According to a new report from the National Association of Regulatory Utility Commissioners' (NARUC) Gas-Electric Alignment for Reliability (GEAR) Task Force, more than 189 million Americans and 5.6 million U.S. businesses rely on natural gas for residential heating and electricity. Last year alone, natural gas utilities added over 609,000 new residential and over 20,000 new business customers.
Natural gas today meets more than a third of the total U.S. energy needs. The North American Electric Reliability Corporation says that “natural gas is the reliability fuel that keeps the lights on, and natural gas policy must reflect this reality ” and that “additional pipeline infrastructure is needed to reliably serve electric load.”
The report explains that natural gas infrastructure was designed primarily to deliver gas for home heating and cooking and for industrial processes – not for fueling electric power plants. In today’s market, however, low prices for domestic natural gas, coupled with environmental concerns, have led many utilities and other large-scale users to switch from coal, making the nation even more reliant on natural gas to fuel electricity generation.
While there is a move underfoot to greatly expand the use of nuclear energy to provide power to data centers, large industrial complexes, and other high electricity users, deployment (especially of planned nuclear fusion reactors) is years, if not decades, away. The other chief concern is that gas infrastructure and markets are not properly aligned to handle the electric generation demand, and this has led to serious reliability incidents (for example, the Texas outages in winter 2022).
Regional transmission operators and independent system operators that together serve 144 million Americans across 36 states have asserted that infrastructure expansion to improve gas-electric coordination is a critical national security issue.
But several states and municipalities, egged on by anti-carbon “net zero” proclamations, have in recent years sought to ban natural gas pipelines as well as new installations of natural gas appliances and home heating systems. Federal courts have rendered disparate rulings in two notable cases, and there remains the possibility that the U.S. Supreme Court will be asked to intervene to set a consistent national policy on barring access to critical energy sources.
Back in 2023, the 9th Circuit Court of Appeals struck down a City of Berkeley law prohibiting gas piping in new buildings. The Court agreed with the plaintiffs that the ban was preempted by the Energy Policy and Conservation Act (EPCA). But late last year, the U.S. District Court for the Southern District of New York upheld New York’s ban on using any fossil fuel for heating in newly constructed residential buildings.
That case is headed to the 2nd Circuit Court of Appeals, and if the appeals court does not reverse, the matter could be decided by the Supreme Court. Yet, just days ago, New York state officials agreed to suspend implementation of the All-Electric Buildings Act, which was to take effect on January 1, 2026.
One reason for the change of heart (albeit potentially only temporary) comes from the Rochester Home Builders’ Association, where construction of new homes --- much needed in the wake of the state’s major housing shortage – had been halted.
The reason? The power companies lack electric generation capacity to handle the additional demand that all-electric homes require. No electricity – no construction. No construction – more homeless and lower tax revenues. The vicious circle expands rapidly, and people suffer from higher home prices for fewer available homes and the prospect of brownouts and blackouts.
One affected builder, John Graziose, vice president of Gerber Homes, expresses the common theme that “It just seems really ridiculous that we’re still moving forward with not allowing natural gas and/or other fossil fuels in new developments where the gas is available. It’s already there and there’s not enough electric power.”
It’s not just state and local governments that create obstacles to expanding the interstate natural gas pipeline system to meet the widely recognized need for additional infrastructure. The Federal Energy Regulatory Commission (FERC), which has authority over siting and construction of interstate pipelines, has developed an unnecessarily long, burdensome permitting process that is subject to extraordinary litigation risk.
In a rare victory for the natural gas industry in “blue” states, environmental agencies in both New York and New Jersey last week gave new life to the Northeast Supply Enhancement Project, a proposed 37-mile pipeline to deliver natural gas from Pennsylvania to serve New York City and Long Island customers.
Energy developer Williams Cos., a year ago, had abandoned the project after years of permit rejections from both state agencies. But both state agencies on November 7 jointly announced their approval of resubmitted water quality certification applications, as well as wetlands, flood, and waterfront development permits for the 400,000-dekatherm-per-day project.
What happened?
President Trump had engaged New York Governor Kathy Hochul in a series of discussions, pointing out that the state needed increased energy infrastructure to boost state electricity reliability. Construction firms and other business groups encouraged pipeline approval, which has been severely criticized by newly elected anti-growth New York Mayor Zohran Mamdani, retiring U.S. Rep. Jerry Nadler, and other progressive politicians.
Williams has withdrawn for the moment its application for the 125-mile Constitution pipeline that would deliver natural gas to upstate New York but plans to resubmit an amended application in the future. Hochul, who is running for reelection in 2026, says she has become open to natural gas but has also been “crystal clear” that any future project will undergo a thorough review.
If Gov. Hochul can recognize that failing to meet real-world energy needs would have severe consequences for households and businesses alike, perhaps the approval of the Northeast Supply Enhancement Project is a signal that the crazy days of emotion-led policy are ending.
Common sense – and national security – require rational actions to ensure energy sufficiency. And keeping natural gas as a major fuel for homes and power plants is critical to American prosperity – at least for the foreseeable future.
Duggan Flanakin is a senior policy analyst at the Committee For A Constructive Tomorrow who writes on a wide variety of public policy issues.