New York Utilities Polarize Over Push to Ban Natural Gas

A proposed gas ban has pitted ConEd against big oil, real estate lobbyists, and other investor-owned utilities.

Lee Harris   ·   December 1, 2021
Combined gas and electric utilities have been realizing that electrification is an opportunity. | ConEd

This story was co-published with The American Prospect.

A top provider of natural gas to New York City is quietly supporting a fight to ban gas hook-ups in new buildings.

Con Edison sells both gas and electricity in New York, where it is counting on higher electric demand in winter months as it backs activists’ efforts to eliminate fossil fuels in new housing and commercial developments. The investor-owned utility has lobbied the City Council to pass Bill 2317, which would prohibit developers from piping oil or gas into new construction projects or major renovations as soon as this year.

“They’re putting down some specific industry lies,” said Pete Sikora, a climate campaigner who has led activist efforts to decarbonize buildings. “It's very, very useful.”

The stance pits ConEd against national lobbyists for the oil industry, and against local real estate interests fighting to slow the phaseout of gas.

“It's becoming a common pattern,” said Leah Stokes, an environmental policy professor at University of California, Santa Barbara who testified at a recent hearing on the ban. “Combined gas and electric utilities have been realizing that electrification is an opportunity.”

Not all energy companies are convinced. All-gas utilities are resisting efforts to phase out the fuel, and in some states are trying to head them off.

The city’s other main gas provider, National Grid, has opposed the ban, though in what activists say is a break with more aggressive past tactics, its criticism has been comparatively muted.

Meanwhile, new documents show that even as some downstate utilities begin to evolve their business models away from fossil fuels, a Buffalo-based gas giant is digging in its heels.

ConEd persuades NYC lawmakers to support gas ban

New York is a major market for oil and gas, consuming more fossil fuels in its buildings than any other state in the country. Much of that consumption happens in New York City, a market that is as politically visible as it is lucrative. As a result, fossil fuel companies have become unusually involved in a municipal fight they may regard as a tipping point.

ExxonMobil, which has led the fracking boom, ran an ad blitz opposing the New York City ban, and circulated a petition calling for state lawmakers to stop targeting natural gas. According to Eco Bot, a group that researches corporate greenwashing and analyzes internet ad campaigns, Exxon has shifted away in its targeted ads from the pleasures of cooking with gas to a darker emphasis on the gas industry’s provision of “critical community needs… like schools, hospitals.”

Ending the use of fossil fuels for home heating would not only cut planet-cooking greenhouse gas emissions but would also reduce unhealthy air pollution, which is heavily concentrated in poor and Black neighborhoods, according to Harvard researchers.

Since it would apply only to new buildings, the gas ban is a relatively easy battle for NYC environmentalists compared with other recent campaigns. Landlords lost a tougher battle over a law requiring them to upgrade existing housing stock, where polluting systems are locked in.

“Elite consensus” has shifted to embrace electrification, said Ben Furnas, director of the NYC mayor’s climate office. “I think you’re seeing forward-looking utilities embrace this also, and I would put ConEd in that category.”

Given the momentum towards phasing out fossil fuels, most critics take issue with the pace rather than the inevitability of a gas ban. They include the Real Estate Board of New York (REBNY), a trade group, which says that the plan could increase homeowners’ and renters’ electric costs and strain the city’s carbon-intensive electrical grid. The Partnership for New York City, a business trade group, echoed those concerns in its testimony, arguing that the transition to all-electric “will require greater reliance on older and dirtier power plants.”

Supporters of the ban say technological improvements have cut costs, bringing all-electric buildings roughly in line with gas-powered ones. The improved energy efficiency of clean heating systems would also bring down utility bills. And while electric appliances would still be hooked up to a power grid that uses fossil fuels, New York City has a clean enough grid that electrification would cut carbon pollution, Stokes said at the hearing.

For its part, ConEd submitted testimony in favor of the law for a City Council meeting earlier this month, arguing that the electric grid is “well-poised to support the transition to heating electrification.”

“A lot of the opposition that we've heard is, ‘This is impossible, the grid can't support this, the grid’s too dirty to make the transition off of fossil fuels feasible.’ So it helps to have the utility that is providing the electricity say, ‘No, this is possible. And in fact, we do support this,’” said Annie Carfaro, an organizer with the environmental group We Act NY. “They're definitely taken much more seriously by elected officials, by the mayor's administration, by other industry leaders.”

That stance doesn’t mean the investor-owned utility has ditched gas for good. ConEd has continued to press for expanding gas infrastructure such as Kinder Morgan's East 300 Upgrade Project, which will send more gas to Westchester County.

ConEd could also be a powerful future backer of electrification beyond New York City, but it hasn’t gone all in yet. State Senator Brian Kavanagh has proposed a statewide all-electric requirement that would prohibit gas in new buildings starting in 2023.

“I believe our position is the same on both the city and the state legislation, so it would be, we wouldn’t oppose either,” Jamie McShane, ConEd’s spokesperson, said when reached by phone about the statewide ban. McShane later walked back that stance, writing in an email, “We are still evaluating the state legislation.”

Meanwhile, some climate activists claim credit for what they describe as National Grid’s softer touch when opposing the gas ban. Facing pushback to a fracked-gas pipeline that would have run through Queens, National Grid implemented a moratorium on new gas customers, in what activists say was an effort to dramatize the effects of dwindling gas supply. That backfired when the state denied a key permit last year, leading the firm to abandon the project.

“That was a super-muscular move to try and force the governor to approve the pipeline, and it hugely backfired,” Sikora said. “I think they're a little bit gun shy now.”

“We are not resting on our current delivery systems,” the utility wrote in testimony for the hearing, which detailed concerns about the proposed gas ban.

The Utility Backlash

The more muscular pushback on prohibiting gas is now coming from upstate, in a pattern that may become increasingly common. Progressive cities have been first movers in the fight to decarbonize housing, since zoning laws and building codes are local. Some investor-owned utilities that provide both gas and electric power are now shifting towards a new model centered on electricity. California’s PG&E, for example, loudly touted its support for a statewide mandate for all-electric construction. Others, like Los Angeles-based SoCal Gas, are fighting back. 

Gas industry lobbyists have pushed laws through more conservative state houses to forbid gas bans—banning cities from writing legislation preventing the use of the fuel.

That dynamic is especially pronounced in states like Pennsylvania, where a legislature more friendly to fossil fuels is the first line of defense against liberal climate activists in the capital.

National Fuel, a New York-based gas utility with operations in Pennsylvania, has been involved in efforts to forbid gas bans in that state. In emails shared with New York Focus and the Prospect, gas utilities lobbyists coordinate to discuss “energy choice” legislation that would bar cities in Pennsylvania from prohibiting gas. Ed Damico, who is copied on and discussed in those emails, is registered as a National Fuel lobbyist in New York state.

An email sent by a lobbyist for UGI, a Pennsylvania-based natural gas company, refers to uniform agreement among gas utilities on the preemption strategy. “I met with the other NGDCs (copied) on Friday and everyone is eager to move forward,” the UGI lobbyist wrote, copying Damico. “We spent a good deal of time discussing the benefits of a fuel neutral bill.”

In another email, executives at Philadelphia Gas Works, a natural gas utility, refer to discussions on energy choice legislation with Damico. (The Energy and Policy Institute, a think tank, originally obtained the emails).

National Fuel is involved in pro-gas lobbying closer to home, too. New York has tasked a council with determining how to bring down emissions in line with the Climate Leadership and Community Protection Act (Climate Act), a climate law passed in 2019 requiring the state to cut emissions 40 percent by 2030. Documents first reported by New York Focus and the Prospect show that National Fuel sought to influence the council with materials from a group of utilities that belongs to the top national trade group for natural gas.

Reached for comment about Damico’s work on the Pennsylvania preemption bill, SB 275, spokesperson Karen Merkel confirmed to New York Focus and the Prospect that National Fuel supports that legislation. Asked about the New York City gas ban, she said the utility opposes all-electric mandates.

“New York City is well beyond our NY utility service territory so our involvement has been minimal within the confines of coalitions and associations. That said, National Fuel does not support natural gas bans. By focusing policy on an ‘all-of-the-above’ carbon-reduction approach, we can achieve the Climate Act’s targets,” Merkel said.

“That's just industry propaganda,” Stokes said. Multiple climate policy experts including Bob Howarth, a biogeochemist at Cornell University who sits on the council, have disputed the claim that New York can achieve the mandated carbon emission cuts in the Climate Act while relying on natural gas.

“That’s wrong right now, but it’s really, really wrong over time,” Sikora said. “This is multi-decade infrastructure, so you're not installing something that lasts one year and gets replaced. You’re installing something that lasts twenty years.”

Lee Harris co-founded New York Focus and currently works part-time on strategy and development as contributing editor. She is also a staff reporter at The American Prospect, where her reporting focuses on climate, finance, and labor, and her work has appeared in outlets… more
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