Brutal Cold Snap Proves Need for PennEast Pipeline

Pat Kornick | January 11, 2018 | Energy & Environment
Price of natural gas skyrocketed in New Jersey during recent freeze to more than 3,000 percent of that in Pennsylvania

pennEast house
Although New Jersey sits a stone’s throw away from one of the most affordable natural gas supplies in the world, natural gas prices in the Garden State skyrocketed day after day during the brutal cold snap and Bomb Cyclone last week — eventually cresting over 3,000 percent higher than Pennsylvania pricing.

That’s right: 3,000 percent higher.

At its peak on January 5, New Jersey customers paid more than $150 per dekatherm compared to $6 in Pennsylvania’s Marcellus Shale production areas.

Across the Northeast, supplies were so limited and costs so high, that fuel mixes were altered to burn coal and oil to help keep the power running, driving up carbon emissions.

The proposed PennEast Pipeline would directly tap the low-cost Marcellus natural-gas supply for New Jersey. It’s moments like those, with temperatures in single digits, that the public is reminded of the vital lifeline that this energy infrastructure provides — around the clock.

Click to open/close
The reason for last week’s cost spikes and daily pricing differentials in New Jersey is simple: New Jersey lacks sufficient pipeline infrastructure to move enough natural gas, especially at times when it’s needed most.

Even in off-peak “shoulder” months, like October, pricing differentials were three times higher in New Jersey compared to Pennsylvania. Had the PennEast Pipeline been in service last November as originally contemplated, preliminary estimates project the region would have saved at least $300 million in recent weeks.

With significantly more affordable natural gas supplies a short distance away, there’s no valid reason why New Jersey families and businesses are stuck paying more. It slows growth, job creation, and a move toward a fairer economy. The higher prices are especially difficult for families and seniors struggling to pay for energy in their homes.

Significant supply of new natural gas would not only keep costs down, but protect the environment from higher emissions and ensure reliable energy delivery.

New Jersey is unique; natural gas not only heats three of every four homes in the state, it also is seeing growing demand for generating electricity. Now nearly 60 percent of the state’s electric portfolio, natural gas has resulted in a drop in costs and a documented double-digit drop in carbon emissions as the power sector has moved from coal and oil.

During the last similarly cold event four years ago, an independent expert found PennEast would have delivered nearly $1 billion in electric and gas savings for the region in that one season alone. Since then, extreme voices, like those of ReThink Energy, have said market reforms fixed the pricing and reliability challenges of the Polar Vortex event. As often is the case, though, ReThink Energy’s hyperbole and misinformation were proven false.

Stopping needed pipeline development like the PennEast Pipeline might fit a narrow political agenda, but in areas like New England without an abundant supply of natural gas, shortages forced approximately one-third of electric generation to come from oil, emitting 40 percent more carbon emissions than natural gas.

Renewables are an important part of the energy mix as we look to the future. To date, member companies of the PennEast Pipeline Co. have invested approximately $7 billion in renewables.

In events such as those last week, though, solar and wind could not meaningfully address the energy demands of those extreme winter days. Practical observers realize that clean natural gas is critical to providing the essential round-the-clock backup power for fuel sources that work only part of the day, supporting a grid that demands energy every second of every day — regardless of the season.

With three government regulators agreeing its construction and operation are safe for the environment, it is time to move the PennEast Pipeline Project forward — to protect our environment, to stabilize and lower prices, and to support a diverse energy grid that provides the much-needed heat and power on which the region relies.

We’re in this together
For a better-informed future. Support our nonprofit newsroom.
Donate to NJ Spotlight