Is New York About To Face An Energy Crisis?

Amid the fracking boom that brought natural gas prices to historic lows and led to the transition of a lot of power generation capacity from coal to gas, New York and New England may face power shortages tantamount to an “energy crisis” due to state policies in recent years that have effectively banned fracking and blocked pipelines that would bring in gas, writes the editorial board of the Wall Street Journal.

Ever since the previous governor, David Paterson, introduced a moratorium on fracking in New York back in 2010, the state has become a poster city for the drive towards renewable energy, with Peterson’s successor, Andrew Cuomo, banning fracking indefinitely in 2014 and last year blocking the construction of the Constitution pipeline that would have transported natural gas from Pennsylvania to upstate New York and New England.

Between 2010 and 2015, WSJ’s editors note, natural gas production in New York fell by 50 percent, resulting in job losses, a decline in royalties for landowners, and lower revenues for local governments.

At the same time, the daily’s editorial board writes, New York is shutting down generation capacity—some 14 percent of the generation capacity in New England will be retired by 2020, according to New England’s Independent System Operator, and the region will need new gas pipelines to ensure the stability of the power grid.

The Indian Point nuclear plant is also awaiting shutdown, which means the government will need to find an alternative that will supply at least one quarter of the energy needs of New York City and Westchester County. Related: EIA Spreads Optimism With Double Draw

The state of New York currently receives most of its energy from gas-fired power plants, data from the Energy Information Administration shows. While petroleum-fired power plant contribution is negligible, nuclear is the second-biggest energy generating source in the state, followed by hydroelectric.

Renewables, despite the drive, remain a small part of the state’s energy mix, at 550 GWh for May this year, versus 3,274 GWh for nuclear, and 3,617 GWh for gas. Suspending the growth of gas-fired generation capacity could indeed lead to serious problems with energy supply in New York and New England.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Forget OPEC, China Controls Oil Prices
• Two Countries Could Push Oil Over $50
• Shale Drillers Head North As The Permian Fills Up