Murphy DEP LNG Permit Approval & Suspension Exposes A Rigged And Corrupt DEP Permit System

Posted on June 13, 2019 by Bill Wolfe

DEP Permit Regulations Ignore Climate Change

DEP Coaches Permit Applicants & Rubber Stamps 95%+ Of Permits

DEP fails to comply with Legislation mandating Annual Permit Reports

The Public Is Shut Out When Critical “Go-No Go” Policy Decisions Are Made

If the LNG debacle does not trigger major management, regulatory, and permit review reforms at DEP, then nothing will.

[Updates below]

As skeptical as I am, even I was shocked by reading this (excellent reporting by Jon Hurdle at NJ Spotlight):

In New Jersey, the Department of Environmental Protection issued a permit to Delaware River Partners on May 20 to build a new dock and dredge a 45-acre area of the river to a depth of 45 feet below the low-water mark. The permit said nothing about the plan to build an LNG terminal. On June 5, the DEP suspended the permit because of a procedural error but said it would review its action after a 15-day public comment period.

Obviously, the LNG developer – with the knowledge, cooperation and support of the DEP – tried to stealth what they knew would be a hugely controversial fracked fossil fuel permit process that would trigger massive public opposition and protest.

When the scam was outed by diligent environmental activists, suddenly DEP discovered a “procedural error” and “suspended” the permit and provided a mere 15 day new public comment period.

That DEP story is simply not credible. And their remedy is sham.

And if it is true, it exposes gross mismanagement, technical incompetence, and regulatory negligence.

Heads at DEP must roll for “errors” of this magnitude.

But we think this LNG “error” is not an anomaly, but instead exposes the following systemic flaws at DEP – flaws we have personal knowledge and experience of and have written about for years:

1. Mis-mangement in high places

This is not the first management “error” by DEP Commissioner McCabe.

The folks in Vernon are correctly calling for McCabe’s resignation for similar “errors”.  Ditto many other NJ communities that have been betrayed by DEP. (the full list is too long to post here)

How could a DEP permit engineer not know or ask about LNG export activity and approve a permit for this kind of facility? How about his/her supervisor, Section Chief, Bureau Chief, Assistant Director, Division Director, Assistant Commissioner, Deputy Commissioner, legal team, AG’s Office, and Commissioner not ask before the LNG permit went out the door?

At least 50 DEP professionals must have been aware of this project, yet not one had the integrity to internally warn the Commissioner? Not one had the courage to blow the whistle to environmental groups and/or media? They all let this happen? How could that be?

Climate policy is allegedly Gov. Murphy’s number one environmental priority and a major focal point for the Murphy DEP.

If a huge, international LNG export facility on the Delaware River can slip through the cracks in this context, it means that the Commissioner has zero leadership and zero control over her own agency.

McCabe must go. So must her entire management team. Period. Final Straw. The camel’s back is broken.

But I am not optimistic, as the Executive Director of the Pinelands Commission effectively and similarly tried to stealth a gas pipeline through the Pines, and she still serves there in good standing, see:

2. DEP permit regulations ignore climate change and greenhouse gas emissions

As we’ve written, DEP permit regulations ignore climate change, see:

There is a possibility that the LNG permit application did not require disclosure of fossil energy related issues.

Regardless, if a case like this does not force major changes to DEP regulations and permit review practices, we truly are lost.

3. The DEP Permit review process, by design, is rigged and captured by regulated industry

I’ve previously written in detail about how the DEP permit process is rigged:

The DEP permit process is rigged

The permit process is heavily biased in favor of the permit applicant not the public.

The bias is present at the beginning and the end of the process.

At the beginning, months before the project was announced publicly, Transco, NJNG, and SJG were given multiple opportunities to meet with DEP staffers and managers.

Those meetings are known as “pre-application conferences”. They are secret and not subject to OPRA. (Listen to how the Pinelands Commission got caught on tape responding to my criticism of “pre-application conferences” with SJG pipeline.)

Those meetings provide access to DEP technical staff and upper management. They allow permittees to understand how DEP interprets the regulations and how to comply with them. They basically iron out all problems in advance and receive conceptual approval of a project before the public is even aware of the existence of a project.

After many months of technical coordination, the public then gets to comment on draft permits at the end of the process.

In this case, DEP held public hearings on the permit applications, not draft permits.

This process allowed the permit applicants to get another bite at the apple and fix any deficiencies the public identified during comments!

I also wrote more recently to criticize DEP Commissioner McCabe for going right along with all that, including failure to submit legislatively mandated annual “Doria” Permit Activity Reports::

The regulatory game is rigged – no wonder DEP rubber stamps 95% of permits. In fact, DEP stopped writing the annual permit “Doria” report mandated by the legislature after the data in that report revealed that DEP approved 95% of permits – and the other 5% were typically withdrawn and resubmitted and later approved.

This institutionalized corruption is far beyond the informal academic concept of “regulatory capture”:

Regulatory capture is a theory associated with George Stigler, a Nobel laureate economist. It is the process by which regulatory agencies eventually come to be dominated by the very industries they were charged with regulating.

Yet Murphy DEP Commissioner McCabe has written that this practice represents a “broad range of stakeholders”.

Meet the new boss – same as the old boss.

To expand and update that criticism, just days before this alleged LNG permit “error” emerged, I had submitted an inquiry to the DEP’s Office of Permit Coordination.

Here’s how DEP explains the mission of that Office – an incredibly revealing description that shows exactly how oblivious DEP is to issues of regulatory capture and bias and how remarkably out of touch and divorced from the public DEP is:

The mission of the Permit Coordination Unit is to insure that complex multi-media, high value projects receive proactive and facilitated communication and coordination in support of timely, predictable, and positive permit decisions.

We accomplish this by:

  1. Being the primary manager/driver for several large cross- program projects at any given time.

  2. Providing a “one stop”/single point of entry for a second tier of smaller cross- program projects where we will coordinate and facilitate multi program permits but not be primary manager of those projects. Applicants will leave our Permit Readiness Process with confidence that:

    • there is no fatal flaw (early ‘no’ if needed) in their site or project,
    • certainty they are in fact ready to submit permit applications (that no preliminary approvals like LOIs or consistency with WQMPs) are needed or if so that they have been obtained),
    • their project has had the benefit of an informal review and comment on their project by permit reviewers prior to submitting a formal application,
    • they have been introduced to individual program contacts,
    • they have an approximate predictable schedule for permit issuance assuming the submission of a complete and approvable application and fees.

  3. Providing an early, informal review and comment on ‘ideas’ or conceptual projects before applicants invest time and money into more detailed project design i.e. – a general GIS overview of site limitations or encumbrances to determine if it is worth further investing in a project.

  4. Identifying and resolving initial/overarching policy or rule interpretation or process questions by the Department needed to determine the viability of a project prior to entering the permit application process.

I asked DEP just what a “positive permit decision” is and whether they are concerned about an appearance of coaching permit applicants and “regulatory capture”, all while keeping vital information from the public.

Here is a list of questions I submitted to DEP – all of which take on added significance in light of the LNG debacle – to which DEP has refused to respond:

Hi Ruth – I am researching and planning to write about the role and performance of your office.

In a rare mood of fairness, I was wondering whether you might be interested in responding to a few questions and providing relevant data (in coordination with DEP Press Office, of course):

1. How do you respond to the concern that the role and function of your Office is to provide “coaching” to permit applicants, while not providing equivalent services to the public and communities impacted by regulated activities?

2. How do you respond to the criticism that the records for your office regarding “pre-application” conferences and other services you offer to permit applicants are considered by DEP to be exempt from OPRA and therefore your office operates in the dark, without transparency and accountability?

3. Do you charge fees for the services your office provides to regulated entities? If so, please provide fee schedule. If not, why not?

4. How is your Office funded and what are its staffing levels and budget?

5. On of the functions described on your website is:

“Identifying and resolving initial/overarching policy or rule interpretation or process questions by the Department needed to determine the viability of a project prior to entering the permit application process.”

Can you provide a justification for this? How do you respond to the concern that it fails to provide due process and equal access to the public in making important policy interpretations?

6. How do you respond to the criticism that your Office exacerbates problems associated with “regulatory capture”?

7. according to your website:

“Mission of the Permit Coordination Unit

The mission of the Permit Coordination Unit is to insure that complex multi-media, high value projects receive proactive and facilitated communication and coordination in support of timely, predictable, and positive permit decisions.”

What are “positive permit decisions”?

Can you see a serious problem with that in creating false expectations? (e.g. positive could easily be interpreted as meaning “approved”)

8. Can you provide program activity and performance data, e.g. number of cases your office is involved in, types of involvement, and ultimate disposition (outcome)?

9. Do you track and can you provide any environmental data that would identity benefits associated with your reviews?

10. The Department previously published annual “Permit Activity Reports” under the Doria legislation, but no longer does so.

Does your Office maintain that kind of comprehensive permit data? If so, could you provide it? If not, why not? Does any other program in the Department maintain that data? If so, where could I find it?

*11. Does any of the NEPA, EO 215, and/or permit coordination work of your office include reviews of the impacts on climate change, greenhouse gas emissions, consideration of energy efficiency potential and inclusion of renewable energy, or the need for climate adaptation?

I anticipate writing in the next few days and obviously would prefer to have facts and the Department’s views before I write (but am willing to proceed without same). I appreciate your timely reply.

Again, if the LNG debacle does not trigger major management, regulatory, and permit review reforms, then nothing will.

Update #1: 6/16/19 – I just learned that Kirk Moore broke this story back on June 11, 2019, so he deserves the credit, see:

Update #2 – just found out that the Philadelphia Inquirer really broke the story win June 9, see:

The Delaware Riverkeeper Network, in a May 28 letter to federal and state regulators, said the private port’s true purpose is to export LNG produced in northern Pennsylvania. “This looks to us like a deliberate cover-up,” Maya van Rossum, the head of the riverkeeper network, said in a statement. ~~~ end update#2

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