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FERC approves PennEast gas line

22 Jan 2018, 9.45 pm GMT

FERC approves PennEast gas line

Houston, 22 January (Argus) — The US Federal Energy Regulatory Commission (FERC) has approved the 1 Bcf/d (28mn m³/d) PennEast natural gas pipeline project, despite one commissioner's dissent and statements of concern from two other commissioners.

Following the approval, the project's developers released a new in-service date of 2019, with construction beginning this year. The line was originally expected to begin service in 2017 but has been delayed multiple times throughout the regulatory approval process.

The 120-mile (193km) pipeline project is designed to deliver Appalachian natural gas to Mercer, New Jersey. It has garnered thousands of public comments after it applied for FERC approval, and was denied a crucial wetlands crossing permit from the state of New Jersey last year.

Democratic FERC commissioner Richard Glick dissented on the PennEast approval, saying he does not believe the commission's order properly concludes that the project is needed or that the commission has successfully found that the line's benefits outweigh its harms.

Democratic FERC commissioner Cheryl LaFleur concurred with the commission's decision to approve PennEast, but she released a statement expressing concerns that the review had a significant number of incomplete environmental surveys because of lack of access to private property along the route. LaFleur said she supports Republican FERC chairman Kevin McIntyre's decision to review the commission's pipeline certificate process.

Republican commissioner Neil Chatterjee also released a statement that echoed LaFleur's comments on the incomplete surveys and expressed his concerns about the effect on those landowners. But ultimately Chatterjee also concurred with the line's approval.

FERC's approval of PennEast is not a guarantee that the line will be built, the New Jersey Conservation Foundation said. The group's campaign director Tom Gilbert pointed to a recent US Second Circuit Court of Appeals ruling that upheld a decision by the New York State Department of Environmental Conservation to deny a water permit for the Constitution pipeline. That pipeline, which had already been approved by FERC, remains in legal limbo.

PennEast's developers said the need for the pipeline is clear, and that access to additional natural gas supplies will reduce the cost of gas in eastern Pennsylvania and New Jersey, where prices can spike during times of high demand.

During the a cold snap earlier this month, natural gas prices spiked 31 times higher in New Jersey than supplies in the Pennsylvania production areas because of "pipeline constraints and inadequate supply to meet demand," PennEast said.

Spot natural gas prices at Transcontinental Gas pipeline zone 6 non-New York North spiked to nearly $124/mmBtu on 4 January amid extremely cold weather, compared with its December 2017 average of $6.62/mmBtu, according to Argus prices. That index includes locations near the proposed terminus of the PennEast line. The Transco index on that day held a premium of nearly $120/mmBtu to Dominion Transmission South, located in the Appalachian production region.

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