Since last spring, residents all over the southern tip of New York have been notified by their utility, National Grid, of a gas moratorium — meaning there are no new hookups for commercial, industrial, and residential customers. Businesses and home buyers in Brooklyn, Queens, and Long Island cannot get the fuel they need for heat, hot water, and cooking. Affordable housing projects are stalled, small businesses are losing hundreds of thousands, and large developments are forced to rely on higher emitting sources to heat their buildings.
New York’s inability to acquire gas has been driven, in part, by state politicians, who have denied approval to build new gas infrastructure — leaving residents to foot the bill. New Yorkers are grappling with the consequences of the gas shortage. The lack of sufficient energy is jeopardizing new development and stifling growth in communities. Much like New York, our region is struggling to build the infrastructure required to meet our growing energy demands. Without an adequate supply of energy, one day, down the road, we could face a similar reality to that of our neighbors in the Northeast.
Our region shouldn’t follow in the footsteps of New York. Critics will say new pipeline projects like PennEast are unnecessary and that our region has more than enough pipeline capacity — but experts disagree. For instance, the region’s independent power grid operator, PJM, says PennEast is needed for their “grid reliability” and fuel diversity.
Moreover, if we had a sufficient supply of natural gas in New Jersey, prices would remain stable regardless of the peak or off-peak demand seasons in the winter and summer. An economic study by Concentric Energy Advisors, an independent firm specializing in energy markets, has shown that the region would have saved $1.32 billion across electric bills, businesses, and gas utility customers had PennEast been in service during recent winters.
Historically, major pipeline projects have not been built “on spec.” To be economically viable, pipeline project developers require a significant portion (over 95%) of the pipeline capacity to be confirmed in a long-term contractual commitment from end-users before the pipeline developer will commit to investing. The gas delivered by PennEast was fully subscribed five years ago with contracts between local gas utilities, power generators, and energy companies in our region who provide reliable energy to millions of homes and businesses. After five years, demand has only increased, and supply hasn’t kept pace.
Local utilities, like New Jersey Natural Gas, told the New Jersey Board of Public Utilities that last fall, their supply forecasts showed they may not have enough gas to meet their customer needs by 2021. What’s worse is that supply disruptions in April 2016 cut gas flows by 64%, which, had that occurred in the winter, would have forced 250,000 homeowners in New Jersey to lose heat for weeks. And just in the last weeks, PSEG, which serves 1.8 million gas customers in New Jersey, also told the N.J. Board of Public Utilities that they will not have enough gas in the 2021 range.
The Chamber of Commerce for Greater Philadelphia recognizes the importance of infrastructure projects as a catalyst for growth. The chamber’s Greater Philadelphia Energy Action Team (GPEAT), a group of 150+ industry leaders across the region, has championed projects like PennEast that present real economic benefits and job creation opportunities for our region.
Not only will PennEast provide a much-needed supply of affordable energy to families and businesses across New Jersey and Pennsylvania, but the project also has the potential to support industrial development and grow good-paying jobs in our region.
Prospective energy-intensive manufacturing businesses considering our region for an expansion project need an available, uninterruptable, and affordable natural gas supply. Price stability for natural gas in the region is also a strong consideration for potential industrial developments. Projects, like PennEast, are essential to continue facilitating the development of energy-intensive manufacturing in the greater Philadelphia region.
Greater Philadelphia cannot afford a moratorium on growth; our residents and businesses need a supply of sustainable, affordable energy to power our region.
Rob Wonderling is the president & CEO of the Chamber of Commerce for Greater Philadelphia and represents the chamber’s Greater Philadelphia Energy Action Team (GPEAT).