Political efforts to curtail gas supply and demand have met with limited success. Methane rules, drilling restrictions on public land, and opposition to new pipelines have only incrementally slowed the growth of natural gas in the United States. But the obstinate anti-fossil-fuel lobby and their government allies want much more: moratoriums on new gas service and bans on natural gas usage and appliances.
The City of Las Cruces has fallen in this trap with its proposal to ban natural gas, as described in its following statement: “Las Cruces Utilities (LCU) is making a plan for the future of natural gas. Right now, most homes and businesses in Las Cruces use natural gas for heating, cooking, and hot water. But to meet goals set by the City of Las Cruces Climate Action Plan, we are looking at different ways to bring energy to homes and businesses.”
Bans by municipal jurisdictions with (presumably) the legal authority to do so have been in the news for some time. The City of Berkeley initiated municipal efforts in July 2019 to electrify (for example, via electric heat pumps and electric stoves) by prohibiting natural gas in their new buildings. Since then, dozens of cities in other jurisdictions, have sought to restrict the use of gas in new buildings. Some cities have even considered banning or restricting natural gas appliances from existing homes and businesses, as well.
The primary purpose of these efforts is to mitigate climate change, however infinitesimal in the whole, by making buildings zero carbon. A ban is much more extreme than just creating a tax to discourage consumption of a product or service. With a tax, the decision is still left to consumers on how much of a product or service to purchase. A tax can counter a negative externality that is unaccounted for in the decisions of either suppliers or consumers, such as pollution or second-hand smoke; a gas ban obliterates consumer choice for meeting space and water heating needs, not to mention a flame for superior cooking and taste.
Such prohibition violates consumer freedom to purchase a desired product or service like natural gas in place of an inferior one, namely electricity. Cheapness and quality are sacrificed on the altar of an environmental fixation that is itself debatable.
In technical economic terms, a gas ban fails miserably with the benefits virtually zero and the costs potentially high. Thus, the benefit-cost (B-C) ratio is close to zero or the C-B ratio is infinite; or as public policy, a ban is off the charts as being exceptionally socially damaging.
Here is why: Less than 9% of carbon-dioxide emissions in the U.S. come from direct use of natural gas in homes and buildings. The U.S. emits about 15% of world CO2 emissions. Thus, converting all buildings to all-electric, and assuming that all electricity is produced from “clean” sources (it is not), reduces world-wide emissions less than 1.5%, which according to climate models, would have less than a detectable effect on global climate, temperature, sea level, or otherwise.
A ban can look good politically by giving the false impression that a severe problem is receiving immediate, absolute attention. And a ban is certainly less widespread than a carbon tax or a budget gap from new taxpayer subsidies. But at least these two approaches preserve consumers to choose their energy source, rather than precluded from doing so with a ban.
The observation that a gas ban descends predominantly from a quasi-religious opposition to fossil fuels is credible given the lopsided cost-benefit calculus. Climate activists regard natural gas as competing with renewable energy in power generation and for electricity in end-use applications. Their position seems to be that “getting rid of the competitor” would make it easier to have more renewable energy and clean electricity.
Is it only because of special interests that local and state governments like the City of Las Cruces would even consider prohibiting consumers to choose natural gas as an energy source to meet their space, water heating, and cooking needs. After all, in most parts of the country where gas is available, it is the most economic and desired source of energy.
Gas bans are little more than symbolic, reflecting a stance of “we have to do our part”, or perhaps more accurately “whatever it takes to combat climate change,” even if bans resoundingly fail a cost-benefit test.
Good public policy balances the economic and environmental consequences in enhancing the public interest. Because a gas ban – command-and-control policy at its worst – has virtually no effect on global climate and will inevitably increase cost and reduce quality for consumers, one would have to look hard to find a governmental action that is so intrusive, imbalanced and detrimental to society’s welfare.
One cannot avoid concluding the craziness of banning or even restricting a product like natural gas that has greatly benefited, and will continue to do so, both energy consumers and the economy. A ban on natural gas is throwing out the baby with the bath water.
Kenneth W. Costello is a regulatory economist and independent consultant, who resides in Santa Fe.
