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Proposal to split PennEast into two phases faces new objections at FERC

Highlights

Groups contend DC Circuit has sole jurisdiction

Argue 'distinct projects' need further evidence, review

Project faces legal, regulatory hurdles in New Jersey

Washington — PennEast Pipeline's pitch to split the 116-mile, 1.1 Bcf/d natural gas project into two phases has drawn a flood of objections at the Federal Energy Regulatory Commission.

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The objections indicate there is no shortage of continued friction for the project, which would connect Marcellus Shale dry gas production to markets in Pennsylvania, New Jersey, and New York. Amid legal and regulatory hurdles in New Jersey, project proponents have been seeking a path forward by asking FERC January 30 to amend the certificate authorization to allow PennEast first develop a section in Pennsylvania.

The 650,000 Dt/d Phase I would entail 68 miles of pipeline in Pennsylvania, terminating in Northampton County, two out of three compressor units at the Kidder Compressor Station, as well as new interconnection facilities. Phase 2 would encompass the remaining route in Pennsylvania and New Jersey. Total project capacity would remain 1.1 Bcf/d.

The approach would allow the project to meet public needs in Pennsylvania while allowing more time to resolve hurdles in New Jersey, PennEast has said. Holding up the project in New Jersey, a 3rd US Circuit Court of Appeals ruling has blocked PennEast from condemning lands in which the state held an interest, and the pipeline developer separately has struggled to obtain key water and wetlands authorizations in the state.

PennEast's abbreviated amendment application at FERC has now drawn hundreds of comments and motions to intervene, mostly from individuals, but also from groups that have previously litigated against the project.

QUESTION OF JURISDICTION

The group Homeowners Against Land Taking-PennEast argued that because of appeals court challenges to the FERC certificate, the US Circuit Court of Appeals for the District of Columbia now has jurisdiction and FERC cannot amend the certificate order. In October 2018, FERC filed the certified index to the record in consolidated appeals, giving the DC Circuit exclusive jurisdiction, the group said.

It also argued that PennEast effectively put forward three separate pipelines, with different start and end points and different amounts of gas projected to be consumed. "Since the commission is not authorized to approve a smorgasbord of options in a certificate of public convenience and necessity, each of the three pipelines now being proposed requires a distinct application and certificate," it said. Further, it argued that the 36-inch-diameter pipeline is two to three times larger than what is needed for Phase I customers.

SEEKING MORE ANALYSIS

Similar arguments were put forward by the New Jersey Conservation Foundation and Watershed Institute, which contended that an entirely new certificate is required, underpinned by a new analysis of the project's viability, need, and environmental effects.

The New Jersey Rate Counsel, for its part, argued that the amendment application shows that substantial volumes of gas can be delivered to New Jersey shippers using a combination of construction in Pennsylvania and existing capacity in New Jersey. It has previously argued the project was unneeded in New Jersey.

Some landowners and localities also wanted more notice and time to comment on the project.

The debate comes as PennEast is separately seeking US Supreme Court review the 3rd Circuit decision blocking the route. FERC has already weighed in by issuing a declaratory order stating that the Natural Gas Act empowers pipeline companies to use eminent domain powers to acquire state lands.

FERC has also agreed to extend the timeline for building the project for two years, over objections from project opponents.