By Avi Salzman and Laura Sanicola

A conflict over a proposed 124-mile natural-gas pipeline from Pennsylvania to upstate New York is shaping up to be one of the most consequential energy battles in the early days of the Trump administration.

In a country with more than two million miles of oil and gas pipelines, the Constitution Pipeline would be little more than a stub. But it has become a high-profile battleground in the Trump administration's broader war on environmental regulation, pitting the White House against governors, landowners, and courts across the Northeast.

As President Donald Trump tells it, the pipeline makes simple business sense. More gas supplies will lead to lower heating and electricity prices for consumers, in a region famous for high energy costs. But it's also a test case for a much broader theory -- that the federal government can override state policies in the interest of achieving national goals like "drill, baby, drill."

To do that, Trump is coming after state laws that limit fossil fuels to slow climate change. In an executive order this week, the president directed Attorney General Pam Bondi to halt enforcement of state climate-change laws that she deems unconstitutional. He said his administration will take legal action against state and local policies that "discriminate" against energy producers from other states.

The Constitution Pipeline could be the physical manifestation of that idea, pumping fossil fuels into a region that had vowed to phase them out. It would run from the gas-rich Marcellus shale fields of Pennsylvania to population-dense regions of the Northeast. At Albany, N.Y., it would connect to new networks extending into New England.

For years, natural-gas producers have been hoping for something like this -- and they almost got their wish. Pipeline giant Williams Cos. and three partners first proposed the Constitution in 2012, and won federal approval in 2014. The developers even began site work, chopping down maple trees in Pennsylvania to make way. But the project got bogged down in a fight over water permits in New York, and they abandoned it in 2020, writing off more than $300 million in expenses.

This time will be different, Trump told reporters recently in the Oval Office: "It's now going to happen." He plans to barrel ahead regardless of opposition. If states reject the idea, he has said that the federal government could push the pipeline project forward on its own. "We are going to get this done, and once we start construction, we're looking at anywhere from nine to 12 months, if you can believe it," Trump said. Chris Wright, Trump's Secretary of Energy, says he thinks construction could start this year.

Just how the administration could fast-track the pipeline remains a mystery. The court fights alone would invariably stretch for months. The White House didn't respond to questions about the details.

Regardless of the pipeline's practicality, Trump's language has alarmed people who had hoped states could lead the climate change fight at a time when the federal government has abandoned the cause. The pipeline push has become "a serious threat to state sovereignty," 233 environmental and community organizations said in a letter to nine Northeast governors this week.

The environmentalists have some reason to worry, beyond Trump's warnings. Governors in New York and New England are under pressure to lower energy prices, and new pipelines could be one solution. Northeastern states don't have their own gas reserves, so they rely on six pipeline systems that bring gas from Appalachia, the Gulf Coast, and Canada. Several of those pipelines are operating at or near 100% capacity, meaning they can't ramp up to deliver more to customers when demand rises.

On a handful of very cold days each year, when natural-gas use spikes, states are forced to import it from other countries by ship, or switch their electricity-generation to expensive, dirtier-burning oil.

The lack of supply is one reason New England pays about 60% more for electricity than the U.S. average of 16 cents per kilowatt-hour. Northeastern households that use gas for heat spend nearly 30% more than the national average during the winter -- even more than Midwesterners, who face more cold weather, according to government estimates.

An S&P Global study supported by the U.S. Chamber of Commerce estimated that prices could come down 17% to 27% annually if enough new gas capacity was added. Trump has suggested more hyperbolic numbers, claiming pipelines could save households $5,000 a year -- more than the average Northeastern homeowner spends on both electricity and heating combined.

So far, the rise in prices has not created enough political pressure to force a broader change in policy. Most New England states have passed binding laws to reduce carbon emissions, and are working to replace fossil fuels with renewable resources. New York even banned new gas hookups for buildings starting in 2026.

But the states' progress on climate goals has been slow, due to rising supply-chain costs for things like wind turbines. Natural gas still accounts for about half of electricity generation in both New England and New York. Trump has made it even harder for them to switch their electricity generation to cleaner methods by delaying grant payments and halting permitting of offshore wind farms, which the states had banked on to replace fossil fuel-generated electricity.

Now some governors seem to be opening the door to new infrastructure. Connecticut Gov. Ned Lamont "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," says Lamont spokeswoman Julia Bergman, in a statement to Barron's.

Massachusetts Gov. Maura Healey and New York Gov. Kathy Hochul have also approved some natural-gas infrastructure during their terms. Hochul met with Trump last month and listened to his pipeline pitch, while remaining noncommittal. Healey says she'll "review any energy proposals through the lens of whether they would lower costs and move us toward energy independence." Still, approving a pipeline would be a major turnaround for her. While campaigning for governor in 2022, Healey celebrated the fact that "I stopped two gas pipelines from coming into this state." As attorney general, she commissioned a study that said no new pipelines were needed in Massachusetts.

Technically, the Constitution pipeline only needs approval in New York, but from a practical perspective the developers would want a wider buy-in from New England states. The two pipelines that would connect to the Constitution are full, meaning there's nowhere for the gas to go once it arrives outside Albany. To make the Constitution worthwhile, companies would have to build a much larger network through New York and into New England, necessitating further approvals.

Even if the political winds were to shift, the economics remain unfavorable.

Other Northeastern pipeline plans have buckled under high costs for development or the difficulty of finding long-term buyers for the gas. The Constitution would cost significantly more to build now, especially considering new 25% tariffs on steel.

No energy company has publicly committed to resurrecting the project, wary of sinking hundreds of millions into a fight with little payoff. Industry insiders say it's unlikely to move forward.

"The last thing they want is another Keystone XL situation," says Rob Thummel, a portfolio manager at Tortoise Capital, referring to the capital burned building the politically-doomed oil pipeline from Canada to the U.S.

Williams CEO Alan Armstrong has said he supports Trump's plan to build the Constitution, but Armstrong has set a high bar -- perhaps impossibly high -- to move ahead. "We're not going to go putting our neck out until [the Northeast governors] invite us with the red carpet rolled out," he told Barron's in an interview .

Assuming the governors did roll out the carpet, Williams would have to jump through other hoops too. It would need permission under the federal Clean Water Act to cross rivers, and court approval to take the property of private citizens using eminent domain. Trump might bust through some of those barriers, but not all of them. People are still allowed to fight for their own land.

Even if the legal hurdles were surmounted, financial ones remain. To make building the pipeline worthwhile, electricity-generators would have to commit to buying the gas for years ahead. The structure of New England's electricity market makes it unlikely they would, says Ari Peskoe, director of the electricity law initiative at the Harvard Law School Environmental and Energy Law Program.

Generators typically purchase gas through short-term contracts in a competitive, deregulated auction market, not long-term deals that would justify the investment in a multibillion-dollar pipeline.

"Their business model is short-term, so they're not willing to sign one of these long-term contracts with the pipeline," Peskoe says.

Natural-gas prices have been volatile, and pipeline developers are increasingly cautious about committing capital without guaranteed demand. In the past year, U.S. benchmark natural-gas prices have risen 120%, a swing that is sure to show up in electricity and heating bills.

"Renewable energy infrastructure is cheaper to build out and maintain than oil and gas infrastructure, and isn't subject to many of the same challenges -- gas price volatility, outdated infrastructure, cleanup costs -- that come with pipelines," says Alex Domb, a spokesman for Food and Water Watch, an environmental group opposed to new pipelines. "Projects like these only serve to delay that transition."

If it's successful this time, the pipeline would be a boon for natural-gas producers in Pennsylvania such as Expand Energy and Coterra Energy. But for now, gas producers have shown few signs of preparing for a new pipeline. Northeastern Pennsylvania, where the natural gas would be piped from, has just four natural-gas rigs operating today, down from a peak of 77, says John Abeln, senior natural-gas analyst at consultancy RBN Energy.

"It seems like producers are pretty bearish on the region overall," Abeln says. "I would assume they would be producing more if they thought that the Constitution Pipeline was going to start being built in the next year."

Without political will, public demand, or market guarantees, the Constitution Pipeline remains a project in search of a purpose. Nonetheless, environmentalists are taking the prospect that it may get resurrected seriously, five years after they thought they had vanquished it for good.

Anne Marie Garti, a lawyer who represented landowners threatened by eminent domain in the first fight over Constitution, is back at the lead of the fight. "We're going to be ready for them," she says.

Write to Avi Salzman at avi.salzman@barrons.com and Laura Sanicola at laura.sanicola@barrons.com

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April 10, 2025 11:41 ET (15:41 GMT)

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