Overview

Resources and Consumption

New Jersey has no fossil fuel reserves, but it does have high wind power potential located onshore and offshore along its Atlantic coast. Many New Jersey residents live in the greater metropolitan areas of New York City and Philadelphia and work out-of-State in those cities. Due in part to this dynamic, the average commute times for New Jersey workers are among the longest in the Nation, and the transportation sector leads State energy consumption. Residential and commercial energy demand is also high. New Jersey’s industrial energy consumption ranks near the National average, although the energy-intensive chemical manufacturing and petroleum refining industries are well represented in the State.

Petroleum

New Jersey is a major petroleum refining State and distribution center for petroleum products for the high-demand Northeast States. The State’s six oil refineries, clustered along the Delaware River near Philadelphia and in the New York Harbor area, process crude oil mostly imported from overseas. New Jersey is connected to major petroleum product pipeline systems. The Buckeye Pipeline system branches through much of the Midwest and Northeast, while the Colonial Pipeline system pumps supplies from the Gulf Coast through the South and across the Eastern Seaboard before terminating in the New York Harbor area. New Jersey also receives petroleum product imports by tanker and barge principally from Canada, the Caribbean, South America, and Europe.

Located in both New York and New Jersey, New York Harbor acts as a central distribution center for the region, and many of the petroleum products delivered to the Harbor are later redistributed to smaller ports along the Hudson River where they supply local demand. The New York Harbor area has a petroleum bulk terminal storage capacity of over 75 million barrels, making it the largest and most important petroleum product hub in the Northeast.

New Jersey is one of a handful of States that requires the statewide use of reformulated motor gasoline blended with ethanol, and the New York Harbor area is the primary Northeast distribution hub for ethanol supplies. A large ethanol storage facility in Sewaren receives ethanol rail shipments from the Midwest and marine imports from Brazil and the Caribbean and then redistributes these supplies to markets throughout the Northeast.

New Jersey, along with much of the Northeast, is vulnerable to distillate fuel oil shortages and price spikes during winter months due to high demand for home heating. Nearly one-fifth of New Jersey households use fuel oil as their primary energy source for home heating. In January and February 2000, distillate fuel oil prices rose sharply when extreme winter weather increased demand unexpectedly and hindered the arrival of new supply, as frozen rivers and high winds slowed the docking and unloading of barges and tankers. In July 2000, in order to reduce the risk of future shortages, the President directed the U.S. Department of Energy to establish the Northeast Heating Oil Reserve. The Reserve gives Northeast consumers adequate supplies for about 10 days, the time required for ships to carry heating oil from the Gulf of Mexico to New York Harbor. The Reserve's storage terminals are located in Perth Amboy, New Jersey, and Groton and New Haven, Connecticut. The storage terminal located at Perth Amboy is the largest of the three, with a capacity of almost 1 million barrels.

Natural Gas

New Jersey receives natural gas supplies through several natural gas pipeline systems that enter the State from Pennsylvania, and then delivers over one-half of these receipts to New York. Natural gas in New Jersey is used primarily by the residential sector, as roughly two-thirds of New Jersey households use natural gas as their primary energy source for home heating. To help meet demand in the Philadelphia metropolitan area, a liquefied natural gas (LNG) facility has been approved by the Federal Energy Regulatory Commission in Logan Township, New Jersey. If constructed, the plant would have the capacity to import up to 1.2 billion cubic feet of LNG per day from overseas.

Coal, Electricity, and Renewables

Nuclear power dominates New Jersey’s electricity market, typically supplying more than one-half of State generation. New Jersey has three nuclear power plants, including the Oyster Creek Nuclear Generating Station, which came online in 1969 and is the oldest operating nuclear plant in the Nation. Natural gas- and coal-fired power plants supply most of New Jersey’s remaining electricity generation. New Jersey’s coal-fired plants burn coal received by rail and barge primarily from West Virginia, Pennsylvania, and Virginia. Although it contributes only minimally to net generation, New Jersey is a major producer of electricity from landfill gas and municipal solid waste.

In April 2006, the New Jersey Board of Public Utilities approved regulations that expanded the State’s renewable portfolio standard, requiring utilities to generate 22.5 percent of their electricity from renewable sources by 2021, with solar sources generating at least 2 percent of this standard. In October 2008, Garden State Offshore Energy was approved by the New Jersey Board of Public Utilities as the developer of a 350-megawatt wind farm off New Jersey’s coast and will evaluate the project’s environmental impacts and wind resource quality as well as begin the permitting process at both the State and Federal levels. The proposed project consists of 96 wind turbines arranged in a rectangular grid 16 to 20 miles off the coast of Cape May and Atlantic counties.