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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Is This The Next Major Threat For Natural Gas?

From California to Massachusetts, some U.S. cities are enacting—or trying to enact—bylaws banning natural gas hookups in new homes, citing concerns over climate change and efforts to decarbonize energy supply.

The quest of many U.S. towns and cities to ensure that all newly built homes will be all-electric has resulted in a fierce battle in dozens of states, many of which have moved to preemptively prohibit their towns from banning natural gas in new homes.

The battle is also between the gas lobby and environmentalists, while many consumers—while supporting their state’s clean energy goals—are wary of rising energy bills and rising costs of building and maintaining an all-electric new home. 

Emissions from the commercial and residential sectors accounted for 13 percent of U.S. greenhouse gas emissions in 2019, as per Environmental Protection Agency (EPA) data. These emissions are generated primarily from fossil fuels burned for heat, the use of certain products that contain greenhouse gases, and the handling of waste.

As climate change concerns and climate goals became a prominent issue at town meetings, Berkeley, California, became two years ago the first U.S. city to ban natural gas hookups in new homes, with few exceptions.

Other towns followed, or at least they tried. Related: Small Crude Inventory Draw Disappoints Markets

Gas Ban Bylaws Pit Cities Vs States

More than a dozen states have introduced this year preemption bills to restrict local communities’ efforts to enact regulations banning natural gas hookups in new homes. As of the end of June, Alabama, Arkansas, Colorado, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Mississippi, Missouri, North Carolina, Ohio, Pennsylvania, Texas, Utah, West Virginia, and Wyoming had such preemption bills introduced, according to a tally compiled by the Natural Resources Defense Council (NRDC). Four other laws went into effect last year in Arizona, Louisiana, Oklahoma, and Tennessee. 

In March this year, Colorado homeowners and businesses called on the General Assembly to protect their right to propane and natural gas as part of a new initiative, “Protect My Gas.”

“There’s a movement underway to ban gas from homes and businesses. This effort would have severe consequences on the residents and businesses of our state: higher utility bills, new appliances and the threat of rolling blackouts,” said Dan Binning, Executive Director of the Colorado Propane Gas Association and a member of the Protect My Gas coalition.

Massachusetts Town’s Fight To Demand All-Electric New Homes

The latest chapter in the cities-vs-states battle over natural gas hookups is unfolding in Massachusetts, where a town outside Boston is taking its fight to ban fossil fuels in new homes into a second year.

Brookline, Massachusetts, passed such a bylaw in 2019, becoming the first city outside California to attempt to restrict a type of energy supply to new homes. In July 2020, however, Massachusetts Attorney General Maura Healey rejected Brookline’s bylaw, saying it superseded state authority, although she noted that she supports efforts to reduce greenhouse gas emissions.

Brookline now tries with new ordinances, and instead of outright bans, the town is rewording the proposed bylaws requiring future homeowners to agree to go fossil free in exchange for a special building permit.

“We think it will pass muster with the AG,” Brookline Town Meeting member Lisa Cunningham told Boston’s news outlet WBUR in June.

“There’s really only one way to reduce our emissions, and that is to stop using gas and stop using fossil fuels,” Cunningham told The Wall Street Journal last month.

Acton, Arlington, Concord, and Lexington also want to have the right to demand all-electric new homes by asking the Massachusetts legislature to allow them to ban gas hookups in new homes or in buildings undergoing major renovations. Related: Merger Mania Paves The Way For A New Era In U.S. Shale

Energy Choice and Energy Costs

However, many consumers are not sold on the idea of living in all-electric new homes. They are concerned that their choice of energy—natural gas or propane in this case—is taken away, and that their energy bills will be higher, especially in towns with colder winters.    

Opponents of the natural gas ban, including the American Gas Association, say that residential energy costs would be much higher without any use of natural gas at homes.

According to an American Gas Association study from 2019, the total annual residential energy cost for appliances in a typical new natural gas home is $879 lower than the electric home, $924 lower than the oil home, and $965 lower than the propane home. For space heat alone, residential consumers of natural gas can save $525 a year relative to electricity consumers, $593 a year compared to oil customers, and $655 a year compared to propane customers, according to the association.

The National Association of Home Builders (NAHB) said in two separate studies this year that all-electric homes cost more upfront and that American consumers still prefer gas to electricity for cooking.

NAHB’s What Home Buyers Really Want, 2021 Edition survey showed that consumers generally prefer electricity (51 percent) to gas (33 percent) for their air heating and cooling systems, but prefer gas (51 percent) to electricity (39 percent) for cooking. Consumers were split on electricity (45 percent) versus gas (40 percent) for water heating systems, with 15 percent indicating no preference.

Total added construction costs for all-electric homes range from around $11,000 to $15,000 for cities with colder climates such as Denver and Minneapolis, a study prepared for NAHB showed earlier this year. In warm climates such as in Houston, the total added construction costs range from $3,988 to $11,196.

Overall, the study found that all-electric homes cost more upfront in comparison to gas homes. Electric homes in cold climates were also found to have higher ongoing utility costs, NAHB said.

Higher costs for homes could be a big hurdle to lower-income households, opponents of the all-electric buildings say.

“Jurisdictions considering electrification should evaluate these impacts on consumers and work with stakeholders to develop supporting economic measures,” NAHB says.  

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Paul Smith on August 03 2021 said:
    All electric homes cost more NOW. But that is because they are usually better insulated, and they are cheaper to operate. My house is all electric and is cheaper than my last house. My electricity bills are half what my next door neighbor pays for electricity and gas. Same size house.

    I see a lot of comments from the anti electric groups but where are the rebuttals from the all electric side?
  • Bill Simpson on August 03 2021 said:
    The beauty of natural gas is that you can use it to power a generator to keep your electricity on during a power failure. That beats having to store propane, or try to find gasoline after a hurricane or after hackers shut off the power. When New Orleans was under water after Hurricane Katrina, the gas was still on.

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