We spotted a couple of op-eds yesterday commenting on the obtuse position taken by New York State (Andrew Cuomo) in blocking natural gas pipelines. One of the columns, by MDN friend Katie Klaber, makes a brilliant point. Want to know where New York is heading energy-wise? Just look at Venezuela.
The same socialist policies that have thrown Venezuela into a death-spiral will do the same here in NY. Venezuela is a perfect picture of what awaits NY. Klaber, managing partner of The Klaber Group and founding president of the Marcellus Shale Coalition, points to what’s happening in Westchester County, NY as a preview of things to come (see Moratorium on New NatGas Customers Coming in NYC Area). She goes on to point out lack of investments in Venezuela’s infrastructure has led to a situation where one of the most oil-rich countries on the planet is close to running out of gasoline.
The second column also takes aim at Cuomo’s idiotic policies in blocking pipelines, and concludes those policies will inevitably lead to a rationing of natural gas.
Last week’s record-setting frigid temperatures lay bare the case for plentiful, domestic, affordable natural gas. No question that western Pennsylvanians are safe and comfortable with our locally produced natural gas supplies. Many others around the nation and world are not so fortunate.
We need look no further than New York to realize how blessed we are. After several years of warnings, two utilities with operations in the New York metro area have declared that as of March 15, they will not be able to accept new natural gas customers in their service areas. The reason? They can’t meet growing natural gas demand with constrained supply. Paradoxically, the gas is abundant under their feet and immediately across the border in Pennsylvania. However, New York state policies have banned extraction from private lands and blocked pipelines to bring in natural gas from the bountiful shale fields next door.
New York policies are not only driving costs up for New York residents, and stunting economic growth in rural and now urban areas, but they are impacting the energy landscape throughout New England and blocking Pennsylvania companies from accessing customers. If pipelines can’t be expanded through New York, New England states are not able to access Pennsylvania energy. The problem has become so acute that in late January, the U.S. Energy Information Administration created a New England dashboard to track energy capacity constraints.
Not able to access the surplus of shale gas from our Marcellus, Massachusetts’s Everett terminal was forced to import about two dozen ships of Liquified Natural Gas (LNG) from overseas last year, including from Trinidad and Tobago and from Russia. The constrained supply drove prices to a high of $175 million British thermal units, which was nearly 60 times prices in Pittsburgh. Discussions are now underway to allow LNG ships to transport natural gas from the Gulf Coast to New England, a far-from-ideal solution for several reasons. First, either new LNG ships need to be built in the U.S. or the federal Jones Act of 1920 would need to be amended or waived to allow available foreign LNG ships to transport LNG from one U.S. port to another. Second, it is nonsensical to think that natural gas molecules from Appalachia will travel via pipeline to the Gulf Coast, be compressed and loaded onto a ship to be transported by water to Boston for decompression and distribution. Instead of safely and economically transporting the gas from Pittsburgh to Boston via pipeline, it would need to be sent seven times as far, at significantly higher costs for transportation and processing.
When do New York’s fanciful policies become actionable national security issues? When do they become tyranny against consumers and people most vulnerable to unnecessarily high energy prices? We may already be there.
This brings to mind the recent developments in Venezuela. As investments in Venezuela’s infrastructure was neglected by the government, a former world-class economy fell into disrepair. This oil-rich nation may soon be void of even gasoline for transportation. Every U.S. citizen should recognize the importance of keeping our energy choices driven by market forces, not government intervention.
It is a false choice, made especially clear during the bitter cold days of winter, that we should abandon fossil fuels for 100 percent renewable energy. The proponents of that alleged solution should try a few winter days without heat and think first about their fellow Americans that would struggle to stay warm.
Kathryn Z. Klaber is managing partner of The Klaber Group, which provides strategic business services to energy businesses. She can be contacted at [email protected]. (1)
The next column comes from The Evening Sun, the daily (and only) newspaper published in Norwich, NY. MDN editor Jim Willis grew up in the Norwich area–his old home stomping grounds. Little did he know there was still such uncommon common sense to be found in the ranks of Norwich media.
The author makes the point that Cuomo’s policies are so far only affecting places like Westchester County and New York City–but it won’t be long until the rest of the state is so affected. Are you ready for rolling blackouts and natural gas rationing?
Recently a public notice appeared on municipal power giant Consolidated Edison’s webpage. The message they published is, “…new gas connections will be suspended in most of Westchester County service area until further notice.” Consolidated Edition, known as ConEd, is the power company that supplies millions of people and businesses in metropolitan New York with steam, electricity and natural gas.
There are a couple of reasons ConEd is preventing new customers from receiving cheap, clean natural gas: the population and construction in Westchester are rapidly increasing and the pipeline that feeds the region natural gas is too small an old. Furthermore, plans for a new, bigger pipeline transporting gas to Westchester can’t get past the New York State Department of Environmental Conservation (DEC) green energy regulations.
It appears New York’s economic present and our green energy future has collided in a cart-before-the-horse scenario. Despite what we see around us in Central New York, there are areas of the state that have population and commercial growth. That development requires energy infrastructure to supply electricity and natural gas.
The problem is, some bureaucrats in their aspirations for a carbon neutral impact, refuse to consider any improvements or additions to carbon energy sources. They take this stance even though there are no green renewable options available to meet current demands.
Right now there are millions of dollars in private and taxpayer investments earmarked for commercial, industrial and educational buildings in Westchester that have stalled because their plans to use natural gas as an energy source have vanished. In the case of schools, these projects are voted on by members of the district which cause any changes to the scope of projects difficult. In the case of private development, the loss will be jobs and property tax revenue for local governments.
Ironically, in upstate New York, we have a shrinking population leaving empty houses and buildings which have idle gas pipes tunneled into basements delivering zero natural gas. Additionally, there are communities in upstate New York with hopes for natural gas to encourage development and keep existing industry, but extending a pipeline to them is unthinkable.
In Sidney, there is an odd, but not unexpected conflict between state agencies over the delivery of natural gas to a large, if not the largest employer in Delaware County. New York’s Empire State Development Corporation spent just shy of $1 million building infrastructure to deliver natural gas to this sizable business. At the same time, NYS DEC denied pipeline creek crossing permits to feed gas to the same factory. Closer to home, one of the largest employers in Chenango County in the Village of Greene is in a similar situation being denied access to cheap natural gas, which would lower their manufacturing costs.
It is already difficult to operate any size business in New York because of draconian regulations. Adding to the frustration is the fact we sit on a huge natural gas deposit, the Marcellus Shale Formation, from which gas is being pumped out of the ground just a few miles south in Pennsylvania.
We all know New York refuses to let us drill for gas in our state, but the latest proposed legislation from some politicians would prohibit even the delivery of natural gas from other states into or through New York. It’s not just New Yorkers who will be impacted by such legislation if it becomes law; there are millions of folks in New England who each winter depend on natural gas pipelines – all of which pass through New York State.
Let me remind you, this isn’t all about natural gas, but electricity too. Coal-burning electric power plants are a thing of the past in New York, supposedly replaced by wind turbines. We are learning now the huge propellers aren’t making near enough megawatts. Solar panels are in their infancy and not yet mainstream enough to make a dent in our energy needs. The type of facility that is generating enough electric power is the nuclear power plants around the state. Woefully, Indian Point nuclear power plant just north of New York City is being forced to close by 2021 with no real plan to replace the electricity generated by that 2000 megawatt facility.
Erecting wind turbines, like the ones we see on the horizon in Madison County, is the new battleground. Small towns don’t want these forced down their throats and they are enacting laws prohibiting them. There have been ideas to put the turbines off-shore in the Atlantic Ocean and Lake Ontario which brings out a whole different crowd of green protesters against the whirligigs.
All of this political grandstanding in the race to the left is going to have consequences in the future. We are nearing energy starvation with no viable way to replace the soon-to-be-outlawed sources of power. Metropolitan New Yorkers may someday experience rolling blackouts and ‘cold days’ because of rationing of natural gas and then no one will be happy, particularly voters. (2)
(1) Pittsburgh (PA) Business Times (Feb 7, 2019) – Klaber’s viewpoint: The problem with New York regs
(2) Norwich (NY) The Evening Sun (Feb 7, 2019) – New York’s Green Energy Conundrum
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