8/24/2017 Cuomos Natural Gas Blockade - WSJ

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REVIEW&OUTLOOK

CuomosNaturalGasBlockade
NewYorksGovernorisraisingenergycostsformillionsofAmericans.

GovernorAndrewCuomoinNewYork,January18.PHOTO:REUTERS

ByTheEditorialBoard
Aug.23,20177:00p.m.ET

TheU.S.shaleboomhasloweredenergypricesandcreatedhundredsofthousandsof
jobsacrossthecountry.ButthoselivinginupstateNewYorkandNewEnglandhave
beenleftinthecoldbyNewYorkGov.AndrewCuomo,whoseshalegasblockadecould
instigateanenergycrisisintheNortheast.

Progressivesoncehailednaturalgasasatransitionfueltorenewableslikesolarand
wind,butnowtheyarewagingacampaigntokeepitintheground.NewYorkis
groundzero.First,Mr.Cuomobannedhydraulicfracturing(i.e.,fracking),andnowhes
blockingnaturalgaspumpedinotherstatesfromreachingNortheastmarkets.

TheEmpireStatessoutherntieroverlaysthe
TheStateThatWon'tFrack
richMarcellusandUticaShaleformations,
Naturalgasproductioninfoureastern
states,1995-2016
amongthemostproductivedrillingregionsin
thecountry.Shalefrackinghasbeenan
NewYork* WestVirginia Pennsylvania
economicboonforAppalachiaandcould
Ohio
haveliftedupstateNewYork.Since2010
6 trillioncubicfeet
naturalgasproductionhassurged520%in
WestVirginia,920%inPennsylvaniaand
4
1880%inOhio.(Seechartnearby).

Mr.CuomospredecessorDavidPaterson
2 imposedamoratoriumonfrackingin2010.
Afterwinningre-electionin2014,Mr.Cuomo
startedlayingthegroundforaWhiteHouse
0
1995 2000 05 10 15
bidandmadethebanpermanent.Between
2010and2015,NewYorksnaturalgas
Note:NewYorkthrough2015
Source:U.S.EnergyInformationAdministration productionplungedbyhalfwhichhas
THEWALLSTREETJOURNAL
translatedintofewerjobsaswellasless
royaltiesforlandownersandrevenueforlocal
governments.

LastyeartheGovernorcompoundedtheeconomicdamagebyblockingthe120-mile
ConstitutionpipelinetransportingnaturalgasfromPennsylvaniatoupstateNewYork
andNewEngland.AlthoughtheFederalEnergyRegulatoryCommission(FERC)
approvedthepipelinein2014,Mr.CuomosDepartmentofEnvironmentalConservation
https://www.wsj.com/articles/cuomos-natural-gas-blockade-1503529234 1/2
8/24/2017 Cuomos Natural Gas Blockade - WSJ
conductedaseparatereviewanddeniedawater-qualitypermitputativelybecausethe
developershadntprovidedsufficientinformation.

Constitutionsdeveloperschallengedthedenialinfederalcourt.WhiletheCleanWater
Actletsstatesperformtheirownenvironmentalreviews,NewYorkappearstohave
abuseditsdiscretion.LastweektheSecondCircuitCourtofAppealsdeferredtostate
regulatorswhileleavingadooropenforthepipelinecompaniestochallengethe
timelinessofthestatereviewintheD.C.CircuitCourtofAppeals.

WhileConstitutionisntdead,environmentalistssaytheappellate-courtdecisionwill
giveNewYorkandotherstatesmorelatitudetoblockpipelines,whichisnoidlethreat.
TwomajorpipelinesintheNortheastunderdevelopmentwillneedstateapprovals,and
developerspulledtwoothersinthepasttwoyearsamidregulatoryobstaclesinNew
England.

Allofthisisominoussincetheregiondesperatelyneedsmorenaturalgastomakeupfor
lostpowerfromtheimpendingshutdownofnuclearandcoalplants.NewEnglands
IndependentSystemOperatorprojectsthat14%oftheregionselectricgeneration
capacitywillberetiredwithinthreeyearsandsaysmorepipelinesareneededforgrid
stability.

Mr.CuomoisalsoforcingtheprematureretirementoftheIndianPointnuclearplant,
whichprovidesaquarterofNewYorkCityandWestchesterCountyselectricity.He
hasntofferedaback-upplan,butnaturalgaswillhavetoplayarole.Renewables
(excludinghydropower)makeuponly5%ofNewYorkselectricgeneration,andwe
doubtthelocalliberalgentrywillabidewindfarmsoffLongIsland.

EnergycostsintheNortheastarealreadythehighestinthenationoutsideofAlaskaand
Hawaiiinpartduetotheshortageofnaturalgas.Northeastresidentspay29%morefor
naturalgasand44%moreforelectricitythantheU.S.average,accordingtoarecent
studybytheU.S.ChamberofCommerce.IndustrialusersintheNortheastpaytwiceas
muchfornaturalgasand62%moreforelectricity.

Electricityandnaturalgasconstitutemanymanufacturersbiggestcosts,whichinpart
explainswhysomanyarefleeingtheNortheast.Since2010manufacturingeconomic
outputhasincreasedby1.5%intheGreatLakesregionwhileshrinking0.7%inNew
Englandand2.4%inNewYork.

Inclementweathercancauseenergycoststoskyrocket.Duringthe2014polarvortex,
naturalgaspricesinNewYorkCityspikedto$120permillionBtuabout25timesthe
HenryHubspotpriceatthetime.Natural-gaspowerplantsinNewYorkarerequiredto
burnoilduringsupplyshortages.DuetopipelineconstraintsandtheJonesActwhich
requiresthatcargotransportedbetweenU.S.portsbecarriedbyshipsbuiltintheU.S.
BostonimportsliquefiednaturalgasduringthewinterfromTrinidad.Thisisexpensive
andemitsboatloadsofcarbon.

Speakingofwhich,aboutaquarterofhouseholdsinNewYork,45%inVermontand65%
inMainestillburnheatingoilwhichisathirdmoreexpensivethannaturalgasand
producesabout30%morecarbonemissionspermillionBtu.Yetmanycantswitchdue
toinsufficientnaturalgasandpipelineinfrastructure.

Mr.Cuomosnaturalgasblockadeisharmingresidentsandbusinessesthroughoutthe
Northeastwhileraisingcarbonemissionsthatheclaimsareimperilingtheplanet.The
likelyDemocraticpresidentialaspirantmayhopetoridethisrecordtotheWhiteHouse,
butmillionsofAmericansarealreadypayingahighpriceforhispolicies

AppearedintheAugust24,2017,printedition.

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