Appalachian Basin

New York’s Fracking Ban in the Spotlight Amid Rising Energy Costs

There is a host of legislation being teased and introduced in Congress that could have major impacts on the U.S. oil and natural gas industry, particularly in the Northeast, and for consumers as well.

But regardless of what transpires with these bills, they raise valid questions. At a time when inflation is on the rise, gasoline prices are still at serious highs and there continue to be fringe claims of price gouging and requests for energy companies to produce more, why haven’t there been similar calls for states like New York that have passed fracking bans or blocked infrastructure to enable increased production and capacity?

This is especially true in states across the Appalachian Basin and New England where consumers have been paying some of the highest prices for energy in the country – in the world even – for years, yet policymakers have blocked both energy development and pipelines within their borders. As a 2019 Manhattan Institute report explained:

“Utility rates in New York are already among the highest in the country—and shutting off access to more natural gas is only going to make things worse. In 2018, U.S. residential gas customers paid an average of $10.53 per million Btu. By contrast, in January 2019, Con Ed’s gas customers were paying $19.97 per million Btu, roughly 90% more than the national averageBy April, with the cold weather over, Con Ed’s gas customers were still paying $17.57 per million Btu, about 67% more than the national average.”

“In addition to higher natural gas costs, New Yorkers and New Englanders are paying higher electricity prices than average Americans. … Only four other states on the East Coast have higher residential electricity rates than New York. All of them are in New England: Connecticut, Massachusetts, New Hampshire, and Rhode Island.” (emphasis added)

And that’s why Rep. Claudia Tenney’s (R-NY) legislation is gathering media attention. Rep. Tenney told Fox Business this week:

“New York State is sitting on top of natural gas formations that could power our state with clean energy for decades. Unfortunately, far-left policies in Albany and Washington have severely limited our ability to safely tap into these reserves, threatening America’s energy independence, raising prices for consumers, and killing thousands of well-paying jobs.

“As Americans struggle with record-high costs…it is time we take actions to reverse this disaster and restore our nation’s energy independence.”

Her proposed bill would require states like New York and Maryland that have passed bans on high volume hydraulic fracturing, the completions technique commonly used to recover shale oil and natural gas, to lift their bans in order to receive any funds from the Energy Efficiency and Conservation Block Grant (EECBG) program that’s part of the infrastructure package.

While such a move wouldn’t immediately increase domestic energy supplies, it would open the doors for investment that could provide more long-term supply stability. Yet, not once during all of the Biden administration’s requests for operators to increase production this year have they asked these states to reopen for development.

Such a move couldn’t come at a better time with Bloomberg reporting that Brooklyn residents are being asked to reduce their energy usage during recent heat waves, demonstrating the lack of supply:

“Con Edison asked homes and businesses in the affected areas to refrain from using power-hungry appliances including washers, dryers and microwaves until the crew completes repairs. It also requested that residents only use one air conditioner.”

On the infrastructure front, Sen. Joe Manchin (D-WV) released details for a potential overhaul of federal energy permitting rules this week as part of the negotiations for his support of the Inflation Reduction Act. This includes not only completing the Mountain Valley pipeline that will run through Virginia and West Virginia, but also decreasing permitting review times and providing clarity to what Section 401 of the Clean Water Act can be used for.

Natural gas capacity constraints in the New York and New England have fueled high energy prices, utility moratoriums on connecting new customers in New York City and even led to importing Russian LNG into Boston.

Nonetheless, while House Energy & Commerce Committee Chairman Frank Pallone (D-NJ) continues to promote his baseless investigation into price gouging by energy companies and question what they are doing to alleviate consumer prices, there’s been no such calls to action from him or his committee for New York and New Jersey repeatedly denying new, critical pipeline capacity – policy decisions that have been proven to drive up costs across the region.

Whether or not any of these measures will be passed is anyone’s guess, but what they shed light on is that there are measures that could be taken by states and the federal government to lower energy costs for Americans that, as of yet, haven’t even been considered. Maybe it’s time they should be.

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