The Case for Gas Bans and Residential Building Electrification: Equity Perspectives on an Emerging Socio-Technical Energy Transition

Background

In order for California to meet its ambitious emissions reduction goals, fewer units of gaseous and liquid hydrocarbon fuels must be sold and burned to meet the needs of its residents. This includes not only fuels for power generation and transportation, but also the hydrocarbon gas that approximately 67-77 percent of California households currently use for cooking or heating. Some local governments, seeing an opportunity to reduce their present and future emissions, have been changing their building codes to exclude certain kinds of gas appliances (such as water and space heaters) from new construction. Some have even gone as far as to require that new buildings be all-electric, disallowing new gas hookups within their jurisdictions. These code changes—collectively referred to as “gas bans”—have been the subject of news cycles about the cost and invasiveness of climate mitigation policies.  

Critics of gas bans, more often motivated by financial interests than social justice concerns, point out that transitioning to residential electrification imposes a substantial economic burden, which potentially falls most heavily on low-income and under-resourced communities. We share the view that this transition poses a significant equity challenge, as current energy and climate policies are insufficient to address the disproportionate economic and environmental burdens on those communities. But rather than stall a sensible and urgently-needed transition, we can and should revise the regulatory and policy approaches, in consultation with communities and stakeholders, to achieve equitable solutions. 

What are Gas Bans

“Natural gas bans” refer to a diversity of municipal building code changes that disallow certain uses of natural gas in new residential buildings. Gas bans vary in terms of their provisions, but all are intended, along with complementary building electrification programs, to limit the amount of fossil fuels that must be extracted, transported, and burned to meet residential energy needs, thus reducing carbon emissions from buildings, which currently account for approximately 30 percent of the US’s total greenhouse gas (GHG) emissions. To date, all of the natural gas bans proposed or enacted apply only to newly constructed residential buildings and some select types of redevelopment, such as the construction of accessory dwelling units. California is the state with the most municipal bans: 42 cities and counties have limited the use of gas in new construction. Cities in Colorado and Massachusetts have also either enacted, or attempted to enact, similar building code changes.

Gas Bans in California

Gas bans have been enacted in both Northern and Southern California, beginning with Carlsbad and Berkeley in 2019. Since then, an additional 40 municipalities, including San Francisco, San Jose, San Mateo City, San Mateo County, San Luis Obispo, and others have changed their building codes to limit the use of gas in new residential construction. The map below (Figure 1) Illustrates the location of municipalities that currently have policies in place which either fully or partially restrict the use of gas in residential buildings.

Figure 1. California Municipalities with Building Codes Prohibiting Gas Use in New Construction

The Rationale for Gas Bans

The primary reason for eliminating hydrocarbon gas appliances from residential buildings is to reduce the carbon emissions generated by domestic activities, and it is far easier and cheaper to incorporate electrification into new construction than it is to replace all the end-uses of gas in an existing building. This is in part because many electric appliances require tight integration with the design of other building systems, such as in-wall wiring and circuits, as well as the HVAC ducting and equipment plans. And, importantly, policies mandating electrification in new construction, where new equipment must be purchased anyway, are less likely to encounter resistance. Policies that mandate the removal and replacement of existing equipment within peoples’ homes are much more demanding, and would likely face significant legal challenges.  

However, beyond reducing carbon emissions, there are a number of important additional benefits to residential electrification, including: 

• Ambient and Indoor Air Quality Improvements – Emissions from gas combustion can impact both outdoor and indoor environments.(((The burning of hydrocarbon gas emits several combustion co-products in addition to CO2. The most important of these for public health are NOx and small size fraction particulate matter (e.g. PM2.5).))) The use of gas appliances, especially stoves and ranges, in poorly ventilated indoor spaces can produce concentrations of air pollutants in excess of state and federal outdoor exposure limits.(((Seals, B. A., & Krasner, A. (2020). Health Effects from Gas Stove Pollution. Rocky Mountain Institute, Physicians for Social Responsibility, Mothers Out Front, and Sierra Club.))) Recent work published by researchers from the UCLA Fielding School of Public Health indicates that the substitution of electricity as the source of energy for cooking and domestic heating can improve indoor and ambient air quality through reduced pollutant emissions exposures.(((Zhu, Yifang, Rachel Connolly, Yan Lin, Timothy Mathews, and Zemin Wang. 2020. “Effects of Residential Gas Appliances on Indoor and Outdoor Air Quality and Public Health in California,” no. April.))) 
• Reduction in Fugitive Emissions from Gas Infrastructure – Accidental releases of hydrocarbon gas from wells, pipelines, storage areas, and distribution networks—“fugitive emissions”—are an inevitable byproduct of its use, and a significant drag on efforts to reduce the amount of greenhouse gases accumulating in the atmosphere, because methane, the primary component of hydrocarbon gas, is itself a GHG. Methane is more potent GHG than carbon dioxide, despite its shorter lifetime in the atmosphere. Less demand for gas means that less will be extracted, stored and transported, thereby reducing fugitive emissions. 
• Reduced Lifetime Cost for New Construction – Depending on energy prices and the kinds of electric appliances installed, the lifetime cost of a fully electrified residence may be lower than one with gas and electrical appliances. Requiring all new construction to be fully electrified also obviates the need to build more natural gas distribution infrastructure to serve new developments.

Challenges with Implementing Gas Bans

In most instances, banning new gas hookups or certain kinds of gas-powered appliances from residential buildings means replacing the energy that would have come from gas with the other form of energy delivered to the majority of residences: electricity. Broadly speaking, the challenges inherent in banning gas are the same as those presented by transitioning to electricity: the magnitude and distribution of costs associated with the transition, the equity impacts associated with it, and the implications for the operation of the electrical grid. Despite electrification’s status as the only strategy currently feasible for decarbonizing domestic activities, it is neither simple nor unproblematic.   

First, the electrification of appliances that are currently powered by natural gas would likely increase domestic energy costs. Per unit energy, the average cost of electricity in California is much higher than that of hydrocarbon gas. However, whether households will end up paying more for energy ultimately depends on characteristics of the electric appliances installed (e.g. efficiency) and their individual patterns of energy use.(((Navigant Consulting Inc. 2018. “The Cost of Residential Electrification.”))) In terms of up-front cost, while most electric appliances are priced similarly (or lower) to their natural gas counterparts, heat pump hot water heaters and induction cooktops are currently more expensive.(((Mahone, Amber, Charles Li, Zack Subin, Michael Sontag, Gabe Mantegna, and Alexis Karolides. 2019. “Residential Building Electrification in California Consumer Economics, Greenhouse Gases and Grid Impacts.” Energy + Environmental Economics (E3).))) Added to this are other ancillary customer costs, such as the potential need for new induction-compatible cookware and the reluctance by some to give up gas stove cooking.(((Ibid.))) From a broader societal standpoint, targeted and comprehensive workforce transition plans will be needed for the approximately 10,000 California gas distribution workers.(((Gridworks, 2019. California’s Gas System in Transition: Equitable, Affordable, Decarbonized and Smaller.)))

Our own center’s research has added to this list of challenges. We recently published one of the first analyses of hourly patterns of residential natural gas use and associated implications for the timing of additional grid loads from appliance electrification.(((Fournier, Eric Daniel, Robert Cudd, Felicia Federico, and Stephanie Pincetl. 2020. “Implications of the Timing of Residential Natural Gas Use for Appliance Electrification Efforts.” Environmental Research Letters 15 (12). https://doi.org/10.1088/1748-9326/aba1c0.))) Our study revealed that electrifying gas appliances will add to daily peak electricity loads; exacerbating the challenges associated with the decommissioning of the hydrocarbon gas power plants, which are the kind most commonly used to supply peak power demands. 

How Gas Bans Relate to the Process of Electrification

All gas bans implemented to date have been applied to new building construction. But excluding natural gas from new construction is just the tip of the iceberg: drastically reducing emissions from residential buildings will also require electrifying existing buildings. Expanding electrification policies to include existing residential buildings implies all of the challenges mentioned above, in addition to others. 

Electrification retrofits impose significant upfront costs, both for the purchase of new appliances and their integration into a building’s existing electrical system. Under current conditions, these costs would most likely be incurred by the property owner (renters may not even be allowed to make such changes). There are also enormous logistical challenges associated with retrofitting over 13 million households in the state, and, furthermore, if this process puts upward pressure on home prices in under-resourced neighborhoods, it could exacerbate gentrification and renter displacement. 

Also inherent is the risk of an infrastructure maintenance “death spiral” for legacy gas customers.(((Aas, Dan, Amber Mahone, Zack Subin, Michael Mac Kinnon, Blake Lane, and Snuller Price. 2020. The Challenge of Retail Gas in California’s Low-Carbon Future: Technology Options, Customer Costs and Public Health Benefits of Reducing Natural Gas Use. California Energy Commission. Publication Number: CEC-500-2019-055-F.))) A death spiral occurs when widespread electrification creates a significant reduction in gas sales revenues while simultaneously causing fixed infrastructure maintenance and operations costs to become distributed among a shrinking group of paying customers. Furthermore, gas infrastructure is deeply embedded within the built environment and, if no longer in use, must be either safely decommissioned or repurposed. 

Examining the Opposition to Gas Bans

Impacts on Domestic Energy Expenditures

Perhaps the argument most commonly cited in opposition to gas bans is that they will increase household energy expenditures. We share this concern: residents of low-income and under-resourced communities are already disproportionately burdened in terms of the proportion of their income they spend on energy. However, the broader context around this issue warrants more careful consideration. 

An important factor which is often ignored is the historical subsidization of gas production at the federal level—i.e., low cost lease agreements, favorable emissions and safety regulations, tax write-offs, etc. In California, gas production is exempt from the state’s cap and trade program. As a consequence of these practices, the environmental and health impacts of hydrocarbon gas extraction and consumption have been externalized, artificially depressing its price. Paradoxically, by comparison, electricity prices increasingly are internalizing environmental impacts through mechanisms such as escalating renewable portfolio standard (RPS) mandates, which require electricity service providers to generate an increasing proportion of their electricity from zero-emissions and renewable sources. This illustrates an asymmetry in the regulatory frameworks which are currently being applied to gas versus electricity producers. It is very likely that if gas producers were similarly mandated to produce an increasing proportion of their gas from zero-emissions and renewable sources and other federal subsidies for up-stream processes were eliminated, then electrification would be much more cost-competitive than it is at present. 

Policy approaches, similar to the establishment of CARE and FERA discounted utility rates for low-income households, could also alleviate the financial burdens of the transition for  low-income households. The renewable energy transition will increase the cost of generating electricity in the medium to long-term, but there is no reason why the cost of decarbonizing the grid should fall equally on all consumers. Subsidization of electricity consumption should be proportional to household wealth, which is the primary determinant of household energy consumption.(((Fournier, Eric Daniel, Robert Cudd, Felicia Federico, and Stephanie Pincetl. 2020. “Implications of the Timing of Residential Natural Gas Use for Appliance Electrification Efforts.” Environmental Research Letters 15 (12). https://doi.org/10.1088/1748-9326/aba1c0; Fournier, E. D., Cudd, R., Federico, F., & Pincetl, S. (2020). Implications of the timing of residential natural gas use for appliance electrification efforts. Environmental Research Letters, 15(12), 124008.))) 

Impacts on Resilience

Fuel source diversity is often touted as an argument in favor of retaining natural gas hookups in new residential developments. However, while the flow of gas through pipelines may not be disturbed by the types of events most commonly responsible for electricity system outages, there are many other considerations which limit the practical resilience benefits of retaining gas. 

A first consideration is that many residential natural gas appliances will not work without electricity; a household may be able to use their stove by lighting the burners with a match, but most gas furnaces and many gas hot water heaters still require electric power to operate. 

Under more catastrophic disaster scenarios, where utility services may be disrupted for periods of weeks or months, having more of the appliances in one’s home powered by a fuel source which can be generated locally and renewably, such as with on-site solar and battery storage, provides significant resiliency benefits. There is no similar possibility of producing gas on-site. Moreover, if the gas distribution system ceases functioning, it would be extremely cumbersome to deliver gas via alternative means, such as with the refill or exchange of small storage tanks. The capacities of portable tanks are quite modest relative to the average household’s air and water heating energy demands. 

On-site electricity generation and storage that works during a power outage is limited at the moment, but it is possible, and needs to be facilitated equitably at both the household and community scale. This will require a combination of additional utility and state investments, as well as radical streamlining and simplification of utilities’ grid interconnect protocols. 

Holding Out for Renewable Gas

When pressed, many of those who argue against the implementation of gas bans generally agree that fossil hydrocarbon gas combustion is bad for the environment and human health. However, their continued support of gas infrastructure development is based upon the belief that hydrocarbon fuels can someday be produced at scale, with zero net greenhouse gas emissions. This renewable gas could be generated from a diversity of sources, ranging from the electrolysis of water, to the anaerobic digestion of human and animal waste streams. Unfortunately, the technology to produce enough renewable gas to displace gas extracted from fossil deposits is not yet commercially available. The only examples which do exist involve highly bespoke and largely experimental, one-off technology demonstration projects.

Key Equity Considerations for a Just Transition

Impacts on Under-Resourced Communities

Our findings, as well as those from other researchers, paint a thorny and difficult picture. Low -income and under-resourced communities that have borne the pollution burden from gas fired power plants, transportation corridors, oil and gas exploration, and other externalities of the fossil fuel industry are the same ones whose homes are less energy efficient, who have less agency due to higher numbers of renters, and who use less energy per capita. Some are living in a state of energy insufficiency, forced to choose between utility bills and other expenses. These homes are often located in areas which frequently experience unsafe ambient air quality, higher numbers of high heat days, and which are projected to experience larger increases in the number of high heat days due to climate change. All of these factors drive increased need for energy (largely electricity) to cool and filter indoor air, straining household energy expenditures even further.

With sufficient financial resources, equity solutions can be crafted through utility rate setting, in consultation with communities, building trades, housing policy, and workforce development, in order to eliminate the potential negative impacts on these communities. What first needs to be addressed, however, are the underlying assumptions about who should pay and how that money should be allocated. This in turn needs to be examined within the context of some of the big-picture assumptions behind California’s energy transition planning. 

Problems with Market-Based Solutions

The pursuit of market-based solutions (i.e., that utility bill savings will repay the cost of energy efficiency investments as well as provide an incremental profit for investors) as a pathway to addressing the energy transition in low-income and disadvantaged communities is likely infeasible, and also ethically dubious. Market-based solutions have not achieved their desired goals, thus new ways of thinking need to emerge about how to finance the energy transition in disadvantaged communities. Overall, conventional economic thinking is delaying needed upgrades in disadvantaged communities; many policymakers are convinced that it is necessary to construct a means by which value can be extracted by the private sector in implementing these improvements. 

Much like in the non-profit housing sector, the state has elaborated various programs and policies to assist in the energy transition for underserved communities, including programs to encourage the installation of distributed energy resources. These programs, like their housing counterparts, require the mixing and matching of numerous nonprofit and for-profit partners, expert knowledge, access to capital, and understanding of the arcane language and pathways to qualify for state funding. These approaches, which are an outgrowth of neoliberal economic thinking, have led to a miniscule set of disjointed, complex projects being implemented in disadvantaged communities. The exclusive focus on market solutions has created barriers to action, and fails to acknowledge the harms inflicted on these communities from decades of fossil fuel pollution burdens, and the structural inequities built into energy efficiency incentive programs.

Conclusions

The Real Issue at Hand

Critics of gas bans have no shortage of studies and testimonials from research institutes and various sympathetic groups in the construction trades purporting to demonstrate, decisively and quantitatively, that eliminating the use of hydrocarbon gas in residences makes no economic sense  Such studies often document microeconomic barriers to electrification, and then offer their existence as evidence that electrification will be a waste of society’s resources. Many of these same pundits and institutions, who oppose nearly all serious climate policy, cynically frame residential decarbonization as inimical to the interests of low-income and disadvantaged communities, while conveniently ignoring the historical impacts of the fossil-fueled economy on those same communities.

We do not dispute that residential electrification will be costly, that retrofitting existing structures poses a huge challenge, or that current climate and energy policies do not adequately address social justice issues—indeed, much of our work is concerned with these topics. But the loudest critics of gas bans, and by extension, electrification, more often than not have financial interests in seeing such measures fail. They are interested in forestalling the transition so they can continue to profit from the sale of hydrocarbon fuels—and fear that California may once again set a precedent for the rest of the country. 

A Need for Urgent Action

The issue with renewable hydrocarbon fuels is not only their technical feasibility and scalability, but the urgency of the moment. Even if these issues could be overcome, the window of opportunity for limiting accumulated GHG emissions is rapidly closing, and we already have technologies that are mature and commercially available for meeting residential energy needs. 

The case for eliminating residential consumption of hydrocarbon fuels is even stronger when considering the actual physical requirements of domestic energy end-uses compared to those in other sectors of the economy. The absolute temperatures, pressures, and forces which must be generated to take a shower, cook food, or dry laundry are incredibly modest relative to the demands of many commercial and industrial processes. The fabrication of steel, the synthesis of ammonia, and the manufacturing of concrete are all fundamental to supplying the essential material requirements of modern, industrialized societies, yet they are also processes for which low-energy intensity substitutes are in precious short supply. 

If we think of our efforts to respond to climate change as the need to, at a minimum, maintain current standards of living on an annually decreasing carbon emissions budget, then decarbonizing domestic life is an extremely logical place to begin.