Industry experts told NR that the ban will have minimal environmental impact.
A vote last week by the Bay Area’s air-pollution regulators to phase out and eventually ban the sale of new gas furnaces and water heaters in the Northern California region will be costly for residents, will further burden an already stretched electric grid, and will have minimal environmental impact, energy experts and economists told National Review.
The move is emblematic of California’s approach to energy, which involves ramping up the demand for electricity while gutting the state’s ability to meet its electricity needs, they said.
And requiring Bay Area residents to replace broken gas furnaces and water heaters with all-electric systems, which are harder to install and can require expensive home retrofits, could also be dangerous, potentially leaving people without heat for weeks during the winter.
The vote by the Bay Area Air Quality Management District to ban the sale of new gas furnaces and water heaters, is “a regressive policy that’s going to increase costs in a state that is already unaffordable, it’s going to do minimal in terms of reducing [greenhouse-gas] emissions, and it’s going to stress a problem that we already have no plan of addressing, which is [that] our grid is going to be unable to provide reliable electricity,” said Wayne Winegarden, a senior fellow in business and economics at the California-based Pacific Research Institute who is studying the state’s electricity shortfall.
Twenty members of the Air Quality Management District, in a March 15 vote, approved the plan to phase out and ban gas-powered systems that emit nitrogen oxide, or NOx, and that contribute to air pollution. Three board members were absent, and one member abstained.
The new rules could be implemented as early as 2027 for water heaters and as early as 2029 for furnaces, though the board could push the deadlines back. Because gas heating systems tend to last a long time, district officials expect it will take a quarter century to complete the region’s switch from gas to electric space and water and heating systems.
The board’s vote did not address natural-gas stoves because it doesn’t regulate indoor air pollution. Earlier this year, it was reported that the Biden administration’s Consumer Product Safety Commission was considering restrictions, and possibly a ban, on natural-gas stoves.
A Bay Area district staff report said that the gas-furnace and water-heater ban, when fully implemented, would reduce NOx emissions by an estimated 3,236 tons per year and “would avoid an estimated 37 to 85 premature deaths per year and about 110 new cases of asthma each year” in the region, which has more than 7 million residents.
“The Bay Area needs to be first in line,” said board member Davina Hurt, who is also the vice mayor of Belmont in Santa Clara County, according to a report in the San Francisco Chronicle. “Why should we wait for others to act when we know what needs to be done?”
An Attack on Energy Consumers
The Air-Conditioning, Heating, and Refrigeration Institute, in a letter to the board, raised concerns that the ban will limit product choices for Bay Area residents and potentially stick them with substantially higher costs. The trade association took issue with the district-staff report’s estimated costs to residents of purchasing and installing electric heat pumps and heat-pump water heaters, finding the estimates to be extremely low.
While the staff report estimated that the upfront installed cost is $8,027 for a heat pump and $2,824 for a heat-pump water heater, the AHRI letter, citing State of California reporting, said the average cost of a heat-pump replacement is actually $22,745, and the average cost of a heat-pump-water-heater replacement is $8,577, more than double the staff report’s estimates.
Installing electric heating systems also tends to be more complex than installing natural-gas systems. Older homes often need to be retrofitted to run the new systems, and running electric systems is often more expensive then running natural-gas-based systems.
“We’re committed to our products having as little impact to the environment as possible. But we also want to make sure that consumers have access to reliable, affordable, efficient equipment,” Francis Dietz, vice president of public affairs for AHRI, told National Review.
Winegarden said California already has a major housing-affordability problem. “And now we’re going to make it even less affordable,” he said.
While there are state and federal incentives and subsidies for people to purchase and install electric heating systems, Winegarden, an economist, called it a “shell game.”
“Subsidies don’t get rid of the costs,” he said. “They just redistribute the costs.”
Ray Mueller, the San Mateo County supervisor and the only board member who abstained from the vote last week, raised concerns that in its ambition, the board had forgotten middle-class families who are already struggling with inflation and who don’t qualify for several of the subsidies for purchasing and installing electric heating systems.
“We’re going to be first in the nation, but we’ve never done this to the consumer before,” he said, according to the Chronicle.
In its letter to the district, the AHRI also raised concerns that banning gas furnaces and water heaters could be dangerous for residents. Heating systems often fail during the most extreme weather conditions, and requiring residents to retrofit their homes for expensive new equipment could take days, if not weeks, leaving them in a precarious predicament.
“It would be terrible for one homeowner. It would be terrible for ten homeowners, 100 homeowners,” Dietz said. “The fact is, we know just from experience that when equipment does fail, it does it in the most extreme temperatures, whether it is the most extreme heat or the most extreme cold. Either one of those situations poses a risk.”
Increasing Electricity Demand, Not Increasing Supply
Ben Lieberman, a senior fellow at the Competitive Enterprise Institute who researches energy and environmental issues, suspects that the environmental benefits from the gas-heating-system ban will be small. “It’s hard to believe it would even be measurable,” he said.
According to district staff, most NOx emissions come from industrial activities and commercial transportation. Only about 6.1 percent of NOx emissions are from residential heating.
Lieberman noted that California’s air quality has already improved substantially over the past half century, so “it’s hard to create a scare now out of the relatively modest contribution [of NOx] from home appliances that use natural gas.”
Some also worry that an outright ban on electric heating systems will encourage residents to patch and repair failing gas systems longer than they should, blunting the ban’s effectiveness.
The Bay Area’s efforts to ban new gas heating systems comes as federal regulators have proposed stringent new energy-efficiency standards for gas furnaces.
Until recently, environmental groups tended to view natural gas positively and as a relatively clean bridge fuel in the transition to a low-carbon environment. The shift from coal to natural gas, which is cheap and abundant, helped the U.S. power industry lower its carbon emissions by a third between 2005 and 2019, according to a Cato Institute report from last year.
But, over the past decade, many environmental groups have changed their position after research found that a larger fraction of methane in the atmosphere came from industrial sources than had previously been thought. The Bay Area ban on gas furnaces and water heaters is part of a larger environmental war on natural gas and energy generally.
In 2019, Berkeley became the first U.S. city to ban gas hookups in most new homes or commercial buildings, drawing a lawsuit from the California Restaurant Association. Other progressive cities and counties have followed suit with their own bans on new gas hookups.
In September, the California Air Resources Board approved a planning document that includes a possible statewide ban on the sale of new gas furnaces and water heaters. A vote on that particular measure isn’t expected until 2025 or later.
That planning document also did not include a ban on gas stoves.
In the meantime, at least 20 states with Republican legislatures have pushed back with “preemption laws,” which prohibit progressive cities in those states from enacting natural-gas bans. CNN called the preemption laws “bad news for municipal climate action.”
Lieberman disagrees. “There is no problem with natural gas appliances,” he said. “They’re not zero-emitting, but they’re very, very low-emitting. There’s no real problem with the emissions, and they’re economical in use, and consumers prefer them for that reason.”
The Bay Area Air Quality Management District’s staff report does note that “the replacement of existing natural gas-fired space and water heating appliances over time could result in increased energy demand beyond the existing grid capacity.” California’s electrical grid is already increasingly unreliable and the state’s shift to wind and solar power has not kept pace with growing demand. The state’s climate plan would prevent the building of new natural-gas plants.
Winegarden noted that the increased demand on California’s electrical grid — from the electrification of cars as well as heating systems — could require the state to import more electricity. It’s possible, and likely in that scenario, that power could come from coal or natural-gas plants in other states. Solar and wind power also have ecological impacts.
“That’s the trade-off which they’re not really looking at,” he said.
Even though there has not been an official ban on new gas stoves, government-enforced restrictions of the natural-gas market could effectively make gas stoves obsolete.
“You’re continually reducing the market for natural gas, making it harder for them to make a return, and if you drive them out of business, then, ‘Hey, we didn’t ban gas stoves, they just won’t deliver gas to you,’” Winegarden said.
Winegarden said that the Bay Area ban on gas furnaces and water heaters is one piece of a bigger puzzle involving California’s effort to combat climate change, which will drastically limit the state’s ability to provide enough energy to its residents.
“You’re going to have a grid that is unreliable, that is also going to be having to have brownouts, blackouts, you just very quickly will not be able to generate the electricity that we need,” he said. “I think that’s the real important issue.”
The AHRI trade association is calling for Bay Area regulators to slow down and to move away from natural-gas heating systems in an incremental manner. The association is suggesting they consider at least allowing residents to install dual-fuel systems, which operate on both gas and electricity, and would “provide an ideal pathway to lower NOx emissions,” their letter states.
“The concern that we have with these proposals [to ban gas heating systems] is that it tries to get from Point A to Point B in one fell swoop. And we think there’s a better say,” Dietz said.
Moving incrementally will allow consumers and the market to become comfortable with new electric heating technology and to adjust.
“It doesn’t take huge gulps,” Dietz said of the incremental approach. “It takes small bites at a time.”