What About Natural Gas? To Ban or Not to Ban?

Environmental/Land Use Alert (January 6, 2020)

Many cities and counties across the State of California are jumping into action to implement Executive Order B-55-18’s ambitious goal of carbon neutrality by 2045.[1] Some land use agencies are doing so by taking a hard look at the role of natural gas consumption as a contributor of greenhouse gas (GHG) emissions. As the California Energy Commission (CEC) has concluded, “electrification is a potential path to achieve California’s [] climate goals” and “would significantly reduce emissions, resulting in improved air quality and reducing mortality rates from pollution.”[2]  

In July 2019, the City of Berkley adopted an ordinance banning natural gas and requiring building electrification in new construction beginning on January 1, 2020.[3] More specifically, without CEC approval, the City Council unanimously adopted an ordinance banning natural gas stoves, furnaces, and water heaters in all new homes and low-rise apartment buildings. The City concluded that such regulation was necessary because electricity, being more routinely powered by renewable sources, is the cleaner alternative to natural gas, and yet natural gas comprises 27% of the City’s total GHG emissions and 73% of its building sector GHG emissions.[4]

The landmark ordinance has sparked a heated debate. Supporters of natural gas bans cite to the pipeline explosion in Northern California in 2010 for the safety concerns of natural gas infrastructure, and to the GHG emission reductions realized by the increasingly cleaner electricity grid. Opponents of such bans often cite to the worsening housing crisis as being at least partially attributable to the higher cost of electrification and new infrastructure; impaired consumer choice; and the inequities of spreading the cost of fixed natural gas infrastructure across a smaller number of low-income customers. Opponents relatedly reference a study commissioned by the California Building Industry Association finding that, while electrification could reduce a new home’s total GHG emissions by 63-67 percent in 2030, it would increase energy cost for homeowners.[5]

Of interest, in November 2019, the California Restaurant Association (Association) filed a complaint in federal court for declaratory and injunctive relief against the City of Berkeley.[6] The Association argues that restaurants rely on natural gas for cooking particular types of food, and losing natural gas will affect the chef’s control and the manner and flavor of food preparation. The Association’s complaint alleges that the City’s ordinance is preempted by federal law (specifically, the Energy Policy and Conservation Act), as well as state law (specifically the California Building Standards Code and California Energy Code). Therefore, the complaint alleges that the ordinance represents a void and unenforceable exercise of police power and seeks both injunctive and declaratory relief.

As of this writing, over a hundred local governments, including the cities of Temecula and Huntington Beach, have rejected the approach taken by the City of Berkeley and have instead adopted resolutions “making a statement to protect customer choice, protect customers from higher energy costs and making a positive decision for a better environment in the future.”[7]

Despite criticism of and challenges to local natural gas bans, however, many municipalities, Los Angeles and San Francisco being among them, are showing signs of support for the City of Berkeley and are considering policies to eliminate the use of natural gas. In fact, Marin County, San Jose, San Mateo, Santa Monica, and West Hollywood have obtained CEC approval of their adopted ordinances to ban or limit gas appliances in new buildings.[8] The Town of Windsor in Sonoma County, like the City of Berkeley, has been challenged for its natural gas ban, which it adopted in September 2019.[9] Others, Palo Alto for example, have adopted ordinances but are awaiting CEC approval. While most of these ordinances have exemptions (accessory dwelling units, for instance) and/or limited application (applying to residential but not commercial buildings), the City of Mountain View has adopted one of the most aggressive ordinances in the State, requiring electrification of new residential and commercial buildings and allowing for no exemptions for gas stoves, fireplaces, or fire pits.[10]

It is likely too early to determine whether natural gas bans adopted by cities and counties will establish a firm footing in California. Instead, it may be more likely that the trajectory of such bans will be influenced by the pending case concerning the City of Berkeley’s ordinance, the response of utility companies (including the availability of renewable natural gas), and State policy and regulatory parameters.   
   
[1] Executive Order B-55-18 is available at https://www.ca.gov/archive/​gov39/wp-content/uploads/2018/09/9.10.18-Executive-Order.pdf.
[2] Please refer to pages 1-2 of the CEC’s “Air Quality Implications of an Energy Scenario for California Using High Levels of Electrification” report (June 2019), available at https://ww2.energy.ca.gov/2019publications/CEC-500-2019-049/CEC-500-2019-049.pdf.
[3] The City of Berkeley’s Ordinance No. 7,672-N.S. is available at https://www.cityofberkeley.info/Clerk/City_Council/2019/07_Jul/​City_Council__07-23-2019_-_Regular_Meeting_Agenda.aspx.
[4] Please refer to pages 8 and 14-15 of the July 9, 2019 report for Agenda Item 21, available at https://www.cityofberkeley.info/Clerk/City_Council​/2019/07_​Jul/City_Council__07-09-2019_-_Regular_Meeting_Agenda.aspx.
[5] Please refer to page v of the “Impacts of Residential Appliance Electrification” report prepared by Navigant (September 2018), available at https://c4bes.org/wp-content/uploads/2018/09/Navigant-Report-Impacts-of-Residential-Appliance-Electrification.pdf.
[6] Please see California Restaurant Association v. City of Berkeley, U.S. District Court, Northern District of California, Case No. 3:19-cv-07668.
[7] Please refer to https://www.socalgas.com/vision/balanced-energy-resolutions for a list of local jurisdictions that have adopted Balanced Energy Resolutions.
[8] Please refer to the CEC docket available at https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=19-BSTD-06.
[9]  On November 19, 2019, William Gallaher filed a petition for writ of mandate under the California Environmental Quality Act in state court (Gallaher v. Town of Windsor, Sonoma County Superior Court Case, No. SCV-265553), and two days later Windsor-Jensen Land Company, LLC did the same (Windsor-Jensen Land Company, LLC v. Town of Windsor, Sonoma County Superior Court, Case No. SCV-265583).
[10] The Mountain View ordinance is available at https://mountainview.legistar.com/​LegislationDetail.aspx?ID=4198030&GUID=9A1AB443-F524-4487-8E8E-07BEE56C3C83&Options=&Search=.

[This case alert does not constitute legal advice and no attorney-client relationship is created by viewing or responding to this alert.  Legal counsel should be sought for answers to specific legal questions.]