TRENTON — The state Department of Environmental Protection announced Thursday it will reconsider how it appraises future lease deals that allow private interests to use public lands, in the wake of public outrage over a flat $45,750 fee assessed for a natural gas pipeline that will run through several state-owned forests and parks in northern New Jersey. A Texas-based...
Round Valley reservoir in Clinton Township, within the Highlands tract. The northern Highlands provide some of the state's most scenic vistas, but also contain half its water supply. A new deal would place a 23-mile gas pipeline through the region.TRENTON — The state Department of Environmental Protection announced Thursday it will reconsider how it appraises future lease deals that allow private interests to use public lands, in the wake of public outrage over a flat $45,750 fee assessed for a natural gas pipeline that will run through several state-owned forests and parks in northern New Jersey.
A Texas-based firm has been granted a lease to install 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.
"We were doing what we typically had done in the past," said Assistant DEP Commissioner Amy Cradic outside a Trenton meeting of the Statehouse Commission, where she acknowledged "shortfalls" in the appraisal methodology that led to the controversial, 24-year lease deal with Tennessee Gas Pipeline Co.
By a 5-1 vote, the Statehouse Commission approved the deal Thursday, but only after raising the lease payment to $180,000 as suggested by member and State Sen. Gerald Cardinale.
The compromise did little to appease critics, who questioned why a more lucrative deal could not be made on a project that will destroy rare habitat as Tennessee Gas wins a pipeline that will earn the firm millions.
"The problem with the formula you are using is you may be selling yourself too cheap," state Sen. Robert Smith, D-Middlesex, told Cradic.
The only commission member to vote against the deal, Smith added, "If the asset was valued at it’s revenue-generating potential, this might be a totally different story."
The deal had been in negotiations since 2008, but the financial arrangement was not made public until environmental groups demanded and obtained a meeting with the DEP on July 1, the day before the Statehouse Commission was originally scheduled to vote on the deal.
The request prompted the Statehouse Commission to delay action until Thursday, as DEP officials grappled with mounting criticism from a coalition of legislators, environmentalists, hunting groups, animal rights activists, conservation clubs and even the state Fish and Game Council.
Cradic said not all of the criticism is justified, telling the Statehouse Commission the DEP negotiated an additional commitment from the gas company amounting to $2 million in mitigation fees to restore much of the disturbed land, preserve 116 acres elsewhere in the Highlands and establish rare species monitoring programs.
"The department believes that the total compensation package from Tennessee does represent fair payment ... The department negotiated above and beyond the lease compensation for those values not captured through the appraisal by requiring a four-to-one replacement of land for every impacted acre," Cradic said.
However, critics said details of the mitigation programs remain murky and, at best, the money will only go toward partially compensating New Jersey taxpayers for the upland forests and rare habitat that will be permanently destroyed.
"How do you restore 150-year-old trees that will be taken down?" said David Pringle of the New Jersey Environmental Federation, adding the new $180,000 lease payment is still "too much of a low-ball figure" when compared to the millions of dollars Tennessee Gas will earn from the pipeline.
Jeff Tittel of the New Jersey chapter of the Sierra Club and Emile DeVito of the New Jersey Conservation Foundation presented a list of dozens of recent Open Space acquisitions 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. Some purchases were as high as $83,000 per acre, according to the list. Tennessee Gas’s obligation to preserve 116 acres is capped, under the deal, at $7,500-per-acre.
Tennessee Gas contends it is only getting a 24-year lease, not buying the easement, and will have to renegotiate to keep using the state land.
"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 talks since 2008 with the DEP, and is willing to pay the $180,000 required by the Statehouse Commission.
The DEP was accused by members of the New Jersey Highlands Coalition, the Sierra Club, PEER, the environmental federation, the New Jersey Federation of Sportsmen’s Clubs and others of penning a 24-year lease deal to circumvent 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 disputed that charge, contending 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.
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.