PennEast has made a point to show that they are building this pipeline to “benefit businesses and consumers in PA and NJ”, and that the pipeline carries 1 billion cubic feet of natural gas per day, enough to heat “4.7 million homes”.
If we actually were experiencing a natural gas shortage in NJ, and prices were high and we were generally facing an energy crisis, then PennEast might find sympathy with some people here in West Amwell. Not too much – almost no on in the township has residential natural gas. But we could conceivably benefit from gas-fired electricity generation.
But in reality we’re not facing any sort of energy crisis. We’re actually facing a glut of natural gas. Prices in NJ are at historical lows, demand for natural gas is essentially flat, and we are more than adequately supplied. Some people have talked about converting coal-fired electric plants to natural gas fired ones as a possible source of future demand. This may be true in other states, but in NJ we only have one such plant scheduled for conversion.
We really, literally, do not need this pipeline. Today the state of NJ averages about 1.8 billion cubic feet of natural gas consumption per day. That’s across all users, residential gas customers, electrical generation plants, industrial users, and transportation (e.g. natural gas powered busses). The PennEast pipeline by itself will add an additional 1 billion cubic feet of natural gas to our already well-serviced state, piling on an extra 55% of oversupply capacity we don’t need. And this is on top of the recently approved Transco pipeline that’s being expanded to the East of us in Montgomery/Princeton.
We do not need this gas here in NJ or West Amwell. While it may serve to help out during times of peak demand, most of the time these pipelines would stay idle. That is until you consider the concept of Liquid Natural Gas (LNG) exports. Until recently it has been illegal to sell natural gas or oil overseas here in the U.S. However the Department of Energy changed their policy on this a few years back, and several LNG export terminals have been approved in the lower 48 states. This includes the Cove Point LNG import/export facility that is being expanded right now. Even though it’s export facility is not completed yet Cove Point is already 100% subscribed from businesses in Japan and India. Another proposed pipeline on the eastern seaboard is the DownEast LNG facility in Maine, it’s undergoing FERC review right now.
PennEast’s interconnects with other pipeline systems allow it to send natural gas to either one of these terminals.
And this seems to be the real point of this pipeline. The only area of significant rising demand for Marcellus shale gas is via the LNG export market. Countries such as Japan are willing to pay 4x more for natural gas than we do here in the United States, and pipelines such as PennEast are uniquely poised to deliver gas to the export terminals that can get it there.
If you are interested in the= numbers to back this up, along with references to eia.gov and ferc.gov material that corroborates it, please refer to the following articles: