Explosive battle looms over PennEast Pipeline project

Vince Calio//January 29, 2018//

Explosive battle looms over PennEast Pipeline project

Vince Calio//January 29, 2018//

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The proposed PennEast Pipeline may have gotten the approval of the Federal Energy Regulatory Commission, but several New Jersey homeowners, protest groups, state politicians and attorneys are still vowing to get the project shut down before it even starts.

FERC, in a 4-1 vote, issued a Certificate of Public Convenience and Necessity on Jan. 19 for the proposed 116-mile natural gas pipeline. Its construction could effectively displace over 300 New Jersey and 500 Pennsylvania landowners.

The pipeline will pump natural gas from the Marcellus Shale region and stretch from Luzerne County through Carbon, Northampton and Bucks counties in Pennsylvania, then across the Delaware River into Hunterdon and Mercer counties in New Jersey. If built, the pipeline is expected to affect a total of 1,585 acres in both states, and its operation would affect 788 additional acres, according to FERC’s decision.

According to Tim Duggan, an attorney at Lawrenceville-based law firm Stark & Stark that is representing the landowners that will be affected by the project, PennEast still has a long way to go before it can begin. He estimated 70 percent of New Jersey homeowners are not allowing PennEast Pipeline Co. contractors on their property for surveying work.

To get around this, Duggan expects that PennEast will go to court to obtain power of eminent domain over those properties. He also noted that even with FERC approval, PennEast still has to get approval from the New Jersey Department of Environmental Protection, which rejected the project in June specifically because PennEast did not provide enough surveying information to show the project would not endanger the state’s drinking water supply.

Eminent domain essentially gives the federal or state government the power to take private property for public use while requiring that the affected private landowners receive just compensation. Obtaining that power would be crucial for the PennEast Pipeline’s success, given many homeowners in Hunterdon and Mercer counties are being resistant to the PennEast surveyors, Duggan said.

Duggan said he remains fairly optimistic that NJDEP will again reject the project.

“The way I look at it is that PennEast had a home game with FERC. The residents of New Jersey now have a home game with NJDEP,” he said.

“PennEast is not allowed on anybody’s property until they obtain a court order,” Duggan continued. “We expect PennEast to file a lawsuit seeking rights to exercise eminent domain in the next couple of weeks and that they will ask the court to allow them to go on properties to seek surveys and tests. In order for PennEast to complete its application to NJDEP, it needs to complete a whole bunch of surveys.”

Duggan warned homeowners to hire attorneys specializing in eminent domain cases, and experienced property appraisers to determine the just compensation amounts and property damages the project may cause.

“One of the problems that people are going to run into is, if the pipeline is not in the ground and you to sell your house, you’re going to have to disclose that a pipeline is coming through and potential buyers may move on. A new pipeline will certainly affect the value of your home.”
Tim Duggan, attorney at Stark & Stark

“The amount of damages falls into two components,” said Duggan. “One is that PennEast would have to pay you for the property they take. The second is they must pay you for any damages to your property that the pipeline may inflict. Also, if the putting the pipeline into the ground reduces the value of your home, then you are entitled to additional just compensation.”

Those in the affected areas looking to sell their homes will likely see the values of those homes take a hit if PennEast gets the green light to build the pipeline, Duggan said.

“One of the problems that people are going to run into is, if the pipeline is not in the ground and you go to sell your house, you’re going to have to disclose that a pipeline is coming through and potential buyers may move on. A new pipeline will certainly affect the value of your home,” said Duggan.

For its part, PennEast said it is working diligently with landowners to make sure they are fully aware of the company’s intentions and are working with each to ensure they are “fully and fairly” compensated.

“PennEast is committed to continuing to build positive relationships with landowners as it has since announcing the project in 2014,” the company said in a statement provided to NJBIZ. “In fact, constructive input from landowners has resulted in dozens of route modifications that have helped improve the route and minimize impacts.

“PennEast is working directly with landowners to finalize fair compensation agreements that will enable PennEast to build on a portion of their property. In direct contrast to the incessant opposition rhetoric, landowners working directly with PennEast are compensated fully and fairly for the use of a small portion of land and retain ownership and use of their property, including farming.  Allowing a third-party financial determination to be reached in a legal proceeding is not in the best interest of the landowners, the community or the project, and would be counterproductive to PennEast’s long-standing commitment to building positive relationships.”

PennEast also noted that “after extensive review extending more than three years, FERC concluded ‘there is no available capacity for existing pipeline systems to transport the required volumes of natural to the range of delivery points proposed by PennEast.’”

That was echoed by FERC itself shortly after its Jan. 19 decision.

“Those shippers will provide gas to a variety of end users, including local distribution customers, electric generators, producers and marketers and those shippers have determined, based on their assessment of the long-term needs of their particular customers and markets, that there is a market for the natural gas to be transported and the PennEast Project is the preferred means for delivering or receiving that gas.”

New Jersey Resources, the consortium overseeing PennEast Pipeline Co., said the project is essential to the state in order to bring energy costs down.

“The PennEast team has worked diligently to meet all FERC requirements, in order to provide low-cost natural gas to our state’s residents and businesses, reduce energy costs, create jobs and drive economic development in New Jersey,” said Stephen Westhoven, COO at New Jersey Resources, in a prepared statement. “We are pleased this project has received FERC approval, and look forward to delivering the benefits of this locally sourced, abundant, low-cost natural gas to our state.”

NJR’s members include New Jersey Natural Gas, NJR Clean Energy Ventures, NJR Energy Services, NJR Midstream and NJR Home Services.

Opponents of the project include the New Jersey Conservation Foundation, as well as state Sen. Christopher “Kip” Bateman, R-16th District, and U.S. Rep. Bonnie Watson Coleman, D-12th District.

Watson Coleman said FERC’s decision “casts a dark shadow over the promise of clean water, green space and land rights for future generations,” while Bateman called it “reckless.”