Restrictions on new natural gas hookups are a costly and unnecessary imposition on American energy consumers and the bans are contributing to problems of energy reliability and affordability in states where they are prominent, according to a recent report by the Institute for Energy Research (IER).
On May 17, the Biden administration announced a building decarbonization policy to accelerate electrification of the nation’s residential and commercial buildings. The next day, the International Energy Agency urged policymakers to ban fossil fuel furnace sales by 2025 and adopt building codes that would eliminate the use of natural gas use in buildings.
“Municipal bans on new natural gas hookups are a barrier to consumer freedom, have the potential to cause power prices to rise and prevent residents from utilizing appliances like heaters and stoves during extreme weather events,” Paige Lambermont, policy associate at IER and co-author of the report, commented in a press release.
The report also cited the findings of consulting firm T2 & Associates, which show electrifying the entire nation with a goal of eliminating the direct consumption of fuel and reducing climate change emissions could cost anywhere between $18 trillion and $29 trillion.
Local building electrification measures have significantly evolved in the first half of 2021. IER’s report shows 76 cities have placed restrictions on natural gas to date. Armed with significant financial resources, environmentalists are targeting the natural gas industry through local bans on new natural gas hookups that tend to be concentrated in areas where there are legitimate concerns over grid reliability. Although these bans are primarily located in California and the Northeast, proposals have been springing up across the country as groups advocate for coercive measures that would limit or ban the use of natural gas.
Higher electricity bills
The report goes on to add that placing restrictions on the use of natural gas will not be easy or cheap. In fact, natural gas bans in new buildings will result in higher energy bills for consumers in states with comparatively higher electricity prices.
For instance, California—which currently has the most cities with gas bans—saw a rise in the average cost of residential electricity to 19.22 cents per kilowatt-hour (kWh) last year, which is 47% higher than the national average residential electricity price of 13.04 cents per kWh.
In addition, it’s important to note that electrifications and natural gas bans could concentrate energy risks on the electric grid, creating more problems.
“In 2019, the U.S. accounted for 23% of the world’s natural gas production, making it the world’s largest producer of natural gas. The popularity of natural gas is partially the result of historically low natural gas prices and the comparative savings consumers are afforded by using natural gas when compared to electricity,” the report stated.
Pushing back
The report also noted that some states that “are concerned about protecting consumer choice and energy freedom” including Texas, Oklahoma, Louisiana and several others, are working to push back on these local initiatives to limit access to new natural gas hookups.
For instance, in May, Texas—one of the biggest consumers of gas—passed a law that “prohibits Texas cities from banning natural gas as a fuel source for new construction and utility services.” Although this was passed for similar reasons to the other states with similar legislation, it had the added goal of preventing electricity shortage situations like the one Texas faced in February from being as catastrophic by allowing people to retain access to natural gas for heating and cooking during blackouts.
The report shows that 20 states have responded to this “extreme anti-energy movement” and have passed or are in the process of passing legislation that prevents energy discrimination within their borders. “These states are seeking to allow for more freedom statewide and have made it clear all residents should be able to choose where they want their energy to come from, not be told,” the report said.
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