Critics Blame Cuomo for NY Gas Price Spike

Gas prices up, temperatures down, Cuomo still undecided on fracking

Anti-fracking activists in Albany, NY / AP
• January 7, 2014 2:45 pm


Constraints on natural gas supplies are driving up heating prices in New York as the state faces bitterly cold temperatures, and some say Gov. Andrew Cuomo’s indecision on key oil and gas regulations is exacerbating the problem.

Cuomo has repeatedly delayed a decision on whether to allow hydraulic fracturing, an innovative oil and gas extraction technique, in the state. As demand for natural gas skyrockets during the ongoing cold snap, experts say a lack of supply in New York is driving up prices.

Prices are up throughout the northeast, according to the Energy Information Administration. But neighboring Pennsylvania, which has mostly embraced fracking, has seen much smaller increases in natural gas prices than New York.

"The importance of supply changes for prices is shown at the Transco Leidy Hub in Pennsylvania where prices in 2013 were only 11 percent higher than in 2012, despite much greater absolute and percentage price increases at nearby hubs serving New York City and Boston," EIA explained in a report released on Tuesday.

Transco Zone 6 natural gas in New York has seen a 61 percent spot price increase since 2012, EIA noted.

A price spike caused by supply shortages could focus attention on Cuomo’s indecision on hydraulic fracturing. The governor has put off a decision on the practice for years, in what many see as deference to powerful environmental interests in the state.

Environmentalist groups are planning a large protest outside the governor’s upcoming State of the State address. They will demand that he permanently ban fracking in New York.

Critics say Cuomo’s refusal to approve fracking in the state has exacerbated supply problems, causing gas prices to spike.

Thomas Pyle, president of the Institute for Energy Research, called the convergence of record low temperatures and higher natural gas prices "a teachable moment."

"There’s no reason why New York cannot be enjoying or benefitting from the economic advantages that the state of Pennsylvania is reaping as a result of the safe, responsible production of natural gas, other than keeping Yoko Ono from screaming at the top of her lungs in a microphone," Pyle said in an interview.

Ono, one-time wife of Beatles frontman John Lennon, is the public face of the anti-fracking effort in New York. Her group has come under fire for lobbying state officials on the issue without filing legally required registration forms.

"It’s time for the governor to stop contemplating his run for the presidency and take care of the citizens of New York," Pyle said. "That would be a lot more beneficial to whatever his political ambitions are, but unfortunately I don’t think he sees the world that way."

Cuomo’s office did not respond to a request for comment by press time.

The natural gas boom in Pennsylvania has helped alleviate some of the supply shortfall in New York as pipelines ship gas from the Marcellus shale formation to the Empire State.

But EIA noted that "northeastern pipeline constraints" have "prevented supply from increasing to meet higher demand."

"On the natural gas side, pipeline capacity constraints during periods of high natural gas demand can result in a distinct price separation among regional markets, which translates into differences in spot power prices," another EIA report explained.

New York is considering additional pipelines to increase its capacity, but environmentalists oppose that step as well.

Groups such as the Sierra Club have participated in "civil disobedience" designed to stop the construction and utilization of pipelines that bring natural gas to New York City, where it often supplants more environmentally destructive heating oil still used in much of the city.

"Opponents of these pipelines stand in solidarity with all communities resisting the deadly intrusion of fossil fuel infrastructure, and support the transition to a system based on safe and affordable renewable energy," one such group declared.

"The reasonable plan is to stop using gas––or any fossil fuel––altogether," another stated.

Pipeline supporters say opposition to the projects translates directly into higher heating bills for New Yorkers by exacerbating the "pipeline capacity constraints" described by the EIA.

"Anti-fracking groups have become so self-righteous that they think linking pipelines to ‘dangerous fracking’ will somehow save the world," said Steve Everley, a spokesman for the industry site Energy In Depth.

"In reality, all it does is force families in places like New York to pay significantly higher energy bills. … People in the northeast are worse off because of anti-fracking activism, and this proves it."

With temperatures in New York at decade-lows, Pyle thinks the higher energy bills in New York will allow the state’s residents to see through some of the more heated political rhetoric.

"I’m guessing that when homeowners open up their utility bills and see what they’re paying and hear that their neighbors just across the political dividing line [in Pennsylvania] are paying significantly less, they will be asking a lot of hard questions of their politicians."

Published under: Climate Change, Fracking, Natural Gas, Oil