Houston — The year 2020 could reveal whether a smattering municipal bans on new natural gas hookups for buildings becomes a more widespread movement tied to de-carbonization efforts around the country.
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Partly at stake for the natural gas sector is maintaining its share in the residential-commercial market. The res-comm sector makes up about 26% of US gas demand, according to S&P Global Platts Analytics.
While individual gas bans risk a small slice of overall gas demand, they are part of a larger movement that contends gas must be phased out of the fuel mix if global temperature increases are to remain within a range compatible with a stable climate.
"Every one of these [bans] that does this sends a message that natural gas is inconsistent with meeting climate goals and that it's an acceptable demonizing of gas," said one gas industry official who asked to speak on background. "We're not going to worry about 100 Mcf, but you can't accept that premise."
The pioneering action by Berkeley, California, in July to ban gas piping in new buildings helped spawned dozens of related attempts in other municipalities in California, as well as one in Seattle and several in Boston-area towns.
But it also helped fuel coalitions to counteract those efforts.
The American Gas Association, which represents more than 200 gas utilities, is working to form coalitions among restaurant, real estate, construction and other industries, along with labor groups and consumers to push back against the rise of cities banning natural gas for heating and cooking in new buildings.
"The idea of imposing a ban on natural gas for new construction is short-sighted, because it deprives customers and consumers of choice and deprives them of a clean and affordable source of energy, with no thoughtful alternatives going forward," said Karen Harbert, president of AGA. "The story that we are trying to help people to understand is that we are a big part of the solution, and trying to remove us from the picture is only going to make things worse, not better."
Christopher Guith of the Chamber of Commerce's Global Energy Institute noted that in New York, where there were moratoriums on new gas hookups related to pipeline constraints, "you had massive outcries" about the lack of access to gas. "I certainly expect to see some significant pushback as the bans go into effect."
The outcome of early legal battles could also affect momentum. The California Restaurant Association is challenging the Berkeley ordinance on the ground that it is preempted by federal law regulating energy efficiency and appliances, and failed to follow state law procedures. In Sonoma County, developers have asked a county superior court judge to block a requirement adopted by Windsor, California, that most new homes use electric power for heating and cooking.
In Massachusetts, city solicitors have warned lawmakers in Cambridge and Newton that courts are likely to determine that gas bans are preempted by state law, which broadly protects consumer access to gas and electric power.
"There's a whole host of legal arguments that I think are going to be successfully mustered against these ordinances," said Bill Scherman, a partner with Gibson, Dunn & Crutcher. "I think these ordinances directly conflict with federal policy in ensuring a national and competitive gas market, and conflict with Federal Energy Regulatory Commission policy that goes back to Order 436."
STATE OF PLAY
So far, more than 20 towns and cities and one county in California have passed some form of building electrification ordinance. Another 42 measures are in development or under consideration in other California jurisdictions, according to the Building Decarbonization Coalition.
Several followed Berkeley's example, using so-called police powers to ban or limit gas piping in new buildings. But most have chosen to use reach codes, which allow local governments to exceed state building standards and require or incentivize developers to build all-electric homes and commercial structures.
In Massachusetts, Brookline banned gas hookups for heating and hot water through an amendment to town bylaws. Neighboring cities Cambridge and Newton are advancing similar ordinances, and other nearby towns are considering joining the movement.
In Seattle, outgoing City Councilman Mike O'Brien has continued to engage with stakeholders after delaying a vote on a Berkeley-style gas ban amid opposition from local businesses, labor groups and gas distribution company Puget Sound Energy. Several council members intend to advance the legislation after O'Brien steps down this year and may hold a vote in the first half of 2020, he said.
Aside from legal battles, a messaging battle is in full swing.
Some 114 towns, cities and counties -- following outreach by Southern California Gas -- have adopted "energy choice" resolutions, which basically urge California officials to reject statewide policies that would block access to gas in buildings.
And the gas industry is working to show that new technologies, including use of renewable natural gas and hydrogen, can allow for emissions reductions at a lower cost than banning gas use.
The American Gas Foundation in mid-December released a study estimating natural gas residential emissions could be reduced by approximately 40% at "a very competitive cost" of $66/mt CO2 emissions, using emerging direct use technologies.
But the sector faces headwinds. Among them, the Sierra Club's Readyfor100 campaign encourages climate advocates to press localities around the country for resolutions committing to 100% clean energy. After lofty goals are set, those resolutions could put localities on the hook to follow through with aggressive measures. As of late December, 155 localities had signed on.
And policymakers in decarbonizing states may face pressure to tackle the 12% of US greenhouse gas emissions estimated to come from the commercial and residential sector.
A recent report released by the Columbia Center on Global Energy Policy found that air source heat pumps are "cost competitive today in places where electricity is cheap and the climate is mild." While costs in colder climates are currently higher, the report found that if policies consistent with rapid decarbonization are adopted and there is reasonably foreseeable technological progress, heat pumps would be the low-cost option for typical residential buildings across much of the US by the mid-2030s.
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