Why would a company with a de facto monopoly actually turn down new business? That is what utility giant National Grid is doing across New York, holding homeowners and small businesses hostage to its demand to get a new fracked gas pipeline in New York Harbor.
The company claims it can’t hook up any new homes or businesses because of a problem of supply. But there are reasons to be skeptical of this PR campaign. In fact, it’s straight out of a very old playbook.
Earlier this year, New York rejected a plan to build the billion-dollar pipeline to deliver fracked gas from Pennsylvania to the Empire State. The application was denied based on an array of harms, including the release of mercury and other toxins in waters now experiencing a remarkable recovery.
More broadly, activists have fought the pipeline because of its impact on the climate. Doubling down on fracked gas as a fuel source means increased greenhouse gas emissions, fueling the emergency in which the planet finds itself.
So now, to step up pressure to get its pipeline built, National Grid is saying: No new pipeline, no gas service.
This is a dubious argument. Building new infrastructure is a mutually beneficial arrangement for pipeline companies and utility companies. While new projects are justified as necessary to maintain adequate supply, in reality it is a tails-we-win, heads-you-lose scenario that guarantees increased profits. The money comes from the rest of us, in the form of higher utility bills.
National Grid is going to extreme lengths to plead its scarcity case, encouraging customers to lobby lawmakers and regulators, and running radio ads blasting out their argument.
Playing the scarcity card to hurt ratepayers and scare politicians is an old industry tactic. In the early 1970s, gas companies warned that supplies were running low. Back then, a few federal politicians like Sen. Philip Hart weren’t buying it, and launched an investigation that showed it was a ruse cooked up by a highly consolidated industry that wanted more freedom to gouge ratepayers.
Then, just like now, the industry peddled its story directly to the public. The American Gas Association ran ads in Life magazine in 1971 saying that while they were proud to serve customers, it would “take higher prices to keep the gas coming.” By 1974, the industry escalated its campaign by slowing down production and taking wells offline.
One company even went so far as to drastically curtail service to the East Coast, in a blatant attempt to cause havoc and build political pressure. That company? Transcontinental Gas, now owned by the Williams Company.
The company’s hostage-taking proved effective; the Carter administration agreed to a plan to re-organize the Energy Department, giving the fossil fuel industry the lax oversight it sought all along.
This time around, things can be different. New York City elected officials are denouncing the company’s scam, and Gov. Cuomo has broadened the investigation into National Grid’s denial of service.
The industry playbook may not have changed much, but political reality — a climate in crisis and a public demanding bold action to get off fossil fuels and into clean energy — will prove to be a more potent deterrent this time around.
Hauter is the executive director of the national advocacy group Food & Water Watch and the author of “Frackopoly: The Battle for the Future of Energy and the Environment.”