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The proposed PennEast Pipeline presents an age-old conflict: jobs vs. the environment

Greg Lalevee, business manager, IUOE Local 825. – AARON HOUSTON

The PennEast Pipeline project has been a point of contention for five years. Proponents contend the proposed $1 billion project will bring natural gas in a safe manner and provide high-paying construction jobs; opponents warn it would damage the environment, displace residents, and pose risks to human health.

In the latest skirmish over the pipeline, the U.S. Third Circuit Court of Appeals on Sept. 10 dealt a setback to the project, ruling that the builder, the PennEast Pipeline Co., cannot use federal eminent domain power to condemn land owned by the state of New Jersey. The pipeline route crosses 40 tracts the state owns as open space.

Tim Duggan, an attorney at law firm Stark & Stark, represents many families in the affected area. In a statement provided to NJBIZ, Duggan wrote that “PennEast will now have to file new lawsuits to condemn over 40 properties in which the State of New Jersey has an interest, a major setback.”

The week before the court ruling, on Sept. 5, the state Department of Environmental Protection also stepped in, finding that the pipeline company’s applications for wetlands and flood hazard permits contained insufficient information.

“It is not surprising that NJ DEP deemed PennEast’s application deficient given its poor track record of providing any credible justification to resource agencies reviewing its pipeline,” Tom Gilbert, the campaign director, New Jersey Conservation Foundation and ReThink Energy NJ, said in a statement.

“PennEast will ultimately be rejected because it simply can’t meet New Jersey’s strict environmental standards,” he added.

The company will review in detail the Third Circuit Court’s opinion and determine its next steps, said PennEast spokeswoman Patricia Kornick.

“PennEast remains committed to moving forward with the PennEast Pipeline Project to provide New Jersey and Pennsylvania residents and businesses increased access to clean, affordable natural gas,” she said.
“As it pertains to the NJDEP permit application, PennEast will move swiftly to provide the supplemental data the NJDEP believes it needs to begin its thorough review of the 24,000-page application. PennEast also is committed to working with the NJDEP as this process moves forward. The approved route was designed with feedback from the Department to minimize environmental impacts. The resulting successes include aligning nearly half the route with decades’ old power lines, reducing wetland impacts by half and decreasing the project footprint by 20 percent.”

As the legal and bureaucratic wheels continue to grind ahead, groups on both sides of the issue are making their cases to the agencies and the public.

120 miles

Under the proposal, the PennEast Pipeline Co. would construct underground pipes carrying natural gas along a 120-mile route from Luzerne County, Pa. across the Delaware River and through Holland, Alexandria, Kingwood, Delaware, West Amwell and Hopewell townships in New Jersey. The company consists of NJR Pipeline Co.; PSEG Power; SJI Midstream; Southern Company Gas; Spectra Energy Partners; and UGI Energy Services, according to the PennEast website.

During construction PennEast estimates it will generate $1.62 billion in economic activity, support about 12,000 jobs with an associated $740 million in wages, according to a 2015 study from Econsult Solutions touted by the company.

PennEast estimates it will generate close to $65 million in state and local tax benefits during the pipeline’s first five years of operation and more than $100 million in federal tax benefits. The company also lists reduced natural gas and electric costs and increased reliability among the benefits to area communities. The Econsult study found for every $10 million in consumer savings offered by the project, consumers would generate $13 million in economic benefits to the region.

As an interstate natural gas pipeline, the PennEast Pipeline Project falls under the jurisdiction of the Federal Energy Regulatory Commission. PennEast obtained a FERC Certificate of Public Convenience and Necessity in January 2018.

PennEast’s team of engineers and consultants balanced the most direct pipeline route with numerous safety, environmental, structural, conservation and land-use factors, according to the company. It said routes are designed to minimize impact on communities and the environment.

PennEast said it will also use existing utility corridors and roadways to help minimize impacts, which it has done in New Jersey where nearly half of the route is located adjacent to decades-old power lines. However, colocating a pipeline with other utility lines is not always an option and can be pursued only when safely and logistically feasible.

A familiar divide

Greg Lalevee, business manager at the International Union of Operating Engineers Local 825, said natural gas pipelines play an important role in New Jersey’s economic development. The local’s membership 6,500 operators who worked to complete New Jersey’s portion of the Tennessee Gas Northeast Upgrade. According to the IUOE, its members have worked on a $2 billion pipeline in New Jersey.

Without a natural gas pipeline extension, Lalevee said New Jersey’s economic development will suffer. He said pipelines are far safer than transporting natural gas by barge or rail and that pipelines are essential to creating a sound energy policy.

“Pipelines are a big thing to us work-wise and economically,” Lalevee said. “Look at the argument for renewable energy. The extreme left wants renewable energy by 2030. New Jersey is 40 percent nuclear. France is 70 percent nuclear. To take natural gas out of the mix is more of a tagline than anything. I do not think it is a practical solution to reach [that goal] even by the year 2030 or 2050. Our organization promotes natural gas infrastructure. It means lots of jobs, good-paying jobs that sustain families.”

He pointed to Penn East’s tax projections. “As we wrestle with the tax pie in New Jersey, I do not know how we ignore that. I do not see how the renewable energy industry could have this kind of impact in a short period of time. To have a large supply of natural gas drives down the prices.”

On the transmission side, companies contract out maintenance work, Lalevee said, adding that gas pipelines are safer than ships and trains.

“There are zero concerns about safety structures,” Lalevee said. “If you are okay with driving a car, you should be okay with flying. Pipelines are safer than flying. Flying is safer than driving.”

Jeff Tittel, director of the environmental organization New Jersey Sierra Club, opposes the proposed Penn East Pipeline because of its potential to hurt people and the environment.

“There is no demonstrable need for the pipeline,” Tittel said. “The rate-payer advocate did a paper on that. … This would cut through our waterways and sources of drinking water and wildlife areas. Natural gas prices are set by the commodities market. One pipeline will not change the price of natural gasoline.”

Tittel argued that the state should be focusing on cleaner sources of energy. “It is about moving to a green economy. This proposed pipeline would cut through a scenic area and streams that it would cross are high-quality streams. It would cut through protected open space and preserved farmlands. It would destroy environmentally sensitive open space areas.”

David Hutter
David Hutter grew up in Darien, Conn., and covers higher education, transportation and manufacturing for NJBIZ. He can be reached at: dhutter@njbiz.com.

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