THIS ISSUE BRIEF is part of a series examining a variety of controversial local and national issues, focusing on specific policy proposals that are under active consideration. The premise of these essays, as outlined here and here, is that many important public policy issues are more complicated than the most fervent adherents to either side usually acknowledge, a dynamic that often hinders our ability to engage in thoughtful debate. (Earlier essays in the series have addressed proposals for free community college; free MBTA service; the state’s right-to-shelter law; allowing municipalities to enact rent control; whether the state should legalize supervised injection sites; giving school librarians more control over book selection while limiting the say of school committees and parents; whether to establish a reparations commission; and whether to require voters to produce an ID before casting their ballot. )
For each proposal in the series, I provide some basic background, with a high-level framing of the disagreement and the polarized “bumper sticker” arguments on both sides. I then present what I believe to be the most reasonable evidence-based cases, pro and con. Each issue brief concludes with reflections on possible avenues for finding common ground or higher ground and some basic data points, with links to useful resources, to help facilitate a rational and civil dialogue, ideally leading to agreement or at least understanding, if not in the halls of power, then maybe just around the dinner table.
The Proposal:
Limit repairs, upgrades or expansions of natural gas infrastructure, including restrictions on new residential or commercial gas hook-ups.
Background:
In response to the risks posed by global climate change, the Commonwealth has enacted a series of legislative measures to limit or reduce the use of fossil fuels, with a goal of becoming a “net zero” emitter of greenhouse gases by 2050 (or no more than 85 percent of the state’s greenhouse gas emissions in 1990). Most recently, the legislature passed a sweeping climate bill that seeks to reduce reliance on natural gas, in part by subjecting applications for repairing, upgrading, or expanding pipelines and other infrastructure to strict scrutiny by a new “energy facilities siting board,” including consideration of the potential “cumulative impact” on the state’s greenhouse gas reduction goals and the availability of clean energy alternatives.
Separately, a law was enacted in 2022, authorizing the state Department of Energy Resources to launch the “Fossil Fuel-Free Demonstration” pilot program, encouraging up to 10 cities and towns to adopt permitting or zoning ordinances that severely restrict or prohibit natural gas hook-ups for new or renovated buildings. The first municipal pilots went into effect this past Spring.
Just over half of all Massachusetts households rely on natural gas for heating and cooking, accounting for almost one-third of natural gas consumption in the Commonwealth. About half of our electric power is generated with natural gas, which accounts for just under 30 percent of the state’s total natural gas usage. Commercial buildings represent slightly less than 30 percent of total natural gas consumption, with the remainder going mostly for industrial uses.
Massachusetts ranks 47th nationally in per-capita energy consumption and 42nd in per-capita natural gas consumption.
Sticking Points and Bumper Stickers:
Notwithstanding the potential costs and benefits of restricting natural gas infrastructure or the impact of the new procedures on approvals for projects for gas companies or service for property owners, the public argument over this issue tends to boil down to prioritizing climate change or economic growth and energy independence.
End Fossil Fuels, Now! Climate activists argue that the threat of climate change is so severe and so imminent that a policy of abolition is the only viable or moral path forward. If we can’t shut down the fossil fuel industry overnight, the least we can do is stand in the way of any effort to sustain, let alone strengthen its existing operations here in Massachusetts.
Drill, Baby, Drill! Advocates for fossil fuels argue that national security and the American economy depend on affordable oil and gas and any effort to hinder the industry will only serve to weaken the country, drive up energy costs, spur inflation, and send jobs overseas. Massachusetts is particularly vulnerable as a high-cost, cold-weather state.
Evidence-based Argument in Favor:
Although climate change is a global crisis, effective responses will have to come from all levels, including state and local initiatives. There is no silver bullet and there can be no ultimate solution unless and until every man-made source of greenhouse gas is reduced or eliminated. This is no easy or short-term task, but that doesn’t mean we shouldn’t act now wherever progress is possible to develop and evaluate viable strategies for a carbon neutral future. The Commonwealth is well on its way to becoming a model that other states and countries can learn from.
In Massachusetts, natural gas accounts for about one-third of total energy consumption as measured in BTUs and close to 40 percent of all our greenhouse gas emissions. The share of natural gas in the Commonwealth’s total energy portfolio has been fairly stable over the past 10 years, but total natural gas consumption last year as measured in cubic feet was the lowest it’s been since 2006, down almost 14 percent per capita over the past decade. In 2023, residential consumption of natural gas was the lowest it’s been since 1998, down almost 25 percent from its peak in 2019.
At the same time, the demand and supply of all-electric homes has been increasing nationwide. The Northeast has trailed behind, but with recent affordable technology advances (e.g., heat pumps), there is growing acceptance of electricity as the primary heating source.
In other words, Massachusetts is already weaning itself off natural gas, so government action to further limit its use will mostly serve to accelerate an existing market trend, rather than force change on unwilling consumers.
The future of natural gas as an affordable energy source also presents challenges as its existing aging infrastructure deteriorates and as clean energy options become more cost competitive. According to a 2020 study, it will cost about $14 billion to repair leaks in Massachusetts’ natural gas distribution system. It will cost even more to upgrade or expand capacity.
The costs of energy infrastructure investments are typically financed over 30 years, so assuming even a gradual downward trend in natural gas demand these financing costs will outlast the need for the existing capacity, let alone any expansions, creating useless and expensive stranded assets and uneconomic incentives for continued natural gas consumption. In other words, it’s cheaper to invest in clean energy that will be here for the long-term, than it is to reinvest in overbuilt natural gas infrastructure that is becoming obsolete.
The case against improving or expanding existing natural gas infrastructure also applies to enabling new gas hook ups for residential and commercial customers. Most home buyers and business operators don’t care how their heat or electricity is generated, as long as it’s safe, reliable and cost-competitive. Concerns about the cost and disruption of converting from gas to electricity in an existing home or business are certainly real, but they are much less important in the case of new construction or major renovations. And over time, the on-going cost of utilities to consumers and businesses will likely be cheaper with all-electric buildings.
The new Fossil Fuel-Free Demonstration pilot program in 10 municipalities is a modest first step to determine whether and how demand for fossil fuels can be further reduced without causing significant disruptions or unreasonable costs.
Evidence-based Argument Against:
Notwithstanding the need to address the challenges posed by climate change, the reality is that any transition away from fossil fuels will have to be gradual. At a global level, dependence on fossil fuels is increasing and will likely continue to increase for years to come due to the growing demand from the economically developing world and the difficulty of substituting renewables for fossil fuels in many agricultural and industrial sectors. These macro trends are likely to overwhelm any conceivable growth in efficiency or clean energy production.
Here in Massachusetts, over 70 percent of all homes are heated by natural gas or oil. A similar percentage of our electricity is generated by fossil fuels. And less than 1.5 percent of vehicles are electric. The magnitude of this installed base makes dramatic shifts to renewables a generational project at best. An indicator of the challenge is the fact that renewable energy constituted 75.1 trillion BTUs of energy consumption in Massachusetts in 2022, the same amount as in 2015.
Adding to the challenge is the fact that electricity demand, which still relies heavily on fossil fuels, is likely to grow. ISO New England projects net electricity demand will grow by close to 2 percent per year through 2033, adding up to a 17 percent increase over 2023 levels after taking into account savings through efficiency measures and the expansion of user-generated solar energy.
Accelerated adoption of electric vehicles and the potential for new local data centers to accommodate Artificial Intelligence (not to mention cryptocurrency mining) could push electricity demand even higher, as could major state and federal policy initiatives to increase manufacturing and housing.
Even with significant growth in the share of electricity provided by solar and wind, energy storage limitations make fossil fuels a long-term necessity to avoid intermittent service during periods of peak demand, which ISO New England projects will grow by over 3 percent per year during the winter months. According to the U.S. Energy Information Administration, “assurance of natural gas supply remains a critical energy issue for the region.”
The new state law on permitting upgrades to natural gas infrastructure is designed not only to prevent any expanded capacity, but to actually reduce throughput by requiring a prolonged review process for proposed investments with preferential consideration of non-gas alternatives. Not only could this delay essential repairs, thereby raising health and safety concerns, but it will inevitably increase costs that will be passed on to residential and commercial users who are already paying some of the highest energy costs in the country.
The pilot project authorizing 10 municipalities to prevent new gas hook-ups seeks to directly restrict demand, rather than supply of natural gas by requiring electrification of new or renovated buildings. Although the costs to construct a new single-family house fully wired for electricity are comparable to homes built to accommodate natural gas after taking into account state and federal subsidies, it’s unclear whether the economics will hold for multi-family dwellings (i.e., affordable housing) without even more generous government support.
Importantly, the advocates for the Fossil Fuel-Free Demonstration are already pressing ahead for a much broader statewide program that would severely restrict consumer choice and place an even greater burden on the power grid, before any evidence from the new pilot program can be collected – not to mention evaluating the impact of recently enacted “stretch” building codes to maximize energy efficiency of new construction, which have been adopted voluntarily in over 300 municipalities across the state.
Beyond the existing risks and costs associated with these new regulations restricting or reducing access to natural gas, the negative attitude of the incoming Trump administration towards renewables will likely mean that optimistic projections for expanding clean energy production will have to be scaled back, at least for the next four years. As we enter this new political context at the federal level, Massachusetts should take a more cautious approach to moving away from natural gas to ensure an adequate, stable and affordable energy portfolio.
Potential for Common Ground or Higher Ground
Greenhouse gas emissions are a prime example of the tragedy of the commons. We all share the same atmosphere, regardless of national sovereignty over the land below, which means we can’t control our own destiny when it comes to climate change. As a result, there’s a natural inclination to act in ways that maximize each country’s own (short-term) interests, while ignoring the larger (long-term) interests of the planet and humanity as a whole. This dynamic is even more pronounced at the state and local level. After all, what difference does it make if Massachusetts reaches its net zero goal by 2050, if the rest of the world doubles its carbon emissions – especially if we achieve these goals by further increasing the already high cost of living and doing business in the Commonwealth?
Given competing priorities and potential trade-offs, state policymakers have little choice but to take (relatively) incremental steps, balanced by mitigation measures, while figuring out who should bear the costs and risks.
As a general rule, incentives tend to work better than mandates or regulation as a means of efficiently changing behavior, while being flexible enough to address differing and changing circumstances. So, in this case, natural gas infrastructure projects that are likely to produce a significant net reduction in carbon emissions could be encouraged by making them eligible for fast-track permitting and concessionary financing (possibly through an expanded capitalization of Mass Development or a new public-private infrastructure bank). Similarly, tax credits or public-private financing incentives (via an expanded Mass Save program) for all-electric homes, multi-family dwellings and businesses could be increased, both for new construction and conversions.
Incentivizing carbon-reducing investments by the natural gas industry and consumers would also produce secondary benefits in terms of increased jobs and economic activity, at least partially off-setting the added cost to taxpayers of larger public subsidies.
James Peyser served most recently as Massachusetts secretary of education under Gov. Charlie Baker.
Data:
- Percent of MA primary energy consumption that comes from natural gas (2022): 32.9% in BTUs
- Percent of MA carbon emissions that come from natural gas (2021): 38% (millions of metric tons of CO2)
- Percent of MA primary energy consumption that comes from renewable sources (2022): 5.7% in BTUs
- Percent of MA in-state electricity generation that comes from natural gas (2023): 63%
- Percent of MA in-state electricity generation that comes from renewable sources (2023): 34%
- Percent of MA homes using natural gas for heating (2022): 50.5%
- Percent of MA homes using electricity for heating (2022): 19.9%
- Change in MA natural gas consumption from 2012-2022 (BTUs): +0.3%
- Change in MA renewables consumption 2012-2022 (BTUs): +14.3%
- Per-capita natural gas consumption in MA compared to US (2022): 61.9 million BTUs (MA) vs. 100.3 million BTUs (US)
Sources and Resources:
Massachusetts Clean Energy Climate Metrics (https://www.mass.gov/info-details/massachusetts-clean-energy-and-climate-metrics)
U.S. Energy Information Administration State Profile and Energy Estimates (https://www.eia.gov/state/analysis.php?sid=MA#119)
U.S. Energy Information Administration State Energy Consumption Estimates: 1960-2022 (https://www.eia.gov/state/seds/sep_use/notes/use_print.pdf)
U.S. Census Bureau survey (https://data.census.gov/table/ACSDT1Y2022.B25040?q=B25040:+House+Heating+Fuel&g=040XX00US25)
FRED Economic Data, St. Louis Federal Reserve Bank (https://fred.stlouisfed.org/series/EMISSCO2TOTVTTTOMAA)
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