Fossil Gas Has No Future in Low-Carbon Buildings

Over 20 California cities took steps to phase out fossil fuels in buildings, along with Brookline, Massachusetts. Cities in a handful of other states may follow suit next year. America has done this before: in forty years, coal went from the majority heating fuel in American homes to nearly gone in 1980. But this time, we have only thirty years, if that.

January 6, 2020  |  By Mark Silberg, RMI, No Future for Fossil Gas in Buildings

States and cities across the country are beginning to grapple with a persistent source of carbon emissions that has largely gone ignored: burning fossil fuels in buildings. While the electric power sector nationally has reduced emissions more than 25 percent, there has been no change in carbon emissions from direct fossil fuel use in homes and businesses in decades.

While far more attention has been paid to reducing emissions in the transportation and electricity sectors, local leaders are realizing they need to slash direct building emissions to have any hope of meeting their climate goals. Over 20 California cities took steps to phase out fossil fuels in buildings this year, along with Brookline, Massachusetts. Cities in a handful of other states may follow suit next year.

Burning gas along with smaller amounts of oil and propane in buildings accounts for 10 percent of total US economy-wide emissions, and only 10 large states are responsible for 56 percent of those emissions.

But, as RMI’s new analysis, The Impact of Fossil Fuels in Buildings, shows, the proportion is much higher in several states. And these states with the highest proportion emissions from fossil fuels in buildings all have ambitious climate goals, committing to as much as an 80 percent reduction in greenhouse gas emissions by 2050. Achieving these state-level commitments is necessary for the United States to maintain pace toward meeting Paris climate targets—irrespective of federal action.

Although these figures do not account for the emissions impact of imported electricity, combustion emissions produced within these jurisdictions suggest it will not be possible to meet climate goals without immediate and durable action on building fossil fuel use. Including building-sector emissions from electricity only ramps up needed ambition for building decarbonization through efficiency, electrification, and renewable electricity supply.

Of the top 10 states and territories by total proportion of energy sector emissions from building fossil fuel use, Connecticut, Washington, D.C., Maine, Massachusetts, New Jersey, New York, Rhode Island, and Vermont have each set climate targets that cannot be achieved without removing fossil fuels from buildings.

Today, in each of these climate-ambitious states, electrifying air heating and cooling with air-source heat pumps will immediately reduce emissions when compared to gas, oil, and propane alternatives– even in the coldest, most heating-intensive climates. In addition, all of these states still need to reduce gas consumption in existing buildings.

Eight of the top 10 states and territories by total proportion of energy sector emissions from building fossil fuel use have each set climate targets that cannot be achieved without removing fossil fuels from buildings.Tweet

An astute reader will notice many of these states are in the Northeast, where there have been many notable state efforts to switch customers off of expensive and polluting heating oil and propane. And while we agree it is critical to get these customers off of these fuels as fast as possible, our analysis demonstrates the importance of leapfrogging a reliance on oil and propane to electric, rather than to gas.

Note: Washington, D.C. data not available; state-level data up to 2017

It is not possible to meet any of these states’ climate goals by switching existing fuel oil and propane customers to gas alone. Switching from fuel oil to gas may only reduce a home or business’s emissions by as much as 27 percent, or around 16 percent for propane.

Therefore, the billions of dollars that these states are collectively spending on expanding and repairing gas infrastructure is simply incompatible with their climate goals. These billions of dollars assume customers will continue to pay for this infrastructure well past 2050, a time at which all fossil fuel consumption in most states must approach zero.

The good news is that several states have started to enact policies that will accelerate the transition to all-electric homes and buildings. But if these states are serious about meeting their carbon targets, more effort is needed. Even if all new building construction is zero-carbon, and all existing fuel oil and propane customers switch to zero-emission alternatives, a significant effort still must be made to switch the remaining homes and businesses—those consuming natural gas today—to a zero-carbon source.

A Choice between Two Paths

As we’ve seen in the data above, converting existing fuel oil and propane customers to natural gas is insufficient to achieving state-mandated climate goals. Even buildings currently heated by gas – irrespective of new customers being added to the gas system or moratoria on gas in new construction – must be rapidly decarbonized over the coming decades.

Although this challenge is most severe today in the states listed above, we expect other states to require similar levels of efforts– especially as the building sector begins to contribute a proportionally larger share of total greenhouse gas emissions as progress continues in transportation, electric power, and industry.

Two broad schools of thought have emerged to address this issue. One school says that we should continue to utilize and expand the existing gas system for decades to come, one day replacing fossil gas with lower carbon alternatives through biological or chemical processes (e.g., biogas, “renewable natural gas”, synthetic methane, or electrolysis hydrogen).

The alternative is to electrify buildings, which today will reduce emissions compared to gas, and savings will increase over time as the power sector continues to clean up. Based on RMI analysis, we know today in most states electrification not only reduces emissions and in many cases saves money, but also can allow buildings to participate in electricity markets as demand-side resources. This further lays the groundwork for new renewables and further decarbonization of the power sector and, in turn, the building sector. This virtuous cycle deserves further consideration.

These targets are daunting, but they also present one of the largest opportunities for job creation in our economy today. Research published this year suggests that the trend toward electrification and building efficiency created 180,000 jobs in 2019, with 5.8–9.9 percent annual growth in 2019, far outpacing other sectors. We expect these trends to continue as states begin to require all-electric new construction, and as more customers learn about and adopt lower-carbon, lower-cost electric alternatives for heating, cooling, and cooking.

A strong case for electrification is shown by our work to date on this issue, as well as our observations of the demonstrated datapolitical engagementadvocate support, and organic customer momentum toward electrification. This can be contrasted with the excessive cost and lack of availability of zero-carbon gas.

Even by the American Gas Foundation’s own analysis, the technical potential of “renewable natural gas” is inadequate to supply all of today’s buildings and industry, let alone electric power. This underscores the importance of ensuring scarce zero-carbon gas resources are utilized for the hardest-to-abate end-uses like industrial processes, manufacturing, and heavy transportation.

We’re ready to get started on the hard work of electrifying buildings today. Individuals, cities, and states have the right to choose the right zero-carbon pathway for their buildings, and we can’t wait around for zero-carbon gas to show up.

America has done this before: in forty years, coal went from the majority heating fuel in American homes to nearly gone in 1980. But this time, we have only thirty years.

Analytical disclaimer: We have assumed that the building sector must contribute emissions reductions proportional to their share of state economy-wide reductions. All data is from EIA with internal RMI analysis unless otherwise stated. The annual number of customers to be decarbonized is an average; in reality, we expect (consistent with past fuel switching trends) that the number of customers who fuel switch will start small and ramp up to an even higher annual number than stated in these narratives. It is important to electrify all existing oil and propane customers as soon as possible, but that’s not enough. Banning new gas connections is not enough. States serious about their climate goals need to start decarbonizing existing gas buildings as soon as possible.