Marcellus Gas Pipeline's Cheap Path Through Jersey Parklands

The State of New Jersey is not doing its own appraisal before
considering a major pipeline project through state parklands, according
to documents released today by Public Employees for Environmental
Responsibility (PEER). This morning, the State House Commission is
slated to decide whether to approve a 24-year lease for a $2 billion
pipeline that will cross through several state parks and preserves for a
one-time payment of only $45,000 - less than $2,000 per year.

This
ultra-low lease figure was produced by an appraisal performed by a
consultant to Tennessee Gas Pipeline Co., not the state Department of
Environmental Protection (DEP) which owns the land. The pipeline will
apparently serve as a major distribution line for natural gas extracted
from potentially huge Marcellus Shale gas deposits in neighboring
states.

"This pipeline easement has all the earmarks of a
sweetheart deal. Campers at a state park now pay rates more than 2,500
times per acre what DEP wants to charge this gas pipeline," stated New
Jersey PEER Director Bill Wolfe, who obtained the consultant's appraisal
report under the state Open Public Records Act (OPRA). "Unfortunately,
the supposed guardians of the taxpayers' interests cannot be roused to
perform even basic due diligence." PEER charges that the deal reflects a
pattern of DEP failing to charge utilities, oil companies and other
corporations the full market rate for use of state lands, facilities and
rights-of-way.

The State House Commission, which approves
leases and easements on state lands, tabled the Tennessee pipeline
proposal in late June when DEP could not answer basic financial
questions about the proposed arrangement or produce an appraisal. The
appraisal that was finally produced is by a consultant to the pipeline
company and includes a number of assumptions that dramatically lower the
value of the 16.5 acres for the pipeline itself and the additional
estimated $18,000 "fair market value" for more than 50 acres of park
land that will be used for access roads and other "temporary workspace."

PEER also objects to the lack of transparency surrounding the
pipeline deal, including -

• Structuring a 24-year lease
  deal to avoid public hearing requirements attached to any lease
  agreement of 25 years or longer; and
• Denying an OPRA request
  for a copy of the lease itself, mitigation plan documents as well as
  correspondence between the corporation and DEP.

"In New
Jersey, corporations are apparently allowed to come in and name their
own price for using state lands," Wolfe added, noting the array of
adjustments and discounting methods used to reduce the value of the
parklands that include some of the most important wildlife habitat in
the state. "This is a generation-long lease for significant public
assets. The public should be able to review it in the clear light of
day."

Read
the Tennessee pipeline appraisal report

See
denial of OPRA request for state/corporate understandings

Look at how New
Jersey habitually undercharges corporate users of state land