Building PennEast Pipeline Will Not Deliver Promised Jobs, Report Asserts

Tom Johnson | November 5, 2015 | Energy & Environment
New study argues that natural-gas company significantly overestimates number of jobs, economic benefits to NJ

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PennEast Pipeline significantly overstated the jobs its proposed 118-mile natural-gas conduit would create, according to a new analysis disputing the economic benefits of the project.

Moreover, the jobs and economic benefits that do stem from the project would flow to Pennsylvania where the pipeline would start instead of New Jersey, according to the 71-page study by The Goodman Group (TGG). The New Jersey Conservation Foundation commissioned the $40,000 analysis of PennEast’s own economic study.

The pipeline, one of at least a dozen proposed in New Jersey, is sparking widespread opposition, due to the fact that it would traverse environmentally sensitive lands and waters and to some extent it would cut through relatively affluent communities.

Tom Gilbert, campaign director for energy, climate and natural resources for the foundation, said yesterday the study overestimates the number of short-term construction jobs the project creates by threefold.

“The erroneous job claims made by PennEast hardly justify the construction of this massive pipeline that would damage more than 4,000 aces of preserved open space and farmland, impact numerous high-quality streams and wetlands, and take private property from homeowners,’’ Gilbert said.

The project would cross through Hunterdon County and parts of Mercer County.

In its own economic analysis of the project, PennEast’s consultant — Drexel University and EcoSolutions — said the $1.1 billion pipeline would create more than 12,000 jobs and economic benefits of $1.6 billion over the course of the project.

Pat Kornick, a spokeswoman for PennEast Pipeline LLC, said the natural-gas industry has a strong history of creating jobs and economic benefits as a result of its pipeline projects.

[related]“The bigger picture is the cost savings and greater reliability consumers will have,’’ she said, if the pipeline is built. If the pipeline had been built and operational, customers would have saved $890 million the past winter, according to another study commissioned by PennEast.

Many business groups strongly back the project, viewing it as further lowering the cost of natural gas, the price of which has dropped dramatically in the past few years. Vast new supplies of the fuel have driven the cost down, a boon to utilities that deliver gas to customers because many are in the midst of expensive new programs to modernize their infrastructure.

All four gas utilities in New Jersey are sponsors of the project, which needs approval from the Federal Energy Regulatory Commission and various permits from state agencies, including the New Jersey Department of Environmental Protection.

The TGG study did not look at cost savings for customers or the economic benefits claims, according to Ian Goodman, president and founder of TGG. He did fault the company’s study, however, for not doing a cost-benefit analysis in its economic report.

“Any project looks good if you only look at one side of the ledger,’’ Goodman said.

As far as TGG’s analysis, it noted that the PennEast study projected 10 ongoing jobs in New Jersey and 88 ongoing jobs in Pennsylvania would be created to operate and maintain the pipeline after construction.

“As low as they are, the PennEast estimates of annual jobs from operations may still be overstated,’’ he said. Other pipeline studies, notably for comparable Northeast gas pipelines “estimate substantially lower job impacts from operations.’’