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Environmental Protection Agency Administrator Andrew Wheeler slammed New York Gov. Andrew Cuomo for holding up natural gas pipelines.

 

The New York governor's decision to veto pipelines is "the worst environmental decision by an elected official in the past year," the EPA administrator said during remarks Tuesday to the Detroit Economic Club.

In fact, the decision is "subjecting New England and New York to further imports of natural gas from overseas," Wheeler said. He added that American natural gas is produced in "a much cleaner and environmentally conscious manner" than gas from Russia, which Wheeler said is where New England is importing from.

Cuomo has repeatedly rejected permits for construction of natural gas pipelines in New York, citing water quality concerns under section 401 of the Clean Water Act.

The Trump administration, however, is seeking to rein in states' authority under that section of the law, following criticism from industry, energy states, and Republican lawmakers that blue states were holding up critical infrastructure.

Wheeler appears to share those concerns, saying that most states use their section 401 authority "thoughtfully" but New York was not one of those.

Cuomo "isn't vetoing for water quality reasons. He's vetoing because he doesn't like fossil fuels," Wheeler said.

Wheeler also suggested that importing natural gas from foreign sources harms the climate more than transporting American natural gas in pipelines.

 

"I assure you that Russia is not at all concerned about their methane emissions," Wheeler said, adding that the carbon footprint of transporting gas by ship is large.

The EPA is now reviewing comments on its proposal to limit states' use of section 401, which is sure to draw fire from blue- state attorneys general.

Democratic lawmakers have also cried foul, calling the proposal an assault on states' rights.

"In our view, this is a full-throated refutation of the state authority explicitly preserved within the Clean Water Act, and a total abdication of any pretense of cooperative federalism carefully created by Congress," Senators Tom Carper of Delaware, Tammy Duckworth of Illinois, and Cory Booker of New Jersey, wrote in a letter to the EPA on Monday.

"There is no legal basis, no national economic justification, and no definable wrong that would motivate rational policymakers to undertake such a rulemaking," the senators added. "It is just wrong."

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How do you know Gov. Andrew Cuomo has realized a policy is a political loser? Watch for him to start claiming someone else is responsible.

Thus his comment in an interview last week about how the “political decision” of OK’ing a pipeline to ease the Brooklyn and Long Island natural gas shortage “will probably come down to the state Legislature.”

Bull: It’s Cuomo’s Department of Environmental Conservation that blocked the Williams pipeline on spurious water quality grounds. (Yes, spurious: It would run next to another pipeline, built years ago with less advanced technology, that plainly didn’t poison New York’s water.)

Even if lawmakers changed how the DEC is to make such decisions, it’d still be the DEC’s call — and the DEC would still be doing exactly what the governor ordered.

Cuomo has plainly ordered up a near-total ban on new pipelines to win the favor of extreme greens. But that leaves businesses and homes stuck without access to natural gas and having to rely on higher-carbon fuels.

First, the gov blamed the relevant utility, National Grid; now he’s fingering the Legislature. If only he could find a way to pin the blame on Mayor Bill de Blasio …

On Monday, September 23, 2019, at about 1:00 am, a truck carrying compressed natural gas overturned on Interstate 88 near Binghamton, New York. The crash killed the driver, 52 year old Jeffrey Lind, and punctured the truck’s container system, resulting in compressed methane gas leaking into the atmosphere. That caused Governor Andrew Cuomo to issue a state of emergency in Broome County, New York.

Mr. Lind’s truck was part of a “virtual pipeline” that has been established to transport natural gas drilled in the Marcellus region of northeastern Pennsylvania, just south of the New York border, to customers in the southern tier region of upstate New York. The reason for the truck convoy “virtual pipeline”, of course, is Governor Cuomo’s refusal to issue the permits necessary to allow natural gas pipelines through New York State. Indeed, the route followed by many of these trucks basically mimics the route of the proposed Constitution Pipeline itself, which the Governor has blocked for years.

Environmentalists were quick to call for an end to the truck convoys. They demanded to know why the trucks were allowed to drive near homes, schools, and places of worship. These arguments are identical to those used against construction of the pipelines, but ironically give support to the energy industry’s argument that pipelines are the safest means of transportation for natural gas. The Lind crash was the 11th in just the last two years in New York suffered by XNG, the carrier charged with transporting the gas. In at least three incidents, gas has ruptured from the containers and leaked into the atmosphere. September’s accident caused the closing for a day of two school systems and the evacuation of approximately 80 homes.

Left unanswered by the environmentalists’ demand for an end to the truck convoy is any practical solution to how to deliver the gas to the people who need it. Winters in upstate New York are notoriously long, cloudy, snowy, and cold. While the Governor uses the power of his administration to block creation of a natural gas infrastructure in his state, he fails to address the effect that his actions are having on its citizens: How will upstate New York keep the lights and heat on during the winter? New Yorkers already pay some of the highest prices for electricity in the nation. If the current winter is cold and snowy, they could see price spikes that will cause energy prices to soar.

Both solar and wind power are great technologies with numerous advantages, but also have issues that manifest themselves dramatically in places like the southern tier and Central New York. Solar will be of little use during the immense number of cloudy days in upstate New York, and solar does not generate any power at night. Wind power is notoriously spotty and irregular. Neither has the battery storage needed to make electricity available when they are not generating power, nor has the existing power grid been upgraded to allow power made from renewal sources to get from remote places where it may be generated to those population centers where it is most needed. Meanwhile, the existing nuclear power plants are being decommissioned without replacement. Hydro energy sources from Canada not only involve large dams that can be environmentally harmful, but would necessitate the construction of new infrastructure. Even if power systems based entirely on renewables could be created, they would not be danger free - witness the California wild fires last year sparked by power lines from Pacific Gas and Electric.

In the coming days a Spanish-flagged ship, the Catalunya Spirit, will deliver a shipment of Russia-originated liquefied natural gas (LNG) to Puerto Rico. Bizarrely, the United States—a leading exporter of LNG—is nonetheless importing it from a geopolitical rival. And this isn’t a first. Last year a supply of Russian LNG arrived in Boston amidst a spike in demand to fight off the winter cold.

So what gives?

Basically, the Jones Act. This 1920 law mandates that vessels transporting cargo within the United States must be U.S.-registered, at least 75 percent U.S.-owned, at least 75 percent U.S.-crewed, and U.S.-built. But no ships capable of transporting LNG in bulk quantities that meet these requirements exist. Of the world's more than 525 LNG carriers, not a single one is Jones Act-compliant. And so even as ships laden with U.S. LNG voyage to countries as distant as India and Japan, it cannot be sent by water to other parts of the United States.

This is almost certain to remain the case so long as no changes are made to the Jones Act. The law’s strictures virtually guarantee that transporting U.S. LNG to Puerto Rico, or via ship to any other part of the United States, will never make economic sense.

The cost of ship construction alone is prohibitive. According to the Wall Street Journal, a U.S.-built LNG carrier would cost over half a billion dollars more than one purchased from a South Korean shipyard ($700 million versus $180 million). Beyond the general inefficiency of U.S. commercial shipyards, this differential is explained by a lack of expertise—U.S. shipyards have not built an LNG carrier since 1980. In a 2015 GAO report one U.S. shipyard admitted that to build such a ship it would have to “hire an additional 250 to 300 skilled Korean workers for the duration of the build time to ensure the work is done correctly.”

Crewing the ship with Americans still further diminishes the attractiveness of a Jones Act-compliant LNG carrier. U.S.-flagged ships are estimated to have operating costs in excess of $6 million per year compared to ships operating under foreign flags, with U.S. crews the primary cost driver.

To make the math pencil out, a Jones Act-compliant LNG carrier would have to charge rates well above those of foreign-flagged carriers. This would cut into the savings of using cheap U.S. LNG in the first place, if not erase it entirely. And when such a ship was not delivering LNG to Puerto Rico, how would it earn its keep? For deliveries to international destinations the ship would have to compete against foreign-flag vessels with far lower costs. Any U.S.-built and U.S.-crewed LNG carrier would almost certainly be unemployable and unviable on a long-term basis.

Flying cows and the importation of Russian gas—the gross inefficiencies wrought by the Jones Act would be laughable were they not so serious.

Colin Grabow is a policy analyst at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies.

This article originally appeared at the Cato Institute.

 

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