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Title: Energy Poverty in New York: The Adverse Impacts of the State’s Green Power Mandates

Citation Type: Miscellaneous

Publication Year: 2022

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Abstract: Rising fossil fuel prices since January 2021, recently exacerbated by Russia’s invasion of Ukraine, have revealed the importance of gasoline, diesel fuel and heating oil, propane, natural gas, and electricity to the economy. Not only have higher energy prices created hardships for millions of individuals who struggle to afford to heat their homes; but raising the costs of producing virtually every good and service supplied to businesses and consumers exacerbates the effects of the current inflation caused by the expansionist monetary policies and supply-chain constraints. Two fundamentally different strategies have been advocated to combat rising energy prices. Ironically, both call for U.S. energy “independence,” by which advocates typically mean not relying on imports of crude oil from hostile and politically volatile regions (e.g., Russia, Venezuela, and the Middle East). One strategy calls for increasing fossil fuel supplies by ending the Biden administration’s policies that are hostile to fossil fuel development. These policies include the cancellation of the Keystone XL pipeline, which would have delivered crude oil from Alberta, Canada, and moratoriums on new drilling permits on federal lands and in the Gulf of Mexico. The other strategy calls for transforming the U.S. economy to rely solely on green and zero-carbon energy resources. Capitalizing on Russia’s invasion of Ukraine, for example, Senator Edward Markey (D, MA) has said: “This moment is a clarion call for the urgent need to transition to domestic clean energy so that we are never again complicit in fossil-fueled conflict.”1 Similarly, President Joe Biden touted the rise in gasoline prices as a component of what he termed an “incredible transition” toward less reliance on fossil fuels.2 For some green energy advocates, the invasion of Ukraine has been, in effect, a “twofer”: it has allowed them to emphasize the need for green energy to rescue the planet from what they term a “climate emergency”3 and to reduce the country’s exposure to future fossil fuel price shocks. New York’s policymakers are all in for the second strategy. The state government has been adverse to fossil fuel development and production and has long advocated green energy policies to address climate change. These policies include the “zero-emissions” electricity mandates in the 2019 Climate Leadership and Community Protection Act (hereinafter, Climate Act), preventing upstate communities from rejecting large-scale wind and solar projects, bans on siting new natural gas pipelines, and mandates for “electrifying” end-use energy—vehicles, furnaces, water heaters, and even cookstoves. These efforts will fail. The Climate Act’s zero-emissions mandates are physically infeasible, and, in any event, the resulting reductions in greenhouse gas emissions would have no measurable impact on the world’s climate. But the attempt to implement these policies will impose damaging hardships for businesses and consumers. Low-income New Yorkers, in particular, are already being hard hit by higher energy prices, a phenomenon known as “energy poverty.” Energy poverty is not a new concept. In many developing countries, such as in Africa, energy poverty usually has meant a lack of physical access to energy supplies because no energy supply infrastructure exists. In developed countries, energy poverty is about the affordability of energy. Energy affordability has been a long-standing issue in the Empire State. In the first decade of this century, high prices for natural gas and electricity meant that many New Yorkers spent more than 10% of their incomes—the usual gauge of energy poverty—to heat and light their homes. But thanks to technological advances in hydraulic fracturing (“fracking”), gas supplies boomed, especially in Pennsylvania’s Marcellus Shale play. Production also increased in New York until former governor Andrew Cuomo banned fracking in the state in 2014. Natural gas prices for the state’s residential customers have been increasing since 2016, and electricity prices also continue to increase. Consolidated Edison (ConEd), which provides electric and natural gas service in New York City and Westchester County to about 3.3 million customers, filed for a rate increase in January of this year. If it is approved by the state’s Public Service Commission, residential electricity will cost nearly 30 cents per kilowatt-hour (kWh),4 more than double the average residential price of electricity in the U.S., which was just above 13 cents/kWh in 2020.5 The most recently available U.S. census data show that about 1 million New York households faced energy poverty during 2015–19. The situation today is surely worse. Even if the recent run-up in fossil fuel prices moderates, the state’s energy policies will plunge millions of New Yorkers into energy poverty.

Url: https://media4.manhattan-institute.org/sites/default/files/Lesser-Energy-Poverty-in-New-York.pdf

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Authors: Lesser, Jonathan A.

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Data Collections: IPUMS USA

Topics: Natural Resource Management

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