PennEast Pipeline Not Needed for Reliability: Research Shows Claims are Flawed and Outdated

Posted November 12, 2015

STOCKTON, NJ, (Nov. 12, 2015) – In comments filed with the Federal Energy Regulatory Commission, the New Jersey Conservation Foundation disputes claims by PennEast that its proposed pipeline is needed to address natural gas supply challenges such as those that occurred in the extremely cold winter of 2013/2014 during the “Polar Vortex.”

NJ Conservation Foundation cited new research on actual gas flows during the Polar Vortex showing that several of the five interstate natural gas pipelines serving PJM East (the electric grid operator) never fully utilized their existing capacity even as spot market gas prices skyrocketed.

“The events from January 2014 cannot be used to justify the expansion of additional pipeline infrastructure, since policy changes to use existing pipelines more efficiently have already been successful in ensuring a reliable supply of gas,” said Tom Gilbert, NJ Conservation Foundation campaign director – Energy, Climate and Natural Resources.

Gilbert also noted that PennEast’s jobs claims were rebuked in a report released last week by the Goodman Group, a consulting firm specializing in energy and regulatory economics and economic development.

“There is mounting evidence that PennEast’s assertions are flawed and misleading and should not be relied upon to justify construction of a massive, 118-mile pipeline that would damage over 4,000 acres of preserved lands and 31 of the cleanest streams in our state,” Gilbert said.

In its comments to FERC, the NJ Conservation Foundation highlighted analysis by SkippingStone, a leading energy markets services firm. The analysis provided strong evidence that reforms to the interstate natural gas market design would increase the availability of gas for electric generation and mitigate constraints faced during peak demand periods. Agreeing that reforms were needed to improve coordination and more fully utilize the existing pipeline system, FERC and PJM subsequently changed policies on the scheduling of gas deliveries.

These reforms have fundamentally changed and improved the coordination of natural gas and electricity in the Mid-Atlantic. This was proven during the harsh winter of 2014-15, when the system performed well in the region served by PJM.

“The fact that reforms implemented since the Polar Vortex were effective in providing stability last winter demonstrates that the PennEast pipeline is not needed to resolve reliability issues,” Gilbert said.

The NJ Conservation report faults PennEast for failing to take these recent reforms into account in its application to FERC, and for not factoring in new pipeline projects that have come on-line since the Polar Vortex. In FERC’s 2015-16 Winter Energy Market Assessment, the agency declared, “new natural gas pipeline expansions and projects to reverse flows on some pipelines will also provide more transportation capacity from producing to market areas this winter” resulting in the “Northeast corner of the nation becoming a net exporter of natural gas for the first time this summer.”

“Clearly if the Northeast is now a net exporter of natural gas, there is a real risk of over-building pipelines. The need for the PennEast pipeline has not been documented and it should be rejected,” Gilbert said.


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