I continue to be amazed that a conglomerate of 6 large corporations like PennEast makes so many – and such a wide variety of – errors. Their slogan really should be:

PennEast Pipeline Company LLC: The “oops” company.

PennEast has made statements in lots of different media: public and private meetings, FERC submissions, newspaper articles, letters to the editor. And it’s simply astounding to me how many mistakes, errors, gaffes, and outrageous missteps they’ve made in all of them. There isn’t any one spokesman or employee that’s been messing up. It basically seems to be all of them.

One of their most recent epic-sized faux pas is in the area of co-location. This is a hot topic. Co-location is generally seen as a good thing and gets pipeline companies brownie points with some people. So naturally PennEast crowed to the rooftops when they made their route change in January and claimed they were now co-located for most of the route. The big change was in NJ where they co-located along an existing JCP&L power line easement, bringing them up to 60% co-location in the state.

Except that it wasn’t really co-location. Subsequent filings from PennEast showing construction diagrams clearly showed that the pipeline would have to be placed a considerable distance from the power lines, and their construction ROW would have to be confined to one side of the power lines. This was documented in April here:

https://thecostofthepipeline.com/2015/04/29/why-co-location-isnt-a-panacea

Still PennEast persisted and said that they were co-located. They proudly presented this fact even to the NJ DEP – who promptly said that even 60% wasn’t enough.

Apparently someone at PennEast finally woke up and actually looked at the construction plans, and then looked up the definition of co-location (or maybe FERC reminded them). And saw they had made a HUGE mistake. It’s finally documented in their most recent set of resource reports from last week.

Here you can see PennEast now admitting that only 36% of the total project is co-located, with 39% in NJ and 35% in PA. Meaning that PENNEAST ADMITS THAT NEARLY TWO-THIRDS of the route is NOT CO-LOCATED.

This is yet another epic fail from PennEast…and serves as yet another one from a long list of them.

When are they going to figure out that they’re just not capable of building this pipeline and give it up?

Changes to the Pipeline Route have come in. They are available permanently on the “Detailed Route Map” link above as well.

https://www.google.com/maps/d/edit?mid=zBHvkb8lr8vw.koP3GtgS1aLc&usp=sharing”

Green is the March route, Red is the July route.

There only a few major changes.

List of changes:

NJ:

Change at the terminus in Pennington, NJ, new houses impacted.

Change at Lambertville interconnect, now south of 202 instead of North of it (away from Alexauken Creek but destroying more forest).

Small change at Lambertville-Headquarters Road.

Small change at Sergeantsville Road

Further west between Kingwood Locktown Road and Barberton Point Breeze Road (new houses impacted, some VERY close). Looks like they are screwing homeowners to save the solar array.

Small change near Everittsville Farm Lane.

Small change near Gilbert Generating station in Milford/Holland.

PA:

Slightly to the North on Bath Road, impacting a couple more houses (one has the centerline through their house).

Major change at Appalachian Trail. They now virgin cut far more forest going far west to cross the trail near a quarry. It now also takes out 2/3 of the quarry parking lot.

Major change at Route 81. Now further to the East and closer to a quarry again (PE loves quarries!). 14 new houses added to the route.

An enormous group of agencies, towns, organizations, and individuals have been fighting the PennEast pipeline for months now. At times it’s been a hard, grueling campaign and we all lose heart a little bit here and there. It’s easy feel a bit of despair at the enormity of the task, and the length of the road ahead of us.

But we’ve hung in there, and the efforts of so many people working towards a common goal is finally beginning to snow ball. We are seeing more and more negative news items about PennEast. More and more townships, like Delaware Township, are rising up to demand their elected officials take a hard stand against the pipeline. And conservation organizations keep grinding away, day after day and week after week, producing mountains of evidence against PennEast.

Then we have a week like last week.  The NJ DEP issued a report to the FERC saying that they couldn’t evaluate PennEast’s applications at all because their survey permission rate was below 35%, and that in general their submissions were woefully incomplete and inadequate:

http://www.nj.com/mercer/index.ssf/2015/07/opponents_of_12_billion_penneast_pipeline_see_vict.html

http://www.lehighvalleylive.com/news/index.ssf/2015/07/penneast_pipeline_has_a_ways_t.html

This is a momental setback for PennEast and a dire blow to their plans to run this pipeline anywhere through NJ.

And then we have a week like this one. Reports have started pouring in from around the region that PennEast had been conducting test bores all over the place. Drilling rigs have been spotted in NJ and PA.

One of the most disturbing was a rig discovered in Mercer county off of Pleasant Valley Road. Conservationists and individuals swooped in and investigated the site, took pictures, and started digging what was going on and who gave permission for test bores to be drilled into Baldpate. They discovered that PennEast had been talking to Mercer County about it, and PennEast more or less conned Mercer County into granting permission for test bores.

The outrage over this was deafening. People poured out of the woodwork to lodge complaints and protest this violation of a unique, preserved site.

And here’s the really amazing part: it worked. Mercer County Executive Brian M. Hughes released a statement today saying that they would be blocking all further access by PennEast:

He states in the release:

In light of the intrusion on numerous ecosystems and news that the N.J. Department of Environmental Protection has been unable to collect enough information to issue permits to PennEast to perform work, the county has blocked further access to its property….

Unless this project receives federal approval, the county will no longer permit any soil borings to occur on Baldpate Mountain. The county is prepared to fight on the behalf of county interests and to fight for the open space it has purchased. The county remains opposed to the pipeline

The Executive also sent a very strongly worded letter to PennEast that was reported in this article:

http://www.nj.com/mercer/index.ssf/2015/07/mercer_county_boots_penneast_pipeline_from_county.html

“PennEast is directed to immediately CEASE AND DESIST all activities on County property,” the letter reads. “Please have your company’s contractor(s) immediately remove all equipment and personnel from the County’s property, after returning the property to the condition it enjoyed prior to any work being conducted.”

This bold action is the result of the hard work of organizations such as the New Jersey Conservation Foundation, Hopewell Township Citizens Against the Pipeline, the Sourland Conservancy, the Delaware Riverkeeper Network, and individuals such as Fairfax Hutter who brought this information to the attention of the county and sought action from them.

A  similar fight is brewing up in Holland Township, where anti-pipeline groups have observed similar test drilling rigs being setup in sensitive areas.  Various members of Concerned Citizens Against the Pipeline (CCAP) in northern Hunterdon County began monitoring and investigating the site and have had heated discussions with the survey personnel and management companies.  PennEast reps were found to be test drilling in Highland protected water and fouling a nearby pond.

When asked if they had DEP permits to be running these test rigs they replied that they did not.

They were then questioned on what materials were being used in this test drilling.  They replied that it was only water, but it was found that the test rigs on Baldpate were using drilling oil.  A CCAP member on the scene reports:

I politely asked the geologist from Hatch where the water source was for the hoses, and that’s when things got uglier.  He said the pond.  I said I thought you weren’t discharging into the pond; he said we’re not.  I said what is that big stream off the drill that ‘s running back to the pond.

At this point, Western got in my face and stood between me and the Hatch geologist so I couldn’t speak to him anymore.  I explained to Western that they are drilling on flood plain which requires permits from DEP, which they said they did not grant.  I said that they are introducing contaminant into Highland waters which are protected against degradation and that this rig contaminated soil over the weekend.  That samples of the soil contaminant have been taken, and that our lawyer is currently collecting samples from the pond for analysis.  That we are submitting all this information to NJDEP and to the township.  John from Western Land Services said they would not be telling me who issued the permits, but we could probably find out from FERC.  I said we would find out from the township, and that our results from today will be reported to the DEP and to FERC.

There is also a question of whether PennEast secured permission from the property owner(s), and permits from the township and county for these test rigs.

As you can see momentum truly is building up against PennEast, and organizations against the pipeline are remaining vigilant and will not let PennEast sneak anything past them (and they try – boy do they try).  These latest actions from PennEast show exactly how little they can be trusted, and how eager they are despoil sensitive ecological areas with no care for the consequences.

You can’t see me but I’m standing up applauding right now for the people who have worked so hard to make these moments happen, and for elected officials such as Mr. Hughes for listening to their constituents and doing what is right.

eia.gov’s Natural Gas Weekly report continues to be a thorn in the side of pipeline companies like PennEast.

Last week’s entry heralded a new era where we reached historical lows in natural gas prices on key regional hubs:

http://www.eia.gov/naturalgas/weekly/archive/2015/07_09/index.cfm

According to the report:

Responding to robust supply, mild temperatures, and low holiday demand, several trading locations in the Northeast and Mid-Atlantic regions set record low natural gas spot prices this past week, as prices fell well below $1 per million British thermal units (MMBtu) on July 2.

Following a cold and snowy winter, natural gas prices in the Northeast have been relatively low since April. Prices at Transcontinental Zone 6 New York (Transco Z6 NY) and Algonquin Citygate, with service to Boston, have averaged $2.43/MMBtu and $2.21/MMBtu, respectively, from April 1 through July 8. In New York, the average price over that period this year is 35% lower than the same period in 2014, and the average price in Boston is 50% lower this year compared to last year. Prices at the Algonquin Citygate reached a historic low on June 5, dropping to $1.19/MMBtu, and fell even lower, to 82¢/MMBtu, on July 2. Similarly, in New York, prices neared their historic low on June 5 at $1.38/MMBtu, and dropped to a record low 89¢/MMBtu on July 2. The July 2 spot price was for gas delivered July 3 through July 5 for the Fourth of July holiday weekend.

There are several factors contributing to the lower prices this year, including year-over-year growth in production, particularly from the Marcellus, and higher natural gas storage volumes.

Look at that, natural gas was 82 cents at the Boston gateway, and 89 cents at the NYC one. These numbers boggle the mind. Keep in mind that fracking companies need to sell their gas at about $4/MMBtu to generate a profit.

Take these numbers and plug them into PennEast’s Purpose and Need statements and you see, yet again, just how hollow PennEast’s words are.

There is literally no need for this pipeline in the region.

PennEast filed their monthly status report today and indicated that they’ve made more route changes in June. No details are available yet, although they do seem to indicate that it’s no a major re-route. The details will be sent out as soon as they’re available.

A FERC comment I am filing today…

PennEast recently met with representatives of Lower Saucon Township, PA in a closed door meeting about the pipeline. The representatives published the information discussed at the meeting under PA’s sunshine laws, including a presentation given by PennEast that is available at the URL below:

http://www.lowersaucontownship.org/penneast/pepipelineproject.pdf

Page 18 of the presentation quotes a study done by Allen, Williford & Seale in the Saddle Ridge subdivision in Dallas Township, Luzerne County PA. The slide indicates:

– Studied Saddle Ridge subdivision in Dallas Township, Luzerne County from 2009-2014:
– Allen, Williford & Seale Residential Study
– Subdivision developed beginning in 2005 around an existing 24-inch pipeline ROW
– Study showed undeveloped lots within the ROW sold at a 16% discount compared to lots outside the ROW
– However, existing homes within the ROW sold at a 3% premium compared to homes outside the ROW
– Conclusion: Pipeline easement has no negative impact on the sales prices of existing homes along the ROW

The full study is available here:

http://www.irwaonline.org/eweb/upload/web_mayjune_15_PipelineProx.pdf

After analyzing this study it is clear that it is entirely invalid and the data cited does not support the author’s conclusions.

First, some background:

The study includes:

– The study covers 27 houses in the subdivision: 20 houses not encumbered with a pipeline easement, and 7 that are encumbered.

– The study compares, in part, the average and median sale prices of the houses from 2009-2015, and attempts to also match up encumbered/not encumbered houses by sale date/size (although the actual data is not shared).

– The study also compares unimproved lot sales

Here are some of the many issues with this study that invalidate the author’s line of reasoning entirely:

1) Only 7 houses in the study are on the pipeline route. This is a very small sample on which to base such broad conclusions.

2) Average and median prices are compared between the two groups (encumbered and unencumbered) over a 5 year period, 2009 to 2014. This was the period during the housing crises when house prices crashed. Comparing 27 houses over this range of time is severely flawed and invalid. The author’s own data supports this information. Despite saying that the houses were largely “similar”, in fact the home prices involved varied from $284,640 to $458,872. There is a massive $174,232 (60%) spread between the prices.

3) The study does not measure time on the market or homes that were withdrawn from the market due to lack of interest. A common observation from Real Estate Professionals is that not only do properties with pipeline easements suffer in terms of price, many times the properties do not sell at all. This study did not look into this aspect of the problem at all.

4) The study did not look into important price determiners such as corner lots and adjacency to empty lots in house prices. The encumbered properties as a whole had fewer neighbors around them which adds significant value to properties.

5) A minor point – the study talks about “encumbered” land vs. “unencumbered” land. The legal definition of encumbrance is: “An encumbrance is a right to, interest in, or legal liability on real property that does not prohibit passing title to the property but THAT DIMINISHES ITS VALUE (emphasis mine)”. By using the termed “encumbered” the authors are unwittingly acknolwedging that easements decrease property value.

6) Most critically, the study failed to investigate moribund lots that remain undeveloped. The study includes parcel maps of the entire sub-division, indicating roughly 100 parcels, with the parcels split between “Phase 1” development and “Phase 2”. Phase 1 development is complete and consists of houses present in this map on Pennbrook Lane, Canter Drive, and the southern reach of Saddle Ridge Road:

http://binged.it/1S8JTbC

Phase 2 has just commenced, and includes houses along the northern portion of Saddle Ridge Road.

Note that large portions of Phase 1 is undeveloped land. Where is this undeveloped land located? Why, on the pipeline easement of course! In total there are only 7 houses in the whole subdivision that are along the pipeline easement. The other 9 lots with pipeline easements are undeveloped. And Saddle Ridge developer is now pushing Phase 2 into areas well north of the easement, and Phase 2 is much more densely packed than Phase 1. Why is the developer situatating phase 2 north of the pipeline easement? And why is phase 2 much more densely packed than phase 1? Because Phase 1 has a pipeline easement through it, of course.

7) If you zoom out on the map, you in fact see that this area of Dallas Township is characterized by many densely packed suburbs – except in the vicinity of this pipeline easement. In the vicinity of the easement houses are very sparse and development ends. This pipeline was built in the 1950’s and 60 years ensuing every development in the region has avoided it. This shows clearly how families are unwilling to buy houses that are on or close to natural gas pipelines. Developers know this and as a rule do not even bother building houses along the route.

Conclusion

It is abundantly clear from these points that not only is the Allen, Williford & Seale study deeply flawed and invalid, it is highly deceptive and the underlying data supports the exact opposite conclusion that the authors posit.

While they claim that pipeline easements have no impact on housing prices, in reality what the data shows is that pipeline easements make it extremely difficult to sell a house on such encumbered land at all, and that developers avoid land with such easements and leave them unimproved.  Look at maps of PA and you’ll see housing developments invariably stop at the edge of pipeline easements, and that housing density drops off dramatically around such easements.  The Saddle Ridge sub-division provides a text-book example of this and demonstrates how pipelines negatively impact the ability to sell land.