NGOs Seek to Block Pipeline Development

Last summer I published an article in this blog discussing the fact that many stakeholders were turning their focus to pipelines. With steady supplies of natural gas from the Marcellus and Utica shale plays as well as gas from gulf states and low prices expected to continue, it is not surprising that NGOs have identified pipeline development as strategic targets for opposition campaigns which could stop the flow of natural gas from producing regions to east coast population centers that would benefit from a stable, inexpensive energy source. Having failed to shutdown exploration and production in the leading shale plays, it appears that NGOs have concluded that preventing midstream development may be an effective strategy for achieving their ultimate goal of keeping carbon fuels in the ground.

On March 31, 2016, ReThink Energy NJ, an organization launched by the New Jersey Conservation Foundation, the Stony Brook Millstone Watershed Association and Pinelands Preservation Alliance to promote renewable energy, urged the Federal Energy Regulatory Commission to block PennEast’s proposed $1 billion pipeline that would be constructed between Luzerne County, Pennsylvania and Mercer County, New Jersey. ReThink Energy NJ argued that PennEast’s lack of responsiveness to FERC’s request for information (which prompted FERC to issue a notice of schedule delaying the timeline by at least seven months) jeopardizes the integrity of the project. ReThink Energy NJ joined the New Jersey Sierra Club, the Hopewell Township Citizens Against the PennEast Pipeline LLC and New Jersey Senator Shirley K. Turner (D-Mercer/Hunterdon) who have opposed the project. The opponents claim PennEast has not provided sufficient information and details about the location of drinking water wells that could be adversely impacted, geologic information, stream crossing plans and wetland restoration or mitigation plans.

On March 31, 2016, the Sierra Club asked FERC to reject Transcontinental Gas Pipeline Company, LLC’s application to expand the capacity of a 10,200 mile pipeline running from Texas to New York City which would deliver more gas to New Jersey. The Garden State Expansion Project would allow Transco to make modifications including the installation of a new compressor station, meter and regulating station that would add new gas delivery to Burlington County. New Jersey DEP had asked FERC in December 2015 to impose restrictions to protect wildlife and limit air pollution. The Sierra Club reiterated those points and asserted that FERC should conduct a full National Environmental Policy Act review and consider the cumulative impacts.

A group of landowners, local municipalities and environmental groups, including Riverkeeper, Inc., have been opposing a $971 million gas pipeline project for Algonquin Incremental Market (AIM), a subsidiary of Spectra Energy, that will run through New York and New England. The groups argue the project was not needed and an evaluation should have been conducted as to the project’s impact on increased gas production and the resulting climate change impacts. They are also concerned about risks associated with the proximity of the pipeline to the nearby Indian Point nuclear facility, despite the fact that the Nuclear Regulatory Commission approved the project after what the NRC described as a “thorough, peer-reviewed analysis” as to whether a pipeline rupture could adversely impact the safety or shutdown of the two operating reactors. FERC accepted the NRC decision and rejected a request by the NGOs to rescind its approval. FERC also rejected a request by New York Governor Cuomo to reconsider its decision and stay the pipeline’s construction until the state could conduct its own safety analysis. On March 28, 2016, a coalition of NGOs led by Riverkeeper and several individuals filed a joint petition for review of FERC’s decision in the U.S. Court of Appeals for the D.C. Circuit.

The efforts of these NGOs reveal the importance of midstream development in the energy industry’s efforts to take advantage of the shale gas production and find new markets. As more and more pipeline systems become available to transport inexpensive natural gas to markets in the northeast, developers of renewable energy projects may have difficulty competing for support and funding and become more dependent on government mandated energy portfolio decisions.

Stephen Smith focuses his practice on environmental and energy-related matters including regulatory counseling and litigation, administrative law, governmental affairs and lobbying. He represents clients before federal and state courts and administrative agencies. He provides client counseling and advice on compliance, permitting and agency communications as well as business transactions.
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