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PennEast pipeline application reviewed

Published by
World Pipelines,

The New Jersey Division of Rate Counsel, which represents ratepayers' interests, submitted a strong case on 12 September against the supposed market need for the PennEast pipeline, at the close of the Federal Energy Regulatory Commission (FERC) public comment period on its Draft Environmental Impact Statement (DEIS) for PennEast.

According to the New Jersey Rate Counsel's comment published on the FERC PennEast docket, the ratepayer advocate agency "is concerned that the DEIS does not address that the 'need' for the project appears to be driven more by the search for higher returns on investment than any actual deficiency in gas supply or pipeline capacity to transport it." The report concluded that "the terms under which the project has been proposed are unduly generous to PennEast and unfair to consumers" and that "the pursuit of rich financial incentives does not constitute a showing of 'need,' and is insufficient to justify the project."

"We are grateful to the New Jersey Rate Counsel for serving as a public watchdog against profit-driven pipelines like PennEast," said Tom Gilbert, campaign director, New Jersey Conservation Foundation. "The Rate Counsel has affirmed the self-serving nature of PennEast's proposed pipeline. New Jersey ratepayers should not be forced to pay for a pipeline we don't even need."

Another new analysis published on 12 September demonstrates that current and projected demand for natural gas in the New Jersey and eastern Pennsylvania region can be easily met through the year 2030 by existing pipelines and supplemental supplies. In addition, these alternatives to meet gas demand needs during "peak" periods are more cost effective and less environmentally damaging than building the proposed PennEast pipeline.

Gas market expert Skipping Stone, a nationally respected consulting firm that has provided analysis to energy companies and testimony to FERC and other regulatory agencies for more than 25 years, conducted the analysis. The report was submitted to FERC as a formal comment on the DEIS, by the Eastern Environmental Law Centre on behalf of New Jersey Conservation Foundation and Stony Brook-Millstone Watershed Association.

In its DEIS, FERC failed to conduct a thorough analysis to determine whether there are less harmful alternatives to its proposed pipeline, including a no-action option. Such an analysis is required under the National Environmental Policy Act (NEPA).

The New Jersey Division of Rate Counsel's comment also acknowledged this deficiency in PennEast and FERC's assessments, stating "the DEIS gives overly short shrift to the 'no action' alternative."

"FERC completely ignored the mandate to fully analyse whether less harmful alternatives exist," Gilbert said. "Skipping Stone's new analysis demonstrates that other, less costly options are available that would avoid the devastating impacts PennEast would cause. There is no justification to build this unneeded, damaging pipeline other than to profit private companies at the expense of ratepayers and our communities."

The Skipping Stone analysis shows that PennEast is not needed to meet current or projected demand for natural gas, and that current pipeline capacity far exceeds even peak winter demand. By 2030, a small potential gap between peak winter demand and pipeline capacity shown by projections can easily be met by utilising existing supplemental "peak shaving" resources.

Using supplemental supplies to meet demand that exceeds pipeline capacity has been a common practice "for as long as there has been a gas business," according to Skipping Stone's report.

Gilbert pointed to a quote in a recent rate hike request from New Jersey Natural Gas — one of the owner companies of PennEast — that reinforces this practice:

"The weather-sensitive nature of NJNG's customer requirements exhibits a pronounced peak over a limited number of days. Pipeline service, designed to provide year-round availability, is less cost-effective to meet this portion of the firm requirements of NJNG's customers."

To demonstrate to FERC that additional alternatives exist to the PennEast pipeline, Skipping Stone's study evaluated the option of importing peak winter supplies through existing LNG terminals. The analysis shows that existing pipeline capacity can be used to bring peak winter supplies to the region from existing LNG facilities in the Northeast. This conclusion highlights the failure of the DEIS to consider less costly and less environmentally damaging alternatives.

"This is a clear-cut situation in which NEPA mandates FERC to consider 'no-action' alternatives to PennEast's proposed pipeline," said Jennifer Danis, Senior Staff Lawyer, Eastern Environmental Law Centre. "Not surprisingly, FERC did not adequately consider these alternatives, because PennEast said they would not serve its needs. Despite PennEast's attempts at denial of process, Skipping Stone's new analysis provides the proper consideration for this massive project, which carries huge potential for damage. Federal law has made FERC's directive clear; it must consider the 'no-action' alternative submitted — it meets public needs without blindly gratifying private purposes."

"This analysis provides further evidence that PennEast is about private gain, not public need. Once again, PennEast companies are doing what's good for their bottom lines, not their customers or ratepayers, and regardless of massive environmental impact," said Jim Waltman, Executive Director of Stony Brook-Millstone Watershed Association.

Edited from source by Stephanie Roker

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