Update On New York’s Self-Inflicted Energy Crunch

As I have noted many times before, this whole green energy thing is all just so much talk until the point hits where energy shortages start to emerge or consumer prices begin to soar. At that point, the people will notice. And then, how will the politics shift? Will the politicians press forward with green energy — and impose energy deprivation on the people in the process? Or will they promptly back off the green energy blather, and return to the cheap and reliable fossil fuels?

Here in New York, where professing the green religion is the indispensable ticket to entry into polite society, we’re in the early phases of seeing this process play out. Out there in the hinterlands, you may be interested in the dynamics.

Our Governor Andrew Cuomo clearly thirsts to be part of polite society. Same with the members of the legislature. Thus, fealty to green orthodoxy must be regularly demonstrated. Result: We have had one measure after another over the past several years to restrict fossil fuels and promote energy from wind and solar sources. First came an outright ban on fracking in the state for oil and gas, imposed in 2014 despite the fact that a broad swath of upstate sits right atop the rich Marcellus shale formation. Then came the blocking of two major pipeline enhancements across the Hudson River and New York Harbor, most recently a denial in May of this year of a water quality permit for a cross-harbor project. Then there have been announcements of plans for multiple massive pie-in-the-sky wind and solar projects — none of which, however, has actually begun construction. In June the legislature passed a law (signed by the Guv) declaring that the entire state of New York will be “carbon neutral” by 2050!

But is any of this stuff real, in the sense that it will stand up when the crunch hits?

In August, the first inklings of the crunch began to hit. As I reported on September 3, after the cross-harbor pipeline was blocked in May, the natural gas utility named National Grid, which covers Long Island (including the parts of New York City known as Brooklyn and Queens) announced that it could not accept any additional gas customers. By August, some 3000 potential customers in that area had been denied service. These included people who had just renovated a house and now found that they had no functioning heat system, and others who planned to open restaurants but now found they had no functioning stove or oven. Within days, the affected customers were all over their state legislators, and the legislators were demanding action.

In other words, we had upon us a one hundred percent self-inflicted impending crisis, about 90% of it the personal responsibility of the Governor, with maybe a 10% assist from the legislature. So how has the Governor reacted? If the answer is not obvious to you, then you clearly will never qualify for political office.

The answer is that the Governor reacted by blaming National Grid. On November 12 he issued a letter to the utility, claiming that it had failed to provide “adequate and reliable service,” and threatening to revoke its operating permit unless it immediately resumed acceptance of new customers in its service area. Excerpt:

The essential responsibility for a utility to provide adequate and reliable service is to manage the supply and demand. The very lack of supply you now point to as the reason for your denial of service to thousands of customers exhibits your failure to plan for supply needs. Your fundamental legal obligation as mandated by your certificate of operation was to plan and provide for future needs. You failed by your own admission.

But hadn’t they made a perfectly reasonable plan for a pipeline that then got blocked by the Governor himself? That doesn’t count!

National Grid has made clear that its only plan for future supply was based on a single, speculative project: construction of a private pipeline through New Jersey and New York. The plan to build such a pipeline was risky at best. . . . There are existing short-term options to contract for non-piped gas from other sources, which National Grid either deliberately, negligently or incompetently did not secure. National Grid should have explored all options before denying service. Gas can be trucked, shipped, or barged. . . .

The only meaningful “risk” of the pipeline was that the Governor himself (or his minions) would disapprove. Anyway, instead of a safely buried pipeline, are we now going to have thousands of trucks bringing highly-explosive natural gas across the George Washington Bridge to get to Long Island? I’ll bet Cuomo didn’t clear that one with his environmentalist friends. (And by the way, don’t even think about moving the gas by rail. Federal regulations currently do not permit transport of liquefied natural gas by rail at all. However, there is a proposal by the Pipeline and Hazardous Materials Safety Administration — I’ll bet you never heard of that one — to begin to allow such transport. Your comments on the proposed rulemaking are due December 23.)

And I’ll also bet that the response of National Grid will not surprise you. They crumbled like a stale cookie. On November 25 they agreed to resume hookups, and also to pay a “penalty” of some $36 million for the period of the moratorium. Presumably, they continue to have at least a small amount of spare capacity in existing pipelines that will permit additional hookups for perhaps a few months until new supply alternatives are in place. Supposedly there will now be a “study” of how to make additional supply available. The only option that makes any sense is the pipeline.

So great victory there Cuomo. You went to battle against the evil utility, and like David against Goliath you emerged victorious. Except, let’s have a review of what this “victory” looks like:

• Progress toward green energy? Of course not. At this point there is no reasonable alternative to natural gas for most home heating and cooking. One way or another, you have to let the people have their natural gas.

• To be brought in by truck rather than pipeline? How is that a victory for anybody? Trucks are far more costly, far more dangerous, and far more likely to have adverse environmental effects.

But how about all those offshore wind turbines that are supposedly on the way? According to this piece at Smart Energy on October 28, New York finally let its first major contract for an offshore wind development on that date. The capacity will be 880 MW, although readers here will know that it will deliver at best a third of that over the course of a year, and at unpredictable times. There is no indication that construction has begun, or when it might begin.

Essentially, our Governor has patched together a temporary kludge to paper over the uselessness of his green energy schemes for another few months or years, until the next piece of the crunch hits. Yes, this can go on for quite a while. But not forever. Meanwhile, it’s very hard to underestimate the stupidity of the New York electorate.