Los Angeles — The move to ban natural gas hook-ups to certain types of new-builds in Berkeley, California, could soon spill over to other municipalities across the state, the president of the Western States Petroleum Association said Wednesday.
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Reheis-Boyd made the comments during the LDC Gas Rockies and West Forum in Los Angeles on Wednesday morning.
Passed by the city council last month, the ban takes effect on January 1, 2020. It bans gas hook-ups in new multi-family construction, but provides some allowances for first-floor retail and certain types of large structures. The measure looks poised to spread to other cities across the state, with approximately 50 municipalities mulling their own version of such a law.
Part of the reason cities are looking to implement such a measure is due to Senate Bill 100. Signed into law last September, It intends to eliminate all gas use by 2045 as the state plans to shift to 100% renewables by that time. However, renewable gas will be allowed under the law.
Electricity generation is intended to replace gas in those new-builds for purposes such as heating and cooking.
"We've heard a lot about the push against fossil fuel use in Colorado, but California is like Colorado on steroids," said Reheis-Boyd, whose organization represents the oil and gas industry in California, Oregon, Washington, Nevada and Arizona. "We are at a tipping point in California."
The rapid push to renewables, combined with multiple fees and taxes, have caused California energy costs to increase by 25% over the past several years, while the rest of the US has only increased by about 3%.
"Energy costs are through the roof," Reheis-Boyd said. "This is having a serious impact on low-income residents. We don't shy away from the energy mix, instead we have an all-of-the-above strategy," she said. "But California has picked a winner, and it's not oil and gas."
And while Oregon and Washington also continue to push back against the industry, Reheis-Boyd expects it to eventually extend into Nevada and Arizona as well.
The complete push away from gas by 2045 appears a daunting task as gas currently connects to roughly two-thirds of all homes in California.
This past February, gas demand for local distribution companies reached an average of 6.5 Bcf/d, according to data by S&P Global Platts Analytics. It was the largest daily average LDCs pulled from supply over the past five years. Gas-fired power generation also remains strong despite an increase in renewables, averaging more than 2 Bcf/d month to date so far in August.
It also appears likely California Governor Gavin Newsom, Democrat, will unveil some type of proposed ban on hydraulic fracturing in the near future. He supported a ban during his campaign, and just last month he fired the head of California's oil and gas regulatory agency for approving too many hydraulic fracturing permits to producers.
"We have something coming in California," Reheis-Boyd said. "Governor Newsom plans to ban hydraulic fracturing."
California operators had an average of 14 rigs deployed across the state in July, and produced 459,000 b/d, according to Platts Analytics. Gas in the production mix in California fields only averaged 374 MMcf/d in July.
-- Brandon Evans, bevans@spglobal.com
-- Edited by Richard Rubin, newsdesk@spglobal.com