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PennEast urges FERC to release report for stalled gas pipeline project

Highlights

Tells FERC of 'critical' need of project shippers

Phased approach faced questions over need, end use

Washington — PennEast Pipeline is pressing the Federal Energy Regulatory Commission to continue advancing its proposal to build the 118-mile, 1.1 Bcf/d natural gas pipeline in two phases, urging the commission to promptly release an environmental assessment originally targeted for July 10.

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The action comes as PennEast, faced with persistent legal and regulatory hurdles in New Jersey, has sought to amend its FERC authorization to begin with a 68-mile segment in Pennsylvania with the capacity to carry 695,000 Dt/d. In a second phase, it would build another segment, mostly in New Jersey, that would enable the full capacity.

That phased proposal, pitched in January, drew a deluge of comments from stakeholders at FERC, including from those who argued PennEast had failed to explain the independent utility of the two phases, particularly the end use of the gas in the first phase.

FERC had said it planned to issue an environmental assessment July 10, tailored to focus on a single added metering and regulation station with two separate interconnections, meter, and regulation facilities and a pig launcher and receiver, all in Bethlehem Township in Pennsylvania. That plan drew objections from those calling for a more extensive review.

Now that FERC's target date has come and gone, PennEast has told FERC that prompt issuance of the EA is "critical for PennEast to meet the Phase I shippers' needs for firm natural gas transportation service on the Phase I facilities by the winter 2021-22 winter heating season."

In a July 24 filing with FERC, PennEast complained that, contrary to FERC's usual pattern, the commission did not release the EA by the date listed in its notice of environmental schedule, and did not provide any update of that schedule when it missed the milestone.

PennEast asserted that the project applicants, environmental agencies, and other stakeholders rely on deadlines set forth in the schedule to make decisions about projects. It added that issuance of the EA is needed to stay on a realistic schedule for issuing a certificate order by October 1 to keep PennEast construction on track for Phase I.

Opponents of the PennEast project, by contrast, have criticized the developers for declining to document their shippers' needs and restating that FERC is not required to look beyond precedent agreements to evaluate shippers' needs.

"First, they claim it is 'critical' for PennEast to meet its Phase 1 shippers' needs. But PennEast has repeatedly refused to actually document their shippers' needs —at all," wrote Michael Spille, chairman, West Amwell Township Environmental Commission, in a comment posted July 26.

The PennEast project's struggles reflect, in part, the increasingly challenging and litigious climate for large interstate natural gas projects in the northeastern US.

The project was set back by permit denials in New Jersey and by a ruling in the 3rd US Circuit Court of Appeals blocking PennEast from condemning lands in which New Jersey holds an interest. The court ruling has been appealed to the US Supreme Court.

In a previous move helpful to the pipeline developers, FERC weighed in prior to the Supreme Court petition by issuing a declaratory order stating that the Natural Gas Act empowers pipeline companies to use eminent domain to acquire state lands and warning of profoundly adverse impacts to interstate gas transportation development should the 3rd Circuit ruling stand.

But the Supreme Court, on June 29, put off deciding whether to hear the case, potentially for months and instead sought the view of the US solicitor general in that case.