Two commissioners were absent and voted by phone. A third, Edward Lloyd, whom the Attorney General's Office had asked to withdraw, citing a conflict of interest, recused himself.
Since eight votes were needed to approve any action, opponents, including environmental groups, erupted into cheers and applause, while many supporters, including union workers who hoped to find work on the pipeline, exited.
The minutes of the commission meeting will be delivered to Gov. Christie, who can accept or reject them. He is unlikely to take any action that would affect the outcome, officials said.
The pipeline, proposed by South Jersey Gas, would have run nearly 22 miles from Maurice Township in Cumberland County to a proposed gas-powered electrical-power plant in Upper Township in Cape May County.
About 15 miles of it would have gone through the Pinelands: 10.2 miles in the forest area along, with two miles in a Pinelands rural development area and 2.7 miles in the Pinelands Village management area, commission officials said.
"We are disappointed, particularly for our customers in Cape May County, that the [variance to allow the work] was not approved," said South Jersey Gas spokesman Dan Lockwood. "At this point, we need to review our options and determine what our next steps will be."
Jeff Tittel, director of the New Jersey Sierra Club, which opposed the pipeline, thanked the commissioners for their "hard work. I know it was not an easy process. At the end of the day, the system worked."
The project would have turned the Pinelands into "an industrial development," Tittel said.
Opponents had accused the Christie administration of bullying tactics after Lloyd, an environmental law professor at Columbia University, was asked by the Attorney General's Office to recuse himself from deliberating or voting.
On Friday, Lloyd issued a statement, read at the meeting, expressing his disappointment at not participating in the vote and reiterating his belief that he had no conflict. He also said he was awaiting a response from the state Ethics Commission on the issue. "I guess I did feel my arm was twisted," Lloyd said Friday.
Lloyd said pipeline supporters have two alternatives. "They could apply, showing compelling public need" for the project, he said. "Or they could propose a pipeline outside the Pinelands."
The governor's office did not return calls for comment about the pipeline Friday.
At the commission meeting, pipeline opponent Temma Fishman, 73, of Medford Lakes, wore a muzzle with Lloyd's name on it to protest Lloyd's recusal.
The proposed Upper Township plant was to have replaced the coal-fired plant operated by B.L. England Corp. at Beesley Point, which has for decades violated state air pollution standards. The state Department of Environmental Protection has endorsed the project on those grounds.
"We would like to see the Beesley plant cleaned up and jobs created," said Denver Westphal, 38, a pipeline supporter, Vincentown resident, and union pipe fitter who hoped to find work on the project.
"I want to put my group to work through the conversion of the Beesley plant from coal to gas," said James Kehoe, president of the New Jersey State Association of Pipe Trades, who was disappointed by Friday's vote.
"Nobody came here today in a horse and buggy," Kehoe said. "They heat their homes, have air-conditioning, burned gas to get here and have high-tech equipment."
The 24-inch gas line would have passed through about 10 miles of protected forest where new utility lines are barred unless they primarily serve local customers.
Commission staff have determined that the line did not meet the local-service standard but said other possible routes would cross wetlands or require extensive drilling under the Great Egg Harbor River.
The staff recommended Jan. 6 that the 15-member commission vote in favor the proposal, and a report signed by the commission's executive director, Nancy Wittenberg, called for the variance's approval.
The variance, known as an intergovernmental memorandum of agreement, was sought by the state Board of Public Utilities on behalf of South Jersey Gas.
As part of the agreement, the company would have paid $8 million: $7.25 million to buy land to prevent its future development, and $750,000 for educational programs, including $250,000 for an interpretive center.
In voting against the pipeline, commission member Leslie Ficcagilia said she was impressed by the opposition from four former New Jersey governors: Democrats Brendan T. Byrne and James J. Florio, and Republicans Thomas H. Kean and Christie Whitman. "A yes vote would sound the death knell for Pinelands protection," Ficcagilia said.