Opponents of Pennsylvania-New Jersey LNG Plan Cheer Federal Ruling
| March 24, 2021
Critics of a plan to transport liquefied natural gas from northeastern Pennsylvania to a port on the Delaware River in New Jersey welcomed a recent federal ruling that they say could put up significant regulatory speed bumps – or possibly derail the project altogether.
The ruling, by the Federal Energy Regulatory Commission, involved an LNG facility in Puerto Rico run by New Fortress Energy. The company had sought a ruling that FERC lacked jurisdiction over the facility but the commission ruled on March 19 that it does have oversight.
That decision is significant for what bearing it might have on another New Fortress Energy-related project, which would process natural gas at a plant in Wyalusing, Pa., liquefy it through super-low temperatures and then send it via rail and/or highway to a port in Gibbstown, N.J.
“With the caveat that this is speculation, but informed speculation, I will say yes, this does have an impact on Wyalusing,” said Jordan Luebkemann, an associate attorney for Earthjustice, which opposed the New Fortress special permit allowing LNG to be transported by rail.
New Fortress has sought to have FERC disclaim jurisdiction over the project, which has already gained numerous federal, state and local permits, including one from the Delaware River Basin Commission.
A full-fledged FERC review could set off environmental assessments that could consider the ecological, cultural and human impacts of the project.
That, in turn, could also mean opportunities for litigation to challenge the quality and thoroughness of those reviews – all of which could amount to added time, scrutiny and chances for the project to be delayed or derailed.
A New Fortress spokesman did not respond to a request for comment.
The company has two filings pending before FERC seeking declarations that both the Wyalusing and Gibbstown sites are free of its oversight.
A FERC spokeswoman, Tamara Young-Allen, said the filings remain pending. Citing regulations against discussing the timing of a proposed action, she would not estimate when the commission might render rulings.
It was not immediately clear how long the permitting process might take if FERC were to assert jurisdiction over the Pennsylvania and New Jersey sites.
It’s possible the commission could assert jurisdiction over both, one, or neither of the sites.
Critics of the Pennsylvania-New Jersey project said the Puerto Rico plant has parallels to the planned facilities in Wyalusing and Gibbstown and expressed hope that, under a Biden administration, FERC will take a harder look at the New Fortress plans.
Diana Dakey, an activist with the group Protect Northern PA, said that FERC asserting jurisdiction in the Puerto Rico case was a “positive.”
In a recent federal filing, New Fortress said it had spent nearly $160 million on the Pennsylvania-New Jersey project. The filing said the company had “not issued a final notice to proceed” to its engineering, procurement and construction contractors.
In an earnings call on March 16, Wesley R. Edens, the co-chief executive officer of Fortress, the parent company of New Fortress, said: “Pennsylvania is a project that we think has a lot of merits. We haven’t given up on that by any means.”
The FERC ruling on Friday turned on several technical regulatory questions. Among others, the commission rejected arguments by New Fortress that it was exempt from jurisdiction based on the acreage the plant in Puerto Rico occupies, other federal permits that were required to construct it and questions about whether the plant relied on a pipeline.
The commission directed New Fortress to file an application within 180 days. It also found that it was “in the public interest” to allow the plant to continue operating while the application was pending, and that, presuming the company complied with the order, no enforcement action would be merited.
In its ruling, the commission also sent a signal that LNG operators should tread carefully.
“Given the rapid growth in interest in LNG and the wide variability among facility configurations, we acknowledge that the commission’s precedent regarding its jurisdiction over LNG facilities is not easily extrapolated from one facility to another,” the decision reads.
It said its order should clarify that situation but added: “At the same time, we emphasize that uncertainty regarding the scope of our authority does not give an entity carte blanche to purse an action which ultimately might be found to violate the (Natural Gas Act) – while New Fortress had informal discussions with commission staff, it chose not to seek a declaratory order from the commission on its jurisdiction before constructing its facility.”
One of the commissioners, James P. Danly, dissented, asking what remedy FERC was considering in its ruling.
He said the ruling would mean forcing New Fortress to file an application, the contents of which “we cannot anticipate, and then roll the dice and see if New Fortress Energy can be allowed to remain in operation.”
“I question the wisdom of this course of action,” he said.
Opponents of the Pennsylvania-New Jersey project had been following FERC’s actions on the Puerto Rico plant closely and said the decision gave them hope.
Tracy Carluccio, deputy director of the Delaware Riverkeeper Network, said attempts by New Fortress “to avoid regulatory controls and oversight by FERC is typical of NFE’s standard operating procedure – try to avoid regulation, skirt reviews, and fly under the radar to ease their path to operation.”
She added that New Fortress, which indicated in federal filings in October that it expected Wyalusing to be operational by the first quarter of 2022, “wasted a lot of time when they could have been going through the FERC process and now have to tack it on in the 11th hour, just when they planned to be operating to turn a profit.”
“This could be a very expensive mistake for them,” she said.