Governor Phil Murphy, still less than a month into his first term, has articulated a bold vision for New Jersey’s environmental and energy future, and he’s indicated that he wants to stand up to the fossil fuel industry.
He supports a permanent ban on fracking at the Delaware River Basin. He brought New Jersey back into the Regional Greenhouse Gas Initiative (RGGI), a nine-state cap-and-trade agreement. He’s called for 100% clean energy in the state by 2050.
But a big question mark looms over Murphy: will he stop the PennEast Pipeline?
PennEast is a proposed 120-mile pipeline that will deliver fracked natural gas from Luzerne County, Pennsylvania, to Mercer County, New Jersey. And as our new report shows, it’s positioning itself to influence the new administration, with five lobbyists in the Murphy transition, including a former top advisor to Cory Booker.
PennEast’s Attempt to Sway Murphy through Lobbyists and Donations
Two key owners of the pipeline – New Jersey Resources and South Jersey Industries – are based in New Jersey, and New Jersey’s Department of Environmental Protection has to approve the pipeline before construction can begin.
In other words, what happens in New Jersey, and what Governor Murphy chooses to do, will ultimately decide the pipeline’s fate.
It’s no surprise, then, that PennEast is trying to sway Murphy in a number of ways – most notably by filling his transition team with five pipeline lobbyists.
PennEast coughed up $260,270 – over a quarter-million dollars – for lobbying in 2016 alone (2017 numbers should be available soon). Here are the lobbyists – all from two powerful firms, Princeton Public Affairs Group (PPAG) and Mercury LLC – who made it into Murphy’s transition committees:
- Michael Soliman, Mercury. Soliman was a top strategist for NJ Senator Cory Booker. He was also Senator Robert Menendez’s State Director, New Jersey Chief of Staff, and spokesperson. Soliman was appointed to Murphy’s Transportation and Infrastructure Committee.
- Christina Zuk, PPAG. Zuk was Chief of Staff and campaign political director for former New Jersey State Senator Barbara Buono. She’s the Executive Vice President of the New Jersey Young Democrats of America and is also dating NJ State Senator Vin Gopal. Zuk was appointed to Murphy’s Budget Committee.
- William Pascrell III, PPAG. Pascrell advised former New Jersey Senator and Governor Jon Corzine, Senator Robert Menendez, and Governor James McGreevey. His father is a longtime member of Congress from New Jersey’s 9th district. Pascrell was appointed to Murphy’s Transition Counsel Committee.
- David Smith, PPAG. Smith is a well-connected lobbyist tied to major national lobbying groups, including the Advocacy Group and Public Affairs Council. He was appointed to Murphy’s Environment and Energy Committee.
- Sonia Delgado, PPAG. Delgado has longtime ties to New Jersey Democratic party initiatives and committees. She was appointed to Murphy’s Healthcare Committee.
One striking thing about these pipeline lobbyists are their close ties to the New Jersey Democratic Party, including US senators, former governors, and state legislators. The Democrats control New Jersey by large majorities. The party is divided over fracking and fossil fuel pipelines, with a rising swath of the Democratic base opposing them.
While these are just five of PennEast’s lobbyists, they have nearly a dozen more revolving door lobbyists in New Jersey and Pennsylvania, most with close ties to powerful politicians and regulatory entities. And if that wasn’t enough, a Koch brothers-backed lobbying group is lobbying for PennEast at the federal level.
(Again, all this is laid out in more detail in our new report).
Furthermore, just five PennEast execs and lobbyists showered Murphy with over $23,000 in campaign contributions during his gubernatorial run.
- New Jersey Resources – a 20% pipeline owner – has two execs, including CEO Larry Downes, who gave a total of $12,900 to Murphy.
- Two PennEast lobbyists – PPAG’s Patti McGuire and Sonia Delgado – gave a total of $2,000 to Murphy.
- Energy industry lobbyist Edward Salmon, who also heads up the New Jersey Energy Coalition, of which PennEast is an advisory member, gave $8,300 to Murphy. Salmon was also appointed to Murphy’s transition team.
Pipeline Profiteering, Powerful Ties & Regulatory Conflicts
While attempts by PennEast lobbyists to sway New Jersey politics may be news enough, our report lays out other unsettling findings about PennEast. These include:
- In its 2017 SEC filings and presentations to investors, PennEast owner South Jersey Industries downplayed any need for the pipeline and instead focused on the high profits it would bring it. SJI repeatedly mentioned “FERC level returns” – a reference to the higher returns, set by FERC, that come from an interstate pipeline. PennEast critics, including the NJ Division of Rate Counsel, have speculated that this promise of high profits is the core motivation behind the pipeline. Moreover, SJI also emphasized the possibility for pipeline expansion – a prospect that worries PennEast critics, especially with the looming lure of LNG exports.
- The top execs and directors of New Jersey Resources and South Jersey Industries have close ties to important state entities and influential groups in New Jersey – indeed, the leaders of these corporations are embedded in a veritable web of power that projects itself over state politics. The entities that these PennEast companies are closely tied to include the NJ Chamber of Commerce (an SJI board member is its head and SJI’s CEO is a Chamber director), the subsidy-granting New Jersey Economic Development Agency (NJR’s CEO is a director while another top NJR exec is a former NJEDA exec), and other influential entities.
- Significant conflicts exist within regulatory entities that must approve the pipeline. For example, the Executive Director of the Delaware River Basin Commission, which must approve the pipeline, was formerly a top executive for American Water in Pennsylvania. American Water is a pro-fracking wastewater company that is a member of the Marcellus Shale Coalition, which counts a PennEast owner and shipper as members. A former American Water CEO is on the board of Penneast owner New Jersey Resources, while its CEO was a longtime exec at Southern Company, another Penneast owner.
More on all this in our report.
Despite last month’s FERC approval, the Penneast Pipeline is reeling from a string of setbacks. It’s application for a water quality permit was rejected last Thursday by the NJ Department of Environmental Protection – and this comes upon a previous rejection last June. PennEast was told it needs to reapply for the permit yet again. And just yesterday, the NJ attorney general rejected as insufficient PennEast’s right-of-way request to build the pipeline through several parcels of land.
This controversial, unpopular pipeline is clearly on the defensive.
With a new green governor in office, New Jersey has a rare opportunity to shut down the pipeline – which could emit as much greenhouse gas as 14 coal plants – and project a future that goes beyond destructive fossil fuels.
So what will Murphy do?