After Three Years, PennEast Pipeline Approved by Federal Energy Regulatory Commission, Construction to Begin

FERCThe Federal Energy Regulatory Commission (FERC) issued an Order under section 7(c) of the Natural Gas Act approving construction of the PennEast Pipeline.

PennEast Pipeline Logo

Anthony Cox, Chair of the PennEast Pipeline Company LLC Board of Managers said “They will reap the benefits of accessing one of the most affordable and abundant supplies of natural gas in all of North America. PennEast will lower gas and electricity costs, increase reliability, improve air quality, and make the region more competitive for jobs in the coming decades.”

The approximately 120-mile pipeline route begins in the Marcellus Shale production area near Dallas, Pennsylvania, and connects with the existing underground Transcontinental Pipeline near Pennington, New Jersey. The route includes 24 municipalities in Pennsylvania and six in New Jersey.

Access to additional natural gas supplies via PennEast Pipeline should reduce the cost of gas in eastern Pennsylvania and New Jersey, even during non-peak periods. Natural gas prices in the market areas worsen during periods of peak demand, such as the sustained recent cold snap, where natural gas prices spiked 31 times higher in New Jersey than supplies in the Pennsylvania production areas. This is due to pipeline constraints and inadequate supply to meet demand.

Since 2005, natural gas use has more than doubled in New Jersey and increased five-fold in Pennsylvania for electric generation. As a result, carbon emissions are dropping to their lowest level in nearly three decades while air quality has improved across the region. A diverse fuel supply and the reliability of the electric grid are the primary reasons PJM Interconnection, the largest electric grid operator in the world, cited in an October 2016 report to FERC that the PennEast Pipeline is needed for grid reliability.

FERC issued its Draft Environmental Impact Statement (EIS) first under the Obama Administration in July 2016, and finalized its recommendations after nearly nine months of additional public input. The Final EIS in April 2017 affirmed that construction and operation of the PennEast Pipeline would have minimal environmental impact, which would be reduced to “less than significant levels” with PennEast’s and FERC’s mitigation measures.  The Pennsylvania Department of Environmental Protection under Democrat Governor Tom Wolf issued its 401 Water Quality Certification in February, and in May, the United States Environmental Protection Agency Region 3 added that the Final EIS included “improved safeguards for the protection of human health and the environment.”

Additionally, the PennEast Pipeline Company updated its estimated in-service date to 2019, with construction still beginning in 2018. The original project timeline allowed for many variables, though did not anticipate the many months without a voting quorum at FERC.

“In the coming days, we will work to finalize fair and positive compensation agreements with landowners,” added Cox. “In the weeks ahead, survey crews will collect remaining field data in support of our permit applications to ensure minimal environmental and community impact. We look forward to continuing our work with state, bi-state and regional permitting agencies and expect those permit reviews to be conducted on the merits of the application, without outside interference.”

If you or your business have questions regarding energy law or real estate law, including right of way and easement negotiations, condemnations or eminent domain, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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Filed under Business Law, Consumer Advocacy, Energy Law, Real Estate

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