No deal: Trump, Hochul to continue talks on Constitution pipeline, energy issues

President Donald Trump and New York Gov. Kathy Hochul kicked the can down the road on reaching a bargain over several energy policy topics, including advancing a scrapped Williams natural gas transmission project.

A White House meeting on March 14 did not yield "formal agreements or decisions," according to Hochul spokesman Jerrel Harvey. However, the conversation was "productive" and "we look forward to continuing the dialogue in the coming weeks," Harvey told Platts, a part of S&P Global Commodity Insights.

The leaders discussed a range of topics, including energy policy, tariffs, the redevelopment of Penn Station in New York City and a congestion pricing program in Manhattan that the Trump administration announced it would block in February, Harvey said.

Ahead of the meeting, Trump signaled that he would press Hochul to cooperate on advancing the Constitution Pipeline project. New York has historically opposed the project, which would deliver 650,000 Dt/d from Pennsylvania shale fields into the Northeast.

Williams and its partners canceled the project in February 2020, even after a US appeals court ruling that set a supportive precedent for federal project approvals. That court decision prompted the Federal Energy Regulatory Commission to overrule New York's effort to block the project using authority granted to the state under the federal Clean Water Act.

Despite those positive developments, years of opposition diminished the project's return profile so much that Williams and its partners no longer supported the project, the company said at the time.

Williams interested in reviving project

However, Williams is now "absolutely in support of building Constitution Pipeline," provided the project has "strong support" from regional governors, CEO Alan Armstrong said during a March 12 briefing at the CERAWeek by S&P Global energy conference in Houston.

Armstrong made his comments one month after Trump said he wanted to revive the project. New York was the only state standing in the way, Trump said in a March 13 post on Truth Social.

"Every other State in New England, plus Connecticut, wants this, in order to help the Environment, and save BIG money," Trump wrote. "We only need the final approval from New York State."

Following the White House meeting, Williams told Platts that it appreciated Trump's commitment to addressing the Northeast's gas supply constraints, high energy prices and continued reliance on fuel oil.

The company reiterated its interest in resuscitating the Constitution project but said the operator needed to see sufficient customer demand and political support "to mitigate the risk of costly permitting delays, court battles, and injunctions during construction."

Support from regional leaders uncertain

The pipeline would deliver Pennsylvania shale gas to an interconnection with the Tennessee Gas Pipeline and Iroquois Gas Transmission System systems in eastern New York. Those systems have the ability to deliver into both New York and New England demand centers, Platts reported in 2016. Williams did not respond to a question on the project's current anticipated potential to boost supply capacity into New England.

Connecticut Governor Ned Lamont's office told Platts that the Democrat "has been clear that he wants to bring new energy resources into New England to lower costs for ratepayers and is willing to work with federal and regional partners to achieve this goal."

Press secretaries for other New England governors did not immediately respond to requests for comment on whether they would support the project.

More than a decade ago, six New England governors asked ISO-New England to take steps to develop new electric transmission infrastructure and gas pipeline capacity in order to lower their states' energy costs. More recently, in 2020, five New England governors asked ISO-NE to pursue reforms to facilitate their states' climate goals — but did not address pipeline capacity.

Some stakeholders back more gas capacity

Regional electric transmission organizations have raised concerns about gas supply adequacy for power generation due to pipeline capacity constraints. Northeast gas utility operators have also advocated for policies to preserve gas supply reliability.

In recent years, New York and some other northeast states have taken steps to reduce or phase out gas demand and limit investments in gas infrastructure. Those include backing building electrification initiatives, as well as requiring gas utilities to explore non-pipeline alternatives to meeting energy demand and consider decommissioning parts of the gas grid.

Still, Hochul's administration has lately shown openness to projects to increase gas capacity into New York.

The New York State Department of Environmental Conservation granted a key air permit to a compression enhancement project on the Iroquois network, which connects to TC Energy's Canadian mainline along New York's border with Ottawa. The project also received a FERC certificate application extension and is awaiting permit approval in Connecticut.

The Constitution project would still face legal and regulatory hurdles. In November 2021, a US appeals court vacated FERC orders granting the project a Natural Gas Act certificate and a waiver of New York's Clean Water Act permitting authority.

New York used Section 401 authority under the Clean Water Act to delay and ultimately block the Constitution project. Other states led by climate-focused leaders have taken a similar approach to oppose certain infrastructure projects. The first Trump administration tried to rein in that authority, but a federal court vacated the Environmental Protection Agency's final rule.