Natural gas price spike exposes risk of delaying a just transition off fossil fuels
Watch out for your wallets this winter, because home heating costs are surging as natural gas prices are set to skyrocket. With the coldest months of winter on the way and half of American homes reliant on this energy source for heating, the price of natural gas in the U.S. has doubled since last year.
Home heating bills for natural gas are going to increase by as much as 50% in the coming months as a result, reaching an average of $746. The U.S. Energy Information Administration is forecasting that natural gas prices will reach a 13-year-high when they peak over the winter.
This is not just a painful, inflation-fueled fluctuation or temporary market volatility. It’s a glimpse of a future scenario where repeated spikes in energy costs and home heating bills hammer low-income families, small businesses, and homeowners, because the U.S. failed to transition off of fossil fuels in a just and equitable manner. Make no mistake, the transition to a clean energy economy is happening as we combat the climate crisis — whether the fossil fuel industry wants it or not.
However, the decisions we make today will determine how this future unfolds. If we make justice and equity the foundation of our decision-making, we can avoid these worst-case scenarios. That won’t happen if we prioritize protecting utility companies’ bottom lines and shareholder profits. We can protect vulnerable and historically marginalized communities in the energy transition. Fossil fuel-based markets and their energy pricing are going to be roller coasters moving forward, and the wealthiest consumers will want to exit as quickly as possible. While they will be able to afford to do so, we can’t leave everyone else behind and strapped to outdated, aging infrastructure and volatile pricing.
Recently, Stand.earth’s SAFE Cities movement co-hosted a panel discussion on building electrification with Elected Officials to Protect America, the Sierra Club, and the Building Decarbonization Coalition. The panel features local elected leaders and advocates who are advancing the building electrification movement, which is gaining momentum throughout the U.S. and Canada. Equitable electrification was an important topic raised during the panel, which included Matt Gough, a senior campaign representative with Sierra Club’s My Generation campaign; Councilmember Katie Valenzuela of Sacramento, CA; Panama Bartholomy, executive director of the Building Decarbonization Coalition; and County Legislator William Reinhardt, of Albany County, NY, who is also a former Senior Project Manager with New York State Energy Research and Development Authority (NYSERDA).
“We need to make sure that low income communities and communities of color are not left behind in this transition,” Gough said during the panel. “There are significant cost burdens associated with electrifying an existing building. We need to advocate for funding from local, regional, state, and federal entities to help cover the cost of existing building electrification, so that we’re not putting these undue cost burdens on individuals. Existing buildings are where we are going to make the bulk of our savings in terms of greenhouse gas emissions reductions and public health protections.”
Many building electrification policies only cover new buildings. Councilmember Valenzuela said that local governments looking to pass building electrification policies for new construction need to have a strategy for electrifying existing buildings as well or they will worsen inequities.
“It’s not as simple as separating new and existing buildings,” Valenzuela said. “Those approaches exacerbate some long standing inequities in our community, in addition to the well-acknowledged impact it has on workers, specifically plumbers and pipefitters. A policy that leaves behind workers and leaves behind folks who can’t afford or access the new clean technologies is inequitable. That’s really what informed our work in Sacramento.”
Valenzuela joined her fellow Sacramento City Council members to vote to approve a building electrification policy in June 2021 but only after the Council agreed to create a plan for electrification of existing buildings as well. This policy could come before the council in 2022. It aims to foster an equitable process and outcomes that will avoid bill increases, ensure benefits flow to renters, and creates green jobs. The city wants to provide financial assistance to low-income residents and businesses, while integrating distributed renewable energy generation and energy storage. Electrification also offers opportunities to increase energy efficiency and to weatherize and improve resiliency, because these projects can coincide with the retrofit work.
Dozens of communities, including more than 50 cities and counties in California, have taken action to get natural gas appliances and systems out of newly constructed buildings. Some of the leaders of these trail-blazing jurisdictions are also developing policies to equitably transition existing buildings with gas appliances and systems onto clean technology. In addition to the work happening in Sacramento, the City Council in Ithaca, N.Y., voted in November 2021 to decarbonize every building in the city by 2030. To help accomplish this, Ithaca is raising money from private investment that will go toward climate proofing buildings. Over $100 million has been raised so far. Vancouver, B.C. passed a Climate Emergency Action Plan with equitable electrification of existing buildings as a key principle. In 2019 New York City passed Local Law 97, which addresses emissions from large, existing buildings. On Nov. 17 of this year, the City’s Committee on Environmental Protection held a hearing on bill Intro 2317 which would ban gas hookups in new construction and major retrofits.
Bartholomy argued that electrifying new construction can be a key step toward equitable electrification. “Every building that we build now may have a low income family in the future that is going to be straddled with the costs of having to expensively retrofit the gas appliances and the gas systems out of their building as gas prices escalate. That’s what we are going to see.”
While policies must assist lower income people with electrification, said Reinhardt, the fossil fuel industry is spreading misleading information to call into question the cost and attractiveness of electrification for low and higher income people alike. Reinhardt said that the gas industry uses “half truths” such as outdated information about the price of heat pumps or the comfort they provide compared to gas or oil heat.
“All of these things are sort of half truths that are used by the fossil fuel industry and their surrogates to be critical of renewable energy when that is no longer the case,” Reinhardt said during the panel. “It was 10 years ago but it is not anymore.”
Reinhardt also spoke about how Albany, NY is coupling together neighborhood improvements, such as stormwater retention and geothermal heat exchangers, to magnify benefits for a lower income community, and he also noted the benefits of a whole house approaches that includes elements like on-site power generation and energy efficiency to lower costs.
Valenzuela also noted the importance of elements like local renewable power sources and a whole house approach along with electrification. “What environmental justice people talk about a lot is that building decarbonization isn’t the goal,” said Valenzuela, but part of the “path toward community resiliency.”