A contentious proposal for an underwater natural gas pipeline in New York, previously denied three times, is gaining new traction. State officials are now considering its potential to strengthen the region’s energy supply.
Just last week, the Public Service Commission (PSC), a state body overseeing utility services, greenlit a long-term strategy for National Grid, a major gas provider for approximately two million customers across New York City and Long Island. This updated plan now includes the potential use of the Northeast Supply Enhancement (NESE) pipeline, should it receive final approval.
Regulators cited critical reliability concerns, particularly referencing a severe winter storm in 2022 that nearly triggered gas service disruptions in New York City. Their decision was almost unanimous.
Ken Lovett, the governor’s communications adviser for energy and efficiency, stated before the decision, “We must explore diverse avenues to ensure our energy infrastructure remains robust as demand escalates.”
However, this move has ignited alarm among environmental activists and political figures. They view it as a troubling sign that the pipeline could become a reality, undermining New York’s commitment to reducing greenhouse gas emissions. Critics also highlight that New York utility customers would ultimately bear the burden of the pipeline’s estimated $1 billion cost.
State Senator Liz Krueger voiced her strong opposition, saying, “The PSC is pushing us perilously close to saddling New York gas consumers with billions of dollars in costs for outdated, environmentally damaging infrastructure.”
In May, Williams Companies, an energy firm based in Tulsa, Oklahoma, resubmitted its pipeline construction proposal. The project is currently undergoing a crucial environmental assessment that will determine its future.
The current political climate plays a significant role: President Trump actively promotes increased oil and gas production, and Governor Kathy Hochul, facing concerns about rising energy demands, appears open to these discussions.
Both New York and New Jersey state agencies responsible for upholding water quality standards are re-evaluating the project. They are expected to deliver a decision by next spring.
A Familiar Debate
This isn’t the pipeline’s first rodeo. The project was proposed and rejected three times, starting in 2018, during Governor Andrew M. Cuomo’s tenure.
The NESE pipeline aims to transport natural gas from Pennsylvania to the New York City metropolitan area. Its planned route would involve approximately 23 miles of underwater installation beneath New Jersey’s Raritan Bay and New York Harbor, eventually connecting to existing infrastructure near the Queens coastline.
Notably, only New Yorkers stand to benefit from this gas supply, not residents of New Jersey. Consequently, New Jersey Governor Phil Murphy has held off on making a decision, waiting for New York’s verdict.
Under the Clean Water Act, both states possess the authority to determine if a project meets their respective water quality standards. Should these standards not be met, federal intervention or private company influence typically cannot overturn the state’s decision.
During its last rejection in 2020, New York’s Department of Environmental Conservation concluded that the dredging required for the pipeline would release toxic substances like mercury and copper into the water. Furthermore, the department noted that the pipeline would generate greenhouse gas emissions, directly conflicting with New York’s climate legislation.
New Jersey subsequently issued a similar rejection.
Why the Pipeline’s Reappearance Now?
President Trump’s administration has been a vocal proponent of fossil fuel industries, coinciding with numerous delays and cancellations in renewable energy projects.
Last spring, Governor Hochul, concerned about the future of a major offshore wind project, successfully lobbied the president for its continuation. During these discussions, the governor signaled her willingness to consider other new energy initiatives.
Inspired by this shift, Williams Companies decided to re-present its case for the NESE pipeline.
According to Mr. Lovett, Governor Hochul is navigating a complex landscape marked by a volatile economy, escalating power demands, and a federal government that is generally unsupportive of New York’s ambitious emissions reduction targets.
He emphasized, “While the federal government is actively attacking renewables, Governor Hochul is pursuing a comprehensive energy strategy that prioritizes affordability, grid stability, and economic growth.”
However, this approach faces opposition from other political figures, including Lieutenant Governor Antonio Delgado. Mr. Delgado, who is also running for governor next year, argues that the pipeline would violate the state’s climate law and potentially contaminate coastal waters. “Nothing about this project has fundamentally changed—it remains toxic, unnecessary, and a boon for fossil-fuel billionaires,” he asserted.
A Threat to New York’s Climate Goals?
Michael B. Gerrard, an environmental law professor at Columbia University, noted that the interpretation of the Clean Water Act is flexible. He suggested that if the governor genuinely wished to revive the pipeline, state regulators might find a way to make it happen.
While New York recently enacted the nation’s most ambitious climate legislation, the Climate Act, it doesn’t explicitly ban new pipelines.
The Climate Act, signed in 2019, mandates that New York reduce greenhouse gas emissions by 40% by 2030 and 85% by 2050. However, the latest state report indicates that New York is significantly behind schedule in achieving these targets.
Attorneys representing New York City recently informed state regulators that approving the pipeline would represent a “significant step backward” for both state and city climate objectives.
Will Natural Gas Lower Bills?
National Grid estimates that constructing the pipeline would cost its customers, who typically fund infrastructure upgrades, approximately $1 billion. This translates to a projected monthly energy bill increase of about 3.5%, or roughly $7.50 per month.
Mark Izeman, a senior attorney for environmental health at the Natural Resources Defense Council, warned, “If constructed, the NESE would burden customers with decades of costs.” The nonprofit also suggested that rising supply costs could further inflate prices.
Energy experts agree that natural gas will remain essential for meeting surging electricity demands until renewable energy sources are more fully integrated. National Grid’s recently approved gas plan acknowledges the upfront cost increase for consumers to finance the pipeline but also forecasts up to $6 billion in statewide electricity cost savings once the pipeline begins delivering gas.
Sally Librera, President of National Grid New York, affirmed that the pipeline is “crucial for meeting increasing energy demand,” predicting that an abundant gas supply could drive down costs, eventually leading to billions in savings for New Yorkers.
What Lies Ahead?
The PSC’s vote does not guarantee the pipeline’s construction. The commission has also instructed National Grid to develop alternative plans in case the pipeline faces another rejection and to implement strategies aimed at reducing gas consumption.
Ultimately, New York’s Department of Environmental Conservation holds the power to decide the pipeline’s fate by granting or denying the necessary water permit.
A spokesman for Governor Hochul stated that she would respect the department’s final decision.