The U.S. Energy Information Administration reported last week that natural gas in storage increased to 36 Bcf. There was an injection for the same week last year of 27 Bcf while the five-year average injection is 28 Bcf. Total U.S. natural gas in storage stood at 2,714 Bcf last week, 16.2% less than last year and 5.8% lower than the five-year average for this time of year.
The Energy Information Administration reports that natural gas generated 40.3% of all U.S. electricity in 2020. At the moment, it is an accessible, abundant, and affordable fuel source. However, with aggressive carbon mitigation goals slated for the next 10-15 years, including the Biden Administration’s 2035 emissions free power sector target, the implication is that a monumental reduction in natural gas use will be required. This is a tall task. Billions of dollars are invested into the natural gas industry and sprawling infrastructure each year. Many states have only recently embarked on efforts to transition from oil and coal to natural gas.
On the state and local level, regional officials have taken a wide range of stances and initiatives, both for and against. In July 2019, Berkeley, CA pioneered a ban of natural gas connections in new construction, adapting its local building code to effectively prohibit further natural gas expansion starting in 2020. Other cities have since followed Berkley’s path in initiating local bans. Others states have taken explicit moves to protect the gas industry. As of today, 19 states across the country – mostly in Midwest and south –have passed legislation prohibiting local governments from restricting natural gas utility services, with only 2 states (California and Washington) approving local bans and 3 others (New York, Massachusetts, and Vermont) due to weigh in on local bans.
A summary of local governments’ actions to curtail natural gas usage in Massachusetts, New York, and Vermont are discussed below:
Massachusetts:
Brookline, MA is in the midst of its second effort to curb fossil fuel hookups in future construction, which would make it the first MA municipality to do so. Its first legislative effort, passed in 2019, was blocked by the Attorney General, who ruled the local law, as written, conflicted with state law and could not be enacted. The initial ban, similarly to its CA counterpart, blocked building permits for construction or major renovations that included gas piping for space and water heating. The revised legislation, approved by Brookline in June, took feedback from the state’s ruling and is no longer a direct “ban” of new gas hookups, but instead heavily incentivizes all-electric buildings by granting special permits for all-electric buildings in perpetuity, while scrutinizing and limiting permit lifetime for buildings with gas infrastructure.
Since Brookline’s initial efforts, a similar push across other Massachusetts towns and cities has grown. As of today, 12 Massachusetts communities have partnered with the Rocky Mountain Institute to promote all-electric construction in respective communities. Their ultimate goal is to update the state to target net-zero greenhouse gas emissions by 2050 in part by mandating building electrification. On a local level, this group will look to follow the model set by Brookline in order to achieve goals using local legislative power. Brookline’s second attempt is expected be reviewed by the state in the latter half of 2021, and stakeholders will see if the adjustments made can fit within state law. Despite it being a long, strenuous journey, proponents are optimistic about this process and aim to demonstrate widespread support for electrification mandates through shared policies to avoid potential opposition from state legislatures.
New York:
On May 27, New York City introduced legislation that would effectively ban natural gas usage (as well as other fossil fuels) in new buildings and renovations, accelerating Mayor Bill de Blasio stated aim of prohibiting fossil fuel usage in building systems by 2040 and imitating the steps successfully taken in various Californian municipalities. The proposed City Council bill leverages the City’s authority to regulated building code with respect to CO2 emissions, and would effectively ban natural gas by preventing new buildings from burning fuels that exceed specified emissions limits.
Vermont:
Burlington, VT became the first in the US to source 100% of its power consumption from renewable resources and city legislators are now in the midst of efforts to incentivize all-electric building. This would be achieved by levying fees on new buildings that are constructed with natural gas connections. Mechanically very different from the hookup bans seen in California and attempted in Massachusetts, Burlington’s legislation, which is yet to be weighed on by the state, instead levies fees on new buildings with natural gas infrastructure for their emissions. In addition, incentives for the retrofitting of gas hookups to electric systems and appliances has also been proposed. On October 6, 2020, the ordinance was officially announced by Burlington Mayor Miro Weinberger and subsequently gained support from 65% of voters in the following March. At the same time, the city is advancing another renewable heating ordinance by requiring newly constructed buildings to have a primary heating system that sources around 85% of load from renewable sources. City officials believe this ordinance could serve as a failsafe if state-level legislation is encumbered and that regulations could be implemented gradually over a ten-year basis.
Use the filters to sort by region
Market data disclaimer: Data provided in the "Market Data" section is for the newsletter recipient only, and should not be shared with outside parties.