East Coast Natural Gas Plant on Hold After Legal Challenge

(AP) -- The future of a major liquified natural gas facility proposed for northeastern Pennsylvania was thrown into question Monday after its developer settled a legal challenge brought by environmental activists.

A subsidiary of New Fortress Energy Inc. agreed to pull the plug on its proposed LNG plant in Wyalusing -- at least for now -- in an agreement with a coalition of environmental groups that filed suit seeking to overturn the company's air emissions permit.

The $800 million plant was intended to liquify million of gallons of natural gas from the Marcellus Shale gas field per day, with the liquified gas to be transported by rail or truck more than 175 miles (281 kilometers) to a proposed New Fortress export terminal in Gibbstown, New Jersey, along the Delaware River near Philadelphia. From there, the LNG would have been loaded onto ships for overseas delivery.

PennFuture, the Clean Air Council and the Sierra Club took legal action to block the project. Under a settlement announced Monday, a New Fortress subsidiary agreed to halt construction and allow its air emissions permit from the Pennsylvania Department of Environmental Protection to lapse. If it wants to restart the project, the company will need to begin the state permitting process over again, according to settlement documents.

The company's intentions weren't immediately clear. A message was sent to New Fortress seeking comment.

Environmental groups had raised concern about air and water pollution near the proposed Wyalusing facility, as well as the risk of catastrophe during transport to New Jersey by either truck or train. New Fortress had obtained a special federal permit from the Trump administration to move the liquified gas by rail; the company applied for a renewal of that permit in November.

In its renewal application, the company said its plan to export LNG from Pennsylvania's gas fields had been delayed by the "pandemic, massive supply chain and workforce disruptions, and widespread economic and political uncertainties."

Abigail Jones, a vice president at PennFuture, said the settlement with New Fortress, which was reached Friday, could wind up killing the company's planned New Jersey export terminal as well.

"By halting the construction of the Wyalusing facility, we're hopefully eliminating all of those impacts across the two states from this New Fortress energy export scheme," she said.

Industry officials decried the environmental groups' efforts.

"Unnecessary regulatory hurdles and frivolous lawsuits hinder consumer access to clean, affordable natural gas," said Marcellus Shale Coalition President David Callahan. "The worldwide need for U.S. natural gas exports has never been more critical."