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PennEast in-service delay request opposed by waterway advocates in latest hurdle for US project


1.1 Bcf/d pipeline would be tied to Appalachian Basin gas

Developers also face several legal challenges

Houston — Environmental advocates want the Federal Energy Regulatory Commission to reject an in-service delay request by PennEast Pipeline and have asked a federal appeals court to allow it to reopen its challenge of authorization for the project.

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Opposition to natural gas infrastructure expansion in the US has been fierce in recent years in part due to concerns about construction impacts on creeks, wetlands, forests and communities, especially for projects tied to the prolific Appalachian Basin producing region in the Northeast.

Market participants were urged at a recent S&P Global Platts industry conference to be more aggressive in their defense of natural gas, due to demand for more pipelines to get production from the wellhead to storage facilities, processing plants and liquefaction terminals to serve growing exports and power and home heating needs.

"There's a lot of noise around, whether its stopping exports or stopping fracking," Jason Satsky, a managing director at Bank of America Securities, said at the storage outlook conference January 8. "It's important to keep your eye on that."

That message is not lost on PennEast, a 1.1 Bcf/d project backed by affiliates of Enbridge, Southern Company, New Jersey Resources, South Jersey Industries and UGI that is designed to boost takeaway capacity from producing areas in northeastern Pennsylvania to downstream markets. The 116-mile pipeline would add capacity into the often-constrained New York City market area.

Issued in 2018, the project's FERC certificate required the developer to put the pipeline in service by January 19. Two weeks ago the operator asked for a two-year delay to 2022, citing what it said was good cause due to unforeseeable circumstances, such as difficulties in obtaining permits.

In a letter to FERC made available Friday, Delaware Riverkeeper Network, which works on issues that impact the health of waterways in Pennsylvania , New Jersey, Delaware and New York, urged FERC to reject the request and require the developers to submit a new application with what the group described as a viable route and documented environmental and economic data. The letter argued that PennEast has had enough time to address its legal and regulatory challenges.

"If FERC approves this extension, they will be essentially writing PennEast a blank check -- allowing them to fill in the route, the species, the waterways, the properties that they will irreparably harm under FERC's rubber stamp," the group said.


A pipeline spokeswoman declined to comment Friday on Delaware Riverkeeper's letter.

The letter to FERC followed a January 7 request that the same group filed with the DC Circuit Court of Appeals to lift a hold on a legal challenge to the PennEast certificate. Oral arguments in that challenge had been scheduled for October 2019 but were put off indefinitely by the court pending resolution of proceedings in other courts related to the pipeline.

One of the biggest obstacles faced by PennEast is a decision by the 3rd US Circuit Court of Appeals that not only limited pipeline companies' ability to use eminent domain to obtain right of way on lands in which a state holds an interest, but also complicated PennEast's application for a Clean Water Act permit from New Jersey. Based on that court decision, the New Jersey Department of Environmental Protection denied the application.