Gibbstown LNG Project: Many Hurdles Remain

About the Gibbstown port

New Fortress has already one dock at the Gibbstown port for a variety of cargo.

Delaware River Partners – which is majority-owned by Fortress Transportation and Infrastructure Investors, which itself is affiliated with Fortress Investment Group -- is seeking to construct a second export terminal there that would feature two 43-foot-deep docks to accommodate LNG temperature-controlled tanker ships.

The so-called Dock 2 Project involves dredging approximately 665,000 cubic yards of river sediment (roughly the equivalent of what could be carried by 55,400 average-size dump trucks) and the construction of two deep-water berths, along with supporting infrastructure on the land.

About 13 trucks per hour would enter the site around the clock, seven days a week, with each truck carrying approximately 12,000 gallons of LNG, according to U.S. Army Corps of Engineers records. The LNG would be pumped directly to a waiting LNG vessel and those ships would then export the gas to global markets. Loading time would take about two weeks.

Supporters of the port project say it will create jobs, boost the local tax base and that federal regulations and oversight will ensure the safe transportation of LNG.

Opponents say the transportation safety measures are inadequate protection and the risks outweigh the potential hazards. They also object to the additional stress on the environment caused by increased LNG production earmarked for export.

One of the most recent approvals for the project came from the Delaware River Basin Commission, a regulatory body whose commissioners are the governors of Delaware, New Jersey, New York and Pennsylvania, and the U.S. Army Corps of Engineers.

In a decision that drew the rebuke of environmentalists, DRBC commissioners voted 4-0, with New York’s designee abstaining, to endorse a hearing officer’s recommendations to approve the project. (The commission had originally approved the project in June 2019 but the Delaware Riverkeeper Network sought an administrative appeal, triggering a hearing and stay of that approval.)

The commission’s latest vote drew headlines and brought the Wyalusing-to-Gibbstown LNG rail project into sharper focus. It was also seen by some as the last major regulatory approval needed before the project could move forward.

While the DRBC’s vote was a sizeable hurdle cleared, it hardly remains the last.

• The Delaware Riverkeeper Network has vowed to go to court to overturn the DRBC’s ruling. While a suit has not yet been filed, the Riverkeeper has shown itself to be a formidable and persistent watchdog of the river’s health and well-being.

• The Riverkeeper has already taken the U.S. Army Corps of Engineers to federal court, challenging a permit issued in February 2020 allowing the construction of the proposed new docking facilities, among other improvements. The suit was filed on Oct. 30, 2020, and remains pending.

• Riverkeeper is challenging in State Superior Court a New Jersey Department of Environmental Protection waterfront development permit issued to Delaware River Partners. Among other things, the Riverkeeper maintains the DEP failed to analyze the dock project as an “energy facility” under its own rules.“It’s a flawed permit and it has to be challenged,” said Tracy Carluccio, deputy director of the Delaware Riverkeeper Network. The DEP declined to comment, citing the pending litigation.

• Fifteen state attorneys general have challenged a federal rule allowing the transportation of LNG by rail. The case is in its early stages and it is unclear what impact, if any, the outcome of the case might have specifically on the Gibbstown project.

• Federal Energy Regulatory Commission: Delaware River Partners and Bradford County Real Estate have filed separate petitions with FERC seeking rulings that their projects in Wyalusing and Gibbstown are exempt from the agency’s jurisdiction. However, the Riverkeeper and other activist groups have filed protests opposing the requests, which remain pending.“We believe the project should be looked at a whole – as one big project – and FERC is the only one that is going to do that,” Carluccio said.

• The U.S. Coast Guard: The agency needs to issue a “letter of recommendation” for the Gibbstown project. It’s unclear if the agency has issued such a letter.In response to an inquiry by Delaware Currents, the Coast Guard first said it was researching the answer to the yes-or-no question but then followed up to say that a federal public records request was needed to provide a response.

  The Washington Post reported on Jan. 5, that “the Gibbstown project has received a green light from the Coast Guard,” but the Coast Guard did not respond to a question about the veracity of that report.

• U.S. Department of Energy: Bradford County LNG Marketing needs departmental authorization to export LNG to Free Trade Nations under the Natural Gas Act. The company applied on Oct. 7, 2020, and the application is pending.Though there is no set statutory timetable for when approval can be expected – the act requires the department to act “without modification or delay” -- the actual processing time largely depends on the workload before the department.

• Pennsylvania Department of Environmental Protection: The department has received a permit application from Appalachia Midstream for the construction of a natural gas pipeline that would come into the proposed gas-processing plant in Wyalusing.A submerged lands license agreement is required because the pipeline proposes to cross the Susquehanna River, a DEP spokeswoman said.

  The department also anticipates that the proposed plant will be subject to regulation by the Safe Drinking Water Program as a noncommunity non-transient public water system.

• New Jersey Department of Environmental Protection: Carluccio said the Gibbstown project needs the department to issue a major air quality permit and grant approvals under the Toxic Catastrophe Prevention Act.The Riverkeeper has also petitioned the DEP to require Delaware River Partners to secure individual New Jersey Pollutant Discharge Elimination System permits for stormwater discharges associated with the construction of the Gibbstown project.

  The DEP did not provide an itemized inventory of outstanding applications but pointed to a statement by Gov. Phil Murphy made two weeks after the DRBC vote in December that he would seek to block any export of LNG at the port.

  “The administration, however, remains unwavering in its commitment to continue advancing critical initiatives to protect the environment and public health for future generations. It will explore all avenues within its authority to prevent the use of this dock for LNG transport,” the governor said, NJ Spotlight reported.

  The statement comes even as the governor’s DRBC representative was one of those who voted to approve the Gibbstown project.

  The governor’s statement sought to square that circle by saying: “The DRBC vote was in support of upholding a dredging permit for the construction of a dock. It was based upon an extensive and comprehensive scientific and technical analysis of its impact on water quality performed by DRBC staff and examined again during a subsequent hearing.”

  Murphy’s press office did not respond to a request for comment.

• Pipeline and Hazardous Materials Safety Administration: A special permit issued to Energy Transport Solutions allowing the transportation of LNG in specialized rail tank cars expires Nov. 30, 2021, though the renewal process does not appear cumbersome.

• On Jan. 12,Appalachia Midstream withdrew its application to the Pennsylvania Department of Environmental Protection for the construction of a 20-inch diameter natural gas pipeline of nearly 3 miles that would cross the Susquehanna River and come into the proposed gas-processing plant in Wyalusing. It was not clear why the application, which was nearly a year in the making, was withdrawn or what will become of the connection.

• A condition of the U.S. Army Corps of Engineers permit requires that trucks carrying LNG cannot access the Gibbstown site other than from the GloucesterCounty Route 44 bypass. However, the bypass is projected to be completed by spring 2021, according to the New Jersey Department of Transportation.

• It’s unclear how, or whether, a condition spelled out in the U.S. Army Corps of Engineers permit might slow progress on the port project. The permit prohibits in-water work between March 15 and Sept. 15 each year to protect the early life stages of Atlantic sturgeon

• Political: Could the incoming Biden administration look to roll back some energy and transportation policies adopted by the Trump administration that helped set the stage for the Pennsylvania-to-New Jersey LNG project?

• Economics: Opponents of the Wyalusing-to-Gibbstown project hailed a recent ruling by Ireland’s High Court that squashed permits for a planned Fortress LNG plant in Shannon, forcing the company back to drawing board and opening a window for the country to ban LNG imports entirely.However, that project in Ireland is but one of numerous overseas LNG projects Fortress has: It already has facilities in Jamaica and in Miami, Fla., and is developing terminals in Angola, Mexico, Nicaragua and Puerto Rico.

  There’s also the question of supply and demand.

  During the summer of 2020, monthly exports of LNG from the United States were the lowest in 26 months but have since rebounded thanks in part to an easing of Covid-19 restrictions and a drop in global supply because of unplanned outages, the U.S. Energy Information Administration reported.

  In November, LNG exports surpassed the previous record set in January 2020 but whether those trend lines hold for the future remains to be seen.

• The Rocket-Courier newspaper reported in July that New Fortress confirmed that construction of the Wyalusing project was on “pause” while additional planning and coordination with subcontractors continued.In September, the company affirmed that it still intended to move ahead, the newspaper reported.

  “We look forward to sharing more in the coming months and ahead of the planned construction in 2021,” a company statement said.

  The company said that, as of the end of 2019, it had spent $165 million to develop the Wyalusing plant.

  In a federal filing in October, the company said production of LNG at the Wyalusing plant was now not expected to begin until the first quarter of 2022.

  New Fortress did not respond to a request for comment about its latest timetable to be in operation.