ALEC and gas companies have passed prohibitions against gas bans across 20 states: 31% of US building gas use

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States that outlaw gas bans account for 31% of US residential/commercial gas use https://www.spglobal.com/marketintelligence/en/news-insights/blog/insight-weekly-june-7-2022

A legislative push to prohibit gas bans in buildings has protected access to natural gas utility service in states that account for almost a third of U.S. natural gas demand in the residential and commercial sectors.

The 20 states that passed such legislation have together consumed 30% of residential gas volumes and 33% of commercial gas supplies in 2020, according to analysis of U.S. Energy Information Administration data by S&P Global Commodity Insights. The states’ combined residential and commercial gas use was 31% in 2020, the last year for which the EIA data was available.

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States with gas bans

Meanwhile, four states where policymakers have passed measures that restrict building gas use — California, Colorado, New York and Washington — accounted for 24% of the nation’s residential gas use and 20% of its commercial gas demand in 2020. Three states where local governments have advanced similar restrictions — Massachusetts, Oregon and Vermont — accounted for nearly 4% of combined U.S. residential and commercial gas use.

While these policies stand to curb gas utility customer growth, they do not immediately put existing gas demand at risk. With the exception of Denver’s policy, the ordinances and building codes largely restrict gas use in new residential and commercial buildings but do not address retrofits.

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The residential and commercial sectors accounted for 15% and 11% of total U.S. gas consumption in 2021, according to the EIA.

Only Washington has passed statewide all-electric construction requirements. New York policymakers are considering statewide mandates for both new and existing buildings.

New York and California were the nation’s largest gas consumers in the residential and commercial gas sector. New York City adopted a gas ban in December 2021. More than 50 California towns, cities and counties have passed gas bans or electrification reach codes since 2019.

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Colorado, Massachusetts and Washington ranked in the top 20 for gas use in both sectors. Several states with policies supportive of building electrification were also large gas consumers.

Illinois, the nation’s third-biggest residential and commercial gas consumer, passed 2021 climate legislation that allows utilities to promote and offer building electrification to achieve required energy savings.

New Jersey ranked in the top 10 for both sectors, but there has been little progress codifying the state’s aspirations for “maximum electrification” into law. Maryland, where the legislature recently declared that the state would move toward building electrification, also ranked in the top 20.

States without bans

Among states prohibiting gas bans, only Ohio and Texas ranked in the top 10 for residential and commercial gas use. Seven other states with laws that preempt gas bans were in the top 20 in one or both sectors.

Preemption legislation is also advancing in Pennsylvania, the nation’s seventh-largest consumer in both sectors. Looking at other large gas consumers, preemption bills have made little progress in Michigan and Minnesota. Wisconsin lawmakers introduced a bill just before the legislative session ended in 2022.

By the EIA definition, the commercial sector uses gas for heating, cooking and other end uses in businesses, government buildings and certain living quarters. It also includes sewage treatment and combined heat and power facilities, which gas bans typically do not cover.

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro. State-level efforts to prohibit natural gas bans have protected gas utilities in states that account for nearly one-third of U.S. commercial and residential gas demand. (S&P Global)

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