On September 12th, 2016, Pax Silvis LLC submitted an analysis to the Federal Energy Regulatory Commission (FERC) in regards to the PennEast Pipeline Company’s Purpose and Need and Alternatives section of the Draft Environmental Impact Statement. The report was prepared and signed by a number of organizations, including:
- Alexandria Citizens Against the Pipeline
- Delaware Township Citizens Against the Pipeline
- HALT PennEast
- Holland Township Citizens Against the Pipeline
- Kingwood Township Citizens Against the Pipeline
- Kingwood Township Environmental Commission
- Lambertville Coalition Against the Pipeline
- West Amwell Township Environmental Committee
- West Amwell Citizens Against the Pipeline
The report found a number of issues and deficiencies with the DEIS. The full report is available on the federal docket below:
Below is the Executive Summary
The Draft Environmental Impact Statement (DEIS) issued by FERC for the PennEast pipeline project, docket CP15-558, was issued on July 22nd, 2016. This report was commissioned by several Citizens Against the Pipeline groups in New Jersey along with HALT PennEast to study the project’s proposed “purpose and need” and alternatives analysis within the DEIS.
We conclude that the DEIS is flawed, incomplete, and does not consider several viable options or properly consider the “no action” alternative.
The DEIS predominantly cites the existence of long term precedent agreements on the project as adequately proving its fulfilling a public need, but does not note that the majority of these transactions are between affiliates and as such are not arms-length transactions. Affiliate transactions do not indicate true market demand or need, and should be regarded by FERC as insufficient on their face to demonstrate true need.
The DEIS fails to note that claims within the PennEast application are contradicted by the shipper’s own SEC filings. Numerous counter-examples exist to the shipper’s claims for needing more diversity in their gas supply and resilience and avoidance of single-points-of- failure in their systems.
The DEIS does not capture the true financial motivation for the PennEast owners, which is to capture a new approximately $220 million/year revenue stream for those companies.
Terms such as “costly” and “inexpensive” are used within the document without references and without a solid basis to compare them with one another.
The majority of the justification used by PennEast for the project was contained in a study PennEast commissioned by Concentric Energy Advisors (Concentric). That study looked at the “polar vortex” winter of 2013/2014, and the potential impacts PennEast could have had if it had existed at that time. FERC did not include this study in the DEIS, which we view as the correct action since the study was theoretical, and addressed historical situations that have already been solved in other manners. However, by leaving this study out of the DEIS, FERC has stripped out the only study put forth by PennEast in support for their project. With the Concentric study removed, PennEast has only its affiliate transactions and a handful of others to justify its environmental costs.
As a result of these issues, the “no action” alternative is incomplete and unconvincing. It uses a self-referential circular argument for the proposed project which is controverted by the shipper’s own financial filings with government.
Other alternatives are failed to be considered at all, including dual-fuel power generation and storage options.
Finally, the project is not fully subscribed, with 100,000 dekatherms/day of capacity still available after 2 years time. When combined with the fact that the majority of the capacity were not contracted as arms-length transactions, this would seem to indicate that demand in the region and New Jersey in particular is far lower than PennEast would indicate. The recent failures of both the Diamond East and North East Direct proposals due to lack of demand in the region underscores this fact and points to PennEast being a case of aggressive over-building of pipeline infrastructure for little public benefit.