The gas industry is losing its most valuable customer: Blue states

New York just passed the first statewide law to ban gas in new buildings. Others could follow.

Republicans have eagerly jumped to the gas stove’s defense ever since it entered the culture war fray. But there’s one major miscalculation: The natural gas industry needs blue states much more than it needs red ones.

The clearest sign yet that the natural gas industry is losing ground among its most valuable customer base is in New York. On Wednesday, Gov. Kathy Hochul signed the first budget to include a statewide ban on gas in new buildings. The law requires new buildings shorter than seven stories to have all-electric heating and cooking by 2026, and taller buildings to meet the requirements by 2029. There are some notable exemptions for the commercial sector, including restaurants, laundromats, and hospitals. The law builds on a similar New York City gas ban, passed in 2021.

Cities and states across the nation have been taking a hard look at their electrification options. More than 100 municipalities have taken action to halt gas expansion, and Washington and California have also weighed statewide action. Meanwhile, Illinois has considered adding warning labels to new gas stoves sold in the state.

Climate activists and environmental campaigners have two main motivations for targeting gas in buildings. One is the air pollution produced by natural gas. When natural gas combusts indoors, concentrations of nitrogen dioxide can build up to harmful levels for our lungs and hearts. The second concern is the climate pollution — natural gas is composed of methane, which warms the atmosphere even faster the carbon dioxide. Increasing evidence points to methane leaks wherever gas is used, even in the kitchen. Carbon emissions from buildings are also a major driver of climate change. In the US, 13 percent of greenhouse gasses come from commercial and residential buildings powered by fossil fuels.

But because parts of the country are more reliant on gas than others, some cities and states count for a disproportionate share of these climate emissions. New York is one of them. So are a bunch of other blue states weighing action.

The gas industry is losing a major market in New York

New York can’t take serious action on climate change without considering the impact of its buildings. The state relies on oil and gas for 80 percent of its home heating, and gas dominates the mix. Buildings are No. 1 in greenhouse gas emissions for both New York City and the state, overtaking transportation.

The law takes aim at new construction only (some 40,000 new homes are built each year) and carves out some concessions to make it politically palatable. One is to exempt certain commercial sectors, including restaurants, from having to use electricity in new construction. “Right from the jump, both in the city and the state, we decided that we were not into trying to overcome the restaurant industry’s opposition,” said Pete Sikora, a climate activist with New York Communities for Change, a group that pushed for the legislation.

Another part of Hochul’s proposed budget didn’t become law, but previews the next fight over gas: a requirement for existing buildings to phase out gas by ensuring that new replacements are electric. Over time, replacing dying furnaces with electric alternatives can add up. “Each time you do a fossil-fuel boiler installation, you lock in at least 15 more years of new pollution,” Sikora said.

The gas industry is prepared to fight, and already has dozens of counteroffensives throughout the country (one of its more creative approaches has been to hire minor celebrity influencers to defend the gas stove).

The industry will likely challenge New York’s law in court. In the meantime, the national lobby for the gas industry, the American Gas Association, responded to the ban by emphasizing the limits on consumer choice. “Any push to ban natural gas would raise costs to consumers, jeopardize environmental progress and deny affordable energy to underserved populations,” American Gas Association president and CEO Karen Harbert said in a statement.

New York also has extra momentum to electrify its buildings because of the Inflation Reduction Act. The federal law, combined with new state incentives, creates tax breaks and rebates for more consumers to swap gas stoves, boilers, and furnaces with induction and heat pumps. There are also IRA credits to contractors of up to $500 per project for new energy-efficient homes and retrofits for low- to moderate-income households.

Losing more blue states would be disastrous for the industry

To understand why New York’s law is so big, it helps to compare it to another statewide fight over gas stoves. A few months ago, Florida Gov. Ron DeSantis, who is weighing a presidential bid, pushed for a sales tax exemption to encourage Floridians to buy a gas stove. “They want your gas stove and we’re not going to let that happen,” he said.

DeSantis also had to admit this was purely symbolic. “It’s just the principle of it,” he said, because there is practically no gas in Florida. According to the EIA, just 8 percent of Florida households use gas for cooking, far less than the national average of 38 percent.

Nor can Florida just wish a gas industry into existence. Much of the southeast is less dependent on gas than the northeast and southwest, and to change that states would need to entirely remake their grid, including new pipelines.

According to Energy Information Administration (EIA) data, Florida accounts for about 1 percent of the nation’s gas usage in buildings.

Gas tends to be more prevalent in reliably Democratic states, according to EIA data. Over half of the nation’s gas usage comes from just 10 states, eight of which are solidly blue. Some of those top states are:

• New York (also No. 1 state in total volume): 9 percent of the nation’s usage in commercial and residential buildings
• California: 9 percent
• Illinois: 8 percent
• Michigan: 6 percent
• New Jersey: 5 percent

There are some exceptions. Texas is a relatively big gas user (at 5 percent of the US total) as are Ohio (6 percent), which is increasingly red, and Pennsylvania (5 percent), which is still very much a swing state. But by and large, the biggest users of gas happen to be blue states.

It’s a big win amid some setbacks for the electrification movement

New York is a major win for an electrification movement that hasn’t had an easy road.

Two weeks ago, a conservative panel of justices on the Ninth Circuit ruled that Berkeley violated federal law with a ban on gas in buildings, symbolically significant because it was the first city in the country to pass a ban. The repercussions so far seem limited, according to the environmental legal group Earthjustice, because most municipalities took a different approach to phase out gas through building codes action. Even Berkeley is considering going back to the drawing table to find another option for a ban.

The electrification movement’s success has also inspired backlash, and now more than 20 states controlled by Republicans have passed their own bans on any kind of gas ban at the city level. An S&P Global analysis conducted last year found that the 20 states prohibiting gas bans account for at least 31 percent of the nation’s usage.

The electrification movement has its challenges. But they’ve still got the political map working in their favor, especially as more consumers realize that their beloved gas stove isn’t as harmless as it is portrayed.