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Not Cooking With Gas: Phase-out Mandates Ignore Economics of Energy Transition

Loren Steffy, UH Energy Scholar

My gas water heater recently started leaking, and I replaced it with an electric one. It wasn’t an obvious choice.

On the one hand, the price of propane, which powers most of my home appliances, has surged 42 percent since last October. On the other hand, I was among the more than 4 million Texans who lost power during record freezing temperatures in February. The state’s stubborn and willful embrace of an unreliable electric system means that during the next winter freeze or other grid-rattling weather event, I may lose hot water.

My choice is playing out, albeit under different circumstances, in other parts of the country. Homeowners and local government officials are reassessing the use of natural gas appliances, and in places far removed from Texas — places like the northeast where they prefer to leave the production of fossil fuels to others — municipalities are actively encouraging the switch to all-electric homes. 


Communities around Boston, for example, are debating whether to block or limit the use of natural gas for cooking and heating in new houses. Similar efforts to phase out natural gas are underway in San Francisco, Seattle, Denver and New York. The first phase-out ordinance was passed by city leaders in Berkeley, Calif., in 2019. The measures, these city leaders believe, will reduce demand for fossil fuel and help meet climate change goals.

Of course, oil-producing states such as Oklahoma, Texas and Louisiana have adopted laws prohibiting gas phase-out measures.

All of this law-making and goal-setting misses the point. No matter what goals or limits we set, energy transition is driven by economics — we need abundant and reliable supplies that can be produced affordably. Banning the use of natural gas is just as bad as banning a ban on its use. Both policies ignore the underlying economics of energy transition.

During the past 15 years, we’ve made steady progress toward cleaner fuels, but we haven’t done it by legislating demand. We’ve done it by innovation that has improved the economics of alternatives. Hydraulic fracturing, for all its negative consequences, has allowed the U.S. to shift more power production away from coal — a far greater environmental scourge.

In 2005, the U.S. generated half its electricity with coal. By 2019, that share had been cut in half. Natural gas, meanwhile, rose from 19 percent to 38 percent of all generation. The reason: fracking made gas cheap and abundant.

Those trends, by the way, may reverse in the short-term as skyrocketing demand for post-pandemic electricity collide with lower natural gas production, which is driving up gas prices. In July, average spot prices for gas were more than double a year earlier, and 62 percent above 2019.

The rise of electric vehicles and other alternative transportation fuels — natural gas among them — likely represents the next big shift. And that shift can’t occur without natural gas. If we’re using electricity for transportation, that means we need more natural gas, not less, in the short-term, to generate that additional electricity.

“I think we could migrate away from crude oil, but I’m not sure it makes sense to migrate away from all fossil fuel,” said Christine Ehlig-Economides, a University of Houston petroleum engineering professor.

The phase-out argument seems to say that by switching away from gas appliances, demand for natural gas — and, of course, that great green bogeyman, fracking — will diminish.

But that, if you’ll pardon the pun, is a pipe dream.

Renewables simply can’t meet the demand. They account for only 20 percent of U.S. generation, and it’s intermittent and weather-dependent. Even the Biden administration’s overly optimistic plan, released in early September, to decarbonize the grid by 2050 will be possible only with hefty federal investment of about $210 billion.

But even so, achieving that will take another three decades. At the moment, renewables have neither the capacity nor the consistency to meet, on their own, the rising demand for electricity. What’s more, most large-scale wind and solar farms are built in remote areas, and we lack adequate transmission capacity to get that power to cities.

Combined-cycle natural gas plants are the best option we have for supporting renewables. The more renewables we build, the more we need natural gas plants to support them.

This is particularly true in Texas, where we became the biggest wind power producer in North America with the help of abundant — and cheap — natural gas supplies.

The drive to phase out natural gas is premature — a case of climate change fears getting ahead of rational policy. Cooking with electricity instead of gas isn’t going to save the planet. In fact, homes and businesses account for just 13 percent of the greenhouse gases the U.S. produces annually, according to the Environmental Protection Agency.

The move to cleaner fuels needs to focus on the dirtiest fuels first — coal, then oil, then natural gas. The chemicals industry, for example, is shifting away from oil and turning natural gas as feedstock for plastics, pesticides, paints and other household items. Chemical companies use of petroleum accounts for more than 14 percent of all greenhouse gas emissions.

At the same time, natural gas producers need to understand that providing the foundation for our energy future comes with a responsibility to the public that the industry has largely ignored.

In the wake of the February freeze in Texas, which left some 200 people dead and cost billions of dollars in property damage the natural gas industry has taken little responsibility.

In fact, some players made billions and turned around and funneled that money to state politicians in for the form campaign contributions. State leaders can try to legislate against gas phase outs, but the industry now faces a consequence of its own inaction: consumers throughout the Midwest face higher gas bills. In Texas, consumers are facing billions in charges that could add to their bills over the next 30 years.

That could undermine public trust in natural gas as a heating fuel and cause more homebuyers to demand electric appliances. 

The past 15 years has taught us that we can combat climate change and embrace energy choices that are cleaner and more affordable. Rather than mandating phase outs or banning them, elected officials need to focus on encouraging the most reliable and affordable options, then let consumers choose.

In my case, I chose to phase out my gas water heater because of rising propane costs, but I still want the option of having gas appliances. If the February freeze taught us anything, it’s that we don’t have reliable energy infrastructure in Texas. So I’m hedging my bets: the new water heater is electric, an older one is gas.

The reason is simple: reliability matters too. We won’t be ready to phase out gas until we have an electric grid that can support growing demand for electricity. Even by the most optimistic assessments, that will take decades.   

Loren Steffy is a writer-at-large for Texas Monthly, an executive producer for Rational Middle Media and a managing director for 30 Point Strategies, where he heads the 30 Point Press publishing imprint. He is the author of five nonfiction books: “Deconstructed: An Insider’s View of Illegal Immigration and the Building Trades” (with Stan Marek), “The Last Trial of T. Boone Pickens” (with Chrysta Castañeda), “George P. Mitchell: Fracking, Sustainability, and an Unorthodox Quest to Save the Planet, The Man Who Thought Like a Ship,” and “Drowning in Oil: BP and the Reckless Pursuit of of Profit.” His first novel, “The Big Empty,” was published in May 2021. 

Steffy is the former business columnist for the Houston Chronicle and previously was the Dallas (and Houston) bureau chief and a senior writer for Bloomberg News. His award-winning writing has been published in newspapers and other publications worldwide. He has a bachelor’s degree in journalism from Texas A&M University.

UH Energy is the University of Houston’s hub for energy education, research and technology incubation, working to shape the energy future and forge new business approaches in the energy industry.

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