Making Sure Private Firms Pay Fair Prices When They Lease Public Lands

Tom Johnson | December 15, 2015 | Energy & Environment
Assembly panel releases bill that would revamp leasing process. Lawmakers, conservationists, state officials concur change is needed

Credit: Lindsay Lazarski/WHYY
Crews weld a pipeline connecting to a natural gas well in the Loyalsock State Forest.
When public lands preserved with taxpayer dollars are diverted to other uses, the state is supposed to be properly compensated.

Too often, that doesn’t happen, according to legislators, conservationists, and state officials. They complain that open space is at times leased by private entities for less than what it cost to preserve it.

The issue has emerged as more of a priority given the extent of expansion of natural-gas pipelines and high-voltage transmissions lines throughout New Jersey, most of which crisscross protected open space and farmland. Some of the projects traverse the New Jersey Highlands; others are proposed to cut through parts of the Pinelands.

Trying to remedy the problem, lawmakers are once again reviving a measure — debated on and off for the past four years, but never winning final approval — that would overhaul the system that addresses the loss of public land to ensure the state gets paid more when it happens.

With unanimous support, the Assembly Environment Committee released a bill that revamps how the system would work, including basing the lease of the preserved land on the financial return of its intended use. An identical bill has been voted out of the Senate Environment and Energy Committee.

“This is an abuse that has been happening in New Jersey for years,’’ said Jeff Tittel, director of the New Jersey Sierra Club, a longtime advocate for changing the lease process. “This fixes a broken system.’’

He cited the case of a landowner in Ringwood who sold an undeveloped parcel in the New Jersey Highlands for open-space preservation and received $45,000 an acre. A few years later, the Tennessee Gas Pipeline leased portions of the property for $4,000 an acre, Tittel said.

“Right now, it’s a taxpayer rip-off,’’ said David Pringle, campaign director of the New Jersey branch of Clean Water Action. If pipeline companies had to pay fair-market value to expand or build new pipelines, it might deter them from pursuing such projects on public land, he said.

Beyond the state being shortchanged on the leases, conservationists also worry the increasing diversion of lands set aside with public funds could jeopardize support for future acquisitions.

“It’s critically important to ensure we pursue land preservation in New Jersey,’’ said Amy Hansen, policy analyst for the New Jersey Conservation Foundation.

The legislation makes other important changes in the leasing of public lands, which has been criticized in three separate audits performed by the Office of Legislative Services.

One of them would shorten the leases from 25 to five years. One OLS audit found that nearly half of the 236 leases under the purview of the state Department of Environmental Protection had expired.

The bill also would require certain transactions involving the lease of public lands to be approved by the State House Commission. The issue emerged in 2010 when the commission initially approved a lease by Tennessee Gas Pipeline for $45,000, but then balked at the conveyance after widespread protests from conservationists. The commission renegotiated the lease for $180,000.