Today’s Upside-Down Preference for Wind over Natural Gas

This past May, President Trump and New York Governor Kathy Hochul struck a contentious political deal to break the energy gridlock that has plagued New York, and indeed all of New England. Trump, for his part, announced he would remove the barrier the federal government had raised to the completion of the Empire Wind 1 offshore farm that New York had proposed to advance its stated goal of “decarbonization” by weaning itself from all fossil fuels. The Governor’s apparent quid pro quo was more guarded. She would not waive any of the state’s exacting standards for blocking new pipelines but she was prepared to “work with the Administration and private entities on new energy projects that meet the legal requirements under New York law.” The two pipelines seeking revival are the Constitution Northeast Supply Enhancement pipelines that could carry natural gas (usually cheaper and superior to the heating oil commonly used in the Northeast) from the Appalachian shale field through New York to the Northeast. It is a bad trade all around. The pipelines should be a gimme. Wind remains a disaster.

Start with wind. The Hochul wind facility may be completed, but only if the government overcomes intense political opposition that has savagely attacked wind up and down the Atlantic coast. These massive new structures require equally massive foundations that necessarily inflict major damage on vital shoals that serve as breeding grounds for various fish. Their blades may not emit carbon dioxide, but the noise they produce during routine operation is a serious form of pollution with negative effects on the spawning of all local fish and the various species of whales that travel through the region, which are easily disoriented or thrown off course by the underwater noise. These facilities, moreover, do not last forever. Indeed, all too often, they need repair while in ordinary use because their design is stretched to extract the last amount of energy without due regard for the risks created. They require constant maintenance in a hostile ocean environment and are susceptible to the risk of catastrophic failure. Thus, last year, a Nantucket wind farm failed in ordinary operation when one of its oversized 300-foot blades imploded, casting bits of foam and fiberglass up and down the Atlantic coast. The manufacturer of the blade, Vineyard Wind Farm, apologized for the loss, dismissing it as “highly unusual and rare” and promising to investigate. However, the company did not indicate that it was prepared to pay any fines, accept any tort liability, or make any voluntary payments to offset the massive damages, both long-term and short-term, to both public and private property. Liability under the Oil Pollution Act 1990 covers containment, cleanup, and damages resulting from the spill. Liability at common law for oil spills has been established for decades. Why coddle wind energy?

The woes do not stop here. These massive facilities are as expensive to dismantle and remove at the end of their uncertain useful life as they are to maintain during the period of operation. The effectiveness of any facility is not justified solely by the absence of carbon dioxide emissions, while ignoring other forms of pollution emitted during its operation. Instead, the more accurate accounting is always a life-cycle proposition, from conception to conclusion, for current facilities, which must also take into account the extent to which future advances in technology can improve matters.

Hochul’s wind farm should be shut down, like others in a failing industry, at home and abroad. Fracking should be allowed (not subsidized), and pipeline construction should not be forced to run an impossible gauntlet. Unfortunately, New York has long taken the opposite course of action. First, in 2014, then-Governor Andrew Cuomo refused to allow any fracking in the rich Marcellus shale, citing that its adverse effects on global warming—never estimated—would be long-lasting, while its benefits would be “far lower than originally forecast,” which seems counterintuitive for an industry that is booming wherever it is allowed. Nor did he address two key objections to his position. First, safety records of all extractive technologies improve rapidly over time, and indeed have made significant advances well before the 2014 decision; indeed, today many pipeline repairs can be made using “no-dig pipeline spot repair using material and automation technology.” Second, the energy that cannot be obtained from these sources has to be obtained from somewhere else, mainly because the applications to build more pipelines across the state have also been denied because the proposed plans did not meet the exacting requirements for review on state law.

This double-whammy brings to mind the famous line from Samuel Taylor Coleridge’s poem, “The Rime of the Ancient Mariner,” which reads: “Water, water, everywhere, nor any drop to drink,” stating the plight brought upon sailors stranded in salty ocean waters. The energy shortages that now plague the American Northeast read, similarly, “oil, oil, everywhere but not a drop to burn.” Yet there is this big difference. Nature has supplied the Northeast with an abundance of nearby energy in the Marcellus shale that runs through both Pennsylvania and New York. Pennsylvania has allowed for aggressive fracking in its portion of the shale and has become significantly wealthier as a result.

The Pennsylvania decisions on fracking are not lightly made. The owners of the surface are in no position to frack themselves, so there are commonly oil and gas leases with surface owners who receive a royalty and other protections in exchange for giving companies the right to frack for the oil and gas. This simple arrangement contains two forms of protection. First, the drilling company that leaks necessarily loses a substantial source of revenue, as it faces the heavy costs of fixing the leak and the resulting damage, so that its operations can continue. Second—and missing for wind damage—the leakage or damage has powerful adverse effects on the surface owner, who faces lost revenue and potential property damage and will exert private pressure on the fracking company. Ditto for heavy damage awards to injured third parties, and it should be no wonder that the advances in fracking dwarf those for wind farms, which at present do not face these risks. Indeed, these fracking operations usually take place at depths of 5,000 to 10,000 feet—which is far below water tables—not in the choppy waters of the North Atlantic. Any fracking operations closer to the surface may well present environmental risks that could require more intensive safety regulation, higher levels of insurance, or local bans. Yet the safe operations in places like Texas, Pennsylvania, and Ohio should have convinced Governor Hochul to revisit New York’s ban, but her recent remarks make it all too clear that she is utterly unresponsive to any technology-driven changes in the social cost-benefit ratio.

The same is true concerning new pipelines, which can be developed with safety and monitoring features that were unattainable just a decade ago. The risks associated with pipeline operations occur within a closed environment, so there is no need to segregate their operation from other forms of traffic. Even back in 2014, the hazards were multiplied by road and train accidents because the activities took place in more complex, mixed environments, much like allowing skateboards on interstate highways. It hardly makes sense to purchase natural gas from Russia when other, nearer, and cheaper sources are readily available. Yet in dealing with the approval process for pipelines, New York does not apply Hochul’s imaginary neutral “legal requirements” to these activities.

Sadly, the current debate is in part a re-run of an earlier effort of the Williams Company to build natural gas pipelines, which the Court of Appeals rebuffed for the Second Circuit in Constitution Pipeline v. New York Department of Conservation (2017), where the company sought to build 121-mile pipeline from Pennsylvania to New York, with 98 miles located in New York. Under the law, New York's energy department had to approve the “public convenience and necessity” of the pipeline, which should have been a no-brainer, given the chronic shortages of natural gas in New York and indeed all of New England. Nonetheless, the hostile agency bombarded Williams with demands for detailed information about route selection and safety precautions that had to be answered on an individual basis for every creek or stream in the pipeline’s path. There was nothing distinctive about this pipeline or its rivers and streams. A short route is almost always best, especially when it follows previous pipelines. The construction techniques likewise should have been standardized by adopting a rule that used a more expensive diversion technique for larger streams and simpler underground drilling techniques for smaller ones. But the judicial review never challenged these onerous requirements, but only asked whether the state agency satisfied a low standard of review that gave it loads of discretion to impose these demands, which led to the forced abandonment of the route—which of course was not costless given that shortages persisted and more dangerous delivery systems remained in use.

It is a profound blunder of modern environmental policy to reject newer, safer projects for the more dangerous products currently in place. Hochul goes astray if she insists on a repetition of the overburdensome agency review, followed by a lax standard of judicial review. It will be a re-run of the earlier fiasco, unless she reins in her own agency as part of this deal. And if she does not, Trump should step in more forcefully and insist that the federal government undertake the review process of this interstate pipeline, which it can then run more expeditiously. It is a sign of deep intellectual confusion for Governor Hochul to favor dangerous wind over safer fracking under the guise of wind’s supposed environmental virtue.

Richard A. Epstein is a senior research fellow at the Civitas Institute. He is also the inaugural Laurence A. Tisch Professor of Law at NYU School of Law, where he serves as Director of the Classical Liberal Institute, which he helped found in 2013. Epstein is also the James Parker Hall Distinguished Service Professor of Law Emeritus and a senior lecturer at the University of Chicago.

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