You’ve heard the saying, “If you believe that, I’ve got a bridge to sell you.” The pipeline that PennEast has tried to sell us for the past five years is a lot like that bridge. Now, adding insult to injury, they want to sell us half a bridge. Do they think we’re suckers?
Faced with a court decision barring PennEast from seizing state-preserved land in New Jersey, and iron-clad evidence from gas experts and the NJ Ratepayer Advocate that the pipeline isn’t needed, PennEast is desperately trying to build something — anything — to gain the excessive profits the federal government guarantees for such projects, needed or not.
PennEast recently asked the Federal Energy Regulatory Commission (FERC) for approval to build the pipeline in two phases, constructing in Pennsylvania by 2021, then crossing the Delaware River into New Jersey by 2023. Maybe they think a half-loaf is better than none, but leaders in both states should reject this faulty premise.
PennEast says it has contracts for only half of the gas that would be delivered by phase one of the project and has provided no information about who the customers would be. That doesn’t even meet FERC’s weak test of public need. FERC should put the brakes on this scheme and treat PennEast’s new proposal as an entirely new project requiring intense scrutiny.
PennEast also claims the Delaware River Basin Commission (DRBC) no longer has authority over phase one of the project. That’s an end run around the agency charged with protecting water quality in the area, supplying drinking water to over seven million people. The DRBC shouldn’t let them get away with it.
This all smacks of desperation for PennEast. The state Department of Environmental Protection rejected the company’s application for the permits needed to build the pipeline. A federal court ruled that PennEast can’t use eminent domain to take land owned by the state. And now PennEast says it will appeal that decision to the U.S. Supreme Court in hopes of a ruling that could pave the way for construction of a pipeline that no one needs but PennEast.
Why would a company go to such lengths to build a pipeline in the face of such opposition?
Here are the facts PennEast doesn’t want people to know:
- The companies behind PennEast already receive gas on existing pipelines. They want their own pipeline to, in effect, pay themselves instead of other pipeline owners. It’s a sweet deal, with a guaranteed 14% return for PennEast owners, and higher gas bills for New Jersey customers.
- Today’s excess gas pipeline capacity serves all foreseeable New Jersey needs. During the highest usage day over the past five years, New Jersey customers had access to far more gas supplies than were needed. In fact, the unused supply on the coldest day would have satisfied 40% more than the highest demand.
- Building more pipelines to meet nonexistent demand won’t lower prices to New Jersey consumers. Excess supply relieves price pressure, even during periods of high demand.
- The claim that New Jersey needs more pipelines to maintain reliability if an accident disrupts supply is false. The interstate pipeline network is far more reliable now than ever before. The two largest pipelines in our region, Transco and Texas Eastern, can flow in either direction — and three other interstate pipelines interconnect with these two major pipelines to provide a robust network. If an outage occurs, supply can be rerouted to avoid outages.
The reason PennEast’s alternative-reality campaign persists is money.
‘Winning the lottery’
The partners behind the project — New Jersey Resources, South Jersey Industries, Southern Company Gas, Spectra Energy Partners and UGI Energy Services — stand to make profits so high that the New Jersey Ratepayer Advocate, the state’s utility consumer watchdog, called them “tantamount to winning the lottery.”
But if PennEast’s owners are pretty good at math, they’re flunking science and economics.
They ignore the science showing that fossil gas emits greenhouse gases that worsen the effects of climate change, harming health and jeopardizing safety. PennEast’s response is that gas is cleaner than coal, which is irrelevant because less than 1% of New Jersey’s energy supply comes from coal.
As for economics, PennEast clamps its hands over its ears whenever someone says renewable, affordable energy sources like wind and solar are poised to become the major suppliers of energy to New Jersey. Indeed, the state has set the reasonable goal of 100% clean energy by 2050. The switch will bring cleaner air, thousands of new jobs, and take advantage of the rapidly declining cost of solar and wind generation.
It’s time for PennEast to give up the ghost. There’s little doubt that the companies supporting a pipeline to nowhere will one day sell renewable energy. They should embrace that future now, instead of trying to squeeze consumers for every last dollar to be made from selling unneeded gas.