War on Natural Gas—End User Edition

No matter that it is clean-burning, domestically plentiful, and affordable, natural gas is demonized by the Biden administration as a fossil fuel and for that reason is a target of its climate agenda. This includes the suspension of new natural gas leasing on federal lands and increased federal scrutiny of natural gas pipeline projects. In addition to these upstream and midstream measures, federal, state, and local governments are trying to prevent consumers and businesses from choosing natural gas in favor of electricity, despite the many advantages of the former over the latter. Fortunately, there are signs of pushback.

The most restrictive anti-natural gas measures are those imposed by localities that have banned any new natural gas hookups. Beginning with Berkeley, California, in 2019, several municipalities across the country have limited or eliminated the availability of natural gas for new homes and businesses. For affected end users, this effectively mandates electric space heating, water heating, and cooking over their natural gas-using counterparts.

As with the push for electric vehicles over gasoline and diesel-fueled ones, the preference for electric appliances over natural gas puts more of America’s energy eggs in one basket, and does so at the very time the electricity system is under increasing strain caused by forced retirements of reliable coal-fired generation and the addition of less reliable renewables into the mix.

In the case of New York, such moratoria are being necessitated by state-level efforts to block new natural gas pipelines from bringing in badly needed additional supplies. Specifically, New York used section 401 of the Clean Water Act to reject two proposed natural gas pipelines that would have carried more natural gas into the state (neighboring Pennsylvania has plenty thanks to fracking) and on to New England states that also need it. The Trump Environmental Protection Agency (EPA) finalized a rule that limited the use of section 401 of the Clean Water Act to legitimate water quality concerns and thus would preclude its use as a climate policy tool, as was the case with New York. However, the Biden administration has signaled that it will revisit this regulatory change. If that were to happen, more local moratoria may be needed.

The Biden administration has another anti-gas weapon in its arsenal—appliance efficiency standards. The Department of Energy (DOE) sets energy efficiency requirements for appliances, including ones like furnaces and water heaters and stoves where there are both natural gas and electric versions. The Biden DOE has initiated a new round of efficiency standards for all of these appliances, and it could fashion them in a manner that would make the natural gas versions prohibitively expensive or compromise their performance.

For example, highly stringent standards for furnaces would disproportionately add to the cost of natural gas furnaces relative to electric ones. According to the American Gas Association, a new standard proposed under Obama but rejected under Trump would have added up to $350 to the cost of a new natural gas furnace, and up to $2,200 in installation costs. And for some residential configurations, such new natural gas furnaces would be all but impossible, as the requirements for safe venting of exhaust could no longer be met. Under Biden, this prescriptive proposed standard is back on the table.

Beyond the consumer savings from natural gas appliances, there are performance benefits as well. For example, many restaurant owners and amateur cooks swear by the superiority of natural gas cooking over electric. And it is far from clear that natural gas appliances are responsible for more emissions than electric ones, as much depends on the assumptions made about how the electricity is produced.

The good news is that a backlash is brewing. Several states have enacted laws forbidding localities from outlawing new natural gas hookups. This makes perfect sense from a freedom of choice perspective. Any consumer or business owner who favors electric appliances over natural gas is always free to choose them, but these local restrictions serve to force that preference on every resident.

In addition, the upcoming wave of DOE efficiency standards will be met with opposition. The underlying statutory provisions preclude the agency from promulgating appliance regulations that limit product choice or compromise performance. It is on these grounds that the Competitive Enterprise Institute and others have pushed back, with some success, against excessive and anti-consumer regulations for dishwashers, shower heads, and light bulbs during the Trump administration. We will continue to oppose such appliance regulations, and especially ones that foreclose the choice of natural gas to the detriment of end users.