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Christie Administration DEP and BPU Are Pushing Pipeline Project

So called state regulatory “hurdle” is more like a speed bump

I was going to do this an as update to my post yesterday on the Pinelands Pipeline meeting, but rejected that in favor of a new post because the issues involved are critical and they need to be highlighted independently.

The first issue arises from the Philadelphia Inquirer’s excellent coverage: State rules pose hurdle for proposed Pines pipeline

South Jersey Gas Co.’s proposed pipeline across 21 miles of South Jersey would be permitted through some sections of the Pinelands but not its forest area under state rules, an environmental specialist for the Pinelands Commission told members Wednesday.

My problem is that both the headline and the story over-state the strength of the staff presentation and the Commission’s likelihood of enforcing the “state rules” to kill the project, i.e. conflict with the Pinelands Comprehensive Management Plan and regulations.

Further down in the story are the critical facts that are buried by that headline and lead paragraph of the story:

Ellis said she began “pre-application” conversations with representatives of South Jersey Gas in April 2012 and had met with them regularly since. […]

One who repeated his opposition Wednesday was Leon Rosenson, a trustee of the advocacy group Pinelands Preservation Alliance. “It’s not your job to help them [South Jersey Gas] find an illegal route,” he told commission members.

The Pinelands Commission was “starting to give the appearance of being a regulator agency captured by the interests it’s supposed to regulate,” Rosenson said. “If you turn them [South Jersey Gas] down . . . they’ll find another route, and you won’t have violated your rules.”

Margo Pellegrino of Medford Lakes urged “a lot of deliberation” before the commission makes a decision. “We have a climate in Trenton where everything is fast-tracked,” she said. “We can’t be fast-tracked.” 

At the same time, the story does not specifically report other critically important factors supporting the project at the highest levels of state government.

As a result, the opposite conclusion is far more likely. The so called state regulatory “hurdle” is more like a speed bump.

The Pinelands staffer did not make any recommendation about implementation or enforcement of the regulations and dodged the implications of the conflict in terms of killing the project.

In fact, the quote in the story on “agency capture” supports my conclusions.

The gentleman quoted about “capture” made a statement that included an excerpt from a letter by the Pinelands staffer to South Jersey Gas regarding negotiation of the MOA, or waiver of Commission regulations.

That communication from staff during negotiations on the development of the pipeline application for submission was basically a green light signaling a likely approval despite the conflicts, and is not appropriate for staff to do at that time and behind the scenes without a clear policy decision by the full Commission.

I wonder who directed the staffer to discuss the MOA option with South Jersey Gas ?

The second point arises from the set up and a quote by the DEP Press Office regarding the DEP enforcement Order for the BL England facility with respect to re-powering in the Press of Atlantic City story:  Pinelands panel hears pipeline arguments.

DEP’s Larry Ragonese is quoted as follows:

The plant has been ordered by the state to convert to burning natural gas because of ongoing violations of the federal and state clean air requirements. Owners of the plant, RC Cape May Holdings, have said the approval of the second pipeline is critical to keeping the plant operational.

Several land use permits from the Department of Environmental Protection would be needed for the project and those permits still have yet to be finalized, said spokesman Larry Ragonese. “From an air perspective, it would be a huge benefit to be able to convert that plant from coal to gas.”

Ragonese is distancing the Christie Administration from the their support of the pipeline project and the BL England re-powering, and at the same time creating a false perception that the DEP land use permits are being reviewed independently and objectively – issuance of those permits is a done deal.

It is correct, but misleading without providing the context and history, to say that the state ordered the plant “to convert to burning natural gas”.

The BL England plant was issued an Enforcement Order in 2006 (scroll to page 37 for Order).

That original 2006 Order mandated that the plant upgrade to meet pollution control requirements or shut down.

The original Order allowed for re-powering as an option, solely up to the corporation to decide. Repowering was NOT state policy. Any re-powering was speculative and accompanied by “regulatory risk”.

The Christie Administration DEP renegotiated and amended the Order on May 18, 2012.

The amended Order is what” mandated” the re-powering – as a matter of state policy – and made commitments to issue regulatory approvals and permits.

Shortly after the May 2012 amended BL England Order by DEP, the BPU issued its Order in June 21, 2013 approving the Pinelands pipeline.

That pro-natural gas policy was not limited to the BL England plant, but was expanded statewide to promote expansion of natural gas as a fuel source and to expand natural gas pipeline infrastructure in the Christie Administration’s Energy Master Plan (see page 58). BPU testified to the Commission and confirmed this.

Here is the critical text which greases the skids and basically commits DEP to issuing all  the permits – including land use permits – for the repowering and pipeline project – see paragraph 22:

This history and DEP commitment is critical context for the Ragonese quote, where he dodges the fact that the re-powering and the pipeline project are supported by the Christie Administration, and then tries to ignore the fact that DEP has made commitments to issue the permits required to make the re-powering project happen.

In addition to these points, there was excellent testimony during yesterday’s hearing about a prior SJG pipeline denial, so SJG knew exactly the regulatory risks they were running – these issues require additional research.

But, like I said, it’s Chinatown, Jake.