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Berkeley gas ban likely to spread to other Calif. cities, sector advocate says


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Berkeley gas ban likely to spread to other Calif. cities, sector advocate says

The move to ban natural gas hook-ups to certain types of new construction in Berkeley, Calif., could soon spill over to other municipalities across the state, the president of the Western States Petroleum Association said Aug. 7.

"In the city of Berkeley builders will be prohibited from receiving permits that include gas infrastructure," Catherine Reheis-Boyd said the LDC Gas Rockies and West Forum in Los Angeles. "Wow. Can you imagine if every local municipality takes up this issue? It's death by a 1,000 cuts."

Passed by the city council last month, the ban takes effect Jan. 1, 2020. The ordinance will only apply to newly built low-rise buildings, those with three floors or fewer. It prevents builders from applying for permits for gas infrastructure for those structures, which must instead rely on electric methods for heating space, water and food, such as heat pumps and induction stoves. 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 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, which includes methane derived from biological sources, such as landfills and dairies, will be allowed under the law.

"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."

Reheis-Boyd warned that the rapid push to renewables, combined with fees and taxes, has caused California energy costs to increase more than in the rest of the U.S. over the past several years.

"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 ... But California has picked a winner, and it's not oil and gas."

A complete push away from gas by 2045 appears a daunting task as gas currently connects to roughly two-thirds of all homes in California. Oregon and Washington also continue to push back against the industry, Reheis-Boyd said, noting that she expects the movement to eventually extend into Nevada and Arizona as well.

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 that local distribution companies pulled from supply over the past five years. Gas-fired power generation, too, has remained strong despite an increase in renewables, averaging more than 2 Bcf/d month to date so far in August.

California Gov. Gavin Newsom, a Democrat, may also unveil a ban on hydraulic fracturing in the near future, having supported a ban during his campaign.

"We have something coming in California," Reheis-Boyd said. "Gov. 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 is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.