New York Pipelines Back From Dead Signal Gas Revival Under Trump

(Bloomberg) -- As he sat down for dinner with executives from Williams Cos. back in May, Wall Street fund manager Henry Hoffman was skeptical about the pipeline operator's prospects. Endless permitting issues and delays had plagued new natural gas infrastructure in the US for years and made some projects impossible to build.

Yet as the evening went on, Hoffman recalled, he was struck by the confidence in the room — that, finally, things were going Williams' way. Something had clearly shifted. Most notably: Williams' Northeast pipeline ambitions, long-stalled projects to carry shale gas from Pennsylvania into the region, are back from the dead under the Trump administration.

“I came out of that dinner pretty optimistic. I went in very skeptical. It changed my mind,” said Hoffman, co-portfolio manager of the Catalyst Energy Infrastructure Fund. “They really do have a friendly environment.”

Indeed, the environment for Williams is friendlier than it has been for years. The same week as Hoffman’s dinner meeting, President Donald Trump had brokered a deal with New York Governor Kathy Hochul, opening up a path for two Williams gas pipelines.

Until that point, both the Northeast Supply Enhancement (NESE) project, which would add capacity in New York, Pennsylvania and New Jersey, and the proposed Constitution Pipeline, were considered all but dead. The projects had endured years of strong resistance from environmentalists who oppose any fossil-fuel expansion in the blue state of New York, and they had failed to secure the necessary permits.

In the months since the Trump-Hochul accord, the projects have continued to gain traction, becoming an indicator of just how far the Trump administration can go to reshape US energy policy. During his first week in office, he declared a national emergency intended to supercharge fossil fuel development, a move seen by opponents as unraveling hard-fought climate protections. Successfully removing hurdles for new pipelines would mark a significant win for Trump’s agenda.

Pipeline companies can now undertake projects “with the knowledge that the current administration will prove supportive in regulatory pushback as well as pushback at the state and legal standpoints,” said Gabe Moreen, a managing director at Mizuho Securities, which owns Williams shares. It’s “a change relative to what it was even a couple of months ago,” he said in an interview this week, adding that the industry has a new “backdrop of confidence.”

The Williams projects sit at the center of a broader cultural clash as the Trump administration rolls back Biden-era policies aimed at accelerating the energy transition. Trump’s push for more oil and gas is colliding with deeply entrenched climate priorities in states like New York, where voters have called for a rapid shift away from fossil fuels and planet-warming emissions. Fierce opposition from environmentalists remains. Earlier this month, hundreds of protesters marched across the Brooklyn Bridge to demonstrate against the pipelines — they carried signs decrying the potential for methane leaks, beach contamination and the threat to marine life. 

But politicians like Hochul are also facing mounting pressure to tame rising consumer prices. In New York, utility Consolidated Edison Inc. plans to raise electric bills and gas charges. Bringing in more natural gas, used in power generation and heating, could help to rein in energy inflation. Lowering Americans’ energy bills has been a frequent goal cited by Trump in his quest to unleash fossil fuels, but now even some Democrats have softened their language on energy as electricity demand surges due to AI and the boom in data centers.

Getting new infrastructure built requires layers of approvals from national, state and local authorities: Water permits were the main obstacle for NESE. New York and New Jersey denied them, citing risks to water quality, habitats and aquatic life. Constitution ran into similar issues.

Hochul's agreement with Trump not to stand in the way of new energy projects was a concession made to win support for a wind farm off the coast of Long Island that the president had initially opposed, Bloomberg News reported in May. The Trump administration that month lifted a stop-work order, allowing construction to resume at the project, even as other wind projects have come under attack.

Ken Lovett, a spokesperson for Hochul, said 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 White House said in a statement that approval for the Constitution Pipeline would be “a direct result of the president’s actions” and that “Trump’s agenda to unleash American energy is slashing energy prices.”

As Trump works to cut environmental oversight, Williams has once again filed for the water-quality certification and other permits required for both projects. The New York State Department of Environmental Conservation is reviewing the Williams application and plans to make a decision by the end of November. The process is also under way in New Jersey and Pennsylvania.

Williams has shown more confidence that the permits will be secured this time.

“We’ve made it clear that we need to see support from the state, which we hadn’t seen in the past,” Williams’ Chief Executive Officer Chad Zamarin said in an interview this month. This time around, states are recognizing that “you’ve got to have affordable, reliable energy,” he said, adding that the moves are “showing investors that the risk profile is different.”

Investors like Hoffman are among those re-evaluating the risks for pipelines. At the dinner he attended during an energy infrastructure conference, he sat near Zamarin and Williams Chairman Alan Armstrong. He listened as they laid out the case not just for NESE and Constitution, but the broader change in political winds.

“They were pretty adamant,” said Hoffman, who helps oversee $417 million in energy assets, including Williams shares. “Their thoughts were: ‘Look, we’re going to have all our permits. This is going to be a guarantee before we spend a lot of capital on it.’”

Williams is also getting an edge from recent judicial decisions.

The US Supreme Court has reined in the scope of environmental impact studies under the National Environmental Policy Act. That could limit the ability of legal challenges from environmental groups and states, particularly in places like New York, where climate impacts were previously part of the permitting debate.

As of Thursday’s close, Williams shares were up about 7% this year, outperforming the S&P 500 Energy Index, which had gained roughly 4%.

Still, plenty of hurdles remain. Environmental activists played a prominent role thwarting state permits for pipelines in the past, and they are once again building resistance.

More than 220 organizations across the Northeast have signed a letter drafted by groups Stop the Pipeline and Pipe Line Awareness Network for the Northeast, urging state governments in the Mid-Atlantic and Northeast to hold steady on opposition to pipelines and stick with their clean-energy goals.

On a breezy August Saturday, roughly 500 protesters lined the streets outside of Manhattan’s city hall preparing for a march to demonstrate against new pipeline projects. The crowd spanned across age groups, and there were many parents pushing kids in strollers. Even Hochul’s lieutenant governor, Antonio Delgado, was part of the crowd and spoke against the deal that the governor struck with Trump.

Helen Waters, who lives in Greenpoint, Brooklyn, said she joined the demonstration in part because she’s concerned that toxins from the pipelines could wash up on local beaches.

“My children love the beach, and I’m a concerned parent,” said Waters, 41. “This pipeline would undo all the gains we’ve made to bring health back to our waterways, and it could happen as soon as next summer.”

Rob Thummel, a portfolio manager at Tortoise Capital, acknowledged the risk from environmental pressure, especially in blue states. 

“I get some of the hesitancy,” Thummel said. “You’re never going to be risk-free, obviously. But New York is 10 times more difficult than everywhere else” when it comes to building, he said.

Still, Thummel is supportive of Williams’ goal of reviving the projects, saying the potential returns justify the risks.

Of the two projects, NESE is more likely to see a smoother process.

NESE is “a lot easier to pull the trigger on,” while Constitution still has “lots of hurdles to overcome,” Armstrong said during Williams’ first quarter earnings call.

That’s because Constitution lacks many active permits. Its original customer contracts, now more than a decade old, may no longer be economically viable. The pipeline route also faces complications from competing projects by other developers.

Meanwhile, NESE is an expansion project and already has some necessary certifications. Williams also has contracts with local distributors that can be exercised.

If Williams secures the water permits it’s awaiting from New York and New Jersey on NESE, only a few steps would remain: finalizing air-quality and local approvals and setting construction timelines. Williams has said the segment could go into service by the end of 2027. During a recent call with analysts, Zamarin reiterated that the company is focused on maintaining that schedule and could even break ground on the project this year. 

The difficulty to build new energy projects in the US is “pretty remarkable,” Zamarin said in an interview. “We now take much more time permitting a project than we do constructing a project, which is part of our opportunity as a country to get back to more efficient building.”

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