Nov 20, 2019

America’s war over natural gas hits home in New York

Illustration: Eniola Odetunde/Axios

New York Gov. Andrew Cuomo and a major utility are locked in a standoff over natural gas that’s been years in the making and has national implications.

Why it matters: The battle, which is leaving thousands of New Yorkers without access to the fuel, is the starkest repercussion yet of fights brewing for years across the country over oil and gas pipelines and their role in fueling climate change.

The big picture: On one side, environmentalists and sympathetic liberal politicians are working to stop projects as a way to slow oil and gas production. On the other, energy companies are struggling to handle permitting processes that have become unpredictable after decades of presumptive approvals.

  • Caught in the middle: Anyone who uses natural gas and oil. Up until now, the broad repercussions were moot because you could still pump your gasoline or use your gas stove. But now...

Driving the news: National Grid faces a Nov. 26 deadline to respond to Cuomo's threat to revoke the utility's license if it doesn’t propose ways to restore natural-gas services cut off since the state rejected a pipeline project in May.

  • Nearly 4,000 customers, including restaurants and homes, across Long Island, Brooklyn and Queens have seen their natural-gas services — for things like heating and cooking — cut off.
  • That was when National Grid issued a moratorium after state regulators rejected a 37-mile pipeline connecting natural gas from Pennsylvania to New York and New Jersey.

Where it stands: In two important categories, both of which apply beyond New York:

  1. On climate: Blocking fossil-fuel infrastructure doesn’t (yet) appear to be an effective strategy to combat climate change. America’s emissions are up despite success blocking some pipelines. (In New York, blocking a gas pipeline could even lead households to switch to oil, a dirtier fuel, for heating.)
  2. On business: This uncertain situation is hanging over companies. Moody’s Investor’s Service said Monday that Cuomo’s threat could negatively impact the credit profiles of several investor-owned utilities in New York.

The intrigue: Cuomo is blaming National Grid for not employing contingency plans ensuring energy service even without the pipeline, while Cuomo's detractors are blaming him for blocking the pipeline.

Flashback: Cuomo has fought natural gas production and transportation in New York for years.

  • He banned fracking, a controversial technique to extract oil and gas, within the state in 2014. That’s led to New York importing much of its gas from neighboring Pennsylvania, as the below chart shows.
  • Under Cuomo’s leadership, state government agencies have either stalled or rejected a total of seven natural-gas infrastructure projects in recent years, according to the nonpartisan firm Washington Analysis.
Data: U.S. Energy Information Administration; Chart: Axios Visuals

For the record: Each side sees the dilemma through fundamentally different lenses.

  • National Grid President John Bruckner told a local CBS affiliate in October that the pipeline was needed to address a shortage of natural gas supply relative to growing demand.
  • Cuomo said in an interview last week the utility could barge or ship natural gas into the regions, or find other ways — like ramping up energy efficiency — to ensure service.

What I’m watching: Beyond the Nov. 26 deadline, I’m watching to see how this fight over natural gas hits home in other, mostly liberal parts of the country, where several cities have passed laws banning natural gas in new buildings beginning as soon as January.

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New York's natural gas war reaches a truce

Illustration: Eniola Odetunde/Axios

Utility company National Grid said Monday it was lifting a natural gas services moratorium it had imposed in parts of New York since May in response to the state rejecting a pipeline.

Why it matters: The battle, which left thousands without access to the fuel, is the starkest repercussion yet of fights brewing for years across the country over oil and gas pipelines and their role in fueling climate change.

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To fight climate change, California cities look to ban natural gas

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Driving the news: San Jose is the largest city to pass such a measure in what’s quickly becoming a controversial trend in the Golden State designed to tackle climate change at a more local level.

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The message behind Chevron's $10 billion write-down

Photo: Smith Collection/Gado/Getty Images

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Driving the news: The company said yesterday that the downward revision in its long-term price outlook means that it will "reduce funding to various gas-related opportunities."

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