Pipeline Blockade is Making Things Worse for New York’s Natural Gas

When it comes to energy issues, New York long ago plunged over the cliff. Now, it has attached booster jets to its heels to accelerate toward the bottom. Worse, one fears Governor Cuomo knows exactly what he’s doing — simply depending on others and time to rescue him.

The Machiavellian Politics Behind New York’s Natural Gas Pipeline Ban

New York State is a mess. Its politics reject logical thinking. It is all demagoguery and hype, and only those with a mastery of these along with Machiavellian skills can prosper. Green political correctness runs rampant among urban populations, those whose closest encounter with energy production is using their thermostat. Because New York City dominates its politics, the thoughts of these city dwellers constitute that which must be obeyed.

This is a large part of the reason Governor Andrew Cuomo initiated a fracking ban “at this time” five years ago. It is also the reason he blocked pipeline after pipeline, putting up a blockade against natural gas coming into or moving through the Empire State.

First, it was the Constitution Pipeline that would have delivered gas to New England and New York City, and then it was the Northern Access Pipeline and the Millennium Pipeline extension. Now, it is the Northeast Supply Enhancement project, which is directly focused on supplying the metro area itself with natural gas.

New York’s Department of Environmental Conservation (DEC), under the apparent direction of the Governor himself, has denied Section 401 Water Quality Certification permits for all four pipelines, despite growing demand for natural gas. This has led to moratoriums on new gas connections by two major utilities. Without additional gas there will be little, if any, relief until 2023.

The Impact of New York’s Natural Gas Pipeline Blockade on Utilities and Consumers

New York being New York, its politicians and business leaders who want to be seen as being “green” are reluctant to spell out the exact truth — that Governor Cuomo’s pipeline blockade is responsible for this fiasco. Instead, everyone operates in a state of denial, pretending the solution is simply to become more efficient, install heat pumps for supplemental energy or to order the utilities to reverse their policies.

None of these things will come close to solving the problem, of course. That doesn’t mean there isn’t a solution, though. That solution is approving the pipelines that will ensure the utilities have the gas they need to meet peak demands in the near future. It will give them the ability to lift moratoriums now and supply the gas later as needed. So, why is it not happening?

The answer is not so simple if you are Andrew Cuomo, but it is easily understandable if one appreciates New York politics. Governor Cuomo imagines he must resist natural gas development to the nth degree, even if he wants the gas and recognizes the need for more of it. His strategy, therefore, is straight out of “The Prince,” Machiavelli’s guidebook for rulers. It is as follows:

“Those best at playing the fox have done better than the others. But you have to know how to disguise your slyness, how to pretend one thing and cover up another.“

Why Cuomo’s Natural Gas Resistance Is Holding New York Back

Whether it is intentional or not on Cuomo’s part, this is how things are playing out. His DEC, for example, denied a Water Quality Certification for the Millennium Pipeline extension that now delivers gas to a new power plant in Orange County, New York. It was not done quite correctly, though, and was obviously intended to force the issue into court.

Millennium took the initiative and immediately sued in multiple jurisdictions, receiving guidance from a federal court as to how to proceed further with litigation. The end result was a FERC approval that allowed the pipeline to be built while the DEC continued fighting in the courts. But the win was all Cuomo’s. He got the gas to produce power needed to replace the Indian Point nuclear plant he is forcing to shut down. He also got the “green” street cred he needed for cover.

The Constitution Pipeline has played out somewhat differently and probably not quite the way Cuomo hoped. His DEC kept requiring more information and resubmissions from the developer. The third submission was ultimately denied on spurious grounds at which point the developer finally took the issue to court, again challenging the denial in multiple jurisdictions. It was not generally successful until very recently, but it did bring the issue of political delays to the forefront.

That may well have been a factor in a D.C. Circuit Court of Appeals decision in an unrelated matter that requires states to not take more than a year to act upon Water Quality Certification applications. This opened the door to a FERC ruling that New York has exceeded the time allowed and waived its right to act; thus creating the distinct possibility the Constitution Pipeline will, in the end, be approved.

This would be another great result for Cuomo, as the approval will come from elsewhere and be over his strenuous objections, mounted until the very last minute. Such an approval would signal to the two New York utilities that the gas is coming, potentially providing a lifting of their moratoriums well before 2023. The only wrinkle for Cuomo has been one of timing. Things would have worked much better for him had the Constitution’s developer sued earlier reaching the end game prior to the moratoriums.

The Northern Access Pipeline did sue earlier and is still tied up in the courts, but its long-term prospects, along with Cuomo’s, look good providing the courts overrule his DEC.

The Northeast Supply Enhancement Project: A Make or Break Moment for New York’s Energy Future

The big question is what will happen with the Northeast Supply Enhancement (NESE) project that will directly deliver gas to the metro area. The DEC, once again, denied the Water Quality Certification application, but seemed to leave the door open for a resubmission, the same as it had previously done in the case of the Constitution. The developer, also the same, almost immediately did so.

Was this another DEC head fake? It is very possible, perhaps even likely, but because of the various moratoriums the circumstances are different now. This puts pressure on Cuomo not to play the game out in this instance. If he did, although he would take very heavy criticism from greens, it is counterbalanced by many folks in places such as Westchester County who know they really, really need the gas, and need it now. That itself is still another win for Cuomo; he created the cover for his supposedly very reluctant approval of the project. Cynical yet? Well, this is how it is done in the State of Denial that is New York.

About the author: Tom Shepstone is the owner of Shepstone Management Company Inc., a planning and research consulting firm located in northeastern Pennsylvania. He has advised many counties in both New York state and Pennsylvania, as well as other states, on economic development strategies, especially as they relate to rural and agricultural areas. He is also the publisher of NaturalGasNOW.org, a blog focused on the same objective.