The slippery slope just turned into a slippery cliff

Last night I had the pleasure to be on PANJ Radio live with Jeff Titel of NJ Sierra Club.  The topic was, of course, the PennEast pipeline.  We did the show to help educate Lambertville residents on what’s going on with the pipeline, and get them pumped up about increasing Lambertville City’s opposition to PennEast.  I’ll post a recording of the session once it’s available.

In an attempt to add balance to the discussion, PANJ Program Director Rob Bell contacted PennEast and invited them to join the show.  As usual, PennEast declined the invite .  Not surprising, really, since as we all know PennEast has avoided all meetings with the public since the debacles at the Landowner-invite events in early 2015.  PennEast clearly does not want to be in a position to have someone actually question their claims live and in person.

PennEast spokes person Patricia Kornick did send a statement in though.  Most of it was the same old tripe, that can be summed up here.

1) Usage of home heat and electricity consumption is increasing, so we need PennEast

False: all projections, including those by eia.gov, show NJ energy demand to be flat out to 2040.

2) 90% of the capacity on PennEast is sold, so there must be a need for it!  

This is one of PennEast’s more dangerous arguments, where they are claiming there is a market need for this project because they’ve sold most of the capacity.

But what they don’t like to admit is this:

  • PennEast is a shell company owned by South Jersey Industries, New Jersey Resources, PSEG, UGI, Elizabethtown Gas’ parent company, and Spectra Energy.  And the “customers” on the pipeline are: South Jersey Industries, New Jersey Resources, PSEG, UGI, Elizabethtown Gas, and Spectra Energy.  Yes, this is classic “self-dealing”, not a real market.
  • The PennEast “customers” can only afford to buy natural gas by stopping buying gas from other pipelines.  Yeah, that’s right – with no increasing demand and all the existing pipelines in place, they can only accommodate PennEast by halting their existing contracts.  There’s no “need” here, only transferring money from other companies to themselves.

This graphic might help:

PennEastOwners

There you go – the PennEast owners – SJI, NJR, PSEG, UGI, AGL/Southern Company, and Spectra Energy.  And the PennEast “customers” – South Jersey Gas, New Jersey Natural Gas, PSEG Power, UGI Energy Services, Elizabethtown Gas (owned by AGL), Texas Eastern pipeline (owned by Spectra).

3) PennEast will reduce energy costs!

False.  Last year Kornick was making these assertions, and a journalist asked her to provide her with the cost projections PennEast had made to back up that claim.  Kornick sheepishly replied that no such projections exist.  This is a baseless assertion with no data or analysis to back it up.

4) PennEast will increase reliability

When numerous parties began shooting holes in PennEast’s “increasing demand” and “lower prices” story, they changed direction and said that it was really all about “reliability” and “reducing constraints in the system”.  They pointed to the bogus Concentric study they commissioned showing a mythical $890 million the region would have saved if PennEast went back in time and existed during the polar vortex winter of 2014.

Here’s the reality: there are no such constraints in NJ.  As a state we are awash in Natural Gas and simply don’t need any more.  And you don’t have to  just take my word for it.  PennEast’s own owners same the same thing as well.

Every year, SJI’s annual report and SEC 10K filing gives a detailed breakdown of their gas supplies and system reliability.  In 2015 their peak load was just over 500 million cubic feet in a single day.  But their contracted supply allows for 630 million cubic feet.  So they had a 130 million cubic foot margin on their worst day.

They have multiple suppliers and options, including multiple pipeline suppliers and alternate storage solutions, including their own LNG storage and vaporization facilities.

Their 10K indicates that they have more than adequate supply and diversification in their system.

The same story is repeated in prior years, including the polar vortex winter.

NJR tells a similar story in their 10K filing, concluding:

In fiscal 2015, NJNG purchased natural gas from approximately 86 suppliers under contracts ranging from one day to one year and purchased over 10 percent of its natural gas from two suppliers. NJNG believes the loss of these suppliers would not have a material adverse impact on its results of operations, financial position or cash flows as an adequate number of alternative suppliers exist. NJNG believes that its supply strategy should adequately meet its expected firm load over the next several years.

This story is repeated over and over again in the other partner’s filings as well.  There is no reliability issue for natural gas in NJ.

 

5) PennEast is the first pipeline to pipe Marcellus gas into NJ

I saved the best for last.  This whopper is a new one that Kornick is trying out for the first time.  And it’s a doozy.  Here’s what she says in its entirety:

The PennEast Pipeline will be the first system to bring natural gas directly into New Jersey from a local, abundant natural gas supply.

It is mind boggling that PennEast would even go here.  In fact there are many pipelines coming out of the Marcellus region into our area.  EIA.GOV has the details:

http://www.eia.gov/todayinenergy/detail.cfm?id=24732

Part-PennEast owner PSE&G also disagrees with Kornick on this – right within PennEast’s own application to FERC!  In it, they state….

“PSEG, as the largest utility in New Jersey and one of the largest buyers of Marcellus Shale supplies in the northeast…”

In their SEC filings, PSEG goes on to indicate that they already get the majority of their natural gas today from the Marcellus region – all without PennEast not being in existence.

Conclusion

So PennEast is continuing their campaign of disseminating misinformation throughout the region.  No surprise there.  But what is surprising to me is that they continue to stretch the truth a little more each time.

For those interested, here’s Kornick’s statement in full:

 

 

Hello, Mr. Bell.  I appreciate your contacting the PennEast Pipeline
Project.  I am the project spokesperson for PennEast.

I am providing some key information to supplement information from the

web site.  The information should help in moderating an informative,
balanced segment:

* In addition to millions of local families and businesses relying on

the electricity produced by natural gas, approximately 75 percent of New
Jersey homes and more than 50 percent of Pennsylvania homes rely on
natural gas for heat.  Whether for home heat, or the electricity that
powers the lights, air conditioners, televisions and computers and charges
phones, that use is increasing.

* PennEast’s capacity is under long-term contracts from local public

utilities and electric generation companies that recognize the need for a
local, abundant and affordable energy source.  With approximately 90
percent of the pipeline fully committed, the local market demand for the
PennEast Pipeline Project is clear.


* Rather than relying on natural gas being transported from

Pennsylvania, down to the Gulf Coast and then returning to serve area
energy consumers, the PennEast Pipeline will be the first system to bring
natural gas directly into New Jersey from a local, abundant natural gas
supply.

* As such, the PennEast Pipeline Project will reduce energy costs to

area natural gas and electricity consumers.  It also will increase
reliability by alleviating constraints on the existing pipeline system,
which are most evident during storms and extreme weather conditions.

Based on input from landowners, public officials and others, PennEast
has reviewed more than 100 route options.  Where safely and logistically
feasible, PennEast has implemented dozens of modifications as a result of
such feedback. *


As evidenced by the approximately 2.6 million miles of pipelines across

the United States, including in New Jersey, transmission pipelines exist
harmoniously across rural and urban communities alike. Following pipeline
construction, the property is restored. Landowners may continue to use
their property as they had prior to construction, with the exception of
building directly atop the pipeline or planting trees. Recreational and
farming http://penneastpipeline.com/working-with-agriculture/ activities
also may continue. (PennEast is continuing to work with landowners to
ensure their property-specific preferences are reflected in their easement
agreements.) *


PennEast recognizes that not everyone understands or appreciates the

environmental, economic or practical aspects of building natural gas energy
infrastructure, such as the PennEast Pipeline Project.  Yet, clean-burning
natural gas literally fuels the quality of life for most Americans —
including those using their mobile phones and computers to oppose natural
gas development. *


While there are vocal pockets of people opposed to natural gas

development, the majority of area families and businesses welcome the
reduced utility bills, increased reliability and the other practical,
environmental and economic benefits that PennEast Pipeline will bring to
the region.

In fact, the majority of business and trade organizations within the

region have rendered support for the Project:
http://penneastpipeline.com/supporters. [2].


Additionally, those opposed to natural gas development, and this Project

in particular, are going to great lengths to try to stop the Project,
including filing lawsuits:
http://penneastpipeline.com/new-jersey-superior-court-sides-penneast-dism
isses-baseless-trespassing-lawsuit/ or commissioning “studies” (
http://penneastpipeline.com/wp-content/uploads/2015/03/Concentric-respons
e-to-NJCF.pdf) and espousing the findings as fact.

 

Published by

Mike Spille

I'm a thinker, an analyzer, a synthesizer. Maybe not in that order. I live in West Amwell NJ with my wife Kristina, our two kids Day and Z, our two dogs Fern and Cinna, and two cats Ponce de Leon and Xavier.

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