Natural gas, once seen as a bridge fuel to a new energy future, is now the target of attacks by the anti-industrial Left.
Armed with significant financial assets, environmental groups have spent the past year targeting the natural gas industry and its consumers through local bans on new natural gas hookups. Most of the local bans are located in California and the Northeast, but proposals to restrict new natural gas hookups continue to spring up across the country.
Fact is, these bans are a bad deal for consumers. Natural gas is currently used by both residential and commercial building owners for a variety of purposes, with water heating, space heating, and cooking making up the primary preferred applications. And it is not only price but also quality.
In 2019, residential consumers used 5,015,603 million-cubic-feet of natural gas in the United States; commercial buildings used 3,512,607 million- cubic-feet of natural gas; and industrial consumers used 8,417,300 million-cubic-feet of natural gas. The popularity of natural gas is due to its price and the comparative savings consumers are afforded by using natural gas when compared to electricity.
Restrictions on natural gas use in new buildings will result in higher energy bills for consumers in those states with comparatively high electricity prices. California, in this regard, meets itself coming and going. As Jonathan Lesser explained in a 2019 Wall Street Journal article:
Consider California, the state at the forefront of natural-gas-hookup bans. Last year, the average price of natural gas in California was about $12.30 per million British thermal units (a measure of the heat content of the fuel), according to the U.S. Energy Information Administration. For a homeowner with a new, 95% efficiency natural-gas furnace or water heater, that translates into a cost of just under $13 per million BTUs.
Compare that with the cost of electricity, which averaged 18.84 cents a kilowatt-hour in California in 2018, about 50% higher than the national average. That works out to $55 per million BTUs, more than four times the cost of natural gas. Even heat pumps for space and water heating can’t bridge that gap.”
Today, California’s residential electricity prices are the fifth highest in the country. Last year, the average cost of residential electricity in California was 23.4 cents per kilowatt-hour, compared to the national average residential electricity price of 14 cents. On December 3, the California Public Utilities Commission approved an 8.1 percent electricity rate increase for PG&E, which will cost the average residential customer in that service territory an additional $13.44 per month.
It’s clear that in states like California, bans on natural gas are exacerbating the state’s poverty problem. As others have noted, many cities adopting these bans are some of the wealthiest parts of America. In California in particular, the municipalities that are restricting the use of natural gas are far wealthier than the state or national averages, meaning that by raising energy prices these localities are erecting further barriers to entry. These higher energy bills are of particular concern because they have more of an impact on low-income households.
Additionally, the quest to electrify everything creates relative reliability risks on the electric grid, making conservation orders a failure of the grid an even more harmful event than it otherwise would be. In states like California where the confluence of renewable energy mandates and aggressive zero emissions targets have contributed to rendering the electric grid unreliable, bans on new natural gas hookups push more demand onto the grid, further taxing the system.
California’s bans on natural gas are occurring while California’s electricity prices are increasing, and that the state’s electricity grid has been shown to be unreliable. State residents’ electricity demand has been affected by rolling blackouts during heat waves and power cutoffs to prevent fires caused by old equipment. In fact, blackouts are so common that thousands of Californians have bought small generators powered by fossil fuels to ensure reliable power.
Finally, natural gas has certain properties that consumers prefer based on usability and natural gas bans ignore these consumer preferences. The most prominent example is the gas range stove, which both commercial and home chefs tend to prefer for preparing and serving food. This is why the California Restaurant Association is pushing back on these bans.
Natural gas bans are an affront to Americans who simply desire the most economical and highest quality energy. In order to promote competition and to preserve consumer sovereignty in energy markets, states should continue to push back on these local bans on new natural gas hookups.