Saturday, August 22, 2015

Who Decides Whether PennEast’s Pipeline is Needed, Necessary, and Wanted?

A new report on behalf of PennEast Pipeline co., which has run into stiff local and environmentalist opposition to its proposed natural gas pipeline through Pennsylvania and New Jersey, argues that—

Families and businesses in eastern Pennsylvania and New Jersey would have saved more than $890 million in energy costs had the proposed PennEast Pipeline been in place during the 2013-2014 winter.

The 2013-2014 winter was a particularly cold one for the region. Not surprisingly, opponents reacted negatively to the report. As the Hunterdon County Democrat’s Terry Wright reports:

Critics immediately blasted today's report.

"The new claim by PennEast is more hot air," said Jeff Tittel, director NJ Sierra Club. And he termed the supposed savings for consumers to be a "false assumption since the price of natural gas is set by the overall market, not just in one area."

"There is no guarantee the gas from this pipeline would stay here; it could just as easily be exported from Cove Point, Md.," he added. He was referring to a liquefied natural gas export terminal under construction there by Dominion Resources. The U.S. Energy Department has approved Cove Point's planned exports to other countries starting in 2017.

"The reason PennEast keeps spinning with reports is because the public opposes this pipeline," Tittel added, calling it "unneeded, unnecessary and unwanted."

I left these comments challenging Tittel:

[T]he supposed savings for consumers to be a "false assumption since the price of natural gas is set by the overall market, not just in one area."

This is not true. Local and/or regional factors can and do affect prices. As Bloomberg Business reports in Northeast Record Natural Gas Prices Due to Pipeline Dearth:

“A lack of pipelines is depriving consumers of the full benefits of low-cost energy. Although the wells in Pennsylvania are practically in the backyard of the Northeast and mid-Atlantic states, pipeline companies are still working to connect the gas fields to the utility pipes beneath towns and cities. Until they do, a lot of gas will continue to get pumped more than 1,000 miles from the Gulf Coast to the Northeast.”

The more fundamental issue is moral; the rights of producers and their consumers to voluntarily contract to mutual benefit. Who is Tittel to claim that the pipeline is "unneeded, unnecessary and unwanted?" He has no right to speak for anyone but himself. It’s up to each consumer to decide whether they need the gas. The only moral and practical solution: If you don’t need the gas, [do not] want it, or [don't] find it necessary, don’t buy it. But don’t block other buyers who decide they do need it, want it, and find it necessary.

As for all of the anti-PennEast NIMBY’s out there, keep in mind that 1000 miles of natgas pipelines that supply New Jerseyans—or for that matter the other 2.4 million miles of natgas pipelines now in use in America that 71 million Americans rely on. Be grateful that other NIMBY’s didn’t stop them.

Related Reading:

Untangling the PennEast Pipeline Rights Conundrum

No comments: