San Diego Union-Tribune (Sunday)
Will S.D. step on the gas with green growth?
Some cities restrict use of natural gas in new homes — not San Diego
San Diego leaders are eying a massive green growth initiative that includes bustling new train stations and high-speed rail to usher in a boom in dense housing construction from Chula Vista to downtown San Diego and beyond.
This urban strategy is being sold as a win for the economy as well as the environment — in theory, encouraging hundreds of thousands of residents in coming decades to swap fossil-fuel-burning car trips for walking, biking and riding transit.
“This is an opportunity for job creation,” San Diego Mayor Todd Gloria told the Union-tribune editorial board in January. “It’s an opportunity for meeting our climate goals.”
However, environmental groups say San Diego’s vision for growth isn’t as green as local politicians would have folks believe.
Activists argue it sidesteps one of the hottest battlefronts in the war against climate change: whether to hook up new buildings to natural gas or operate them ex
clusively with electricity.
“We are in a make-orbreak moment,” said Nicole Capretz, executive director of the San Diego-based Climate Action Campaign. “It’s great to grow and be a big city, but we also have to transition off gas. You can’t do one without the other.”
The tension over heating buildings with natural gas is just starting to ratchet up in San Diego, but many cities and even states have been grappling with the issue for the last two years.
In California dozens of cities and counties, starting with Berkeley in 2019, have restricted or banned the use of natural gas in new construction. Seattle, Denver, Boulder and other cities have taken similar steps.
A growing army of activists is now pushing for the widespread adoption of electric heat pumps and induction cooktops. These technologies are not yet widespread in California, where roughly 80 percent of all homes still rely on natural gas.
“If you find yourself in a hole, the first thing you do it stop digging,” said Michael Colvin, director of California energy policy for the Environmental Defense Fund. “That’s the moment in time that we’re in right now.”
Some states, facing pressure from the American Gas Association, have pushed back. Arizona, Tennessee, Oklahoma and Louisiana have passed laws to prevent local gas bans, and about a dozen other states are considering similar action.
Southern California Gas — and its parent company, San Diego-based Sempra Energy — have launched aggressive efforts to prevent governments from phasing out their product. Tactics have included lobbying local officials, suing the state and funding a supposedly grassroots group known as Californians for Balanced Energy Solutions.
Sempra Energy is wedged in a similar place on the federal front, courting the Biden administration while trying to fend off increasingly vocal climate activists.
The issue boils down to an essential question: What role should the gas industry, and its 3 million miles of pipeline across the United States, play in a decarbonized future?
Environmental groups have increasingly argued: none. Their mantra has become “electrify everything.” They see natural gas as a dangerously flammable fossil fuel that pollutes indoor air quality and must be phased out as quickly as possible to prevent further climate disruption.
Once seen as a cleaner alternative to coal, natural gas has come under attack. While anxiety over climate change has jumped with violent wildfires and crop failures in India, fracking and transporting the fossil fuel has been shown to leak huge amounts of methane. The gas is roughly 80 times more potent than carbon dioxide over a 20-year period.
Gas utilities disagree. They argue their huge pipeline networks will be crucial for a carbon-free future, delivering fuel to power plants, heavy industry and even homes when, they predict, renewables fail to fully cover demand.
To green up its product, the industry continues to focus on carbon-capture technology, renewable natural gas from decomposed organic matter and, most recently, blending its fuel with cleaner hydrogen. The term of art in the industry has become “decarbonized molecules,” as opposed to electrons generated by solar and wind power.
“Our focus is on the gas grid, not necessarily what’s flowing through the gas grid,” said Jonathan Peress, senior director of regulatory affairs at Socalgas, the largest such utility in the country.
“Basically, every developed area of the world is investing billions of dollars in order to ensure they can bring to bear decarbonized molecules, and it’s ultimately not going to be any different in California,” he added.
Easing off the gas
California regulators have started formally exploring an orderly unwind of the state’s natural-gas system to achieve its goal of carbon neutrality by 2045. Onsite emissions from residential and commercial buildings account for roughly 12 percent of the state’s carbon footprint, most of which comes from burning natural gas for space and water heating, and to a lesser extent cooking.
The California Energy Commission has repeatedly found that electrification is the cheapest way to reduce emissions from buildings. The high-profile consulting agency Energy & Environmental Economics has also reported that in many cases installing electric heat pumps can currently save ratepayers money over time compared to relying on natural gas.
The CEC is now updating the state’s building-efficiency standards explicitly to discourage the installation of gas heating systems in favor of electric heat pumps. Agency officials said that fewer than 5 percent of homes in California currently use the technology.
But there seems to be a market. Homebuilder City Ventures sold 42 of its allelectric homes in 10 weeks in Santee last year, said sales manger Tom Newell.
“That’s even more demand than a normal hot market,” he said. “People love it because you don’t have to deal with the mess and danger of gas. All the electric appliances now are so energy efficient, it makes it a much better home, especially since it’s solar powered.”
The state’s new rules won’t go as far as activists would like, but a massive transition appears to be under way that will eventually take aim at retrofitting homes and businesses across California.
“New construction is the relatively easy part,” said CEC Commissioner Andrew Mcallister. “The existing buildings are a whole different scale of investment. An orderly plan for transition is what the state needs, and that’s what we’re trying to do.” Still, many local governments, largely in Northern California, haven’t wanted to wait for action from the state, citing the urgency of climate change and plans to boost new housing construction.
Adding to the moment, Pacific Gas & Electric has put up little resistance as cities such as San Francisco, Oakland and Berkeley have enacted bans.
“We welcome the opportunity to avoid installing new gas infrastructure in new construction as it helps reduce costs for PG&E’S existing customers,” the utility said in an email. “PG&E will partner with cities to maintain and install gas infrastructure where they need it, and to connect all-electric buildings to the electric grid where that is preferred.”
Local power
Most California cities only have a few main ways they can shrink their carbon footprints. They can clean their electrical grids, limit suburban sprawl and electrify transportation and buildings.
In the city of San Diego, for example, electricity, transportation and natural gas accounted for 96 percent of emissions in 2019, according to the most recently available data. The San Diego region has made considerable efforts to shrink its carbon footprint over the last five years — though that largely represents preparation rather than actual reductions in greenhouse-gas emissions.
Most notably, the cities of San Diego, Chula Vista, Encinitas, La Mesa and Imperial Beach banded together in 2019 to form San Diego Community Power. The agency, known as a community choice aggregation, is one of dozens of
CCAS that have proliferated across the state to accelerate the use of renewable energy.
The agency aims to ramp up green energy far more quickly than the state’s goal of 60 percent by 2030. It plans to fully launch next year, buying power for roughly 770,000 residential and commercial accounts, providing 50 percent of its energy from renewables.
San Diego Gas & Electric — which currently contracts for about 31 percent green power and buys another roughly 8 percent in renewable energy credits — will still deliver the CCA’S electricity through its poles and wires. Customers could opt out of the CCA if they preferred the utility’s prices.
The formation of San Diego Community Power has taken about five years of painstaking work, and has been met with opposition from SDG&E and its parent company Sempra Energy at almost every step of the process.
By comparison, creating a dense transit-friendly city would take decades upon decades. Electrifying passenger vehicles and freight trucks may well outpace any green growth initiative.
The San Diego region would almost certainly need a housing explosion in its most urban areas to realize the desired shift to public transit.
The region is currently producing only about 9,500 housing units a year, or roughly half the state target for reducing housing costs. State data shows the region grew by just 13,000 people in 2019, or roughly 0.4 percent. More people departed San Diego County than moved to the area.
While environmental groups have blocked many back-country developments in court on wildfire and climate change grounds, homeowner opposition has slowed urban development to a crawl.
On the other hand, phasing out natural gas in residential and commercial buildings is something local jurisdictions in San Diego can have real control over right now. As of last year, Carlsbad requires heatpump water heaters or solar-thermal water heating in new residential construction with three stories or less.
SDG&E officials have said they oppose local restrictions on natural gas, in part because enough electrification could drive up the cost of gas for those who continue to rely on the fossil fuel.
“We worry about decisions that might be made at the local level,” said Estela de Llanos, the utility’s chief environmental officer. “It’s not a good idea to have a patchwork of regulation when you’re talking about something that serves a broader public purpose.”
Beyond limiting the use of fossil fuel in new buildings, advocates would like to see cities launch programs to retrofit existing homes with electric appliances, starting in low-income areas.
“I think it’s pretty obvious for cities like San Diego, if you want to decarbonize, you have to get at the buildings,” said Matt Vespa, staff attorney for Earthjustice.
That’s why environmental groups, such as Climate Action Campaign, have been pressuring San Diego Mayor Gloria to address the impacts of natural gas as part of the city’s current franchise negotiations with SDG&E. The agreement, which grants the utility exclusive rights to operate transmission and distribution lines within the city, hasn’t been renewed in 50 years and expires in June.
The mayor has said the franchise agreement is important to ensuring the city meets its climate goals, but he’s stopped short of talking about a transition away from natural gas.
Gloria and his team declined to comment for this story.
Another obstacle to restricting gas has been overcoming opposition from union workers. San Francisco struck a deal with plumbers and pipe fitters that included a transition to water-recycling work. It’s unclear what that would look like in San Diego.
“Is it feasible? Yes. But it has to be a collaborative approach that takes into consideration the impact on the utility workers, that has protections in writing,” said Nate Fairman, business manager for the International Brotherhood of Electrical Workers Local 465 in San Diego. “Until that conversation takes place and we understand what that looks like, Local 465 will oppose any push towards a blanket gas ban.”
End game
One of the major complications of phasing out natural gas in homes is that those users pay for the bulk of maintaining and operating the pipeline grid. If the rate base were to significantly shrink, it would likely heap those costs onto gas power plants and industry, such as cement and steel manufacturers.
That isn’t something that gas companies appear eager to do.
“Currently, the retail customers are paying a significant portion of those costs,” said Peress of Socalgas. “Ultimately, those bans become an obstacle to orderly decarbonization. Somebody is going to have to pay the costs of having dispatchable, decarbonized fuel being provided to the power plants.” Gas officials have said that dismantling the pipeline grid too aggressively will undermine one of the state’s most reliable sources of fuel. They’ve said that as more vehicles and other parts of the economy become electrified, some form of decarbonized molecules will be needed to meet the growing electrical demand. Specifically, they challenge the notion that utility-scale batteries will allow for a 100 percent renewable energy grid.
“Keep in mind the models show you are going to triple or quadruple the capacity on the grid, which means that peak-day service is going to grow,” Peress said. “It’s likely there will still be a substantial amount of decarbonized gas provided to industrial applications and to large institutional and commercial buildings.”
Environmental advocates have little sympathy for those arguments. While they would like to see the grid dismantled in a way that protects low-income residents, their end game is one that doesn’t include fossil fuel at all.
“Of course they’re going to say that,” said Capretz of Climate Action Campaign. “They’re a fossil fuel company. They’re going to cling to every last morsel of profit for as long as they can. Climate delay is their bread and butter.”