Cuomo’s Natural Gas Blockade

24 Aug 2017   Shale Gas, USA

Progressives once hailed natural gas as a “transition fuel” to renewables like solar and wind, but now they are waging a campaign to “keep it in the ground.” New York is ground zero. First, Mr. Cuomo banned hydraulic fracturing (i.e., fracking), and now he’s blocking natural gas pumped in other states from reaching Northeast markets.  The Empire State’s southern tier overlays the rich Marcellus and Utica Shale formations, among the most productive drilling regions in the country. Shale fracking has been an economic boon for Appalachia—and could have lifted upstate New York. Since 2010 natural gas production has surged 520% in West Virginia, 920% in Pennsylvania and 1880% in Ohio. (See chart nearby).  Mr. Cuomo’s predecessor David Paterson imposed a moratorium on fracking in 2010. After winning re-election in 2014, Mr. Cuomo started laying the ground for a White House bid and made the ban permanent. Between 2010 and 2015, New York’s natural gas production plunged by half—which has translated into fewer jobs as well as less royalties for landowners and revenue for local governments.  Last year the Governor compounded the economic damage by blocking the 120-mile Constitution pipeline transporting natural gas from Pennsylvania to upstate New York and New England. Although the Federal Energy Regulatory Commission (FERC) approved the pipeline in 2014, Mr. Cuomo’s Department of Environmental Conservation conducted a separate review and denied a water-quality permit putatively because the developers hadn’t provided sufficient information.  Constitution’s developers challenged the denial in federal court. While the Clean Water Act lets states perform their own environmental reviews, New York appears to have abused its discretion. Last week the Second Circuit Court of Appeals deferred to state regulators while leaving a door open for the pipeline companies to challenge the timeliness of the state review in the D.C. Circuit Court of Appeals.

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