From The Wall Street Journal:
Progressives once hailed natural gas as a “transition fuel” to renewables like solar and wind, but now they are waging a campaign to “keep it in the ground.” New York is ground zero. First, Mr. Cuomo banned hydraulic fracturing (i.e., fracking), and now he’s blocking natural gas pumped in other states from reaching Northeast markets.
Last year the Governor compounded the economic damage by blocking the 120-mile Constitution pipeline transporting natural gas from Pennsylvania to upstate New York and New England. Although the Federal Energy Regulatory Commission (FERC) approved the pipeline in 2014, Mr. Cuomo’s Department of Environmental Conservation conducted a separate review and denied a water-quality permit putatively because the developers hadn’t provided sufficient information.
Constitution’s developers challenged the denial in federal court. While the Clean Water Act lets states perform their own environmental reviews, New York appears to have abused its discretion. Last week the Second Circuit Court of Appeals deferred to state regulators while leaving a door open for the pipeline companies to challenge the timeliness of the state review in the D.C. Circuit Court of Appeals.
While Constitution isn’t dead, environmentalists say the appellate-court decision will give New York and other states more latitude to block pipelines, which is no idle threat. Two major pipelines in the Northeast under development will need state approvals, and developers pulled two others in the past two years amid regulatory obstacles in New England.
All of this is ominous since the region desperately needs more natural gas to make up for lost power from the impending shutdown of nuclear and coal plants. New England’s Independent System Operator projects that 14% of the region’s electric generation capacity will be retired within three years and says more pipelines are needed for grid stability.
Mr. Cuomo is also forcing the premature retirement of the Indian Point nuclear plant, which provides a quarter of New York City and Westchester County’s electricity. He hasn’t offered a back-up plan, but natural gas will have to play a role. Renewables (excluding hydropower) make up only 5% of New York’s electric generation, and we doubt the local liberal gentry will abide wind farms off Long Island.
Energy costs in the Northeast are already the highest in the nation outside of Alaska and Hawaii in part due to the shortage of natural gas. Northeast residents pay 29% more for natural gas and 44% more for electricity than the U.S. average, according to a recent study by the U.S. Chamber of Commerce. Industrial users in the Northeast pay twice as much for natural gas and 62% more for electricity.
Electricity and natural gas constitute many manufacturers’ biggest costs, which in part explains why so many are fleeing the Northeast. Since 2010 manufacturing economic output has increased by 1.5% in the Great Lakes region while shrinking 0.7% in New England and 2.4% in New York.
Speaking of which, about a quarter of households in New York, 45% in Vermont and 65% in Maine still burn heating oil—which is a third more expensive than natural gas and produces about 30% more carbon emissions per million Btu. Yet many can’t switch due to insufficient natural gas and pipeline infrastructure.
Mr. Cuomo’s natural gas blockade is harming residents and businesses throughout the Northeast while raising carbon emissions that he claims are imperiling the planet. The likely Democratic presidential aspirant may hope to ride this record to the White House, but millions of Americans are already paying a high price for his policies.
Appeared in the August 24, 2017, print edition.