PennEast Pipeline Co. a step closer to construction

Construction on a nearly $1 billion natural gas pipeline through eastern Pennsylvania is one step closer to reality.

PennEast Pipeline Co. LLC of Wyomissing hosted a media teleconference this morning to discuss its submission of a formal application to the Federal Energy Regulatory Commission today for a certificate of public convenience and necessity. The filing moves PennEast Pipeline Co. a step closer to constructing, installing, owning, operating and maintaining the PennEast Pipeline.

The proposed project would transport natural gas produced in one Marcellus shale region of Pennsylvania through a 118-mile pipeline. It would start in Dallas, Luzerne County, and move through Carbon, Northampton and Bucks counties into Mercer County, N.J.

The 36-inch, underground natural gas pipeline would deliver about one billion cubic feet of natural gas per day. Officials said the gas would not be exported to other nations and that it would serve customers and businesses in Pennsylvania, New Jersey and part of New York.

PennEast Pipeline Co. is comprised of AGL Resources, NJR Pipeline Co., PSEG Power LLC, South Jersey Industries, Spectra Energy Partners and UGI Energy Services. UGI serves as the project manager and would be the operator of the proposed pipeline.

“The positive impact on the community extends well beyond the construction phase,” said Pat Kornick, spokeswoman for PennEast. The construction would create secondary economic benefits for retail, restaurants and other establishments, plus create a boost in discretionary income from the reduced rates in energy costs once the pipeline is operational.

The pipeline would be regularly maintained and create work for generations, said David Taylor, president of the Pennsylvania Manufacturers Association in Harrisburg.

“In every way that matters, energy is life,” Taylor said. “Manufacturing is the sector that adds the most value. It’s not just the jobs on the floor, it’s the additional jobs in the supply chains, distribution networks.”

Manufacturers naturally are large consumers of energy, Taylor said. To be able to provide the maximum amount of home-grown energy through infrastructure necessary to reach industrial customers is the top goal of the manufacturing trade group, he said.

Aside from the economic benefit, Taylor spoke about the long-term benefits the PennEast project would bring to the petrochemical industry in Pennsylvania. The transmission of natural gas would allow for more products to be produced by natural gas, including everything from solvents to adhesives and rubber, even affecting growth in the agriculture and pharmaceutical industries.

“There is a new petrochemical industry waiting to be born here,” Taylor said, citing the benefits that will come from the infrastructure required to transmit natural gas more efficiently and less costly.

The end result will put Pennsylvania into a much better competitive environment, he added.

“This is a milestone in our project,” said Peter Terranova, chairman of the PennEast Pipeline board of managers. “Our filing will conclude the voluntary pre-filing phase.”

The pre-filing phase began in October 2014, two months after PennEast first announced the project.

Since the project’s announcement last year, news of the proposed pipeline has drawn strong opposition from governing bodies at the local level as well as residents along the proposed route.

The company has met with nearly all landowners along the route, Terranova said. The important feedback generated by the meetings enabled the company to create a more complete application, he said.

“The process of rerouting the pipeline is not complete,” Terranova said. “We have done a lot of rerouting already. We have put a lot of work into this route and made a lot of adjustments to our route over the past year, so we know we are not done.”

While landowners have expressed fears of the company using eminent domain to acquire properties along the route, Terranova said PennEast has not begun acquisition of land rights.

The company has no set deadline for getting compliance from affected property owners.

“It’s premature to discuss what the ultimate outcome will be,” he said. “We will do everything we can to reach a consensus that’s fair.”

If PennEast receives regulatory approvals, construction will begin in 2017, Kornick said.

The pipeline has at least three interconnections with other natural gas pipelines, so the natural gas will be a benefit to consumers in Pennsylvania, added Terranova.

The overwhelming majority of shippers of the natural gas from the proposed pipeline would be public utilities and power generators and therefore would not be exporting gas, Terranova said.

“PennEast is designed for local consumers; it is not an export project,” Kornick said.

Source: LVB