JC vs. the pipeline
City takes federal agency to court to try to stop pipeline construction
by E. Assata Wright
Reporter staff writer
Dec 23, 2012 | 3976 views | 0 0 comments | 10 10 recommendations | email to a friend | print
Spectra Energy has begun work on its controversial pipeline project in the Newport community.
Spectra Energy has begun work on its controversial pipeline project in the Newport community.
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Attorneys for Jersey City have filed a petition with the U.S. Court of Appeals in Washington, D.C. asking the court to review the government’s approval of a natural gas pipeline that is being routed through Jersey City.

This petition, officially known as a Petition for Review, was filed by the city on Dec. 12. The court is now awaiting a response from the Federal Energy Regulatory Commission (FERC), the agency that granted approval for the pipeline to be built.

For more than two years, Mayor Jerramiah Healy and the city have argued that this pipeline, which would be 30 inches in diameter and with a possible pressure of 1,200 pounds per square inch, is the first of its magnitude to be built in a densely-populated urban area near several transit hubs such as the Holland Tunnel, the New Jersey Turnpike, and the Hoboken NJ Transit and PATH terminals.

Most of the natural gas carried by the pipeline will serve customers of Con Edison in New York, but Spectra – the owner and builder of the pipeline – has reached an agreement to supply gas to the City of Bayonne, whose officials backed away from their initial opposition to the project.

After FERC approved Spectra Energy’s pipeline project in May, Jersey City filed an appeal asking the agency to reconsider. This appeal was denied in mid-October and the city had 60 days to file documents in court if it planned to fight the pipeline through legal channels.
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The promise of construction jobs and other economic investments to the region was among the arguments that Spectra used to win the support of many construction workers and unions.
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In the petition filed Dec. 12, the city has essentially argued that since FERC’s annual budget comes from fees it collects from the energy industry it regulates, its decisions are biased in favor of that industry and do not adequately protect communities like Jersey City from problems that may arise from natural gas pipelines and other energy-related infrastructure.

“The city believes that FERC long ago abandoned its regulatory responsibilities in favor of becoming a business partner to [energy] companies like Spectra,” said Derek Fanciullo, an associate corporate counsel for Jersey City. Fanciullo is the lead attorney working on the Spectra case on the city’s behalf. “The city strongly believes this violates the United States Constitution, as well as other federal laws.”

For its petition, the city has partnered with attorneys for several environmental organizations and the Jersey City-based grassroots group No Gas Pipeline. At this time, the city has turned to in-house legal counsel to fight the FERC decision and is not currently expected to retain an outside attorney.

Conflict of interest?

According to FERC’s Congressional Performance Budget Request for FY2012, the agency “recovers the full cost of its operations through annual charges and filing fees assessed on the industries it regulates. This revenue is deposited into the [U.S.] Treasury as a direct offset to its appropriation, resulting in no net appropriation.”

This detail regarding FERC’s funding serves as the basis of the city’s legal fight against the agency and its approval of the Spectra pipeline.

“While the city does take issue with a number of specific components of FERC’s approval of the pipeline, we are primarily concerned with the biased nature of the whole FERC approval process,” Fanciullo said last week. “In effect, FERC generates and increases its budget through approving pipelines. The more it approves, the more money the agency receives. There is case law to support our position and, in general, the courts seem to be migrating toward the position what we’re asserting.”

Project moving forward as legal battle begins

The legal battle against the pipeline is just beginning. Meanwhile construction for the Spectra project is well underway.

Spectra broke ground for the pipeline in Bayonne in July and more recently broke ground in Jersey City near Caven Point and the Newport neighborhood near 14th Street and Washington Boulevard. The company has already received most, if not all of the specific approvals it needs to build in Jersey City.

Under the plans approved by FERC, the pipeline will include 19.8 miles of new and replacement pipes, six new stations, and other related modifications in Jersey City, Bayonne, and Linden. In Jersey City, the underground pipeline route would run through nearly every municipal ward and near such sensitive areas as Jersey City Medical Center, several schools, the Holland Tunnel, the New Jersey Turnpike, and transportation infrastructure near the Jersey City-Hoboken border.

The pipeline would cross the Hudson River into New York to connect the company’s existing pipeline to Manhattan and Staten Island, supplying customers of Con Edison.

Spectra has also said that it will supply energy to power facilities operated by Bayonne Plant Holding and boilers at the International Matex Tank Terminals, also in Bayonne.

But because of the pipeline’s close proximity to sensitive areas, local activists and city officials have argued that a natural gas explosion could cause mass casualties and significantly damage important transportation infrastructure.

Healy has argued that the potential hazards posed by a gas pipeline could hurt future commercial and residential development in the city. The city has long argued that the pipeline should be re-routed underground and under the Hudson River.

Despite these concerns, Spectra received approval from FERC and permits from the New Jersey Department of Environmental Protection.

The promise of construction jobs and other economic advantages to the region were among the arguments that Spectra used to win the support of many construction workers and unions. Two years ago, Spectra officials claimed the project would create more than 5,000 jobs in the region, including more than 2,300 in Jersey City alone.

When asked last week how many jobs have been created in New Jersey to date – and how many of those jobs have gone to Jersey City residents – Spectra spokeswoman Marylee Hanley said, “The [project] has brought, and will continue to bring, a significant number of direct and indirect jobs to the New Jersey and New York region throughout its completion in November 2013. To date, there have been in excess of 1,100 people directly working on the project, which includes project staff and contractors. Additionally, the project supports a number of local subcontractors and vendors who provide materials and services.”

Hanley did not give any estimates regarding where these 1,100 workers live and did not name any specific New Jersey-based contractors or subcontractors working on the project.

Since the city’s Petition of Review is against FERC it is now up to the agency to respond to the petition in court.

E-mail E. Assata Wright at awright@hudsonreporter.com.

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