Can Trump revive a natural gas pipeline in a Democratic stronghold?

Hello and welcome to Energy Source, coming to you from New York.

My Financial Times colleague Rachel Millard has examined a crucial part of the UK government’s effort to meet its decarbonisation goal: persuading consumers to adjust their electricity use.

Financial incentives may be crucial in encouraging consumers to adjust their power consumption. Northern Powergrid, which serves parts of northern England, has been offering up to £900 per megawatt hour for business and household consumers to shift consumption.

In today’s Energy Source, we take a look at the Trump administration’s push to build new pipeline infrastructure in the US north-east, a region that has been resistant to building new gas infrastructure.

Trump’s pipe dream: why a north-east natural gas pipeline may never get built

Donald Trump is on a mission to expand his “drill, baby, drill” agenda into blue states that have a history of resistance to building new gas infrastructure.

The US president has pledged to resurrect the 124-mile Constitution pipeline, a project that was cancelled five years ago after a New York agency denied it a permit following pressure from environmental groups. 

Recently, rising energy costs have softened Democratic opposition to building gas infrastructure in the north-east. Connecticut Governor Ned Lamont recently warned that the pipeline bringing Pennsylvania natural gas to his state was at capacity, while Maine’s Janet Mills has rejected state legislation to halt the expansion of natural gas infrastructure.

But in New York, where support for the Constitution pipeline’s revival is critical, Governor Kathy Hochul has yet to publicly indicate whether she would support or oppose it. Trump has said he would override any attempt by New York to block the pipeline’s return, and energy secretary Chris Wright has said construction on the project could begin this year. 

The operator of the pipeline, however, has said it will not move forward with the project unless it receives support from Hochul. 

“The governor has got to be supportive of it,” Williams Companies chief executive Alan Armstrong told Energy Source. “We’re not gonna throw ourselves into a bunch of lawsuits.”

Backing the revival of a pipeline would be a significant political risk that could alienate environmental groups that are a crucial part of the New York Democratic base as Hochul faces a tough re-election next year.

“There’s no upside for her to stand against the president and there’s no upside for her to agree with the president,” said Max Morgan, founder of consulting firm Manhattan Strategies, who also served as deputy press secretary to former New York governor Andrew Cuomo. “Why would she sacrifice her environmental credibility for a project that frankly is never going to happen?”

Former Ohio congressman Tim Ryan, who is now the co-chair of the advocacy group Natural Allies for a Clean Energy Future, acknowledged that it would be politically fraught to support the pipeline. 

“Some leader is going to have to step out and maybe take a little bit of a risk,” he said. 

Hochul may not be able to afford to take such a risk ahead of a Democratic primary. Only 39 per cent of voters are prepared to re-elect Hochul, according to the latest Siena poll, with only a small majority of Democrats supporting the governor. 

Mark Izeman, a senior strategist at the NRDC — an environmental group that was involved in litigation over the project in the past — said the governor’s office was likely aware that any attempt to revive the project would be met with “stiff and deep resistance across the state”. 

“It’s fair to expect that any attempt to move forward with this ill-conceived project would be met with opposition from many quarters and would likely end up in litigation,” he added. 

The US president and the New York governor met in March to discuss congestion pricing and the Constitution pipeline but no formal agreement was reached. Instead, a month later Trump revoked a federal permit for Equinor’s offshore wind project in New York, halting construction. 

New York is now one of 17 states suing the Trump administration over blocking permits for wind energy projects.

Although the Trump administration aims to build more gas infrastructure in the north-east, pipeline operators may be reluctant to invest in a region that has been historically hostile to its business. After Williams cancelled the Constitution pipeline in 2020, it lost $400mn. 

“Why in the world would we keep beating our head against the wall in areas where we’re not welcome and supported in terms of getting that infrastructure built? It just adds too much risk,” Armstrong said. “Or we could go to Ohio . . . who’s wanting it, and get something done within a year.” (Alexandra White)

Job moves

Crux has tapped Hasan Nazar, who previously led Tesla’s US federal policy programme, as head of policy. Yonette Chung McLean has joined the leadership team at Crux after serving as a managing director at RBC Capital Markets.

Contact Energy has appointed Matt Forbes as chief financial officer.

Italgas has named Paolo Gallo chief executive.

Power Points

Denmark is considering ending its 40-year ban on nuclear energy as it looks to help balance renewable sources in its energy mix.

Thames Water’s senior executives will receive retention bonuses from the £3bn emergency loan from creditors that enabled the UK utility to stave off renationalisation.

Panasonic, Tesla’s battery supplier, has been pressed to expedite production of its American-made batteries amid US-China trade tensions.

Energy Source is written and edited by Jamie Smyth, Martha Muir, Alexandra White, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.