Expanding New Jersey’s Energy Infrastructure to Meet Current and Future Demand

September 12, 2018

There is no doubt that in the next 10 to 15 years, New Jersey will need to focus on expanding its energy infrastructure to meet increased demand. About 75 percent of the state’s households rely on natural gas as their primary heating fuel, 12 percent use electric heat and 10 percent depend on heating oil. Transmission projects like natural gas pipelines and electric transmission lines are needed to support current energy usage. As economic development and population growth drive increased demand in the future, the need for infrastructure that will not only generate this energy – but transport and transmit it – will increase as well.

Expanding Renewable Sources

The Murphy administration is committed to developing and expanding the use of wind and solar energy to meet New Jersey’s recently updated renewable portfolio standards, which require that 21 percent of the electricity sold in the state be generated from renewable sources by 2021, 35 percent by 2025, and 50 percent by 2030. This means that investing in renewables will be critical.

While the governor has established ambitious green energy goals, whether or not they are achievable remains to be seen. Over the years, attempts at developing offshore wind have not been successful, due in large part to the complicated nature of the process. Making these projects easier to build must be a high priority.

In the meantime, as the demand for energy continues to grow, New Jersey relies on natural gas. In 2017, natural gas and nuclear power, combined, provided more than 90 percent of New Jersey’s net electricity generation – and we don’t see this changing overnight. The state’s leadership needs to “connect the dots” to ensure it is investing in the infrastructure necessary to meet not only anticipated energy needs, but today’s need as well.

Economic Development Fuels Demand

The growth in energy demand is resulting in part from the state’s efforts to attract businesses and jobs and spur population growth and prosperity. According to the Department of Labor and Workforce Development, the projected population increase in New Jersey will be 9.7 percent between 2010 and 2030, and the state’s civilian labor force is projected to grow slightly faster than its population.

New Jersey’s strategic location, transportation infrastructure, extensive warehousing and distribution channels, and educated and skilled workforce have long been a draw for businesses large and small. State leaders have been providing a range of incentive programs and resources to capitalize on the explosive growth in sectors such as e-commerce and logistics, and attract startups and established businesses in fields ranging from tech to healthcare.

Efforts are also underway to revitalize New Jersey’s manufacturing industry, which has been a vital contributor to the state’s economy for close to 200 years. Today, nearly 10,000 manufacturers operate in the state, from large pharmaceutical companies to small machine shops. Those companies directly employ close to 250,000 workers and their products account for nearly 90 percent of all New Jersey exports.

Businesses intent on moving to or expanding in New Jersey rely on our utility companies to continue building the infrastructure they need to grow. Economic development also brings greater numbers of people living and working in the state, and an increased need for natural gas. We have to build the infrastructure to meet this anticipated growth in public need in order to avoid falling behind.

Attorneys Play a Key Role in the Success of Any Energy Project

Natural gas is a primary source of energy, and as renewables come into play this reliance may or may not lessen. However, a critical issue that must be addressed is the fact that no defined pathway currently exists for developing renewable energy projects, which involve federal, state and local approvals and the potential for numerous appeals of those approvals. As a result, these projects often get stalled or run out of money. From a legal perspective, building these projects requires a roadmap that doesn’t currently exist.

Attorneys can play an important role in ensuring the success of any energy project – as long as they are involved early on in the process. The work our firm does with natural gas pipeline clients translates to wind and other renewable energy sources.