Gov. Andrew Cuomo and National Grid struck a deal on Nov. 25 to end a moratorium on new natural gas hookups in Brooklyn and Queens and on Long Island, but the political fight continues over the future of a proposed natural gas pipeline that would run through Lower New York Bay from New Jersey to New York. Environmentalists say that slowing climate change requires the state to block fossil fuel projects, but the latest deal between New York and National Grid still offers the company a chance to make its case that a pipeline is necessary to ensure economic development in the downstate area – though it does take away a key source of leverage from the company.
National Grid imposed the moratorium in May, after the state Department of Environmental Conservation withheld a state water quality permit requested by the Oklahoma-based Williams Companies to build the Williams pipeline, which is officially known as the Northeast Supply Enhancement Project. Williams has resubmitted the application, which is currently under review by the department. The company will also need a similar permit from New Jersey before it can proceed with the project, which has already received necessary approvals from the federal government.
The agreement requires National Grid to provide thousands of new gas hookups that had been put on hold in recent months, pay $36 million in penalties and develop within two years a long-term plan to ensure a steady gas supply going forward. While the deal appears to be a major setback for National Grid, by making it lift the moratorium, the deal includes two bright spots for the company. The state Public Service Commission will not proceed with the revocation of National Grid’s operating certificate as Cuomo has threatened in recent weeks, and the deal allows the company to consider “a new pipeline” as part of its long-term strategy for addressing downstate commercial and residential energy needs, according to a statement released by the governor’s office. The timeline to develop that strategy even conveniently adheres to the company’s original deadline of late 2021 for getting a pipeline up and running.
Cuomo touted the settlement as a big victory for customers who were denied new hook-ups. “It was made clear that we will not allow any business – big or small – to extort New Yorkers in order to advance its own interests,” he said in the statement. National Grid will have three months to consider options before a series of public hearings in the four counties that were affected by the moratorium: Queens, Kings (Brooklyn), Nassau and Suffolk. The goal will be to implement this long term strategy by fall 2021 and while renewable energy and conservation programs will be in the mix of ideas, so will the controversial pipeline that led to the moratorium in the first place.
National Grid has said that the 0.4 billion cubic feet of natural gas that Williams would provide through the pipeline each day – roughly the amount needed daily for about 2 million homes – would ensure that National Grid could keep up with projected demand growth of about 10% in the next decade – especially when demand peaks on the coldest days of the year. The pipeline would provide roughly 15% of the gas that the company says it needs in future years, according to Elizabeth Arangio, director of gas supply planning at National Grid. “If the project does not become available by the 2020/21 winter season, the companies will not be able to prudently satisfy new or additional service requests without jeopardizing the companies’ ability to provide safe, reliable service to its existing firm customers,” she told the Public Service Commission in April.
Pipeline opponents have disputed those claims and cited data showing gas demand is not growing at the rate that National Grid said it would. Increased efficiency and conservation of both gas and electricity have eaten into that projected 10% growth, according to one report published by opponents of the pipeline. While a new pipeline would allow the company to access a new gas supply most cheaply, other gas capacity already exists and could presumably be used by the company to meet present needs at a higher price. The report also states that National Grid has used outdated statistics and overestimates how many residential and commercial boilers need to be transitioned from using oil. Opponents also argue that the company has not fully pursued conservation and renewable energy options before advocating for the $1 billion pipeline, which would be more profitable for the company to use in the short term but more damaging to the environment in the long term.
The new deal between the state and the company substantiates claims by the governor and other pipeline opponents that the moratorium was a political maneuver aimed at shoring up support for a controversial gas pipeline. It appears that other options were available all along, though they may hurt the company’s bottom line. The New York Times reports that at least two new sources of natural gas have already been identified by the company: transporting natural gas by truck and using existing pipelines to provide more natural gas to National Grid’s system. These two supply options are more costly than the pipeline might end up being, but they do ensure that gas can continue to flow without the pipeline.
According to a statement from National Grid, the deal will also require the company to invest $20 million in clean energy projects – which the governor’s statement said will be “directed by the director of the New York State Division of the Budget in consultation with the Public Service Commission” – as well as $8 million for new energy efficiency measures and an additional $7 million to compensate customers for hardships caused by the moratorium. These investments hardly guarantee permanent solutions to future increased demand, but they will likely advance conservation.
The biggest victors are the governor and residents, businesses and real estate developers in the service area. National Grid did not respond to a request for comment. Environmentalists could be said to have won the battle, but not yet won the war. “We have shown that this gas shortage is completely bogus,” said Robert Wood, an organizer with the climate action group 350 Brooklyn, which is part of a coalition of groups opposing the pipeline. “It's something just perpetuated by a company that makes its money building fossil fuel infrastructure ... We have to move to renewable energy right now.”
The state Department of Environmental Conservation is still considering whether or not to grant a key permit for the pipeline and it remains to be seen whether it will deny it once and for all and, if it does, whether that decision can withstand a likely legal challenge that will wind up in the federal court system. No one knows whether in the end the Williams pipeline and other controversial pipelines will ever get built, but the one thing that has been clear all along is that we are likely years away from finally knowing.
NEXT STORY: 9 big New York infrastructure projects