Letter: PennEast Pipeline gas for N.J. and Pa., not export

September 21, 2016


Published September 21, 2016, on LehighValleyLive.com

A recent letter to the editor asked how natural gas gets to New Jersey and questioned the use and benefits of the natural gas from the proposed PennEast Pipeline.

First, the PennEast Pipeline will not export natural gas; it will serve area natural gas and electric consumers. Groups opposed to the pipeline continue to claim that this gas will be exported.

States do not govern foreign natural gas exports; the U.S. Department of Energy has that authority. PennEast has not made any export application.

As for natural gas delivery, five major long‐haul pipelines serve eastern Pennsylvania and New Jersey. Three of these, the Transcontinental Gas Pipeline, Texas Eastern Transmission, and Tennessee Gas Pipeline originate in the Gulf of Mexico.

The current eastern Pennsylvania and New Jersey interstate pipeline system was designed decades before abundant Appalachian natural gas supplies were discovered.

PennEast is the first natural gas pipeline designed to deliver the most abundant, affordable supply of natural gas in North America directly to New Jersey. It will address existing capacity constraints on the pipeline systems that will only get worse in the years ahead. These constraints are clear when one compares natural gas prices in northeast Pennsylvania where gas is produced to the market areas in eastern Pennsylvania/New Jersey where it is consumed. Over the last three winters, there were 164 days where the difference in natural gas prices between northeast Pennsylvania and eastern Pennsylvania/New Jersey exceeded $2/dekatherm — and during the winter of 2013-2014, the difference exceeded $100/dekatherm.

Natural gas currently trades in the $1-2/dekatherm range in northeast Pennsylvania. Estimates show that had the PennEast Pipeline been in operation in 2013, consumers would have saved almost $900 million in that winter on electric and gas bills. The example is almost equal to the cost of building the PennEast Pipeline, which is estimated at $1.2 billion.

The PennEast Pipeline also offers utilities supply security and reliability, supply diversity, supply flexibility and price stability for residents and businesses. It will fuel the electric power sector’s shift from coal and oil to greater reliance on clean, affordable natural gas. That benefits the air we breathe and the environment.

The writer discusses natural gas needs 20 years from now. Natural gas delivered by pipelines will be a key part of our energy future 20 years from now and beyond. In 2015, the U.S. used just over 27 trillion cubic feet of natural gas. Annual use is expected to climb to 34.4 Tcf in 2040. The increased use is driven by natural gas’ environmental benefits and sustained production from abundant domestic supplies, offering families and businesses price stability.

Pat Kornick is a spokesperson for the PennEast Pipeline Co.