This has not been a good year, personally or for the things I care about.
But there is still a lot of beauty and love out there, for which we are thankful for.
This has not been a good year, personally or for the things I care about.
But there is still a lot of beauty and love out there, for which we are thankful for.
We have noted that extraordinarily corrupt complex regulatory games have been played by Pinelands Commission Executive Director Wittenberg to promote the South Jersey Gas pipeline.
I don’t want to go into the regulatory weeds to explain all the details on this latest example.
Here’s the story:
During the review of the “revised” South Jersey gas pipeline application, it was discovered that Upper Township had violated the Pinelands Comprehensive Management Plan (CMP) by illegally constructing buildings without Commission approval.
Under the CMP rules, the bottom line is that until this violation is remedied and approved after the fact by the Pinelands Commission, the South Jersey Gas pipeline application can not proceed.
Talk about a big OOPS!
Until the Commission formally acts to remedy the violation by Upper Township, the SJG pipeline can not proceed.
All the Commission needs to do is find a way to sit on this “after the fact” approval – and just not approve it.
There has been a LOT of negative press, editorial, and hand wringing by certain Pinelands Commissioners and by Pines advocates that the Commission has been stripped of its power to vote on the SJG pipeline application.
They all correctly complain that the Pinelands Commission will not be able to vote on the SJG pipeline project.
At the same time, Pines advocates have long noted the Commission’s lack of enforcement powers for the kind of blatant violation of the CMP that Upper Township engaged in.
So, what does the Commission staff do about it’s inability to vote on the SJG pipeline and its lack of formal enforcement power?
Do they use the leverage that now exists by the need to approve the Upper Township after the fact remedy?
I can’t imagine more leverage or a stronger enforcement power than to be able to block the SJG pipeline by simply doing nothing.
That’s right – all the Commission has to do is to do nothing. Simply don’t approve the Upper Township violation after the fact.
The rationale to delay acting on the Upper Township matter could have been that the Commission would have to amend the CMP to include enforcement sanctions and require mitigation for such violations.
But the staff at the Commission are in the tank for SJG and have engaged in what amounts to another unilateral staff usurpation of the Commission’s powers, obviously again to promote the SJG pipeline.
Knowing that all they need to do was NOTHING, what did the staff recommend that the Commission do?
Of course, they recommended APPROVAL, which would allow the SJG pipeline to proceed: (Nov. 23, 2015 letter)
Note that the staff letter from Chuck Horner, head of Regulatory Affairs, very clearly states that it is sent “on behalf of the Commission’s Executive Director” – that is code that can only mean that Wittenberg put a gun to his head.
If you read the boldface portion of this letter, it is almost as if Mr. Horner KNOWS this is wrong and invites legal challenge.
(why would staff send their recommendation to the Mayor before the Commission votes on it? That surely undermines the Commission.).
Let’s see what the full Commission does with this at their next December 11, 2015 meeting.
My guess is that they will duck the controversy and rubber stamp another Wittenberg coup.
Perverse Incentives to Climate Policy, High Capital Cost Death Spiral, Stranded Assets
I was just reading all the public comments on the Energy Master Plan Update that Christie BPU totally ignored in the Update, and came across an interesting point about how the fundamental economics of gas pipelines work at cross purposes with and undermine both sane economics and climate and energy policy.
(the huge climate footprint of gas is beyond the scope of this economic oriented note).
I call the dynamic an economic death spiral.
NJ dealt with exactly the same economic and environmental dynamics during the debate on garbage incinerators.
In a nutshell, to finance the high capital costs and risks of garbage incinerators and assure that they would operate cost effectively, a fixed large daily volumes of garbage had to be guaranteed to be delivered to the plant by “put or pay” contracts and DEP regulations known as “waste flow”.
These daily waste delivery guarantees resulted in perverse incentives that directly undermined more environmentally sound efforts to reduce and recycle waste. We called it the need to feed the beast.
Then the fatal blow was struck: after the project financing and contracts were executed, the US Supreme Court struck down “waste flow” laws, so cheaper disposal alternatives from nearby Pennsylvania landfills emerged.
At the same time, lower cost recycling increased.
The effect of cheaper alternatives created what was called “leakage”, where waste that was planned to go the incinerator found cheaper alternatives.
This diversion of waste flow increased the effective cost per ton at the incinerator, which provide additional economic incentive to divert even more waste to alternative disposal and recycling alternatives, resulting in uneconomic incinerators and stranded assets the public was forced to pay for.
The death spiral.
Turns out that gas pipelines have exactly the same death spiral economics – as EDF warned the BPU:
New natural gas-fired power plants and interstate pipelines are long-lived resources with useful lives (and depreciated) over forty years or longer. New pipelines, for example, must apply for and obtain FERC approval, in the form of a Certificate of Public Convenience and Necessity, prior to commencing construction. Beforc a proposed new pipeline can apply for a FERC Certificate, it must execute contracts providing sufficient revenue from shippers to pay for the full cost of the project. Because the costs of constructing a new pipeline (particularly a greenfield project) arc so great, these contracts (“precedent agreements” providing for binding transportation service agreements) must be of long duration, typically around 20 years or longer. In precedent agreements, the costs are almost entirely imposed on shippers through take or pay obligations whereby daily pipeline delivery capacity is reserved and paid for by shippers for every day over the period of the transportation scrvice agreements — whether or not those services are used.
,A primary consequence of take or pay transportation agreements is that the fewer the days and the lower the quantities shippers take on those days as natural gas dclivery from the pipeline (i.e., the l0ver the load factor of use), the higher the effective incremental cost of the transportation service per dekatherm delivered or megawatt hour generated using the gas, the effective “cost-in-use.” The fewer megawatt hours generated, the higher the effective incremental, per megawatt hour, cost to customers. There may be a point at which the extent of utilization of new capacity renders its long term cost to be lower than the alternatives. However, this may rcquire a much higher level of utilization than can be reasonably expected (depending on the size of the capacity addition) and will be challenging to predict accurately into the futurc given the ongoing technologically and customer driven trends in the market. Natural gas (the commodity) may be priced relatively low but pipelines to transport it are very expensive, especially when the gas is used primarily to address peak demand conditions or as a firming resource to balance lower cost renewable power generators. Therefore, extreme diligence must be exercised in determining the size of need and the duration of use of new pipeline capacity, especially insofar as fixed long term obligations would be imposed on retail ratepayers. Any continuing presumption that new natural gas pipeline infrastructure will provide price benefits must be supported by analysis, and should consider the stranded cost risk inherent to expensive long-lived infrastructure.
No environmental group has done more harm on so many issues via reliance on markets and economics and corporations.
But this EDF economic analysis is sound and works for the public interest and climate sanity.
But the Christie BPU ignored it anyway.
Do pipeline opponents really think corporations or governments are going to give them a heads up?
Opponents focus on local governments while ignoring State permits
[Update below – reply from CAPP]
For months now, I have been writing about and talking to PennEast pipeline opponents, urging them to get to work NOW, BEFORE PennEast submits permit applications to the NJ DEP.
The reasons for that are twofold:
First, by acting right now, opponents can get out in front and define the overall expectations, the applicable regulatory requirements, a set of technical issues, methodologies, and requirements they think the pipeline must address.
This is especially critical in these pipeline reviews, because environmentalists must force DEP to conduct a more thorough review and enforce water quality standards in land use programs, something that DEP has not done in the past.
Getting active now also generates technical documents and information that is very useful and that can drive informed public criticism and fuel the public campaigns to target pressure on DEP. Keep those OPRA’s going!
There are no secret regulatory kill pills – don’t think Pilgrim’s lawyers don’t know all the angles and that you’ll surprise them at the 12th hour. No way.
Secondly, the public portion of the permit process is a total sham.
By the time a draft permit is “public noticed” and distributed for public review and comment, the deal is done.
The public comment and public hearing process on a draft permit is a sham – a dog and pony show.
Once DEP issues a draft permit, they are pretty much locked in – only minor changes can be made at the margins – if only to save DEP’s face. Like any bureaucracy, they are loath to admit error and listen to the public. There are also legal issues involved regarding how far DEP can go with respect to making changes in response to public comment before having to withdraw the draft permit and start all over.
Besides, at that point, you are stuck with a final permit and pipeline – not a denial.
The Pre-Appplcation Process is Key
In fact, the overall framework, the outcome expectations (YES, MAYBE, or NO), and the applicable regulatory requirements and technical issues are all decided during the pre-application phase!!
DEP holds private meetings with a permit applicant called “pre-application meetings”. The public is excluded from these critical meetings.
DEP has tipped their hand about all that pre-application meeting stuff in the FERC review process, where meetings between DEP and PE on DEP permit issues are revealed.
In a post mortem praising activist, I wrote:
VI) Improving the decision making process
There were several problems revealed during this debate – here are some of the key flaws that must be fixed:
1) the pre-application and review process suggests agency capture – far more transparency and public participation are required for major projects;
2) the Commission relied far too heavily on information submitted by the applicant and lacked independent science and technical review
[NJ Natural Gas also abused the Pinelands pre-application process.]
The South Jersey Gas pipeline project began pre-application meetings around April 2012 and had been before the Pinelands Commission staff for 15 MONTHS before any public criticism was mounted in June/July 2013.
This is exactly the abuse I’ve been trying very hard to avoid with the PennEast pipeline.
So, my head exploded just exploded when I read this, from the Pilgrim pipeline coalition:
Did the CAPP folks really think Pilgrim corporate people or DEC were going to give them a heads up?
Tell them: hey guys, we’re going to submit our permits, so you can begin your public campaign attacking them now!
I realize that these regulatory issues are complex – but ENGO’s have professional staff, don’t they?
They surely have learned nothing and continue to make big mistakes.
It is getting very hard to take.
[Update – CAPP webmaster Joe Testa just sent me this email because he was unable to comment on the post. I share it and my reply for readers. Joe wrote:
I am sorry that your head has unnecessarily exploded when you read about CAPP’s response to the Pilgrim Pipeline filing in New York.
In brief: duh, no, the CAPP folks were not expecting a heads up from Pilgrim or DEC before starting a public campaign attacking them. In case you hadn’t been watching …CAPP activists have been actually been working on a public campaign and been busy engaging local public officials to join in the long battle against the pipeline. The 59 towns along the pipeline route (and nearby) did not spontaneously, independently decide over the past year or so that the pipeline would be a bad thing … they were pushed and prodded by CAPP actiivsts, who have privately worked with local officials and engaged in public demonstrations of opposition.
This bit about the ‘tell us 3 months later’ is just the last chapter of the saga. For you to imply that CAPP has been waiting in Sleepy Hollow, waiting for the good folks at DEC & Pilgrim to wake us out of hibernation, is just flat-out wrong.
Gee, I wonder why CAPP’s own post complained – in the headline – about learning of the permit submission 3 months after it occurred. That kind of proves my point, no? i.e. that they are not involved in the NY DEC pre-application process.
That’s great Joe – but you’ve confirmed my criticism.
I’ve been very critical of the activists’ focus on local bullshit while they ignore they only state regulatory power that can kill the pipeline.
[Update: 11/23/15 – my smart readers informed me that the Bergen Record article I criticize below was generated by a recent League of Municipalities conference panel.
Here is the League’s analysis of the regulatory issues the panel discussed.
The League made one serious error by claiming that DEP environmental review of gas pipelines is preempted by FERC.
As I’ve written numerous times now – backed up by case law and statute and EPA guidance – the DEP is NOT preempted by the Natural Gas Act with respect to the exercise of State delegated Clean Water Act Section 401 and 404 powers or Coastal Zone Management Act powers.
By the same token, I have muddied the waters with respect to the preemption issue on oil pipelines. I suggested that preemption of local land use powers would result from BPU petition under the MLUL. That petition process applies only to gas pipelines as public utlities, it does NOT apply to oil pipelines.
However, it is likely that oil pipelines have eminent domain powers and preempt local land use review powers under other statutes and Court decisions, as discussed in the Leagues’s analysis.
Regardless, I find it remarkable that the League of Municipalities is better informed and BETTER FOCUSED than NJ environmental groups BY CALLING ON DEP TO CONDUCT STRICT ENVIRONMENTAL REVIEWS. ~~~ end update]
When environmental groups began their campaign against the Keystone XL pipeline, they did not expect the Mayor and Town Council of Fort Peck Montana to pass a local buffer ordinance to protect the Missouri River from the pipeline and thereby kill it.
[In case it is not obvious and clear – which it is not to a reader who just sent me an email – I am RIDICULING the notion of expecting a town in Montana to use a buffer ordinance to kill KXL. That does NOT mean I oppose a Town in Montana and the people living there from doing events and activism opposing the KXL. But I would urge them to focus their political energies on President Obama.]
Similarly, although the KXL required approval by the US State Department, pipeline opponents didn’t primarily focus on lobbying the Secretary of State or hold protests and get arrested at the State Department.
They targeted President Obama and held protests at the White House.
When Shell Oil announced plans to drill for oil in the arctic, environmentalists did not expect towns in Alaska to pass local ordinances to block the drilling.
While environmental groups did engage obscure permit requirements – such as EPA air permits and USFWS drilling restrictions, the public campaign, protests, and the media all focused on President Obama.
Closer to home, when NY anti-fracking activists challenged fracking, they targeted Governor Cuomo.
They won. Cuomo issued a moratorium
For the same reason, off shore LNG opponents focused on Governors Cuomo and Christie’s regulatory power to veto the project.
They won. Cuomo vetoed the project (even Gov. Christie vetoed the prior proposed project, before he was running for President).
So why on earth are NJ oil and gas pipeline opponents and the press ignoring these huge wins and totally ignoring the correct target who has the political and regulatory power to kill the various pipelines?
[If the reader that just sent me that email needs a translation: this means mounting a public campaign targeting Governor’s Cuomo and Christie to use their Clean Water Act powers to deny State DEC and DEP permits, OK?]
In sharp contrast, their NY State colleagues get it right.
Why are they instead focusing all their resources, campaigning and organizing efforts on local Resolutions, local ordinances, symbolic political stunts like Legislative Resolutions, opinion polls, jobs impact studies, and FERC reviews under NEPA?
Today’s Bergen Record story is another perfect example of that total failure:
I found this particularly galling:
It’s a question about the possible extent of municipal power that appears untested in New Jersey — and one that activists say is crucial to protecting watersheds that supply millions of state residents.
The extent of my injuries if I jump head first off my roof onto the pavement is an untested question too.
[NJ is not Pennsylvania – we have no Constitutional Right to a healthy environment. The PA Supreme Court decision overruling Act 13 preemption in favor of home rule regulation fracking won’t work here. The NJ MLUL expressly provides for “utility” preemption of local power via petition and BPU routinely grants preemption petitions. Linear utility projects are exempt from the Highlands Act, but not DEP regulation.]
The legal responsibility to protect the water supply for people of NJ rests with the NJ DEP, pursuant to state and federal laws. Local governments have very little responsibility or legal power in this regard.
And just who are these “activists” who say this is a crucial issue? Whoever they are, they don’t know what they are talking about.
The reporter – in perhaps the biggest buried lead ever – tangentially refers to some of the real issues at play, but fails to focus on “the decider” or even mention the most crucial tool to kill the pipeline.
After emphasizing local controls, way down towards the end of the story, we finally read this:
However, under state law, an interstate oil pipeline — unlike a natural gas pipeline — would be subject to full environmental review including wetland permits, Highlands approval and Flood Area Hazard Control rules.
On top of burying the lead and real story, the reporter got it only one quarter right overall, and made a crucial error with respect to gas pipelines.
Yes, oil pipelines are subject to environmental review and State permits.
[NY has an environmental impact statement review law called SEQRA – NJ does NOT. So it is not accurate for the story to state that the pipeline “would be subject to full environmental review”. That distinction is as important as oil v. gas and interstate v. intrastate and State v. local tactics.]
But the story left out the most important State regulatory power under the Clean Water Act and the fact that the NJ reservoirs and waters of the Highlands Preservation Area are all “Category One” (C1) waters protected by federal Clean Water Act based NJ State Surface Water Quality Standards (SWQS) from “any measurable or calculable change in existing water quality” (physical, chemical and biological characteristics). Enforcement of those SWQS could kill the pipeline. As I’ve written, Flood Hazard rules can not.
and there are no regulatory teeth in EPA Sole Source aquifer designation.]
The story got it flat out wrong with respect to natural gas pipelines.
Natural gas pipelines are subject to review by FERC under federal law and local ordinances are preempted.
But the State DEP has power to kill a FERC regulated interstate natural gas pipeline under Section 401 of the Clean Water Act that is not preempted.
I’ve been writing about this for months, so it is absurd that many of the NJ environmental groups opposing pipelines apparently still don’t get it and keep getting it wrong.
This is a major failure on their part and it is becoming intolerable.
Finally, to top it all off, the story closes with reporting this major flaw in pipeline regulation, which is attributed to Inside Climate News:
But the anti-pipeline group’s website cites an Inside Climate News finding that 135 inspectors oversee 2.6 million miles of pipelines, and only one fifth of that length has been inspected in the past eight years.
That really irks me because my organization, PEER, was the group that filed the FOIA and first disclosed those facts and broke that story, see:
[Update 11/23/15 – I just tracked down the source of the mistake. It rests with the Bergen Record reporter or editors, because the Inside Climate News story correctly attributed our work as follows:
According to an analysis of inspection records by the nonprofit Public Employees for Environmental Responsibility (PEER), only a fifth of the nation’s 2.6 million miles of pipeline have been inspected by PHMSA or its state partners since 2006. PEER obtained the records through the Freedom of Information Act. ~~~ end update]
It’s bad enough that the “activists” and the press get the regulatory issues and political targets all wrong, but then they cite our work without attribution.
[PS- this has nothing to do with a small D democratic “grassroots activists strategy” versus a top down, Trenton based, elite professional, or insider lobbyist strategy.
Grassroots opposition to pipelines is necessary – but activists need to select the proper target: both political and regulatory.
It also has nothing to do with trying to limit and narrow the focus of activists to just DEP or water issues.
Again, there are multiple good reasons for opposing pipelines.
But regardless of the reason why people oppose a pipeline, they should be focused on the best tactics to KILL THE PIPELINE.
I’ve been doing this stuff for 30 years – probably longer than the lives of many of the well meaning but misguided activist that seem to be driving the news coverage.
pps – What is the true objective of the activists? To win? Or to lose and build on resentment for some larger battle?
To win? Or to canvass, organize, and fundraise?
To win? Or to cut a deal that avoids preserved lands, maximizes co-location and provides a huge pot of mitigation money?
Does the organizing model of these activists seek to build power by a win (i.e. killing the pipeline) or by a loss, i.e. reaping the anger of those who are pissed off after the pipeline is approved?
ppps – I just got a question from a Pinelands pipeline activist – both those are intrastate pipelines that need Pinelands Commission approvals.