By Avi Salzman

A proposed pipeline buried underwater near some of New York City's best-known beaches will be the first test of President Donald Trump's plans to bring more fossil fuels into the Northeast, even as the region tries to move away from them.

The Northeast Supply Enhancement (NESE) project has become a flashpoint in local politics too, with environmentalists fearing Gov. Kathy Hochul (D., N.Y.) is quietly fast-tracking its approval.

NESE is an expansion of a massive network that stretches 10,000 miles from Texas to New York and carries 15% of the nation's natural gas, which is used for heating and electricity generation. Owner Williams Cos. says that the pipeline expansion can meet the daily needs of about 2.3 million households in New York City and Long Island.

The expansion isn't long, but it covers some tricky terrain. The company plans to add about 10 miles of pipeline in Pennsylvania and 23 more miles under the water between New Jersey and New York. The 26-inch pipe would run under Lower New York Bay from the New Jersey coast past Brooklyn's Coney Island, eventually connecting to existing gas lines at Rockaway Beach in Queens. It is expected to be finished by 2027.

Williams first proposed NESE in 2017, but New York's Department of Environmental Conservation denied the project a water permit because regulators said it would dredge up too many hazardous materials like mercury and disturb sea life. At that point, the pipeline appeared to be dead.

Now it is back, and opponents fear the politics have shifted, with Trump putting his finger on the scale in favor of it. Trump wants more natural gas pipelines into the Northeast, because he says they will reduce electricity and heating prices. He has also directed his administration to investigate laws in the Northeast that try to phase out fossil fuels to slow climate change.

Momentum is building. Williams announced deals last week with utility National Grid to sell all of the pipeline's output for 15 years. Those two companies, along with natural gas producers like EQT, should see financial benefits from a new pipeline.

The odds of the pipeline's success were long in 2019, the last time the public weighed in. Back then, New York legislators and Gov. Andrew Cuomo were openly dismissive of fossil-fuel infrastructure, also killing a project from Pennsylvania to upstate New York called the Constitution Pipeline. Hochul says she, too, is moving the state in a cleaner direction, but wants to be pragmatic about the process.

An event earlier this year may have changed the political calculus. The Trump administration halted construction on a major offshore wind project known as Empire Wind serving New York, citing unspecified deficiencies. Hochul intervened to try to get it back on track, talking to Trump multiple times. The president eventually relented. But Trump's energy czar, Secretary of the Interior Doug Burgum, implied in a post on X that Hochul had made a deal to reinstate the wind project in return for her giving a green light to pipeline projects.

"I am encouraged by Gov. Hochul's comments about her willingness to move forward on critical pipeline capacity," he wrote, on the same day the wind project was rebooted. Hochul denied making any deal.

Environmentalists say Hochul's administration appears to be aligning with Trump to fast-track the pipeline. New York's Department of Environmental Conservation is accepting public comments about the project through Aug. 15, but hasn't scheduled public hearings on it -- an anomaly that is tamping down opposition, according to Food and Water Watch, one of the groups opposing the infrastructure. In 2019, the last time this pipeline was reviewed, the department held at least two public hearings in New York City.

"We are working hard to get her to deny the pipelines and stand up to Trump, but we are very concerned," said Laura Shindell, New York director for Food and Water Watch. "Every move her administration has made so far has signaled friendliness to this pipeline, if not an all-out fast-track to get it done."

Asked why it isn't holding hearings, the Department of Environmental Conservation said it "thoroughly reviews" all applications, and has extended the public comment period by 15 days until Aug. 15 -- a total of 45 days since it began.

The issue is becoming a battleground in New York's Democratic Party. Hochul's lieutenant governor, Antonio Delgado, has spoken out against the pipeline and critiqued the governor. Although Hochul chose Delgado as her second-in-command in 2022, the two have since split. Delgado is challenging Hochul in next year's governor's race, and headlined a rally against the pipeline on Saturday. Hochul is "working in lockstep with Donald Trump," Delgado said in a statement. "These pipelines endanger the environment and New Yorkers."

Hochul spokesman Ken Lovett replied: "Under Gov. Hochul, New York is a national leader in renewable energy investments and remains committed to building a grid that is clean, affordable, and reliable. As the White House rejects any new permitting of offshore wind projects and Republicans in Congress cut billions in subsidies for renewable energy, the Governor is laser-focused on an all-of-the-above approach that will keep the lights on for New Yorkers while also prioritizing affordability and strong economic development."

The pipeline's proponents say it will bring electricity prices down and make the New York grid more reliable. Electricity and heating prices are higher there than they are in other parts of the country, and part of the problem is a lack of supplies of natural gas, the dominant energy source in the state. New York City is particularly dependent on the fossil fuel, using natural-gas generators or dual-fuel plants (gas and oil) for 93% of its power in 2024.

New York closed the Indian Point nuclear plant that supplied the city in 2021, and several planned clean-energy projects in the state have been canceled over the past couple of years, including a transmission line that would have sent renewable power to the city from upstate. Trump has made things even harder by stopping approvals of offshore wind projects, which were expected to make up much of New York's clean generation. Hochul is planning to add nuclear power upstate, but the state still needs major transmission upgrades to get that power to the city.

New York's climate law, passed in 2019, requires the state to cut greenhouse gas emissions 40% by 2030 and fully transition its power grid to zero-emission sources by 2040. Environmental groups recently sued the Hochul administration, accusing it of failing to implement policies to decarbonize the energy system. In January, the state delayed plans to charge companies for carbon emissions.

National Grid and Williams argue that the pipeline will actually move New York closer to its climate goals, because it will reduce the need for residents to rely on dirtier heating oil in the winter. Williams' website for the project says, "We make clean energy happen." National Grid says the net effect of building the pipeline will be a reduction in greenhouse gases, and it will make the grid more reliable by reducing the need for stopgap solutions like mobile units that inject compressed natural gas into the system on high-demand days.

National Grid says a lack of natural gas has "left New York City and Long Island at an increased risk of a catastrophic gas system outage." More natural gas could also allow New York's economy to grow more, perhaps powering things like artificial-intelligence data centers, a company representative said.

Opponents say National Grid's projections are alarmist, and that the utility's past statements about looming shortfalls haven't come to pass -- even during the latest winter, when the weather was colder than normal. Pipelines tend to have useful lives of at least 20 years, meaning that building new ones could lock New York into buying gas for decades, or paying for a stranded asset.

The cost question is also contentious. Williams hasn't released cost expectations, but National Grid estimates that the pipeline will cost $1.06 billion to build. The cost of the pipeline would be borne by customers, who could be expected to pay an additional $7.50 a month on average to fund it, National Grid says. The utility says the benefits to consumers will be much greater, because more natural gas should lead to lower wholesale electricity prices.

An analysis of the pipeline by a consultant for National Grid found that New York City and Long Island customers could save $207 million in electricity costs a year in the first five years after the pipeline is constructed, with all of those savings coming in three winter months, when natural gas demand is high because of heating needs. The consultant found no financial benefits for the other nine months.

Opponents contend that National Grid's construction estimates are much too low, and could escalate even more given Trump's tariffs on steel. Using the company's estimates for fixed capacity charges on the pipeline, costs would rise above $3 billion, says Kim Fraczek, director of environmental group Sane Energy Project.

The potential increases come as New Yorkers have already faced escalating bill hikes from National Grid in recent months. Regulators approved a series of rate hikes for natural gas last year that will boost consumer bills by more than 20% in the region by next year. National Grid's parent company said in its latest annual report that rate hikes were the driving reason its underlying operating profits in New York rose 43% in the past year.

Political upheaval and consumer stress have given the NESE pipeline a new path to success. Those forces could upend it too.

Write to Avi Salzman at avi.salzman@barrons.com

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August 12, 2025 01:00 ET (05:00 GMT)

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