Construction began in 2026, and the company has said it is still targeting completion in late 2027.
The ruling does not permanently stop the pipeline. NJDEP can now reconsider the permit, provide additional justification, require further studies, revise the certification or reach a different decision.
Williams said it is working with state regulators to address the court’s concerns and does not currently expect the ruling to change the construction schedule.
For now, however, one of the project’s most important New Jersey approvals has been set aside, returning the controversial pipeline to the state regulatory process.
Sources: Reuters; U.S. Court of Appeals for the Third Circuit; Natural Resources Defense Council
By NJ RADAR Team