Catching National Fuel Gas telling fibs

On the seventh day of Christmas, the PSC gave to me: A punt on National Fuel

Catching National Fuel Gas telling fibs

There are two kinds of people in this world.

There are those who read Biden’s statement on the death of Henry Kissinger this November and think, “Well, that seems like a typical nice bland sort of thing a politician says when someone dies.”

And there are those other people, who have maybe spent a little too much time in or around government, who read that statement and go “Holy shit, he hated that man. Ice cold, Joe.”

I’ve spent enough time reading state climate policy-related documents that the New York State Public Service Commission’s response to National Fuel’s long-term plan reads to me like “Damn, you lying bastards. Go fix this shit.”

Does it actually say that? It does not.

“The New York State Public Service Commission (Commission) today directed National Fuel Gas Distribution Corporation (NFG) to take a number of actions to modify and improve its gas system long-term plan,” is how a press release announcing the PSC’s decision begins. I can already sense you falling asleep. But if you know where to look, you can see the PSC catching National Fuel in some whoppers.

National Fuel filed a required long-term plan with the PSC in 2022, and you can find it, along with a lot of supplemental documents and public comments on the plan, on the website of the PSC’s staff arm, the Department of Public Service. If my link in this paragraph isn’t working: Try searching the DPS site for case number 22-G-0610.

Like other gas utilities in New York State, National Fuel has a lot of aging and expensive infrastructure. They are responsible for maintaining a large distribution network of pipes that supply homes and buildings with natural gas — a substance mostly made up of methane, and an even more potent climate pollutant when it escapes than when it is burned. A lot of these pipes are old, and, to use an industry term, “leak-prone.”

There’s one way to minimize dangerous and climate-wrecking gas leaks: Replacing all that “leak-prone” pipe with newer, stronger, less decrepit stuff. That’s an expensive task. Gas utilities fund it by “rate-basing” — or, in other words, spreading out the cost of repairing and replacing leaky old pipe across the bills of all of their customers.

There’s another way to get rid of gas leaks, but gas utilities don’t like it much: Planning for the gradual phaseout and eventual end of utility gas service, one neighborhood at a time.

That’s the approach that seems actually compatible with meeting climate goals in New York State. There’s no way around it: The state’s natural gas distribution networks are large, and although rural areas are dominated by fuel oil and propane, New York relies heavily on piped-in gas for heating in more urban neighborhoods. Building HVAC is the number one source of emissions in New York, surpassing transportation and electrical power. Getting rid of greenhouse gas emissions will eventually mean shifting away from natural gas heat.

But utilities are in the gas business, and even if they also serve electricity, most of them want to keep their gas infrastructure and their gas customers. (The exception here is Con Edison, a combined gas and electric utility that thinks it can win in the transition away from using natural gas to heat buildings.)

They can’t argue that they should keep selling fossil natural gas forever, because they know that’s not compatible with climate goals, and we have a climate law in New York that makes that clear. But they really want the PSC to let them raise their rates on gas customers, and use that money to fund a lot of investment in replacing their old leaky pipes.

So what do they do? They tell fibs.

Here’s a big one: “We won’t serve fossil gas forever, but we can keep our stuff. We can just put renewable natural gas and hydrogen in the same old pipelines, and then we won’t have to get rid of them.”

Hydrogen fuel produced by splitting water molecules with a renewable source of electricity is zero-emissions, and can be mixed with natural gas in pipelines in small quantities and burned for heat. But it’s not a great idea, for a couple of reasons. One is that it’s hugely expensive. Another is that hydrogen makes metal more brittle and prone to breakage. That’s not a good thing in pipelines.

Then there’s “renewable natural gas,” or RNG. It comes from agricultural waste, wastewater treatment plants, and landfills — and it behaves a lot like regular fossil natural gas, because both of them are mostly methane. The main problem with RNG is that — like hydrogen — it’s expensive, and there isn’t remotely enough of it to fill New York’s gas pipelines with reclaimed cow gas instead of the underground fracked variety.

The PSC didn’t exactly tell National Fuel their gas plan is garbage. But they did tell them to go back and do a bunch of homework on their unrealistic claims about hydrogen and RNG. And they will also have to work on programs that provide alternatives to gas heat, like heat pumps. Here’s the relevant bit of the press release:

“Specifically, the Commission directed NFG to make filings in the near-term to propose demand response programs and pilot projects focused on cold-climate air source heat pumps. The Commission also directed NFG to provide more complete information on rate and bill impacts resulting from its long-term plan, to develop criteria for determining when leak prone pipe segments can be replaced with non-pipe alternatives, to develop with stakeholder input a benefit-cost handbook to be used to evaluate future non-pipe alternatives and provide updated information on the availability of renewable natural gas in its service territory. In its next long-term plan filing, NFG is directed to include scenarios that evaluate the use of hydrogen and meet demand growth solely with non-pipe alternatives.”

If this sort of stuff is interesting to you, I highly recommend reading a report released this year by the Building Decarbonization Coalition, “The Future of Gas in New York State.” It lays out the looming problem of New York’s many miles of leak-prone pipe, and how, without planning for phasing out gas, it may end up falling in an increasingly expensive way on a shrinking (and trapped) pool of natural gas customers.

On that happy note: Happy New Year, almost. See you in 2024.

On the seventh day of Christmas, the PSC gave to me:
A punt on National Fuel

Boosts for new renewables
Coal country dollars
Local energy grants
Climate banking guidance
And a cap-and-invest study