PennEast in a Tailspin of Delay, Uncertainty as Widespread Opposition Grows

Multiple Gas Pipelines in the U.S. Halted as Difficulties Abound for Beleaguered Fossil Fuel Projects

Stockton, N.J. (June 9, 2016) — According to ReThink Energy NJ, PennEast’s proposed pipeline project in New Jersey and Pennsylvania is considerably delayed in gaining necessary approvals from the Federal Energy Regulatory Commission (FERC) and state agencies, affected by the trend of beleaguered gas pipeline projects throughout the U.S., and widespread, growing opposition by legislators, regulatory agencies and the public.

FERC recently announced a schedule that delays its review of the project by as much as a year. In a press release on April 4, 2016, PennEast acknowledged the delay, stating: “Based on a preliminary review, PennEast anticipates an in-service date in the second half of 2018 rather than late 2017.”

FERC continues to request missing information from PennEast needed to complete the Draft Environmental Impact Statement. FERC’s most recent request made on June 3 highlights missing alternatives analyses and surveys of critical wildlife habitats.

“Highly relevant to PennEast’s problem-ridden application is the fact that multiple natural gas infrastructure projects have faced unprecedented regulatory problems in recent months,” said Tom Gilbert, campaign director, ReThink Energy NJ and New Jersey Conservation Foundation. “We believe these issues signal a change in the regulatory fabric of the natural gas industry, which will impact the PennEast project.”

Recent examples of delayed and halted gas pipeline projects include:

• Jordan Cove LNG export terminal and associated gas pipeline was rejected by FERC in March.
• In April, Kinder Morgan withdrew their Northeast Energy Direct (NED) pipeline application with FERC due to opposition and insufficient demand.
• Also in April, the New York State Department of Environmental Conservation denied the 401 Water Quality Certification for the proposed Constitution Pipeline because the pipeline would violate the water quality standards required by the federal Clean Water Act.
• NJ Department of Environmental Protection (NJDEP) review of the final section of the Transco Leidy Line is significantly delayed due to pending litigation over impacts to streams and wetlands and an outstanding contested permit.

PennEast’s proposed pipeline faces significant regulatory uncertainty, for example:

• In a November 2015 letter to FERC, NJDEP stated that it would not accept an incomplete application and that the timeline included in PennEast’s application to FERC “does not appear to be attainable.” With NJ landowners denying access to more than 70% of the land along the proposed route, the company cannot complete its NJDEP application without exercising eminent domain. Even if PennEast is granted eminent domain power, the earliest it could start collecting the missing survey data is March 2017.
• In an April letter to PennEast, the PA Department of Environmental Protection indicated that PennEast’s permit applications are “incomplete,” citing a host of missing information. They gave PennEast until June 25 to provide the information or the application would be considered withdrawn.
• In April, the Delaware River Basin Commission stated it will hold independent hearings on PennEast in 2017, posing an additional hurdle for PennEast.

“PennEast is facing enormous opposition and is under intense scrutiny by regulatory agencies and the public,” Gilbert said. “The problems they’ve encountered thus far indicate that PennEast could be the next pipeline to go down.”

Expert Analysis Debunks Justification for PennEast

An analysis of the PennEast pipeline project by Skipping Stone, a nationally-recognized energy consulting firm, debunks PennEast’s market justification. The report:

• Illustrates that introducing the pipeline’s capacity to the region would likely increase costs to ratepayers, not decrease them as PennEast claims;
• Disputes PennEast’s use of contracts with local gas distribution companies affiliated with the PennEast partners as ‘evidence’ of market need. As one example of several, New Jersey Resources is a partner in PennEast, and also owns local distribution company New Jersey Natural Gas, who is contracting gas from PennEast. The report asserts that self-dealing within a company is not a market indicator of need;
• Highlights that shippers representing almost 40% of PennEast’s capacity stated that they intend to shift their gas supplies from existing competitor pipelines to PennEast, resulting in excess and unutilized capacity in the market;
• Illuminates the unusually high level of self-interest behind the PennEast project.

“FERC does not have credible information to demonstrate market need for PennEast,” Gilbert said.

The full Skipping Stone study is available here, and a press release is here.

“When considering this burgeoning list of critical issues and risks, it’s hard to imagine how investors can continue to include this pipeline project in their projections for PennEast,” Gilbert said.

Growing Multi-Pronged Opposition to PennEast

Protest by concerned citizens, impacted homeowners, elected officials and conservation groups has been unwavering, and is growing daily:

• To date, more than 1,400 people and organizations have filed intervening motions on the PennEast docket with FERC, with the vast majority opposed.
• A radio and print advertising campaign from ReThink Energy NJ urges lawmakers to take action against unneeded pipelines that threaten land, water, and communities throughout the state.
• Congressman Leonard Lance, Congresswoman Bonnie Watson Coleman, numerous state legislators, and every county and town in the path of the pipeline in New Jersey are actively opposed.
• Several hundred New Jersey homeowners have banded together to form “HALT PennEast” (Homeowners Against Land Taking). HALT PennEast has engaged D.C. law firm Wiley Rein, with veteran environmental attorney Steven Richardson.