The deal will permit Tennessee Gas Pipeline Co. to lay a permanent, 30-inch gas pipe through Highlands region
Fall foliage at the Monksville Reservoir in West Milford. environmentalists are worried a proposed pipeline would disturb forested land in ecologically sensitive areas of Highlands watersheds, including the Monksville Reservoir.HIGHLANDS — The Statehouse Commission approved a deal today permitting a controversial natural gas line to run through several state-owned forests and parks in northern New Jersey, but increased the price to $180,000 amid protests over the $45,750 flat-fee the state was supposed get in return on a 24-year lease.
The deal will permit Tennessee Gas Pipeline Co. to lay a permanent, 30-inch gas pipe by cutting a 25-foot-wide swath through 23 miles of the protected, water-rich Highlands region, including government-owned watershed properties and 29 acres of state parks and preserves. Before the 5-1 vote by the commission, state Department of Environmental Protection officials acknowledged "shortfalls" in the appraisal methodology that determined the $45,750 fee, concurred with critics that it "does not alone fully compensate for the true impacts of the Tennessee project" and vowed to review its process for future agreements.
Assistant DEP Commissioner Amy Cradic tried to deflect mounting criticisms of the deal from a coalition of legislators, environmentalists, hunting groups, animal rights activists, conservation clubs and even the state Fish and Game Council, telling the Statehouse Commission the DEP negotiated an additional commitment from the gas company which could amount to $2 million in mitigation and compensation, which includes buying and preserving 116 acres elsewhere in the Highlands, establishing rare species programs and restoring habitat along the pipeline route.
"The department believes that the total compensation package from Tennessee does represent fair payment," said Cradic.
However, critics said details of the $2 million mitigation proposal remain murky and, at best, the money will only compensate New Jersey taxpayers for the upland forests and rare habitat that will be permanently destroyed.
David Pringle of the New Jersey Environmental Federation said the Statehouse adoption of the higher $180,000 lease payment, proposed by Sen. Gerald Cardinale, R-Bergen, was still "too much of a low-ball figure" when compared to the millions of dollars Tennessee Gas will earn from the pipeline.
"Campers compensate the state each year about $186,000 per acre just to camp, which has no impact on the land. This lease amounted to Tennessee Gas paying $64.65 per acre per year. Even at $180,000, that raises it only to $260 per acre per year — and they are going to destroy rare habitat for a pipeline that is going to be permanent," said Bill Wolfe of Public Employees for Environmental Responsibility.
Sen. Robert Smith cast the only vote against the deal, contending he favored the project, but believed taxpayers were being shortchanged and the lease payment should consider the profits the gas company will make while using state lands.
"If the asset was valued at it's revenue-generating potential, this might be a totally different story," he said.
The DEP was accused by members of the Highlands Coalition, the New Jersey chapter of the Sierra Club, PEER, the New Jersey Federation of Sportsmen’s Clubs and others of signing a 24-year lease deal to circumvent the lease-controlling provisions of the state’s 1993 Rooney-Odgen law. That law mandates a series of public hearings before the state can approve any lease of 25 years or more for private use of public lands, and it requires that the lease assessments consider the financial benefits the private use will reap.
Cradic at the DEP contended that many lease arrangements have been routinely approved for under 25 years, and in this case the DEP believed it was getting more compensation and mitigation from Tennessee Gas than it would normally have received. However, she said, the DEP will be reviewing and modifying how it appraises and handles future leases.
Jeff Tittel of the Sierra Club and Emile DeVito of the New Jersey Conservation Foundation presented a list of dozens of recent Open Space acquistions in the Highlands region, where the price-per-acre paid with tax dollars for preservation, including parcels next to the proposed pipeline, ranged from $25,000 to $45,000, and some purchases were as high as $83,000 per acre. Tennessee Gas's obligation to preserve 116 acres is capped, under the deal, at a $7,500-per-acre price.
"We negotiated a fair deal with the state of New Jersey," said Michael Gross, a lawyer for Tennessee Gas. He said the company has been in negotiations since 2008 with the DEP, and is willing to pay the $180,000 required by the Statehouse Commission.
The pipeline, according to documents filed with the Federal Energy Regulatory Commission, will cost $634.1 million and will involve a 30-inch pipe extending 128 miles through Pennsylvania and New Jersey to deliver gas to New York and New Jersey customers. The new easement will run, in most areas, next to an existing, 50-foot easement where the company erected a 24-inch pipeline under a 50 year lease in 1954, although it deviates from that path in many areas.
A new, 20-year lease was re-negotiated on the old easement in 2007, but the DEP was unable to provide information on the price of that lease.