PennEast submit formal pipeline application despite opposition

Natural gas pipeline being built
Source: WikiCommons, author: Ohikulkija

PennEast Pipeline Company submitted its application yesterday to the Federal Energy Regulatory Commission (FERC) for a permit to proceed with construction of the controversial PennEast Pipeline.

PennEast is requesting that FERC issue a Certificate of Public Convenience and Necessity, which would authorize PennEast to construct, install, own, operate and maintain the approximately 118-mile, 36-inch diameter PennEast Pipeline. Upon completion, the underground natural gas pipeline would deliver approximately 1 billion cubic feet of natural gas per day and address the current pipeline constraints.

“The PennEast Pipeline Project is set to deliver reduced energy costs to residents and businesses, thousands of good jobs, and a cleaner environment by cultivating clean-burning American energy,” said Peter Terranova, chairman, PennEast Pipeline board of managers.

“This safe, state of the art infrastructure project will not only help meet the region’s energy demands, it can power New Jersey and Pennsylvania’s economies for years to come,” he added.

PennEast’s capacity is under long-term contracts, mainly by public utilities and other market-serving entities, such as electric generation companies, in New Jersey, Pennsylvania and New York. “These companies recognize the importance of PennEast to the local consumers they serve,” said Terranova.

The PennEast Pipeline supporters say that the new pipeline will bring natural gas to densely populated areas of New York and New Jersey introducing price stability and lowering the energy bills during the winter months. According to an analysis by Concentric Energy Advisors, had the PennEast Pipeline been in service during the 2013-2014 winter, natural gas and electric consumers in eastern Pennsylvania and New Jersey would have saved more than $893 million in energy costs.

What is more, the PennEast Pipeline would have an estimated $1.6 billion positive economic impact during design and construction alone, supporting approximately 12,160 jobs and an associated $740 million in wages according to a separate study by Econsult Solutions.

This is why the development of the pipeline seems to have the support of the local business. Tom Bracken, president and chief executive officer of the New Jersey State Chamber of Commerce, was quoted as saying: “The New Jersey State Chamber of Commerce supports the proposed PennEast Pipeline. This Project will provide a regional benefit to businesses and citizens, assist in boosting New Jersey’s economy, improve the overall critical energy infrastructure and make our state more competitive, which will lead to job creation.”

“The manufacturing community applauds PennEast’s efforts to increase reliability of natural gas for local users,” said David Taylor, president of the Pennsylvania Manufacturers Association.

“New pipeline capacity like that of PennEast is the key to unlocking the competitive advantage of abundant Pennsylvania natural gas. A recent analysis found that shale gas development could provide U.S. manufacturers with cost savings of $22.3 billion in 2030 and $34.1 billion in 2040, but these savings are contingent on new pipelines like PennEast delivering affordable natural gas to users.”

Not everybody is as enthusiastic, however. Speaking to the State Impact website, Patty Cronheim, with the Hopewell Township Citizens Against the PennEast Pipeline, one of dozens of grassroots anti-PennEast groups, said: ”There’s widespread commitment between citizens groups, municipalities, county, state and federally elected officials as well as the landowners and we will take every possible measure to stop this pipeline.”

She also takes assurances that the new pipeline will bring down energy prices with a pinch of salt. The opponents of the pipeline believe that the real plan behind the PennEast is to sell the gas overseas, instead of using it for domestic consumption.

“They can say that all they want but we know very well that it’s 50 percent more gas than New Jersey can even use,” said Cronheim.

According to the company statement, the construction of the pipeline is expected to commence in 2017, “pending regulator approval”. However, there still seems to be a long way before the legislative and administrative tasks are completed. For one all of the landowners in the proposed path of the pipeline have to agree to lease their properties and it seems that not all of them support the development. In the event of some landowners persistently refusing to grant permission for development on their land the PennEast Company has the option to go to court to obtain the necessary rights through eminent domain, but this route can be costly and time-consuming.

The underground natural gas transmission line is planned to run from Luzerne County, in northeastern Pennsylvania, to Mercer County, New Jersey. The planned route takes the $1 billion pipeline through parts of Durham and Riegelsville in Bucks County.

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