New York State Is Starting to Face Reality on Natural Gas…But, Reluctantly!

Our friend Roger Caiazza took the time to check out New York's Energy Planning Board meeting and, for that, he is due enormous praise, as it was one of the most scripted, robotic and boring events I’ve ever perused. These people have no lives and are slaves to New York State political correctness. Roger provides some overview in a post here and will be digging into the details with additional posts.

Given my inability to pay attention throughout the dreadful succession of monotone performances and powerpoint boredom, I decided to just investigate what was said about natural gas. What I learned is that New York is gradually being forced to come to terms with the fact it needs natural gas and cannot eliminate it. Take this commentary, for example:

[W]e know we face challenges. These are challenges that the Climate Action Council did perhaps did not foresee in 2019 and, the subsequent years as we advanced the scoping plan. But, importantly, and, perhaps in a dynamic way, our ability to bring new renewable generation online may continue to be affected by actions at the federal level. So, this is something that may evolve as this year, develops and something that is hugely, significantrelative to the other issues that we're describing.

But, also, with respect to the analysis, it shows us that reliability needs may require the maintenance or repowering of natural gas generating units in the 2030s and beyond. And this is where I had wanted to highlight the consistency of this analysis with the power trends reports that Rich just mentioned earlier today, where we see a call for repowering both renewable and combustion generating units in that time frame.

Wow! That's a huge admission. And, repowering of renewables is a fantasy as we know, so it's all about bringing old and new gas plants on-line. It’s just incredible ti imagine New York has been forced to acknowledge it.

But's there’s more:

[T]hank you to the planning board for the opportunity to share key findings from the draft state energy plan for the natural gas sector…

Natural gas is one of the most important fuels used by New York residents and businesses to meet their energy needs. In 2022, natural gas accounted for thirty nine percent of New York's primary energy consumption.

Natural gas is used in residential and commercial buildings for space heating, water heating and cooking, for electricity generation, to support industrial processes, and for other uses.

As we'll discuss, we're entering a transitional period for the natural gas sector, which will require strategic planning and thoughtful policy making to ensure New York's energy needs continue to be met safely, reliably, affordably, and in a way that supports the achievement of broader state policy goals.

While New York's natural gas consumption is expected to decline over time, the natural gas system will remain essential for serving New York's energy needs under all scenarios throughout the SEP planning horizon.

Gas planners must continue to ensure safety and reliability by proactively addressing existing and emerging risks.

New York already has a robust multi-stakeholder approach for managing gas system reliability, which includes advanced winter preparedness planning, intra and interstate emergency response coordination, regulations to ensure safe installation and operation of pipelines, and assessments of how utilities can harden their systems to threats posed by climate change.

Notably, New York receives a substantial majority of its natural gas supply from imports through interstate pipelines, and parts of New York, especially downstate, operate under constrained supply.

As such, extreme weather events that impact upstream sources of gas supply, like winter storm Elliott, have the potential to threaten gas reliability here in New York. So it's essential that gas transmission operators, utilities, and the state continue to plan for a reliable and resilient gas system through strategies like maintaining a diverse supply portfolio and demand management.

Gas planning and investment standards need to be evaluated to ensure that they maintain reliability while protecting affordability as the climate and patterns of consumer demand change.

Gas utilities ensure their systems can meet peak demand for a design day, which typically reflects the coldest weather historically experienced in a utility service territory.

This design day standard has helped ensure a very reliable gas system in New York.

Design day demand can be influenced both by shifting patterns of consumer usage from electrification and energyefficiency and from a warming climate.

So utilities should evaluate whether their planning standards properly balance reliability and ratepayer costs using the best available climate science and data on customer usage.

In addition, when evaluating investment in new gas supply infrastructure, the state should consider the potential to reduce vulnerability to upstream supply disruptions.

As noted before, while there may be some regional variability and localized near term growth, natural gas use is expected to decline over time, over the long term, due to state policy and shifting customer preferences towards cleaner alternatives.

This decline would constitute a significant shift from his from the historic trend of growing natural gas use over the past several decades in New York. The state must plan for this shifting landscape through programs, policies, and regulations that reduce greenhouse gas emissions while ensuring that New Yorkers have access to safe, reliable, and affordable energy.

The projected decline in gas system use poses challenges to energy affordability that must be proactively addressed through long term and integrated planning.

Fundamentally, if gas system use declines but investment in the system does not, energy prices can increase driving up bills for customers that continue to use gas. So to maintain affordability and reduce stranded asset risk, utilities must invest efficiently, including in non pipe alternatives or NPAs and demand management.

The state is already making progress on these fronts, especially through the long term gas planning proceeding, but there's need for continued progress.

We recommend that gas utilities be required to identify areas where their distribution systems will be necessary in the long term and prioritize investment in those areas.

We recommend that the gas and electric utilities conduct infrastructure planning on a more integrated basis to optimize energy system investment, and we recommend that utilities continue to prioritize investments in NPAs such as targeted electrification and efficiency, as well as lower cost alternatives to pipe replacement like repair and relining.

Given limited experience with integrated planning and limited six limited deployment of NPAs to date, enhanced planning practices, datasets, and analytical tools will need to be developed to ensure investments in the overall energy system areas efficient as possible, and the state should help support the development of those tools.

Reading the above carefully, it is another unofficial apology for supposing natural gas can be eliminated. Oh, the weasel-wording is there to suggest there's no change in New York's plans for transition, but, reading between the lines, natural gas isn’t going away and will increase along with nuclear. There’s no choice, and, while demand restriction is thrown out as a possibility, ala Andrew Cuomo's bullying of utilities and their surrender, it's now an alternative, not the policy. The presenters were instructed to shift the message but muddle it a bit. That’s what happened.

I eagerly await Roger's take!

#NewYork #Climate #ClimateChange #EnergyPlanningBoard #NaturalGas