Penneast's study says pipeline will have long-lasting economic impact

Penneast's study says pipeline will have long-lasting economic impact


The proposed PennEast pipeline will have lasting economic impact during and after its construction, according to a study released on Feb. 9.

The study was done by Drexel University School of Economics and Econsult Solutions, Inc., both in Philadelphia, Pa. for PennEast Pipeline Company, LLC.

Penneast has proposed a 114-mile-long natural gas pipeline from Pennsylvania to New Jersey. The pipeline would run through Hunterdon and into Mercer County. The project would provide gas markets in eastern Pennsylvania, southeastern Pennsylvania, and New Jersey with natural gas that is produced from Marcellus shale in Pennsylvania.

"We forecast the PennEast Pipeline Project to generate a significant positive economic impact in Pennsylvania and New Jersey, increasing economic activity and supporting new jobs. Construction and ongoing operations of the Project will be economically beneficial to the counties in which the pipeline will traverse and both states as a whole. In addition, the possibility for increased income derived from potentially lower energy bills could induce spending in the regional economy and spur an even broader and larger economic impact," the study concluded.

During construction local labor will be used whenever possible. "We estimate the total economic impact in both states from design and construction to be $1.62 billion, supporting over 12,160 jobs with $740 million in wages," the report said.

The states would benefit from the collection of income taxes from those wages.

Operation of the pipeline would create some permanent jobs as well, although most would be in Pennsylvania. Across New Jersey, operations of the project are predicted to generate a total potential estimated annual economic impact of $2.1 million, supporting 10 jobs with $800,000 in wages.

"An even greater recurring economic benefit to New Jersey and Pennsylvania homeowners and businesses will come from significant savings in utility bills that will result from an expanded and stabilized supply of natural gas. Even if residents do not use natural gas directly, the project is expected to lower gas prices and in turn lower the cost of electricity produced by plants that use gas as fuel," the report states.

Peter Terranova, chairman of the PennEast Pipeline board of managers, said the gas will be produced within 100 miles of the end user. "It's much better to move gas 100 miles than 2,000 miles," he said.

Terranova said more people will have the opportunity to start using natural gas, but the biggest use would be the power plants, "so everybody gets lower costs."

"For each $10 million in increased disposable income, a total of $13.5 million in economic impact could be generated, supporting 90 jobs," the report said.

The study used detailed budget projections provided by PennEast and used an "input-output" model designed to estimate the economic impact that the design and construction activity will generate.

Another study is underway and will focus more on the economic impact on consumers. Results of that study should be released in a few weeks.

If all approvals are granted, construction is expected to begin in the spring or summer of 2017 and be completed that fall.

The proposed pipeline has raised much opposition from residents. Holland, Alexandria, Kingwood, Delaware and West Amwell townships are on the route and many residents and officials in those and other municipalities don't want the line constructed, for a variety of reasons. And environmental groups are strongly against it.

The manner in which the gas is harvested is also highly controversial. Hydraulic fracturing ("fracking"), involves injecting liquid at high pressure into subterranean rocks to force open existing fissures and extract oil or gas.

Environmental consequences of fracking include contamination of ground water, depletion of fresh water, degradation of the air quality, the potential triggering of earthquakes, noise pollution and surface pollution, opponents say.

Federal Energy Regulatory Commission will hold a scoping meeting for the PennEast pipeline draft environmental impact statement on Thursday, Feb. 26 at the Grand Colonial restaurant and catering hall, 86 Route 173 west, Union Township, Hunterdon County.

There is also a meeting set for Feb. 25 in Mercer County at the West Trenton Ballroom, 40 W. Upper Ferry Road.

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