Landowners tear up PennEast leases as New Jersey shelves permit application

  • Jon Hurdle
A landowner rips up an offer of compensation from PennEast at a rally February 2, 2018.

A landowner rips up an offer of compensation from PennEast at a rally February 2, 2018.

Landowners along the PennEast Pipeline route in Pennsylvania ceremonially ripped up leases on Friday, saying they will not agree to the company’s plans to build the pipeline on their land – at the price offered, or in some cases at any price.

The event came the day after New Jersey’s Department of Environmental Protection wrote to PennEast saying the company still has not supplied the information needed to process its application for a wetlands permit, so the matter is “administratively closed.” The regulator last year rejected the application for the same reason, and asked the company to reapply.

At a ceremony on a farm near Bethlehem, around 20 local landowners tore up leases – some real and others substitutes — and scattered the pieces on the floor of a barn. They said they will not sign leases that would allow the company to take easements on their land.

The event took place three days before PennEast’s deadline for leases to be agreed and about two weeks after federal regulators granted conditional approval for the company to begin construction for the project.

Guy Wagner, owner of the Bethlehem farm, said PennEast offered him $95,000 for 5.3 acres of his 107-acre corn and soybean property, where he has farmed for 43 years. He called the offer “a pittance” that did not compare with nearby property prices. He said a neighboring farm sold 12 acres in December for $1.2 million.

Wagner said he would not sign a PennEast lease at any price because the project would hurt the value of the property.

“There’s no amount of money that really makes it right,” he said. “It’s a bad deal all around for the landowner, there’s no upside to it.”

Wagner said three pipeline projects have affected his family’s land since the 1950s and each has resulted in long-term damage, despite the builders’ promises that pipeline rights of way would be restored.

“That right of way will never be farmed profitably again,” Wagner, 65, said in a statement. “What they want to pay me for damages and loss of crops is terribly insulting. You can’t replace this, it’s my retirement and it’s my legacy to my children.”

The pipeline, which would carry natural gas about 120 miles from Luzerne County, Pa. to Mercer County, N.J., has been strongly opposed by some communities along the route. They argue that there is no need for the additional natural gas supply from a project that would damage private property and endanger waterways along its route.

But PennEast says it has secured orders from utilities to buy most of the gas, and that end-use customers in New Jersey will benefit from improved supply at cheaper prices as a result of having access to the abundant gas from Pennsylvania’s Marcellus Shale.

PennEast spokeswoman Pat Kornick said landowners will be “fully compensated” for the use of a “small portion” of their land. She said the company has been working with landowners since the project was announced in 2014, and wants to reach agreement with them to avoid any third-party settlements.

“PennEast views legal proceedings as a last resort; they are emotional, burdensome, costly for all involved and counterproductive to PennEast’s commitment to building positive relationships,” she said.

She urged landowners to accept the company’s current “premium” offers, which she said are likely to be higher than any agreed to under a court settlement.

Kornick declined to discuss individual cases and wouldn’t say how many landowners in both states have yet to sign leases, but said 75 percent of them have given the company permission to survey on their land. Still, those agreements don’t necessarily indicate the landowners will sign leases, she said.

Thomas Rowe, who owns a 50-acre horse farm at Lower Saucon Township, Northampton County, said he wants PennEast to pay him $3.5 million for the right to build a metering station on a four-acre parcel, and to build rights of way across his land. That’s about 10 times what the company has offered him, he said.

Rowe, 78, who has been farming the land for about 40 years, said that a PennEast land agent told him on Thursday that he would have to reduce his compensation demand or the company would begin eminent domain proceedings, and any previous agreement would be negated.

The company can begin eminent domain proceedings now that it has a “Certificate of Public Convenience and Necessity,” which was issued by the Federal Energy Regulatory Commission on Jan. 19.

Rowe said he built two houses on the land for his children who now want to sell up because they don’t want to be near the metering station.

Despite the FERC approval, the project still needs permits from the Delaware River Basin Commission and from New Jersey, where about a third of the pipeline will run, and which last June rejected the company’s application for a wetlands permit as incomplete.

PennEast said in June that it would reapply, but DEP said Friday that it still hasn’t received the information it needs, and so is closing the application “until such time that it can provide a complete application,” DEP spokesman Larry Hajna said.

Kornick said the DEP’s rejection of the wetlands permit application was “not unexpected,” and the company will apply again.

Tom Gilbert, campaign director for the New Jersey Conservation Foundation, which opposes PennEast, welcomed the DEP’s latest decision, which he said shows that PennEast still has regulatory barriers to overcome before starting construction.

“PennEast is trying to claim that FERC’s certificate is a done deal but that couldn’t be further from the truth,” Gilbert said in a statement. “The project cannot go forward without DEP’s environmental review, which has not yet started.”

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