A Case of Pipeline and Propane Phobia
Peter Mantius, a reporter for “DC Bureau” has recently zeroed in on two regional Inergy Midstream projects in articles that can be read here and here. The vitriol that pervades these pieces surprised us and is hard to ignore. We couldn’t help wondering about the agenda of the blog, funded by a group called the Public Education Center (PEC). We checked out PEC and what we found was enlightening. Indeed, it appears this is a case of wild-eyed pipeline and propane phobia fired up by some old acquaintances. Due to some of the egregious claims made in these articles it is necessary to first examine the facts and some background on what exactly the project is and is not before we delve into this larger discussion.
The Marc-1 Pipeline
The Marc-1 Pipeline is a proposed 39 mile pipeline that will be constructed through Bradford, Sullivan and 1 mile of Lycoming Counties in Pennsylvania. We reported on the project previously here and here. Some key facts about the project are listed below:
Fact: Pipeline construction will create 600 high-paying jobs immediately – many of them lasting up to a year. Eight to 10 permanent jobs will also result at two compressor stations. The price tag will approach $300 million, two-thirds of which will stay in Pennsylvania.
Fact: The Federal Energy Regulatory Commission (FERC) environmental assessment was thorough, involved substantial community input, and produced a comprehensive 300-page report on all potential environmental issues associated with this project.
Fact: FERC has sited over 16,000 miles of major interstate pipeline in the last ten years at a cost over $47 billion dollars.
Fact: There are over 300,000 miles of natural gas pipeline in the United States.
Fact: Pipeline construction will be specially timed to minimize any negative impact on migratory birds.
Fact: High tech drilling techniques will be employed in sensitive environmental areas avoiding the need to dig a trench.
Fact: Central New York Oil and Gas, LLC. (CNYOG) has worked with U.S. Army Corps of Engineers, U.S. Fish and Wildlife Service, PA Department of Conservation and Natural Resources, PA Department of Environmental Protection, PA Fish and Boat Commission, PA Game Commission, PA State Historic Preservation Office, Pennsylvania Historical and Museum Commission, Bradford County Conservation District, Lycoming County Conservation District, and the Sullivan County Conservation District to ensure all local, state and federal standards were met or exceeded in planning the project.
How are Pipelines Regulated?
With that background in mind it is also important to cover the extensive regulatory system in place for pipeline construction and operation. All aspects of pipelines including new construction, pricing power, safety, environmental impacts, and many other aspects of operation are all highly regulated by multiple agencies at the state and federal level. Given the extensive focus on federal regulations in Mantius’s writings we will place primary focus here.
Federal Energy Regulatory Commission
According to the Interstate Natural Gas Association of America, FERC regulates many aspects of interstate gas transmission pipeline operations, including approval, permitting and siting for new pipeline facilities as well as transmission rates pipelines are permitted to charge for interstate shipments.
The Natural Gas Act of 1938 (P.L. 75-688) empowers FERC with plenary authority to conduct the review of a proposed interstate natural gas pipeline, coordinate environmental and land use permitting with other federal and state agencies, and determine if a proposed pipeline meets the “public convenience and necessity.” As part of approving a pipeline application, FERC can specify the conditions under which the pipeline can be constructed, including the route used.
Once an interstate natural gas pipeline is built, FERC has the authority to ensure that pipeline rates are “just and reasonable.” These rates include operating and maintenance expenses and an allowed return on investment set as a percentage of the capital invested in facilities used to serve customers. Pipelines must go through a lengthy public process whenever they request rate increases. FERC sets rates on a pipeline-by-pipeline basis, and approves what constitutes a maximum allowable rate for each pipeline. Pipeline customers can, and often do, demand discounts from these maximum rates, with the net outcome being that many pipeline customers pay less than the maximum rate.
Laws Governing Pipeline Construction and Regulation
Several federal laws impact the construction and operation of interstate natural gas pipelines. These include:
- National Environmental Policy Act of 1969
- Federal Water Pollution Control Act (“Clean Water Act”)
- Coastal Zone Management Act
- Endangered Species Act
- Clean Air Act
- National Historic Preservation Act
- The Natural Gas Policy Act of 1978
- The Pipeline Safety Improvement Act of 2002
- Energy Policy Act of 2005
- The Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006
These are just a sample of statutes dictating the federal government’s role in pipeline regulation. There are many more, however it seems neither PEC nor Mantius are much impressed.
DC Bureau- Washington Front for Ithaca Agenda
Now that you have the facts on the Marc-1 project and the extensive body of work that composes pipeline safety and regulation let’s take a closer look at DC Bureau and their parent PEC. If you go to DC Bureau’s website you find that it’s well done. Want to know where to contact them? Try the National Press Club address they list. All of this leads one to assume a sense of credibility about the organization. However, when one digs deeper they find a bit of a different story.
PEC is registered as a 501(c)(3) non-profit corporation funded, in part, by the Park Foundation (see page 42 of attachments), which accounted for 20% of its revenues in 2009. The Park Foundation as many of our readers know is one of the main financiers of anti-natural gas activities and rhetoric in the nation. Ironically, this hasn’t stopped PEC from investing in two oil and gas companies (see page 19).
But we digress; Park also funds Earth Justice (see page 17 of the Park 990 return attachments), Josh Fox, CELDF, CEDC, NRDC and virtually every other group opposing natural gas development. The ties don’t end there. Interestingly, as is noticeable in their tax filings, Wade Green and Robert Leavitt serve on the board of PEC. Turns out they not only serve on PEC’s board but also have strong ties to the Rockefeller family. The same Rockefeller’s that are linked to NRDC, the Catskill Mountainkeeper, the Delaware Riverkeeper, et al. So, we can see that DC Bureau has ties to some of the wealthiest natural gas detractors, or as some would say NIMBYs, out there. Doubtful they will ever sing the praises of anything related to natural gas or oil (except maybe when their stocks over perform the market).
The Inside Job
Mantius attempts, with his two articles, to discredit Inergy and the Marc-1 pipeline project. He does so in two ways. First, he paints a scenario of deep conspiracy among private companies and government officials as well as referencing a letter from an official at Region 3 of the U.S. Environmental Protection Agency on the Marc 1 project. We addressed this letter and the unholy alliance between EPA Region 3 and Earth Justice here. For the purposes of this post we’ll just say there are many similarities between the two efforts and coordination appears to be present throughout the entire public comment process. For a more thorough report follow the previous link.
Mantius also cites a letter sent to FERC by Representative Richard Mirabito. We discussed that previously here. One interesting fact Mantius doesn’t cover is that 20 of the signers were from non-Marcellus counties, including the now infamous Representative Sturla. Many remaining signers were from fringe counties where Marcellus Shale may or may not be developed. Others were from the Southwestern part of the state where their gas would be in competition with natural gas from the Northern Tier. Regardless, none of the signers came from districts where the proposed line would run – not one.
But quickly after highlighting one letter, Mantius trashes another. The difference is one supports Marc-1 construction while the other attempts to block Marc-1. Mantius asserts the former is driven by corruption and the latter is in the public interest. In fact, much of his writing is a carefully woven narrative that would have the reader believe that a politician wanting to ensure a project that will bring jobs and economic revenue and activity to their constituents is somehow inherently evil. It is not, especially when the area has a significant experience with the industry in question, an experience that has been hallmarked by decades of success with minimal impacts to citizens and the environment.
In his articles, Mantius doesn’t cite anyone from Inergy but he does cite John Trallo, a member of the Responsible Drilling Alliance and the farcical Citizen’s Marcellus Shale Advisory Commission. This group has been urging hearings on a previously existing compressor station that could be used for the Marc-1 but currently has no use with the project according to plans. Trallo recently sent out an e-mail blast that not only falsely links the Barto compressor station to the MARC-1 pipeline, but also tries to make the Marc-1 a referendum on natural gas development by confusing the pipeline corridor with the “development corridor”. He also alleges the compressor station “will emit literally tons of toxic air-born chemicals annually into the air ” causing “chronic nose bleeds, migraine headaches, sore throat, respiratory infections, difficulty breathing, loss of smell/taste, and permanent nerve damage” as well as “increased risk of cancer, leukemia, COPD, emphysema, and chronic fatigue syndrome” and “low frequency noise 24/7, the constant venting/flaring of ‘dirty’ methane, the loss of property value, and the increased risk of fire and/or explosions.”
We know from experience Mr. Trallo is not an expert in natural gas engineering. If he were he would know flaring doesn’t occur at compressor stations. That is not part of his knowledge, or interest, though. As a retired guitar player he is only interested in one thing, stopping natural gas development at all costs. At best, this source would be questionable to include in an “objective” investigative journalistic piece. Given PEC’s source of funds however, we are not surprised.
How did Mantius find Trallo? Trallo is a well known and outspoken detractor of the Marc-1 project who resides in one of the counties it will cross. There aren’t too many sources like that to choose from as Trallo himself has had to ask for outside support in resisting Marc-1 as Sullivan County overwhelmingly supports its advance. It probably helped that Trallo was one of very few local signatory to the 22,000 form letters sent to FERC from individuals opposing the project –most of whom were from out of state, some of whom were from other countries.
In his second article Mantius addresses recent flooding and speculates on the impact this could have on the proposed pipeline. For those of you not familiar with regulations, pipelines not only have to meet strict Department of Transportation standards, but when they cross a stream, river or wetland, they are also subject to Army Corps of Engineers regulations and review. Mantius doesn’t mention any of this and instead uses a picture of an exposed pipe along a flooded road to exemplify pipeline risks. There is only one problem. That picture is not in any way representative of what is being proposed.
The pipeline Mantius shows runs parallel to the Susquehanna River above the water line where flooding could have an impact. The Marc-1 is being required to cross underneath rivers, streams, and wetlands using special equipment to minimize impacts. The difference is as clear as night and day. It would be as if someone told you flying was not safe because Cessna’s are prone to crash. It’s an argument based on pure demagoguery. Funded, mind you, by the same folks funding it everywhere else – the Ithaca based Park Foundation. It won’t cease anytime soon, they had net assets of $245 million to spend as of December 31, 2009.
DC Bureau also attacks Inergy’s proposed Finger Lakes LPG Storage Facility. We have covered this one extensively with stories here, here, here, here and here. Please take a few moments to look back at these writings to see the facts on this project. You will find it is nothing more than a continuation of a storage facility, albeit larger in size, that has been historically proven to be a safe practice in Watkins Glen, NY where it is proposed. Why is it an issue for the anti Marcellus Shale forces? One only has to look 20 miles to the east, to Ithaca, where the Park Foundation is headquartered, to know the answer. The LPG facility, along with the Marc-1 and all the other projects PEC, the CELDF, CEDC, the NRDC and other Park minions attack, are simply targets of opportunity to keep natural gas development out of the Park Foundation’s backyard.
So what do we have here? It’s a reasonable question to ask. We have the Park Foundation funding the Earth Justice campaign to stop the Marc-1. We also have that same foundation funding PEC and Mantius to report on the project in a negative light to gin up further opposition. Without investigation one would be led to believe these were unrelated activities. In actuality they are two shots fired from the same gun.
PEC is just another part of the Park Foundation funded anti-gas broadside, another example of manufactured phobia to stop development of an energy source they don’t agree with regardless of what the facts, science, data, experience and a majority of federal and state regulators have to say. Is the Park Foundation trying to distort the record, change the narrative and manipulate data and impressions to fit their agenda and keep natural gas development out of their backyard? You decide.