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The state of New York is working to balance the economic benefits of hydraulic fracturing - or fracking - with the environmental concerns many have about it. While that process plays out, the state has placed a moratorium on the controversial drilling method. At the same time, New York is benefiting from a fracking-fueled boom in neighboring Pennsylvania. A new natual gas pipeline from Pennsylvania to Manhattan is reducing energy costs in the city and improving air quality.

NPR's Jeff Brady reports.

JEFF BRADY, BYLINE: For decades, oil has been the fuel of choice for thousands of residential buildings in New York. But now, the city is encouraging owners to convert to cleaner-burning natural gas. The switch is happening all over the city, including this 100-unit building on the Upper East Side.

BURT WALLACK: What happens is the gas - oh, here we go.

(SOUNDBITE OF ENGINE STARTING)

BRADY: In the basement, a boiler cycles on as Burt Wallack is talking. He's president of the company that manages this building. Wallack points to a shiny new burner and says that - along with all the other costs of switching to natural gas - are not cheap, almost $300,000 for this property. But he says the owners will quickly recover that expense.

WALLACK: In this particular building, it was a no-brainer. The payback will be in about three years.

BRADY: Wallack says natural gas is much cheaper than oil, thanks to all the new gas being produced nearby in Pennsylvania.

WALLACK: The day we switch over, we'll start saving approximately 50 percent of our energy costs.

BRADY: For now, the building is still burning oil. That's because the utility, Con Edison, is upgrading the city's natural gas distribution system. It originally was intended for things like cooking. But now bigger pipes and updated equipment are needed so natural gas can be used for heating and hot water, too.

Christine Cummings is a manager in the utility's gas conversion group, and she says business is good.

CHRISTINE CUMMINGS: This year alone, we're going to have converted more than 1,100 very large buildings in New York City.

BRADY: Recently, a large pipeline expansion was completed that's bringing a lot more gas into Manhattan. Anne Swedberg is an analyst at Bentek Energy, which monitors natural gas markets. She says that pipeline already has changed the wholesale market here.

ANNE SWEDBERG: And if we compare this November to last November, we actually see gas prices decrease about 13 percent.

BRADY: With cheaper prices, Christine Cummings at Con Ed says it's relatively easy to convince customers to switch to gas.

CUMMINGS: A lot of times, when you want to do the green thing, it costs you money. In this case, you're going to do the green thing, and we're going to actually save you a considerable sum of money.

BRADY: But not everyone sees the switch to natural gas as green. Environmental groups concerned about the effects of fracking at well sites campaigned against the pipeline expansion. A pollster for Siena College, Steven Greenberg, says a majority of New York City voters are against fracking.

STEVEN GREENBERG: And it's varied anywhere from one or two-point margin of opposition to as much as 14 points opposition over the last year or so.

BRADY: Despite that consistent opposition to fracking, it looks like most New Yorkers have not made a direct connection between fracking and the increased availability of natural gas. Talk to people on the street, and, like Kevin Leonard, they focus more on the benefits here than the environmental consequences over in Pennsylvania.

KEVIN LEONARD: The oil, when it burns, it discolors my house. It's terrible. You get the smell. You know, natural gas is much better. And it's much cheaper at this point in time.

BRADY: Leonard says he's heard about the potential water quality and pollution problems associated with fracking. But he says like most things in life, there are trade-offs, and until something better comes along, switching to natural gas seems like the best choice.

WALLACK: Jeff Brady, NPR News.

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