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For Immediate Release: Jul 15, 2010
Contact: Kirsten Stade (202) 265-7337

MARCELLUS GAS PIPELINE’S CHEAP PATH THROUGH JERSEY PARKLANDS

Paltry $45,000 for 24-Year Lease on $2 Billion Pipeline Up for Quick Approval


Trenton — 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.”

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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

New Jersey PEER is a state chapter of a national alliance of state and federal agency resource professionals working to ensure environmental ethics and government accountability