Last week, the Eugene, Oregon City Council unanimously voted to repeal an ordinance blocking installation of fossil fuel infrastructure in new one- to three-story residential buildings. The Council had adopted the ordinance only earlier this year, but it immediately became a target of the local natural gas utility, Northwest Natural, which funded an aggressive signature gathering campaign to place repeal of the measure on the November ballot. The campaign succeeded by delivering the simple and powerful message that new home buyers in Eugene should have the right to “energy choice.” The Council’s acquiescence removes the measure from the ballot and energizes opponents of building electrification mandates, who will doubtless adopt similar tactics in other communities.
Natural gas companies and their allies have no shortage of targets, as the drama playing out in Eugene is only the latest in an escalating series of battles that are engaging advocates and lawmakers across the country. The nonprofit Building Decarbonization Coalition lists over 100 measures in 11 states that are all aimed at transitioning away from fossil fuel use. Most of the ordinances impose some form of all-electric requirement for constructing various classes of new buildings. Except for two measures addressing new construction of public buildings in Utah cities, all of these ordinances have been enacted in blue states. For their part, by April of 2022 twenty mostly red states had passed laws preempting the ability of local communities to enact natural gas bans, with eight more states considering such measures. And at the federal level, the House and Senate have each recently introduced several bills restricting energy and consumer protection agencies from enacting safety or efficiency rules that would eliminate gas stoves from the market. The bills are supported by Senator Joe Manchin (D-WV) and have some prospect to become law, as they have not received a veto threat from President Biden. All of the red state and federal initiatives advanced under a freedom of energy choice rationale similar to that employed in the Oregon ballot repeal.
As if opposition from natural gas companies and conservative lawmakers were not enough, green building mandates now also face legal challenges. In April of this year, a three judge panel of the Ninth US Circuit Court of Appeals overturned a lower District Court ruling to invalidate a natural gas ban enacted by Berkeley, California in 2019. This was a highly symbolic decision given that the Berkeley ban was the first in the country to be enacted. A group representing chefs and restaurants sued the city under a 1970s federal law, the Energy Policy and Conservation Act (EPCA), which directs the Department of Energy to enact efficiency standards for appliances such as furnaces and hot water heaters. Although EPCA contains a clause stating that local ordinances may not preempt federal standards, the lower court found that the Berkeley ordinance passed muster because it did not directly address energy standards nor did it mandate particular use of an appliance covered under the law. The lower court also noted that building regulations to protect public health and welfare clearly lie within the inherent powers of local government, and it would be unreasonable to interpret EPCA as intending to displace this long-standing principle. Notwithstanding, the Ninth Circuit invalidated the ordinance by adopting an extremely broad view of EPCA’s scope. Two of the three judges on the panel were Trump appointees and the third has a long history of conservative rulings. Berkeley has requested an en banc rehearing of the case before the full Ninth Circuit.
The 9th Circuit decision has injected uncertainty into the planning processes for electrifying buildings, although its full impact is not yet clear, and decarbonization advocates appear to have workarounds to accomplish their goals. Amy Turner, the Director of the Cities Climate Law Initiative at the Sabin Center for Climate Change Law at Columbia University, explains that municipalities can avoid EPCA entirely by enacting building electrification mandates under policies that call for minimizing greenhouse gas emissions, as recently enacted in New York State. Alternately, ordinances should pass muster more easily under EPCA if they allow a natural gas option, avoiding a full ban.
As the natural gas bans in Eugene and Berkeley illustrate, the political landscape for building decarbonization is highly contentious, with little search for common ground. Progressives note that, in addition to relying on political tropes such as “freedom,” natural gas companies and their allies engage in paltering – the active use of truthful statements to convey a misleading impression. Examples include claims that the fuel is “clean” without indicating that this is only valid with respect to coal, or assertions that it is “renewable” without acknowledging that methane recovered from landfills or agriculture can meet only a small fraction of demand. For their part, centrists and conservatives point out that progressive groups often call for very rapid elimination of fossil fuels and electrification of all end uses, but fail to recognize the complexity of the green energy transition and the central importance of natural gas in the US energy economy for at least several more decades.
There is, however, a win-win scenario that recognizes the urgency of phasing out natural gas while maintaining a robust energy industry workforce to serve residential and commercial needs. Natural gas utilities can proactively transition their business models away from exclusive reliance on fossil fuels, instead adopting a broader vision as companies that offer heating solutions to their customers. Vermont Natural Gas (VGS), a small utility serving Northwestern Vermont, is pioneering this approach by providing energy efficiency and weatherization services, hybrid heating systems that incorporate electric heat pumps, and low-carbon alternatives such as biofuels. In liberal Vermont, VGS benefits from consumer demand for decarbonization solutions and an aggressive state climate plan, but given their technical expertise with pipelines, gas utilities throughout the country are well positioned to benefit from new federal incentives for low-carbon technologies such as blue and green hydrogen, carbon capture and sequestration, and geothermal heating and cooling. These incentives can aid utilities in developing long-term business models that consciously phase out natural gas while diversifying operations to maintain profitability in the coming low carbon energy economy.