The White House is preparing measures that will reduce states' powers over the approval or ban of new energy projects, notably oil and gas pipelines, Bloomberg reported last week, citing three unnamed sources in the know. The implications of such measures would be bad news for a state such as New York, which has already put the brakes on a natural gas pipeline, but they could be good news for consumers.
Last week, FreightWaves.com reported that residents of the Northeastern states are being increasingly burdened by high electricity bills coupled with unreliable supplies, the root cause of which is the lack of enough natural gas pipeline capacity to bring in the fuel needed for power plants.
The report followed an announcement by a regional utility, Con Edison, that it will stop taking on new customers in Westchester County on the grounds that "new demand for gas is reaching the limits of the current supplies to our service area." In other words, the utility cannot supply electricity to all who need it because it cannot produce enough electricity to satisfy demand and the reason it cannot produce it is lack of sufficient gas supply.
What's more, New York is not the only state struggling with growing electricity demand and insufficient supply because of pipeline opposition on the political level, according to the FreightWaves.com report. All New England states are in the same position and even worse, author Henry Carmichael reports, citing a scientist from the Institute for Energy Research.
"The New England states used to be dependent on coal, oil, nuclear and hydroelectricity. And they've shifted quickly to natural gas for generation, and they've shifted so fast that its caused huge draws of natural gas into the system [pipelines] without increasing infrastructure," Dan Kish told Carmichael. Related: Is The Permian Bull Run Coming To An End?
The situation is reminiscent of that in northern China last year, when the authorities were in a rush to switch from coal to gas in power plants but were not quick enough to construct the necessary distribution network, so several million households ended up without heating in the midst of winter.
Meanwhile, New York's governor, a staunch opponent of new fossil fuel infrastructure, announced a so-called Green New Deal with the goal to have 100 percent of the electricity used in the state to be sourced from renewable alternatives to oil and gas by 2040. According to media reports on the news, this is the most aggressive renewables goal in the United States. It also means New York will need to reach a portion of 70 percent renewable power by 2030.
It was probably part of this cleaner energy drive that led New York State to block a natural gas pipeline project that was approved by the Federal Energy Regulatory Commission and that would have increased the flow of gas into New England. Now, if the White House's plans come to fruition, the pipeline project could be back on the table with nothing Governor Cuomo could do about it except perhaps challenge it in court.
The situation looks like the latest in a long string of examples how climate change fighting measures result in problems for ordinary energy consumers in the short term. These problems need to be addressed in advance if the fight is to become a truly mainstream affair. Otherwise, an executive order by a very pro-fossil fuel industry President might become the bitter medicine for too-high electricity bills and gas shortages.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
Comments
As long as land owners are justly compensated,the projects should go forward.