The web site Energy And Capital put up a research article this week that predicts that LNG exports is poised to take off into the stratosphere in the next few years, and that now is the time for investors to get in on the ground floor while natural gas prices are at historic lows and fossil fuel companies’ stock prices are slumping. The article predicts that now is the time to strike in the market, because shortly a full 1/8th of all U.S. natural gas production is going to be shipped over seas, and energy stocks will therefore skyrocket.

The full article is here:

http://www.energyandcapital.com/articles/lng-investing-guide-2015/4904

From the article:

“The fuel sits at typical summertime lows, but as the U.S. develops new electricity generating infrastructure, we’ll see demand rise gradually over the next few years. And the end of this year will mark the beginning of a new wave of natural gas demand that’ll boost the gains for investors who are keyed in now….

Once the current LNG projects under construction start liquefying and exporting natural gas abroad, they’ll soak up about 9 billion cubic feet of gas each and every day.

Right now, that number would be one-eighth of all U.S. gas production.

Sure, some of these projects won’t be finished for a few years, and natural gas production will increase in the meantime, but it would be foolish to think it’ll increase enough to make 9 billion cubic feet per day a negligible amount.

One-eighth of U.S. gas production gone would set up a huge spike in both demand and prices for natural gas in the U.S.

Add to this the industrial uses and the new natural gas power plant additions (which are many), and it’s inevitable that gas prices will rise.

When they do, so too will the value of companies that drill, harvest, ship, and produce the fuel for consumption.

So in relation to PennEast – do you still believe they’re here to bring affordable gas to businesses and consumers in PA and NJ? Or do you think they hear that giant LNG KER-CHING and are rushing to cash in on the export gold mine?

Caroline Katmann, the Executive Director of the Sourland Conservancy, has posted a comment to the FERC docket today that completely exposes PennEast’s incompetence in planning the pipeline route.

She opens her comments with:

As you have already been made aware, PennEast’s DRAFT Wildlife Resource Report of April 21, 2015, is error-ridden. I am writing to make you aware of one particular error that exposes the lack of intelligence, integrity and care that PennEast Pipeline Company, LLC has applied to its research related to this project.

In the Resource Report, Pages 3-24 – 3-25 | 3.4.1.1 Significant or Sensitive Habitats, the following is stated:

“The project is located within the Highlands Planning area in parts of Holland and Alexandria Townships, NJ; this is discussed further in Resource Report 8. The project corridor does not cross the primary portion of Sourland Mountain, but a section known as Baldpate Mountain is within the project area. Baldpate Mountain is discussed further in the Migratory Birds section of Resource Report 3.”

Caroline than explains just how terribly wrong PennEast’s comments are about this:

This is not true. Although it is correct that Baldpate Mountain is a portion of the Sourland Region that is within the project area, hundreds of additional acres of forest, wetlands, agricultural lands and built up land within West Amwell and Hopewell Townships are also within the project area. Every one of the proposed
routes for the PennEast Pipeline have been well within the Sourland Region, including the latest “preferred” route. It is simply a blatant lie to state otherwise.

She goes onto explain the true extent of the Sourland Mountain region and the impact PennEast could have on it:

The Natural Resources Inventory and the maps are based on a study area that encompasses the forest area, the Jurassic Diabase formation that comprises the Sourland Ridge, water recharge areas for the Sourlands, important habitat types on the ridge and on the flanks of the ridge, and areas that would be affected by
water flowing out of the Sourland Region. Any land uses in these areas would have impacts on the resources of Sourland Mountain. As the PennEast pipeline would be a significant and intrusive land use by anyone’s definition, a smart, ethical and thorough approach to research of potential impacts would consider the entire 87 square mile Sourland Mountain Region described above.

It goes without saying that what Caroline is talking about is common sense, and PennEast should not be defining terms and areas so narrowly. But she saves the best for last. Her closing comments are:

The Sourland Conservancy is the only organization solely dedicated to the protection of the Sourlands. Our mission is protect the ecological integrity, historic resources and special character of the Sourland Mountain region. As the Executive Director of the Sourland Conservancy, I have given my contact information to several PennEast representatives at various public meetings and over the telephone. No one has ever contacted me to discuss the Sourland Region – what it is, where it is, how it would be impacted, and so on.

Unfortunately, at one PennEast Open House I asked a dozen PennEast representatives if they could tell me about the Sourlands and none of them had ever heard of the region, including the representatives at the “Environment” table.

I implore FERC, on behalf of the Sourland Conservancy, not to accept the sloppy and dangerously inaccurate research of PennEast regarding the Sourland Mountain Region or any of the other impacted lands along the proposed routes. Please consider carefully all of the research that has been diligently collected and submitted by those of us who have the facts and know the truth about the regions in which we study, research, work, play and live every day!

And the above is the real crux of the matter. PennEast reps really don’t know anything about the area. They’ve done next to no research and nearly a year after they’ve started they still seem to be steeped largely in ignorance about New Jersey. And they show no interest in changing that situation by engaging local residents and organizations and learning more about our state. Countless organizations and individuals have reached out to PennEast to engage in a dialogue with them – and in every case I’ve heard of PennEast has never returned the call. The only time PennEast people will call you is to beg for survey access.

We should thank our lucky stars that we have organizations like the Sourland Conservancy to stand up to the government and PennEast and force them to consider their actions carefully and not go about destroying our land like a bull in a china shop. Join your voice to theirs and keep commenting to the FERC and curing PennEast of their ignorance of our lovely corner of the garden state! And PA residents, keep supporting your local conservation groups like the Cooks Creek Watershed Association and others who are doing the same West of the Delaware.

Her full comments are available here:

Caroline Katmann – FERC Generated PDF
Caroline Katmann – FERC Generated PDF Alternate Site

I attended the NJSpot Roundtable Natural Gas Pipeline Expansion in New Jersey: Good or bad? yesterday in Mercerville, NJ. I’m working on a full report of the meeting but I wanted to share a quick summary of important points that came up during the discussion. For those interested the unedited complete live stream is available here:

http://www.njspotlight.com/stories/15/05/28/streaming-live-natural-gas-pipeline-expansion-in-nj-good-or-bad/

The forum was essentially two anti-pipeline speakers spitted against three prop-pipeline speakers, with a wild card extra person thrown into the mix. The anti-pipeline speakers were Maya van Rossum, Delaware RiverKeeper and Doug O’Malley of Environment New Jersey. On the pro side of the equation were Phil Beachem of NJ Alliance for Action, Thomas Bracken of the NJ Chamber of Commerce, and Greg Lalevee of the Operating Engineers Local 825 union. The wild card was Matthew Tomich of Energy Vision, a company that engages in research in renewable natural gas (RNG) culled from waste sources such as landfills.

At a very broad level Doug and Maya did a very credible job of defending their positions. They had hard number and statistics to back up their positions and cited numerous papers and research programs to support their view.

With the exception of Greg Lalevee, the pro-pipeline speakers Phil and Thomas appeared to be lacking in concrete information and basing their decisions mostly on hearsay and scare tactics being thrown at them. Greg spoke more from a numbers and detail perspective and made some good points, but I think he was missing some critical details that taken together undermined his view.

Maya was, in my opinion, the most passionate and informative speaker, with Doug bringing up a close second. She spoke at length about the dangers of fracking, threats to our water safety, threats to the Delaware River, the cost of building all this infrastructure is extracting from residents and businesses in the region. She spoke of the total lack of justification for the PennEast pipeline and others, stating for the record that the PennEast Pipeline alone would put NJ over capacity by 53% (she’s right – NJ averages 1.88 billion cubic feet of natural gas usage per day, and the PennEast pipeline by itself carries 1 billion). She cited studies showing the horrific impact fracking has had on residents in PA, and how that threat is just as real here in NJ as it is in PA. We too have shale formations in our state (Utica shale), we simply do not allow for its exploitation. But that could change.

Doug O’Malley gave a very broad argument against pipelines, and included a wide range of arguments for renewables and against fossil fuels. He also had statistics and studies to back up his opinions. Along with Maya he pointed out to the union representative that renewable jobs are much more plentiful and lucrative than fossil fuel ones, and that union members should really be pushing renewable energy as a rich source of jobs in the region.

I’ll have a lot more on Doug’s speaking points in the full roundtable report.

Greg Lalevee spoke well and had some numbers to back up his claims, but I think he is slightly misinformed or lets his union bias lead him a little too strongly. He spoke of the fact that 2/3 of NJ residents are served by natural gas and that it’s a critical part of the energy infrastructure that keeps us all going as a whole. I agree with that entirely – but this alone does not serve as an argument for PennEast or any other pipelines. We are already sufficiently served by the existing pipeline infrastructure and don’t need anymore. His argument also lacked punch given the large number of Hunterdon County residents in attendance at the meeting who do not have natural gas and most likely never will. He spoke at length about safety as well and the impressive track record overall of safety in pipeline construction, but he didn’t address the fact that eminent domain means you’re forced to take a risk against your will. Many of us would prefer 0 risk to a possible one, no matter how small it may be statistically. Residents of Edison NJ and Ewing may agree.

I think his argument was also weakened a bit when he stated that his union included just over a hundred members in NJ. A hundred jobs here or there isn’t going to materially impact anyone.

Thomas Bracken of the NJ Chamber of Commerce and Phil Beachem of the NJ Alliance for Action were a disappointment. Their fundamental argument is that energy is one of the three pillars that drives business in the state, and we should do everything we can to support energy companies so that we can fuel job growth in NJ. That’s all well and good, but both speakers fell terribly short on details. You can’t generalize about topics like this, you must dive into the details to see the true shape of what you’re dealing with, but unfortunately both gentlemen stuck primarily with exactly generalizations and some obvious scare tactics that have been thrown at them by industry.

Phil spoke repeatedly about his time as a mayor in NJ many years ago. He spoke about the pipelines coming through his town and how they never had any issues with them. He also said he had never heard anyone say that coal could be cleaner than natural gas, with a strong implication that anti-fracking activists were a bit nuts (without quite saying so).

He lacked specifics to back any of his claims up, and relied on anecdotes instead of statistics and citations. He seemed confident that his experience as a mayor 30 years ago was still relevant today when talking about pipeline infrastructure, which I take as odd given his position today.

Finally we had Thomas Bracken, President and CEO of the NJ Chamber of Commerce. Thomas spoke repeatedly about the answer to pipeline issues to simply be bringing everyone involved into a room together and hash it all out in a compromise. He said that the process was basically what it was, and we should shut up and accept it, and if we didn’t want to accept it we should get the laws changed (but in the meanwhile, touch luck). There were loud murmurs in the audience from this.

He said that high energy costs in NJ are driving the need for more infrastructure, which is why he supported it. I didn’t have a chance to ask questions at the end (time was very limited), but if I did I would have asked him if he knew that NJ and the 4th lowest natural gas prices in the country. And if he also knew that our electric prices were higher than some states only because we lack significant hydro and wind power. States out west have ridiculously low power rates because they are located next to sustainable and renewable supplies. Our electric is higher because we’re stuck here in NJ on fossil fuels.

He also stated at many points throughout the roundtable that he didn’t actually know any of the details of what was being discussed (and didn’t seem interested in finding out). He said he didn’t know what the FERC process was or how it worked. He said he didn’t know any of the particulars of any of the pipelines. He said maybe they could just “turn the fracking off” and gas would still flow to NJ (the answer to this is a resounding “no, that won’t work”).

He also stated forcefully that he was vehemently against any export of natural gas, doubly so for gas going through pipelines in NJ. Phil shook his head in support of this. Unfortunately no one was able to follow up on this and show him the export scenarios playing out.

Thomas indicated that energy companies were perhaps the most powerful companies in NJ driving our economies, and stated that since they were so powerful we should more or less be quiet and let them do what they want to do. They bring us tons of money so why should we oppose them in any way?

Needless to say this did not sit well with most audience members.

I’ll be sending Phil and Thomas white papers showing the economics of the pipelines and exactly how much is projected to be exported overseas in the coming years. I hope they read them, but fear they will not.

In all I was highly disappointed that people in such positions of power were so misinformed about pipeline issues, and seemed content to more or less parrot pipeline company’s PR people. With this situation it is clear why we need people like Maya and Doug to counter pipeline company’s propaganda – we need strong voices that will give our leaders detailed, informed, and nuanced information about pipelines backed up by research and numbers, not hyperbole and anecdotes.

A few weeks ago I posted a correction to the blog where I was talking about PennEast rerouting at the Appalachian Trail crossing (you can get it here https://thecostofthepipeline.com/2015/04/28/clarification-on-appalachian-trail-route-change-in-march-2015/). Basically PennEast had made a number of errors in their scoping response and organizations involved with the A.T. wanted to set the record straight.

At the time there were still some dangling issues that had to be figured out before a formal response could be filed. It appears that the Appalachian Mountain Club has done their homework there and followed through, and their response has hit the FERC docket today:

http://elibrary.ferc.gov/idmws/file_list.asp?accession_num=20150519-5093

What I think I love the most about this comment is how specific it is. It lays out in detail exactly what PennEast got wrong and then painstakingly corrects all of their mistakes, and demands that PennEast responds with at least the same level of detail if not more. After they describe the information they provided and their preferred resolutions, the Appalachian Mountain Club (AMC) writes:

In March and April of 2015, the applicant submitted several documents to FERC responding to the comments received to-date, a response to scoping comments on March 13th, a supplemental response to scoping comments on March 26th, and another supplemental response to scoping comments on April 27th.345 In response to these filings by the applicant, the AMC notes that the applicant failed to meaningfully respond to the comments submitted by the AMC and other stakeholders, and failed to adequately consider the comments received in re-routing portions of the preferred alternative, most notably, regarding the crossing of the Appalachian National Scenic Trail.

They then list the scenarios where PennEast did not address their concerns, starting with:

In the comments AMC submitted in February, it was stated that the applicant had not demonstrated appropriate strategies to avoid and minimize damages to recreational and natural resources of public lands, particularly the Appalachian National Scenic Trail, and provide for mitigation where impacts were unavoidable. AMC asserted that the preferred route should be realigned adjacent to existing infrastructure which would minimize disruption and fragmentation of the Appalachian National Scenic Trail by a new right-of-way. In particular, we recommended that the project cross the Appalachian National Scenic Trail adjacent to an existing power line west of the Delps Trail as one example of a location where co-alignment could be achieved to minimize impacts. The National Park Service (NPS), the agency that owns and manages the Appalachian National Scenic Trail, offered similar suggestions for re-routing the proposed project, and even included maps illustrating preferred routes adjacent to existing infrastructure at four different places nearby the original route.

Their findings on PennEast’s response?

The applicant seemingly ignored these recommendations in moving the preferred route to the west of its original route, at location that was not suggested by the National Park Service, AMC, or Appalachian Trail Conservancy7 (the commenters). In the applicant’s Supplemental Response to Scoping Comments, dated April 27th, PennEast gives a summary, one-sentence response to the concerns of the commenters: “The proposed crossing of the Appalachian Trail has been realigned to avoid federal lands and sensitive habitats.”.8
AMC disputes the applicant’s claim that the realignment avoids federal lands and reiterates the previously submitted comments on the docket of the AMC, NPS and ATC in that the preferred route should be realigned to be adjacent to existing infrastructure where it is proposed to cross the Appalachian National Scenic Trail. Despite the applicant’s statement that the realignment avoids federal lands, the realigned route still crosses Federal lands as illustrated by the maps submitted on the docket by NPS9, and still violates 30 U.S.C. § 185, appearing to cross the Appalachian Trail at tract #331-09, a National Park Service owned easement.

[…]

The preferred route realignment would create a new right-of-way crossing the Appalachian National Scenic Trail, a condition that the commenters seek to avoid and which the applicant appears to have dismissed without response. A new right-of-way crossing comes with steep costs: forest fragmentation, noise pollution, habitat destruction and the propagation of invasive species, and negative impacts to the outdoor experience of the Appalachian National Scenic Trail’s many visitors, including a loss of the scenic beauty, quiet solitude, and sense of wilderness which makes the trail a national treasure for long-distance and day hikers. The applicant should be required to propose a preferred alternative during pre-filing that is realigned to avoid the creation of a new right-of-way, as was suggested by AMC, the Appalachian Trail Conservancy, and the National Park Service.

They then go on to list numerous other issues in PennEast’s response in relation to negative upstream and downstream impacts of the proposal, issues with dependent impacts, citation of out dated research to support gas-fired compressor stations as opposed to electrical, and ignoring pending guidance on greenhouse gasses and climate change.

I urge everyone to download their comments and read them in full, they are a perfect model of how to get people’s attention and force PennEast to respond. They close with this statement:

In conclusion, the responses to the comments of AMC by the applicant are incomplete and misrepresent the recent realignment of the Appalachian National Scenic Trail crossing as a meaningful response to public comments received. The applicant should be required to follow the recommendations of the AMC, NPS and ATC in realigning the Appalachian National Scenic Trail crossing to be adjacent to existing infrastructure and provide substantive responses to the other issues raised by the AMC and the thousands of other individual citizens, stakeholder groups and agencies who took the time to write comments or to speak at hearings. AMC requests that the applicant submit a more comprehensive response to these concerns in the docket before the conclusion of the pre-filing period.

Note how in the end they call for PennEast to “submit a more comprehensive response to these concerns in the docket before the conclusion of the pre-filing period”. This is a smart call, don’t let PennEast squirm away from this on a technicality and let it slide before pre-filing closes.

Well done, AMC. Well done.