Connecting the export dots

As I’ve mentioned before in this blog the numbers for the PennEast pipeline just don’t add up. They say this pipeline is strictly to benefit PA and NJ consumers and businesses. But for the most part, we seem to have more than enough natural gas. PA is already a net-exporter of natural gas so the idea that PennEast is going to help consumers and businesses in PA fails the laugh-test.

That leaves us with NJ. But as my blog post shows, when you look at eia.gov data the numbers still don’t work. This pipeline represents 200% of our existing residential consumption – yes, twice as much as we already consume. Electrical generation is going to slowly switch from coal to gas, but that only represents a modest increase in natural gas usage in NJ.

I talked about price volatility – yes, there are shortages in a few days a year. But those shortages do not justify building a 3-foot wide high pressure gas pipeline. It makes even less sense when you look at all the other pipeline projects approved or proposed.

So why are they spending billions of dollars to build these pipelines?

Connecting the Export Dots

Here’s why.

The above article details the four Liquid Natural Gas (LNG) export terminals approved by the FERC and that will be ready to go in a few years. Some details:

Cove Point LNG,  Maryland — Dominion Resources Inc

This facility will be able to export 1.8 billion cubic feet of natural gas per day. It’ll be up in 2017. PennEast will be connecting to this facility via Spectra Energy’s pipelines. PennEast will start construction in 2017 if approved.

About 1 billion cubic feet of that is approved for sending too FTA nations (nations we have a fair trade agreement with).  The rest is for nations we don’t have an FTA with.

Sabine Pass Liquefaction, Louisiana/Cheniere Energy
This will export up to 2.8 billion cubic feet of natural gas per day.

Cameron Liquefaction Project, Louisiana — Cameron LNG
This will export up to 1.7 billion cubic feet per day.

Freeport Liquefaction & Export Project, Texas — Freeport LNG Development LP
This will export up to 1.8 billion cubic feet per day.

These just cover the four approved as of today.  There are another 17 proposed that the FERC will be evaluating.  One of these will be the Downeast LNG in Maine.  So far they are conditionally approved by the DOE to export up to .460 billion cubic feet per day to FTA nations.

At the same time Creswood Midstream Partners is proposing the Marc II pipeline to connect to the PennEast pipeline;.  This will help get PennEast gas to New England markets.  And just coincidentally will have connections to DownEast LNG’s export facility.

LNG Export as a strategic direction

One of PennEast’s partners is Spectra Energy.  As a public company they’re required to file regular quarterly and annual reports with the SEC outlining their company’s financial health and their strategic vision for the future.  This is called a 10-K document.  Here’s Spectra Energy’s 10-K for the fiscal year 2014.
In it Spectra Energy outlines their business strategy.

——————————————–
Our Strategy. Our strategy is to create superior and sustainable value for our investors, customers, employees and communities by delivering natural gas, liquids and crude oil infrastructure to premium markets. We will grow our business through organic growth, greenfield expansions and strategic acquisitions, with a focus on safety, reliability, customer responsiveness and profitability. We intend to accomplish this by:

• Building off the strength of our asset base.
• Maximizing that base through sector leading operations and service.
• Effectively executing the projects we have secured.
Securing new growth opportunities that add value for our investors within each of our business segments.
• Expanding our value chain participation into complementary infrastructure assets.

Natural gas supply dynamics continue to rapidly change, and there is general recognition that natural gas can be an effective solution for meeting the energy needs of North America and beyond. This causes us to be optimistic about future growth opportunities. Identified opportunities include growth in natural gas-fired generation, growth in industrial markets, incremental gathering and processing requirements in western Canada, LNG exports in North America, growth related to moving new sources of gas supplies to markets and significant new liquids pipeline infrastructure.
——————————————–

Spectra energy comes right and out and says it – part of their growth strategy is via LNG exports.  PennEast, and the other pipelines approved or proposed, are a big part of it.

The PennEast, Transco Leidy Southeast Expansion, etc are all sized way too big for our local markets in NJ and PA.  Way, way, too big.  But they’re sized just right if you want to export gas to Europe and Asia and India.  Dove point is already 100% allocated out to companies in India and Asia.

Look at the Downeast and Dove point export rates – combined they’re capable of sending out 2.2 billion cubic feet of gas per day to countries over seas.  PennEast – as huge as it is – is only capable of doing 1 billion cubic feet of gas per day.  This is why so many pipelines are being proposed – to get shale gas to LNG export facilities.

Don’t believe the smoke screens

There will be minor benefits from the PennEast pipeline.  It’ll smooth out volatility and peak demand, so we’ll be in better shape a few days of the year.  As coal plants convert to natural gas this will help to supply them as well.

But this is a side show.  PennEast all by itself is way too big for these justifications.  These are all smoke screens and side-benefits.  The real purpose of PennEast and the other pipelines is to get the gas to the export stations.

An emphasis on Speed

One David Bojczak posted a submission to the FERC today. It appears to be another postcard dump, this time it’s copies of 126 post cards submitted by union members in support of the pipeline.

Googling David leads you to The Conti Group, a construction company that focuses on energy projects. So his support of the pipeline makes sense.

But go on there site and you read some troubling stories. For example, they worked on a recent Transco pipeline project:

The Challenge:

Transporting natural gas around the country requires amazing efficiency and effectiveness. With thousands of miles of gas pipelines intricately networked underneath America’s soils, quality gas compressor stations, which pressurize natural gas so it is capable of moving through pipelines at high speeds, are essential to gas transportation. The Transcontinental Gas Pipeline Corporation (Transco) asked Conti to build such a station.

The Solution:

The Conti Group worked on an aggressive, fast-track schedule to provide Transco with a quality, fully-operational gas compressor station. Our workforces performed a minimum of ten hours per day, six days per week to complete construction on schedule. During this time, the team performed all civil work, including 1,900 LF of storm drainage piping, grading, excavation, paving, landscaping, over 2,000 CY of reinforced concrete foundations, and structural work on several buildings. We also installed a 69,000 KV electrical substation generator, transformers and switchgear, grounding grids, two 7,500 horsepower Centrifugal Compressor Motors, and welded process and gas lines of all diameters and wall thickness. The work resulted in a capable compressor station constructed in quickly and cost effectively.

Conti was responsible for this turnkey project and performed construction activities, scheduling, Health and Safety, QA/QC documentation, facility testing, finished painting, cleaning, commissioning, and equipment and systems training.

Does this sound like a good idea to you? They’re building a massive natural gas compressor station. Under pressure from Transco to get it done fast, they create “an aggressive, fast-track schedule” where “our workforces performed a minimum of ten hours per day, six days per week to complete construction on schedule”.

Imagine living near a compressor station which was created by tired union workers who were pushed to work 10 hours a day six days a week.

This is the type of firm that will likely be bidding on the PennEast pipeline work should it be approved.

David’s submission is below:

David’s submission – FERC Generated PDF

David’s submission – FERC Generated PDF Alternate Site

Travelling the countryside

I hopped into my pickup with my dslr in hand this afternoon to photodocument the pipeline route. Or at least what I can get to before dark. The pictures are breathtaking…until I stop to reflect that a pipeline might be blasted through here. Pics to follow.

Pipeline supporters have no problem lying to persuade the public

A mini-drama has been unfolding on the comments section of nj.com for weeks now. Mysterious people have been showing up in the comments in support of PennEast with a variety of claims. The most egregious is from a user called “HunterdonTreeFarm”.

He has a heart breaking story to tell:

You can call me a NIMBY, but my family’s second generation tree farm is right along the proposed path; so for personal reasons, my family doesn’t wants to see this pipeline built here.

I don’t want to see this pipeline go through some of our scenic areas, like Balpate mountain. I think most of can agree we would not want to see a scar through such scenic areas. Hopefully Penneast can get some more landowners to allow surveys so they find a alternate route around some of more beautiful areas of the county.

At first I told Penneast they couldn’t survey my land and I planned to fight this. All of my neighbors told me that they were fighting this all the way and that I should fight it too. Penneast hosted a luncheon and a dinner for landowners to show us maps of the proposed plan. While I was there, I saw my next door neighbor looking at the map and talking to a representative. She had her back to me; so she didn’t know that I was there. I could hear her telling the Penneat representative that her land had wetlands on it and they should go through my tract instead. The very same neighbor telling me not to survey or to talk to Penneast was trying to convince them to run it through my property instead of her property. My neighbor was trying to cut a deal and leaving me holding the short end of the stick. At that point I decided to do what was best for my business and my family and gave Penneast approval to survey my property. Believe me, I don’t want this pipeline anywhere near my property and I want to fight this all the way. However, I have to be realistic that this pipeline will most definitely be approved. If I work with them that maybe they can minimize the impact on my land/business. I depend on my tree farm. My family lives pay check to pay check. I don’t see many alternatives. I don’t have the resources to pay the legal expenses to fight in condemnation court. All you get in condemnation court is money for the land value. If I work with Penneast they can give me money for loss of profits, land value, etc. I would never get that much through condemnation. I can’t afford walking away from that offer. I respect some landowners fighting this all the way. I just don’t see a plausible alternative for my family.

This is the type of story I like to try to highlight on the blog here – a real human interest story of a real person being confronted with this pipeline.

The only problem is that HunterdonTreeFarm has been blasting this message all across NJ.com. And others such as “Tony C”, “MonmouthCountyResident”, and the creatively named “WeLuvPennEast” are also joining the chorus and saying odd things like they know Tony Cox (the PennEast project manager) and can put in a good word for people who want leniency from the pipeline company. In fact they all write in the same way and vaguely assert they live around here without giving any plausible evidence of it.

In reality these all appear to be people lying on the forums to push public opinion towards the pipeline. The posts from HunterdonTreeFarm seem to be the lowest in that they’re actually trying to pretend they’re a person being hurt by the pipeline. There’s no evidence that this person is on the pipeline route or even a tree farmer. And of course “HunterdonTreeFarm”‘s dialogue rapidly falls apart as they shift from telling a sad story to being a cheerleader for PennEast:

@WestAmwellResident If Tony Cox says it’s not going overseas then it’s not going over seas. You can take that to the bank!

Has anyone ever stood on the texas eastern pipeline trail on the top of the mountain in the Sourlands between Hunterdon and Somerset County? One of the prettiest vistas in NJ. Spectacular view! You couldn’t get a view like that with all the trees in the way. Once I saw that view, I was sold on the PennEastern project.

So who are these people? Random trolls? Shills for PennEast? Union people trying to influence people through deception? A single lonely soul pretending to be a cast of dozens for kicks?

You can see HunterdonTreeFarm’s comments for yourself here:

HunterdonTreeFarm comments

A strange way to show support

The FERC posted 9 rather odd submissions today. They were images of postcards people apparently were given by PennEast. They filled out their contact info and a checkbox saying they support PennEast. It’s all rather…well, let me just show you:

.

They’re all post marked the same day so I’m guessing these either were solicited from one of the scoping meetings or else someone gave them to PennEast.

The logo on the top says “I support safe clean affordable locally produced natural gas to energize my community!”.

Oh boy.

You can see the submission from above here:

I supposed PennEast postcard – FERC Generated PDF

I supposed PennEast postcard – FERC Generated PDF Alternate Site

Hunterdon County Board of Freeholders talks of “draconian measures”

I heard John King speak at the Hunterdon County FERC scoping meeting. He sounded extremely reasonable, gave well thought-out arguments. And it was clear he was severely pissed at PennEast and the FERC.

John is the director of the Hunterdon County Board of Freeholders, so his words carry some weight.

He opens:

The subject of the Penn East natural gas pipeline has sparked comment and controversy since the unveiling of the project’s concept last year. This Freeholder Board withheld judgment to afford the pipeline’s proponents and critics a fair hearing and consider additional issues affecting Hunterdon County as a whole. In light of the facts before us, we are compelled to oppose Penn East’s application.

Like many people (myself included), he and the rest of the board was not instantly against the PennEast pipeline. He was willing to listen to what they had to say and see what benefits they might afford us.

From my POV, what he found is that:

1) This pipeline is not meant to benefit the people of New Jersey. Any such benefit would be mere side line of opportunity, not the main point.

2) The choice of route is incredibly bad.

3) They are choosing the easy way instead of the ethical way.

In his words:

Our objections are based upon (1) the disregard of potential alternate paths using existing easements that may result in the abuse of eminent domain to destroy conservation easements and pre-empt County open space policy; (2) the insufficiency of proposed compensation to affected landowners; (3) the threat of construction- generated water contamination in specific neighborhoods serviced by private wells; and (4) the absence of a lasting public benefit outweighing the burdens upon homeowners in
the project’s path.

He goes on to point out how PennEast is almost systematically wiping out Open Space conservation easements in the County, and is not even trying to find alternatives.

Among the properties lying in the proposed pipeline’s path are 23 farms constituting 2,007 acres of County-preserved open space. If approved, the Penn East pipeline would necessarily extinguish the County’s conservation easements of those those farms and trump a County open space policy mandated by three successive voter referenda. This issue alone warrants our opposition.

Moreover, Penn East has raised the specter of eminent domain —presumably to thwart the County’s defense of its interests in the preserved open space. This threat arises despite the existence of alternate routes within established public utility rights-of-way, including similar pipeline easements.. It is our understanding that Penn East has not contacted some utility companies to negotiate co-location of its pipeline within their easements. A judicial taking of property for use by a for-profit corporation should always be a last resort. We will never support a proposal that threatens the condemnation of land where less draconian measures of property acquisition have not first been exhausted.

The above issue is one of the biggest ones I personally have with PennEast. They aren’t even really trying here. Their route choices are predominantly based on playing with Google Earth, and a single aerial reconaissance. If they were serious about minimizing impacts they would do real surveys before even getting the FERC involved.

John goes on to talk about the inadequate compensation involved:

Penn East also proposes inadequate —and therefore unjust —compensation to Hunterdon taxpayers in the project’s path. The utility conglomerate merely proposes to pay owners the one-time loss of value attributed to the new encumbrance on property. Pipelines earn continuous profits potentially to include additional revenue from other public utilities. The benefits Penn East would reap from any targeted property are analogous to those received by wireless providers from cell. towers. Wireless companies place cell towers on another’s property with an agreement to provide the owner with a
stream of income, much like a lease. When the company leases those towers to other wireless providers, the land owner receives additional income due to the third party’, commercial use of the owner’s land. Properly owners in the pipeline’s path should be treated no diiferently. Thus, if Penn East is going to earn continuous profits from the exploitation of the land of another, it should make that owner a partner.

The issue of people’s wells is of course well known. He argues that PennEast must avoid these entirely.

Construction disturbance near a local drinking water supply raises contamination concerns. The proposed project slices through 53 acres of Tier 1 well protection areas —neighborhoods with residents overwhelmingly dependent on the consumption of well water. Prior local experience with drinking water contamination caused by poorly supervised construction near an existing transfer station proves that a potential threat to the well protection area is a well-founded misgiving. In fact, we would prefer that any pipeline be routed around this area entirely.

On the question of who benefits, PennEast again fails to give us any useful information.

The usual benefit of a pipeline passing near a neighborhood is access to the natural gas running through it. In the public hearings, however, Penn East could not guarantee that this pipeline would connect a single additional residence to natural gas in any time frame beneficial to current homeowners. In fact, our County is poorly served by natural gas due to the nature of its dispersed rural population. As a result, our homeowners are unlikely to reap much of any corresponding reduction in the cost of natural gas because so few County residents have access to it.

He closes with the point that the main issue is not the source of the gas. It’s an issue for some but not all. But that the route is nearly wrecklessly determined and will not benefit us.

To be clear, this Board has not swallowed whole every argument brandished by critics of Penn East’s application. We do not oppose the principle of constructing underground pipelines to transport natural gas. This method of delivering energy to consumers has proven far less dangerous than alternate means of transport: ship, truck and rail. Natural gas ibrelf is known to be a much cleaner burning fuel than this region’s other major sources of electricity, such as oil and coal. Secondly, several natural gas pipelines already cross Hunterdon County and have existed for decades. We do not subscribe to the notion that the mere presence of an additional pipeline within our County’s borders is a sufficient basis to oppose this project.

As proposed, however, the Penn East project unnecessarily threatens property rights at the Constitutional sword point of eminent domain, and offers no prospect of just compensation for the land it targets for lease or condemnation. The pipeline’s construction endangers an identifiable drinking water supply and fails to deliver the only lasting benefit that such a project can offer atfected neighborhoods: connection to natural gas. Thus, the Hunterdon County Board of Chosen Freeholders shall resolve to oppose the proposed configuration of the Penn East pipeline.

The Hunterdon County Board of Freeholder’s submission is available below:

Hunterdon County Freeholders Submissio – FERC Generated PDF

Hunterdon County Freeholders Submissio – FERC Generated PDF Alternate Site