As natural gas prices continue to increase, Assemblyman Andrew Goodell and Republican gubernatorial candidate Lee Zeldin are pushing for New York to consider environmentally responsible natural gas production.
The New York Independent System Operator is warning of a sharp rise in wholesale electric costs expected this winter due to several economic and geopolitical factors that continue to impact the market cost of natural gas used in the production of electricity. The ISO released an updated white paper on electricity prices recently in an effort to prepare consumers for the winter home heating season.
The NYISO’s report, Impact of National & Global Conditions on Electricity Prices in New York, sources and incorporates material from the Energy Information Administration, state Public Service Commission, U.S. Department of Labor and Power Trends, the NYISO’s annual state of the grid report. The white paper is intended to help serve and educate consumers, the media and market participants, and will be updated as conditions and data change.
Heading into this summer, the federal Energy Information Administration projected the price of natural gas delivered to electric generators to average $8.81/MMBtu this summer, up from $3.93/MMBtu last summer. Actual prices, according to the EIA, were a little less, averaging $7.28/MMBtu.
“New York should move forward with environmentally responsible natural gas production,” Goodell told members of the Independent Oil and Gas Association at their annual meeting held recently in Ellicottville. “Our residents and businesses deserve lower cost natural gas, our farmers and landowners would benefit from these royalty payments, and the Southern Tier would experience an economic boon worth millions of dollars. Instead of making Pennsylvania wealthier, we need to make New York wealthier.”
According to the Western Energy Alliance, natural gas is the number one reason that the United States was able to reduce greenhouse gas emissions more than any other nation in world, as coal plants were replaced with cleaner natural gas plants. U.S. natural gas production has increased 37% since 1990, while greenhouse gas emissions dropped by 17%.
Goodell pointed to federal efforts to restrict the supply of oil and gas, including blocking the Keystone pipeline and other pipelines, issuing fewer oil leases than any administration since the 1940s, blocking refinery expansions and reducing liquid natural gas production with restrictive regulations. Biden has repeatedly stated his desire to phase-out fossil fuels over the next 10 years, which Goodell said has discouraged critical energy investment. The lack of sufficient domestic supplies, coupled with geopolitical events, has resulted in a dramatic increase in prices to consumers.
On the state level, Republicans have argued against Democrats’ actions to block blocked natural gas supply lines, Marcellus natural gas exploration throughout Western New York and denial of applications for new electric generating plants. The Indian Point nuclear power plant that provided about 25% of New York City’s electricity has closed and Goodell said the state is imposing new restrictions on “peaker plants” that further reduce electric supply.
Zeldin is also pressing for a reversal of New York’s ban on hydraulic fracturing. Ending a ban on hydrofracking — put in place administratively in 2014 by former Gov. Andrew Cuomo and then passed into law by the state Legislature in 2021 –would also be a heavy lift and conflict with a separate law requiring the state to transition to more renewable forms of energy in order to combat climate change. But the proposal is among a handful of Zeldin’s stated economic goals if elected governor this November.
“Jobs can be created, we can generate revenue, we can drive down taxes,” Zeldin told reporters in July during a virtual news conference. “There’s a huge benefit for the state to reverse that safe extraction of natural gas ban that we have.”
Hochul, on the other hand, said in March that the state’s dependence on fossil fuels is contributing to climate change and air pollution while also exposing consumers to global commodity price fluctuations. She said the state’s Climate Leadership and Community Protection Act and its move toward the use of no fossil fuels will better protect state residents from rising natural gas prices. Hochul’s 2022 State of the State address and Executive Budget proposal included a new solicitation of offshore wind development, a $500 million investment for offshore wind port infrastructure and supply chain; achieving 2 million climate-friendly, electrified or electrification-ready homes by 2030; phasing out old power plants; boosting the market for new clean energy technologies like green hydrogen and ensure quality green job creation.
“That idea is dead on arrival,” Hochul told WNYC’s “Brian Lehrer Show”, according to the New York Post, when asked of lifting restrictions on hydraulic fracturing. “No way are we going to go backwards to our commitment to protect the environment. And this is just another example of how Lee Zeldin is the one out of touch with New York values. How extreme and dangerous it would be to have someone who is willing to just turn back all the progress you made to protect our planet and protect the people of our state going forward. So we’re not going there, Brian.”
The energy fight during the 2022 election season comes at a time when the New York Independent System Operator is calling for major investments in the state’s electrical system to meet the state Climate Leadership and Community Protection Act. The ISO recently released its “2021-2040 System and Resource Outlook” recently identifying what it terms an unprecedented level of electrical system investment. By 2040, the state will have to add between 111 gigawatts and 124 gigawatts of generating capacity to meet the state Climate Leadership and Community Protection Act’s mandate to have a fully renewable electric grid. For reference, New York has 37 gigawatts of generating capacity, with 12.9 gigawatts of new generation developed since wholesale electricity markets began more than 20 years ago in 1999.
While calling for unprecedented levels of investment, the report does not put a price tag on the upgrades needed.
“The New York ISO remains committed to maintaining reliability as our grid transitions to a clean energy future,” said Rich Dewey, President and CEO of the New York ISO. “The scale of new resource development needed to satisfy system reliability and policy requirements within the next 20 years is unprecedented.”
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Goodell, Zeldin push to allow natural gas production - Evening Observer
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