Natural gas demand is likely to remain elevated for years, especially since New York and other Northeastern states are struggling to build offshore wind projects.
SEATTLE (Oil Monster): A pipeline company is reviving plans to build two natural gas pipelines into New York State, a major reversal that amounts to a bet that the Trump administration will be able to strong-arm states into signing off on energy projects.
New York had blocked both pipelines, called Constitution and Northeast Supply Enhancement, over environmental concerns. But the Trump administration has made clear that it wants more oil and gas infrastructure, including in the Northeast, where pipelines had become so hard to build that companies had all but given up on them.
The decision by the pipeline business, Williams Companies, to formally restart efforts to build the pipelines comes a week after the Trump administration withdrew its opposition to a wind energy project, Empire Wind, off the coast of Long Island, after weeks of lobbying by Gov. Kathy Hochul of New York.
As part of the discussions over letting Empire Wind move forward, Ms. Hochul said she would work with the Trump administration on new energy projects, though she did not explicitly mention pipelines. But Doug Burgum, the interior secretary, later posted on X that Ms. Hochul had signaled a “willingness to move forward on critical pipeline capacity.”
The Constitution pipeline was designed to transport gas more than 100 miles from northeast Pennsylvania toward Albany. The lesser-known and shorter Northeast Supply Enhancement project would run largely underwater, from New Jersey toward New York City.
Williams, based in Tulsa, Okla., said Thursday that it was in talks with state officials about the projects. It also filed paperwork with the Federal Energy Regulatory Commission, asking the agency to reinstate a permit for the Northeast Supply Enhancement. Williams said it aimed to start using the pipeline by late 2027.
The company scrapped both projects after New York officials in effect blocked them by denying water quality permits. In a statement, it described the projects as “essential to address persistent natural gas supply constraints in the Northeast, constraints that have led to higher energy costs for consumers and increased reliance on higher-emission fuels like fuel oil.”
Ms. Hochul said on Thursday that the pipelines could help lower energy costs but added that they would have to abide by state and local laws. “Consider the benefits at a time when energy prices are through the roof and families in every corner of our state are suffering high bills for groceries and utilities,” she said, adding that she would remain committed to New York’s climate goals.
The battle over gas pipelines from Pennsylvania — which is home to a portion of a prolific natural gas field called the Marcellus — into New York and New England has been raging for years.
As New York and New England have closed their coal-fired power plants over the past two decades, they have come to rely heavily on natural gas, which now supplies nearly half of all electricity in both regions. Yet natural gas and electricity costs in the Northeast are among the highest in the country, partly because there aren’t enough pipelines to deliver fuel to the region.
The gas industry and some experts have argued that piping in more cheap gas from Pennsylvania’s abundant shale fields would reduce the cost of energy in New York and New England.
“When you get into the Northeast, the states’ ability to block pipelines has been pretty chronic, particularly in the New York City market,” Alan Armstrong, chief executive of Williams, said in an interview with Bloomberg in March. “I think what’s going to fix that is people being really upset about their utility bills.”
A recent study by S&P Global found that expanding pipelines could reduce natural gas prices in the Northeast by 20 to 30 percent. The effect would be greatest during winter months, when demand is high because gas is used for heating.
Yet many Democratic officials and environmentalists have strongly opposed new pipelines on the grounds that the additional natural gas would make it harder to tackle global warming.
Some analysts have argued that the climate impacts of new gas pipelines are complex. In the short term, the extra natural gas might help reduce New England’s emissions, by displacing oil or liquefied natural gas that generate more emissions per unit of energy. Over a longer period, however, a large supply of cheap gas could discourage businesses and residents from switching to renewable energy or electrifying their homes.
In 2016 and 2020, Andrew Cuomo, New York’s governor at the time, blocked Williams’s attempts to build pipelines into the state by denying it water permits under the Clean Water Act, on the grounds that the projects could pollute local waterways and increase greenhouse gas emissions. New Jersey also denied a water permit for the Northeast Supply Enhancement pipeline.
For Ms. Hochul, new projects that help lower energy costs could be critical politically. She is up for re-election next year and several rivals are exploring runs against her. Her approval numbers have been middling partly because voters are upset about the high cost of living.
She focused much of her efforts during recent budget negotiations on tax breaks and direct refund checks to residents. She has also criticized proposed rate hikes from Consolidated Edison and the New York Power Authority.
Assemblywoman Anna Kelles, a Democrat from Ithaca, said on Thursday that allowing the two pipelines was not the right way to reduce energy costs. She said the state should cap utility bills and encourage more energy-efficient ways to heat homes. Ms. Hochul and her aides should also hasten a program that would limit greenhouse gas emissions while raising money for climate projects, Ms. Kelles said.
“It’s kind of disingenuous to criticize the status quo if we’re not investing in alternatives,” Ms. Kelles said of Ms. Hochul.
Even if Williams faces fewer regulatory barriers, the pipelines still face other potential hurdles. The company needs to line up enough long-term customers for its gas to secure financing for the projects, which had previously been estimated to cost nearly $1 billion each.
Natural gas demand is likely to remain elevated for years, especially since New York and other Northeastern states are struggling to build offshore wind projects. But those states have also set aggressive goals for reducing fossil fuel use, and it’s unclear whether enough businesses will want to sign 20-year contracts to buy piped gas.
“Financing these pipelines is expensive, and the big question is always, Is the gas demand really there?,” said Christine Tezak, a senior director at ClearView Energy Partners, a research firm. “Even if we’re in a very different environment than we were five years ago, I wouldn’t call it a slam dunk just yet.”
Local residents and environmental groups could also try to block the pipelines. Mark Izeman, a senior strategist at the Natural Resources Defense Council, said the projects “will once again be met with stiff and deep resistance in the region — and would inevitably end up in protracted legal battles.”
Courtesy: www.nytimes.com
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