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Let’s Make a Deal on Energy Infrastructure

New York State recently approved construction of a controversial natural-gas pipeline in an effort to ease rising energy prices and prevent future supply shortages. The decision drew criticism from Democratic politicians and environmental groups, who argue that the underwater pipeline will compromise water quality and further entrench reliance on fossil fuels. Many also accused Governor Kathy Hochul of selling out to the Trump administration.

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According to Trump officials, approval of the pipeline was part of a broader bargain. In May, the administration reportedly allowed Empire Wind, an offshore wind farm that had been stalled for “further review,” to proceed with construction in exchange for the state’s approval of the gas project. Governor Hochul has denied that such a deal occurred. Still, if the story is true, would that kind of compromise necessarily be wrong? Perhaps it is time for both sides to lay down their permitting cudgels and consider a truce when evaluating each other’s energy projects. In fact, there shouldn’t be resource “sides” when talking about energy projects. Projects should best meet the needs of energy consumers rather than be determined by government preference. 

The natural gas pipeline, known as the Northeast Supply Enhancement (NESE) project, is one of two proposals by Williams Companies, operator of the nation’s largest natural-gas transmission network, to expand pipeline capacity in New York. Once completed, it will run from Pennsylvania through New Jersey and beneath Raritan and New York Bays before supplying gas to Brooklyn, Queens, and Long Island. 

Along with the still-pending Constitution Pipeline, the NESE represents an effort to relieve long-standing natural gas constraints in New York and New England. As the region, like the rest of the country, has transitioned from coal to natural gas as its primary source of electricity, pipeline infrastructure has failed to keep pace with demand. 

The chief obstacles have been federal and state regulatory and permitting barriers, which have limited the flow of natural gas into the Northeast. Under Section 401 of the Clean Water Act, for example, states can deny certification for projects that they determine would violate water-quality standards. The NESE was denied certification three separate times by New York’s Department of Environmental Conservation, which argued that dredging and sediment disturbance would harm water quality. More broadly, permitting has imposed steep costs on all pipeline projects. Earlier this year, Williams CEO Alan Armstrong noted that the cost of obtaining permits is now twice the cost of building the pipelines themselves.

Yet the effect of these barriers has been counterproductive. Constraining natural gas supply in New England has forced the region to rely more heavily on imported liquefied natural gas (LNG) and oil-fired generators, fuels that are both more expensive and emit more greenhouse gases per unit of energy than pipeline natural gas. The price difference is most acutely felt in winter, when competition for the constrained gas supply, driven by home-heating needs, causes sharp price spikes. Ultimately, these supply constraints have raised broader concerns about the reliability of the region’s electric grid. Both ISO New England and the Northeast Power Coordinating Council have warned in recent reports that limited pipeline capacity poses a threat to grid reliability.

Approving the NESE will not directly alleviate New England’s supply problems, though it will benefit New Yorkers and could signal broader recognition of the importance of adequate natural gas infrastructure across the Northeast

Opponents of the pipeline, though, continue to stress climate concerns, arguing that the pipeline conflicts with New York’s climate law, which requires an 80 percent reduction in greenhouse-gas emissions by 2050. A letter signed by ten members of New York’s congressional delegation, including House Minority Leader Hakeem Jeffries, claimed that the pipeline will entrench reliance on fossil fuels and undermine the state’s clean energy goals. In other words, the critics are willing to sacrifice affordability, short-term emissions reductions, and increased mortality caused by higher home heating costs in pursuit of long-term, arbitrary climate targets with ambiguous benefits. 

It is encouraging, then, that New York state has chosen to stop blocking the project, though the Constitution Pipeline still requires certification and the NESE may face further legal challenges. Permitting has become a political weapon used to stall or block politically disfavored projects. Until the alleged deal between Governor Hochul and the Trump administration, both the NESE and Empire Wind appeared to be casualties of this partisan energy war.

 Why can’t that deal, real or not, serve as an example of how each side might compromise more broadly? Instead of maintaining the status quo, where every project becomes a proxy battle, both parties could agree to stop using permitting as a political cudgel. Democrats should recognize that fossil fuels remain an affordable and essential part of our energy mix, while Republicans should acknowledge that renewables, when required to compete on their own merits and effectively integrated into the grid, offer power with minimal marginal cost. Capturing the benefits of either requires cutting through red tape, not layering it on their opponents.

Even better than a temporary truce would be true permitting reform, creating a system that ensures environmental protection while providing a predictable and efficient permitting process. Reducing barriers to building energy projects would generate enormous gains for the American people: more affordable, reliable, and cleaner energy.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.

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