A ban can directly affect either supply or consumption of a product, in this case natural gas. Attempts to curtail gas supply have met with partial success: methane rules, drilling restrictions on public lands, opposition to new pipelines are examples.
The ban receiving the most recent attention focuses on end-use consumption in municipal jurisdictions, which believe they have legal authority to enforce the ban. In July 2019, Berkeley initiated municipal efforts to electrify its building sectors by prohibiting natural gas in new buildings. Since then, several cities throughout the country have sought to restrict the use of gas in new buildings.
It won’t be long before someone proposes a gas ban for New Mexico municipalities. The major purpose of these efforts is to mitigate climate change by making buildings zero carbon.
Banning natural gas is a government action that forces consumers to find a substitute, namely electricity, that presumably is inferior to the product that is banned (or else such action would not be necessary). Energy consumers may find natural gas cheaper, in addition to providing more heating comfort and better cooking performance than electricity.
Strange bedfellows support electrification: electric utilities and environmentalists, which have different objectives. This represents a particularly strong coalition to reckon with for electrification and portends its growing popularity in the years ahead.
The problem is that the efforts of vocal minorities who stand to gain economically or ideologically drive government action over majorities who individually lose little, but collectively lose a lot.
A gas ban fails miserably, with virtually zero benefits; as a public policy, a ban is exceptionally bad. From a global perspective, the results are similar.
Here is why.
Less than 9% of carbon emissions in the U.S. comes from the direct use of natural gas in homes and buildings. The U.S. emits about 15% of the world’s carbon emissions; thus, converting all buildings to electric and assuming that all electricity is produced from clean sources, the reduction in worldwide carbon emissions would be less than 1.5%, which, according to most computer-based forecasting models, would have no detectable effect on global climate.
A ban can look good politically by giving the appearance that a problem is severe, and requires immediate and absolute attention to soften the burden on citizens. This is unlike a carbon tax or the adverse effects on public budgets from subsidies. But at least those two approaches preserve consumers’ ability to choose their energy source, rather than being precluded from doing so with a ban.
A ban represents a command-and-control policy at its worst. It is a blunt instrument, draconian and highly costly relative to the alternatives in terms of mitigating greenhouse gas emissions.
The good that flows to energy consumers and society from natural gas far exceeds the bad. Natural gas has plenty going for it: (1) abundant domestic availability; (2) low price for the foreseeable future; (3) relative cleanliness when compared with other fossil fuels; (4) promising technological prospects for a more benign environmental footprint in the future; and (5) flexibility in electric power production, one use being as a backup to renewable energy.
It seems absurd to ban or even restrict a product that has done – and is expected to do in the future – so much good for both energy consumers and the economy.
We cannot avoid asking: Is it only because of special interests that we would even consider prohibiting consumers’ ability to choose natural gas as an energy source to meet their space and water heating needs? After all, in most parts of the country where gas is available, including New Mexico, it is the most economic source of energy.
Gas bans seem no more than symbolic, reflecting a “we have to do our part” stance or, perhaps more accurately, “whatever it takes,” even if, in reality, bans have no effect on climate change and fail a cost-benefit test resoundingly.
Good policy balances economic and environmental consequences in achieving an outcome that is in the public interest. Because a gas ban has virtually no effect on climate change and would increase energy costs for consumers, one would have to look far and wide to find a government action that is so intrusive, imbalanced and detrimental to society’s welfare.
Kenneth W. Costello is a regulatory economist/independent consultant who worked previously for the National Regulatory Research Institute, Illinois Commerce Commission and Argonne National Laboratory. He resides in Santa Fe.
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A ban on natural gas is a terrible idea - Albuquerque Journal
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