New 100-mile natural-gas pipeline proposed for Pennsylvania and New Jersey

Yet another natural-gas pipeline has been proposed in New Jersey, billed as a way to bring cheaper and less-volatile prices to the 3 million customers in the state who use the fuel to heat their homes and run their businesses.

PennEast Pipeline Company, LLC, yesterday announced it would seek federal approval to build a $1 billion, 100-mile pipeline from northeastern Pennsylvania to Transco’s Trenton-Woodbury interconnection in New Jersey. The Transco pipeline delivers natural gas from the Gulf of Mexico to New Jersey and the New York area.

Like other projects proposed or approved in recent years, the latest pipeline is designed to tap abundant and cheap natural-gas resources discovered in the Marcellus Shale formations in Pennsylvania and nearby states. Those new supplies have drastically lowered heating costs for consumers who rely on natural gas and have also driven down the cost of generating electricity for businesses and homeowners.

But the pipeline projects have generated significant opposition from environmental groups, particularly when proposed projects would traverse open spaces previously set aside with taxpayers’ money for preservation – especially the New Jersey Highlands region, source of drinking water for more than 5 million people.

The latest pipeline proposal involves companies that own three natural-gas utilities in New Jersey — NJR Pipeline Company, a subsidiary of New Jersey Resources, the owner of New Jersey Natural Gas; South Jersey Industries, the owner of South Jersey Gas; and AGL Resources, the owner of Elizabethtown Gas.

“What it does is it brings lower natural gas into New Jersey, adding to diversity and the potential to lower costs to consumers,” said Michael Kinney, a spokesman for New Jersey Resources.

The cost of developing the pipeline would be shared by the companies sponsoring the project, although no details were revealed by PennEast.

Pennsylvania is the fastest-growing natural-gas producing state in the country, according to the U.S. Energy Information Administration.

The PennEast sponsor companies recognized the opportunity to use locally produced gas to serve growing markets in the mid-Atlantic, according to a press release from the company.

“In response to the abundant supplies and low price of natural gas, customer demand has increased significantly,” said John Walsh, president and CEO of UGI Corporation, whose subsidiary would be the project manager to develop the project and operate the pipeline.

“This project serves to meet that growing demand in the mid-Atlantic marketplace, while providing greater system resiliency and reliability for local utilities,” Walsh said in a press release.

The route of the pipeline has not been settled, but a preliminary proposal on PennEast’s website has the pipeline crossing the Delaware River in Hunterdon County and proceeding down to Mercer County. How much of the pipeline would be in New Jersey is uncertain, according to Patricia Kornick, a spokeswoman for PennEast.

“Right now, we’re in the early stages of development,” Kornick said.

“This pipeline will provide 3 million homes with greater access (to natural gas) and lower prices,” she added.

As expected, the project drew criticism from Jeff Tittel, director of the New Jersey Sierra Club, who said New Jersey already is awash in natural-gas pipelines. “There isn’t enough demand for all the natural gas coming through,” he claimed. “Why do we need so many?”

But the proponents of the pipeline said that beyond providing cheaper gas to customers, it would benefit the region’s economy and create jobs. During the seventh-month construction phase, estimates are that the PennEast project would create in excess of 2,000 new jobs, as well as many ancillary jobs.

PennEast is expected to file a preliminary application with the Federal Energy Regulatory Commission in October and a formal application with the agency in the spring, according to Kornick. If given the necessary approvals, construction on the project will begin in late 2017 and it could be in service in late 2018, she said.

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NJ Spotlight, an independent online news service on issues critical to New Jersey, makes its in-depth reporting available to NewsWorks.