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New York’s NatGas Industry Still On Defense as Enviros Step Up Fight

It was in May, about two years after New York officially banned high volume hydraulic fracturing, that a coalition of more than 40 business, labor and industry interests came together to defend  and promote natural gas development in the state.

In a place that’s been less than hospitable to natural gas, New Yorkers for Affordable Energy was about getting members outside of the silos they had been fighting in to share a common message.

“I just saw that there wasn’t a cohesive voice for the energy industry to push back on the opposition in any way,” said Millennium Pipeline Co. LLC’s Michelle Hook, who as director of public relations has been forced to deal more directly with industry opponents in the state who are contesting the Valley Lateral project. She spearheaded forming the coalition, and said it “seems to work better with the safety of numbers to actually combat what’s coming from the environmental side.”

Even after the fracking ban, the gas industry and its allies still find themselves on defense in New York. They’re fighting a different kind of battle that’s shifted to protecting existing operations, midstream expansions and prospects for more end-users.

The opposition has stepped-up its efforts. National, state and local environmental groups banded together earlier this month for a “week of action.” Demonstrations and press conferences were held to oppose gas projects in all corners of the state, from a power plant under construction in Orange County and a long-delayed propane storage project in Schuyler County, to a proposed micro-grid in Albany and a pipeline expansion to feed growing demand in New York City. 

The anti-fossil fuel campaign, however, is part of a broader push to pressure Democratic Gov. Andrew Cuomo to more fervently support the environmental cause as he enters an election year in 2018 for a third term.

Cuomo is considered a friend to the environmental camp, which has seen increasing success in New York. The New York State Department of Environmental Conservation (DEC) recently denied water quality certifications (WQC) for National Fuel Gas Co.’s (NFG) Northern Access expansion project, the Constitution Pipeline and the Valley Lateral, stymieing more than 1 Bcf/d of takeaway capacity.

Public messaging, lobbying, building grassroots support and dealing in the facts has become much more important for the industry on the ground.

Hook, who formerly worked in the Cuomo administration, said Millennium has had to focus about how it engages with the public in New York to build support for projects given the industry’s setbacks. Millennium operates 244 miles of pipeline across the Southern Tier. She credited having a strong presence in the communities where Millennium works with helping to get the Eastern System Upgrade approved, a project that’s much larger than the eight-mile Valley Lateral that would supply a gas-fired power plant under construction. 

The lateral was eventually cleared to proceed with construction after the Federal Energy Regulatory Commission waived New York’s authority because it took DEC too long to issue a decision on the WQC.

But to combat the abundance of “inaccurate information” about its projects, Hook said she has turned to research firms for reliable information to use at town hall meetings, on the internet, in direct mailers, radio campaigns or in any kind of messaging at all.

“I think that has helped us to have that information in our arsenal just to put it into context that these facilities are not doom and gloom and just making sure that we partner with the right environmental groups, the credible ones,” she said.

Hook added that it has become increasingly important to be environmentally conscientious during pipeline development, not just in New York, but across the country. She said Millennium has worked closely with various conservancy groups and provided hundreds of thousands of dollars in recent years for stream restoration along the pipeline in the state.

Williams, which has partnered with others to develop Constitution, and NFG are both members of New Yorkers for Affordable Energy. Company representatives said the coalition is helping them with outreach efforts in the state.  

Zack Hutchins, a spokesman for the coalition and the Business Council of New York State, said the coalition has been proactive in responding to decisions affecting individual natural gas projects. A listening session was also recently held in Buffalo to discuss the state of gas development in New York, with others planned next year.

“I think the industry is moving forward with what it needs to do,” he said. “We felt that there was a story that needed to be told and we also felt that being able to blend the voices of labor with business creates a nice coalition and a different perspective that wasn’t getting out there, and we wanted to make sure those voices were being heard.”

The governor, whose office did not comment for this story, entered office in 2011 as a moderate centrist on economic issues, but there is a sense that he has moved to the left on energy and social issues. The energy industry has argued in court that DEC’s decisions have been politically motivated, which the agency denies.

“Cuomo isn’t the governor, he’s the king of New York,” said John Holko, secretary of the Independent Oil and Gas Association of New York (IOGANY). Cuomo has not only consolidated power in Albany, but also co-opted the environmental movement in a way that has garnered national progressive support to benefit other political aspirations such as his rumored interest in the presidency, he said.

Food & Water Watch’s Northeast Region Director Alex Beauchamp said the environmental groups don’t see it that way at all. If anything, the state government has to stop “picking and choosing” which projects move forward and which don’t. He pointed to the recent approvals of the Atlantic Bridge project and Millennium’s Eastern System Upgrade as examples. The governor, Beauchamp said, needs to do more and the groups are going to coordinate more closely going forward to slow down natural gas infrastructure in the state.

“For us, come January, this is going to be a really interesting time...for the governor as he enters an election year and begins to court the support of climate activists,” Beauchamp said. “If he wants that, he’s really going to have to step up his game and do more than talk about climate change. He’s going to have to start rejecting some of this stuff. And more than that, he’s going to have to get us to a point where we have 100% renewable energy, which we really don’t have as a policy in New York.”

Under Cuomo’s Reforming the Energy Vision program, renewable energy generation would increase to 50% by 2030.

“I think since the ban on fracking in New York, you’ve seen a lot of the movement move to fighting these individual fossil fuel projects,” Beauchamp said. “The point of this week of action is not necessarily to highlight any one above the other, but rather to say this is all one fight and really the governor has to say no to all of it.”

The regulatory climate in the state has forced IOGANY to “quit” fighting eye-for-eye battles with environmental groups. “We can’t afford it,” Holko said.

Instead, producers that have long worked in New York are focused on priorities to keep their businesses afloat, like staving-off additional emissions regulations, changes to workers compensation or proposals to change how gathering lines are operated. Holko, who also chairs the organization’s public education committee, said the IOGANY has stopped hosting public information meetings and ended public education campaigns to win support.

IOGANY now focuses on getting in front of decision makers to air its grievances and push back against more state control. While it focuses on the high-priority concerns of its members, Holko said it’s good enough for IOGANY to know that the state will continue developing pipeline infrastructure and consuming natural gas because “Cuomo knows he needs it. The state Public Service Commission knows we need it.”

In spite of its position atop vast reserves of Marcellus Shale gas, New York has maintained a higher annual average residential natural gas price than its Appalachian neighbors since 2007.

Natural gas is used to heat about 60% of New York homes and 38% of electricity. API New York Executive Director Karen Moreau is keenly aware of the instrumental role gas plays in the state’s economy. Knowing it remains the fuel of choice, the deep-pocketed trade group has continued to push the benefits of gas and resist the efforts of environmentalists.

“For API, it’s very much a long-run game...We don’t take pages out of the environmental activist playbook,” Moreau said. “Frankly, I call them the ‘change the t-shirt gang.’ A lot of the same activists that I look at -- specifically observe outside the window here in my office in Albany -- were part of the Occupy Wall Street movement. The same activists that opposed fracking have now glued on to the ‘keep it in the ground’ movement.”

Social media has proved a vital tool, Moreau added, in combating the misinformation spread by some opposition groups. API has also built a network of engaged citizens in the state over the years to share more information locally. 

API scheduled no events to counter the environmental protests earlier this month. The fight is more complex than that in New York, where Moreau said the governor “is very, very powerful just by virtue of state law.” The legislature is also narrowly split with Democrats controlling the assembly and the Independent Democratic Conference caucusing with Republicans in the senate to give the GOP narrow control in that chamber.

While Cuomo faces no primary opponents yet, names have been floated and the governor is facing the pressure of a possible challenge.Given the timing, industry representatives fear that pressure from environmentalists could yield more results.

“Make no mistake about it, the companies that want to build pipelines and infrastructure in New York realize that they have a major challenge due to the political climate here,” Moreau said. “You can’t talk about this without understanding the politics. What we do at API, regardless of what these fringe activists are doing, is we continue to educate legislators one-on-one on the role that natural gas and hydrocarbons play both in improving the environment and being vital to an economy.”

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