Times of Trenton Article: PennEast Pipeline Partner Tempers Forecast for Construction

Posted December 2, 2015

PennEast pipeline partner NJResources tempers forecast for construction of natural gas project that has sparked protests from citizens and local governments.

Is Pipeline Progress Slowing?
By: Keith Brown, For Times of Trenton

Hopewell Township — A major investor in the proposed PennEast pipeline appears to have tempered its forecast on the completion of the $1.2 billion project, while opponents cast doubts on whether the project can be completed at all.

New Jersey Resources (NJR), parent company of New Jersey Natural Gas, in July told investors in a quarterly earnings call that the proposed pipeline would gain federal approval in 2017 and begin operating in 2018, according to an NJR presentation.

But in its Nov. 24 year-end earnings call, those projections were removed. The company in its presentation to investors omitted the project’s final approval projection in 2017 and its operational date in 2018. Instead, the company said there would be “continuing progress” on the pipeline in 2016, 2017 and 2018.

Pipeline opponents were quick to say the change is evidence that PennEast is struggling in the federal approval process.


Slide from a July NJResources presentation to investors, showing an federal approval date for the PennEast pipeline and a operational date.

“By changing the milestones for the PennEast project in their investor presentation, NJR is sending a strong signal to the investment community that they are facing significant regulatory delays and strong opposition to the pipeline,” said Mike Spille, founder of West Amwell Citizens Against the Pipeline group.

But Michael Kinney, spokesman for NJR, said the company fully expects PennEast to be operational by 2018, and should not be read as a change in its expectations for the project.

“This does not in any way change our confidence in this project,” Kinney said. “As with all forward-looking statements, we caution that there are factors outside of our control that may affect the timing of this project.”

RELATED: Critics decry ties between PennEast and Drexel University

PennEast, a consortium of natural gas companies that includes all four New Jersey gas providers, wants to build an 118-mile, 36-inch pipeline stretching from Northeastern Pennsylvania to Hopewell Township.

The company in September filed its formal application to the Federal Energy Regulatory Commission, which regulates pipelines that cross state lines. PennEast has said the company expects to start construction, if approved, in 2017.

Patricia Kornick, spokeswoman for PennEast, denied the project has been delayed.

“The timeline has not shifted, and the PennEast Pipeline project is progressing through the FERC application phase,” Kornick said. “The PennEast Pipeline project anticipates beginning construction in 2017 with the line operational in late 2017.”

But Tom Gilbert, of the New Jersey Conservation Foundation, said NJR’s recent forecast perhaps reflects difficulties with the state Department of Environmental Protection and the federal energy commission.

“It’s clearly significantly delayed and it’s going to be a long, difficult road for PennEast,” Gilbert said. “And I think there’s some question of whether they’ll be able to make it at all.”

The state DEP on Nov. 4 sent a 19-page letter to the federal energy commission outlining numerous concerns the agency has about the PennEast application, ranging from potential negative impacts on rare wildlife along the proposed pathway to the company’s construction schedule.

PennEast proposes a 7-month construction timeline, beginning in February, 2017.

“This proposed construction schedule does not, at this time, appear to be attainable,” the letter said.

The energy commission followed on Nov. 24 with letter to PennEast, giving the company 20 working days to provide a 22-page list of changes to the application and provide additional information before the commission could further evaluate the application.

“PennEast is clearly encountering some problems and at a bare minimum they’re behind schedule,” Gilbert said. “I think it raises at least some question as to whether the project could be in jeopardy.”

Municipal opposition to the PennEast proposal has been widespread in New Jersey. Every town through which it is proposed to travel has adopted resolutions against it, including Mercer County government, which banned the company from surveying on public land earlier this year.

“NJ Resources less-than-rosy report to it’s shareholders echoes what communities along the pipeline have been saying all along: PennEast is a bad bet,” said Hopewell Township resident Patty Cronheim, member of the opposition group Hopewell Township Citizens Against the PennEast Pipeline.

Spille, who first wrote about the change in the NJReources investor presentations on his blog, said the change represents a significant departure from the original PennEast timeline.

“While other PennEast partners are still calling for a 2017 in-service date, NJR is saying that it may not be online in 2017 or 2018,” he said. “This difference is a really big deal.”

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