As Natural Gas Bans Go National, Can Cities Fill the Gap?

[ Article was originally posted on http://greenlining.org ]

By David Iaconangelo,

In July, a climate task force convened by Democratic presidential candidate Joe Biden embraced a 2030 goal of zeroing out greenhouse gas emissions from all new buildings.

The plan followed a wave of climate activism targeting buildings, which are often the biggest source of urban emissions as they draw electricity from the grid and guzzle natural gas for heat. Dozens of cities in California and Massachusetts have sought to restrict the use of gas in new structures, provoking pushback by oil and gas associations, utilities, and other groups.

But efficiency researchers say activists’ favored alternative to natural gas — electric heat — is still a costlier option for consumers. Mass adoption of electric heating could overload the grid without significant infrastructure upgrades, other analysts warn. And an all-electric push would drag gas utilities into an existential fight, experts say, creating risks to ratepayers and company workforces.

“This goes to the core of utilities’ business models,” said Sue Coakley, executive director of the Northeast Energy Efficiency Partnerships (NEEP), which backs an electric transition.

Regulators need to examine how to wind down utilities’ gas businesses while providing a future for the companies, she said.

“Utilities are going to say, ‘Keep us financially whole and give us a way forward.’ That’s a reasonable thing to say,” Coakley said.

Meanwhile, building electrification may hinge on a single, silver bullet replacement for fossil fuel heat — electric heat pumps — that can pose technical challenges, analysts say.

“If you’re going to electrify the heating in a building, the logical way to do it is with a heat pump. There aren’t many other options,” said Ron Domitrovic, a program manager in the Electric Power Research Institute’s (EPRI) energy utilization group.

In the Northeast, the stakes are high for determining whether heat pumps can replace fossil fuels. Every New England state, plus New York and New Jersey, has laws requiring 80% emissions reductions by 2050. And the region’s buildings are by far the nation’s most dependent on gas for heating.

“Buildings are really one of our hardest challenges,” said Coakley of NEEP.

But federal and nonprofit electrification researchers see looming problems for the region.

For one, equipping a building with heat pumps can add complex design hurdles, noted Domitrovic of EPRI.

Unlike gas boilers, which burn fuel to create warmth, heat pumps simply transfer outside warmth into a building. By flipping a switch, they can also act as air conditioners.

In cold climates, though, heating demand is often higher than cooling demand. If a heat pump is doing both jobs, it might require a much bigger installation — for heat — than would be otherwise necessary for cooling.

“You had one size for an air conditioner, but if you needed heating, you might need to double the size. Does that mean double the cost? Perhaps,” Domitrovic said.

In general, using the technology for space heating in cold climates would be more expensive for homeowners and landlords than using a gas boiler, said Domitrovic. When temperatures dip below freezing, heat pumps become less energy-efficient, and the cost of running them grows.

It’s one reason natural gas advocates have defended continued use of the fuel, while promoting biofuels as an eventual substitute.

Renewable natural gas or biomethane — a low-carbon fuel produced from manure, food waste and other sources — could prove cheaper than electric heat if it were scaled up and mixed with regular natural gas in existing pipelines, found a study backed by the American Gas Foundation last year.

Heat pump advocates have contested those findings, pointing to a report commissioned by the California Energy Commission that concluded building electrification was the “least-cost” option for decarbonization. They add that using methane as a feedstock, as RNG does, would also pose risks of climate-threatening leaks.

But it may be too early to pick a single winner for decarbonized heat, said Jürgen Weiss, a partner at consultancy the Brattle Group and a senior lecturer at Harvard Business School, who has studied decarbonization pathways for the state of Rhode Island.

“There’s a lot of open questions” about cost, he noted. “We’re more likely to make progress if we push on parallel fronts.”

‘Not your daddy’s heat pump’

Advocates and manufacturers point out that the technology is already in widespread use across the southern U.S., where 63% of new single-family homes came equipped with heat pumps in 2017. Many new models provide reliable warmth at temperatures well below freezing, they say.

“The unfortunate thing is, heat pumps share a name with a technology that just didn’t heat below 40 degrees in the not-too-distant past. This is an entirely different technology today,” said Eric Dubin, senior director for utilities and performance construction at Mitsubishi Electric Trane HVAC, the U.S. arm of the Japanese company that focuses on heat pumps.

“The ability to operate at low temperatures has completely changed, to where you can use this product in Canada and the northern U.S.,” he added. “It’s not your daddy’s heat pump.”

Environmental justice groups are approaching the issue with caution, wary of higher bills for low-income residents in vulnerable communities.

“If you’re talking about an increase in energy bills, none of our members can afford that,” said Carmelita Miller, legal counsel for energy equity at the California-based Greenlining Institute.

Landlords who ditch gas for electric heat, stoves or dryers might pass along the cost to renters, Miller’s group wrote in a report last year. Even people who own their homes may not be able to afford repairs to the house’s envelope and insulation — considered prerequisites for fuel switching. A flight of wealthy homeowners from the gas system could raise rates for everyone else, the report found.

“We could also inadvertently be hurting our community members” if building electrification policies aren’t designed with significant input from “front-line” communities, said Miller.

But buildings are also an important source of air pollution. Fossil fuels burned in residential and commercial buildings contributed to 28,200 premature deaths in the U.S. in 2018, according to a February study from the Massachusetts Institute of Technology that was published in the journal Nature (E&E News PM, Feb. 12). And there are few signs that carbon capture systems are emerging in buildings.

“We can’t just say, ‘Oh, this is going to cause an energy bill hike, so we should just leave our communities in pollution,'” said Miller. “We can’t accept the status quo.”

Groups like hers have begun to contemplate which policies could strike a balance.

“I think all of the clean energy advocates are, in one form or another, learning what [building electrification] is truly going to mean,” Miller added.

Echoes of fracking fights

After Biden’s climate task force recommended a zero-emissions mandate for new buildings, the former vice president embraced a scaled-back version: His latest climate plan would only apply to new commercial buildings.

The plan emphasizes building upgrades rather than fuel switching, although it does call for “direct cash rebates and low-cost financing” for people who electrify home appliances.

Any national-level mandate would elevate an idea that has already taken root in California, where the state Energy Commission is contemplating an all-electric requirement for new buildings.

Last summer, Berkeley, Calif., prohibited new buildings from having natural gas pipes for heat, water and cooking. The town simultaneously mandated they be wired to handle electric heat pumps and stoves.

Over 50 California cities and counties have since proposed similar ordinances. State energy officials have signed off on them, since California’s building code allows cities to set stricter energy standards than those imposed by the state.

That’s not the case in Massachusetts, where the first gas ban on the East Coast was shot down last month by the state attorney general’s office (Energywire, July 24).

Legislators in at least four other states have reacted swiftly to head off the prospect of municipal gas bans, passing laws that prohibit such restrictions.

California cities have faced their own headwinds enacting bans. Berkeley has been sued by the state restaurant association — a group backed in part by gas utilities — saying chefs depend on “the intense heat” provided by a natural gas flame.

This spring, a union representing employees of Southern California Gas Co. (SoCalGas), the nation’s largest gas distributor, managed to postpone a vote over a gas ban in San Luis Obispo by threatening to bus in attendees without observing social distancing, the Los Angeles Times reported.

Caitlin McCoy, a staff attorney at Harvard Law School’s Environmental & Energy Law Program, said recent battles over gas bans remind her of the conflicts over hydraulic fracturing, in which local and state officials vied for the upper hand in deciding where drillers should be allowed to operate.

“All of that has come roaring back with these different natural gas ordinances,” she said.

Utility paradigm shift

Electrification advocates say they expect the clashes in California to be the opening salvo of what will become a nationwide battle, with potential to pit utilities against one another.

Builders, restaurateurs and other groups are likely to resist steps to electrify heat or stoves, according to advocates, but power and gas companies will be at the center of any policy fights.

Gas distributors might be more inclined to take a page from SoCalGas’ playbook, while electric utilities would likely welcome the transition, said Jenna Tatum, director of the Building Electrification Initiative, which advises city sustainability officials.

Utilities that service both gas and electricity, meanwhile, “are going to be all over the map in terms of their response” to electrification policy, Tatum predicted. “They’re going to have to make a lot of changes, but it’s possible for them to shift their business model.”

Regulators in the Northeast and elsewhere are steering their states toward an electric transition, creating rebates for homeowners who buy heat pumps to replace gas or propane. In some cases, heat pump installers and vendors can claim rebates as well, noted the American Council for an Energy-Efficient Economy in a June report.

Officials in California and New York are also reviewing how to square their climate goals, which involve full decarbonization across the energy sector, with the use of natural gas. Massachusetts’ attorney general has similarly asked regulators there to investigate the future of gas infrastructure.

Some electrification advocates say state regulators must take aggressive action to reshape how many gas utilities do business.

Coakley of NEEP noted that on a kilowatt-hour basis, gas tends to be about a third the cost of electricity, citing estimates from the U.S. Energy Information Administration.

That could keep heat pumps at a competitive disadvantage, even though they often use energy more efficiently than gas, said Coakley, who is pushing policymakers to correct that market imbalance.

“There’s a lot of tools we can bring to a solution,” she said. “But it’s pretty clear: We can’t keep using natural gas the way we’ve been using it.”

SOURCE: https://greenlining.org/press/news/2020/natural-gas-bans-national-can-cities-fill-gap/