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 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 is one of the primary suppliers of petroleum products to 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, including the Colonial Pipeline and Buckeye 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, the New York Harbor area has a refined product storage capacity of over 40 million barrels, making it the largest and most important petroleum product hub in the Northeast. 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 where they supply local demand.

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 it 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 would give 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 largest storage site, with an inventory of 1 million barrels, is located in Woodbridge, New Jersey, part of the New York Harbor area.

Natural Gas

New Jersey receives natural gas supplies through several natural gas pipeline systems that enter the State from Pennsylvania. Natural gas in New Jersey is used primarily by the residential sector for home heating, as roughly two-thirds of New Jersey households use natural gas as their primary energy source for home heating. To meet demand in the Philadelphia metropolitan area, a liquefied natural gas (LNG) facility has been proposed in Logan Township, New Jersey. If constructed, the proposed 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 country. 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.