Berkeley Bans Natural Gas

[This is a long, detailed article. For your convenience there is a PDF version at the bottom.]

Copyright 2019 Tony Lima. All rights reserved. Excerpts up to 250 words are permitted as long as a link to this article is included and credit given to the author.

[Updated July 24, 2019 to correct an error in calculating the reduced efficiency caused by using natural gas to generate electricity.]

The Berkeley city council has voted to ban the use of natural gas in new residential construction beginning January 1. Their stated reason is that residential use of natural gas makes up 15% of Berkeley’s total greenhouse gas (GHG) emissions. The city council has structured this ban so it focuses on a relatively trivial contribution to GHG emissions while ignoring the elephant in the room, transportation. Even worse, the city’s plan will increase overall state wide GHG emissions from burning natural gas for residential use. Finally, Berkeley takes no responsibility for emissions created by the Oakland airport. This despite the fact that Berkeley residents regularly use this facility. It’s the ultimate NIMBYism to adopt a plan that will increase overall statewide emissions, continue to outsource a major part of greenhouse gas emissions to another city, and reduce your city’s GHG emissions by a trivial amount.

It’s the ultimate NIMBYism to adopt a plan that will increase overall statewide emissions, continue to outsource a major part of greenhouse gas emissions to another city, and reduce your city’s GHG emissions by a trivial amount.

The San Francisco Chronicle’s summary of the Berkeley ordinance is pretty good.[i]

The ordinance bans installation of natural gas lines in low-rise residential buildings, including single-family homes and town homes.

It goes into effect Jan. 1 and does not affect existing buildings. Accessible dwelling units, including basements and attics, are exempt. [Applies to interior ADU’s only.]

It applies to building models reviewed by the California Energy Commission and determined to meet state requirements if they are electric only.

Berkeley’s new regulations will update as the state commission approves more models, without the City Council having to vote again.[ii]

What in the world are these “California Electric Commission building models”? The CEC creates model buildings that use only electricity. Currently most of the approved models are for residential structures. They are developing new models for various commercial and government structures. As those new models are approved, construction of those types of structures will be automatically included in Berkeley’s new ordinance.

Berkeley is Officially Nuts

This is insanity. In 2018, 46.5% of California’s in-state electric power generation was produced from natural gas.[i]  Burning natural gas to create electricity and delivering that electricity to customers have two inherent inefficiencies.  First, burning natural gas produces waste heat at the power generating plant. There is considerable energy loss anytime heat is used in a process. Second, the electricity transmission inefficiency is significant. Moving electricity through powerlines dissipates some of the energy as heat. A common estimate is that about 2/3 of the energy in the natural gas is lost by converting it to electricity and then moving the electricity to consumers.[ii] Since 46.5% of California’s electricity is generated from natural gas, the net increase in natural gas consumption will be 39.5%. Using electricity generated by burning natural gas will consume roughly 39.5% more natural gas than would be used if it was simply burned on-site at the customers’ locations in furnaces, kitchen stoves, and water heaters.

Berkeley has been kind enough to show us the sources of greenhouse gas emissions within the city limits.

GHG Emission sources

(Click for larger image)

You’ll immediately notice that big orange slice. That’s cars, buses, trains, and other forms of transportation. Those account for 60% of greenhouse gas emissions. Luckily for the city of Berkeley, they do not have their own airport, relying on their southern neighbor Oakland for air transportation services.

Berkeley’s Plan Will Have a Negligible Impact

Berkeley has generated a lot of press buzz with this action.  But this new law will do little to reduce GHG’s.  First, it only affects new construction. Existing houses with natural gas will be allowed to continue to use it. Even over a 5 or 10 year period, new construction in Berkeley is a tiny percentage of the total housing stock. There will be only a slight impact on greenhouse gas emissions.

Second the system-wide effect upstream will be to actually increase greenhouse gas emissions in the state. To get one unit of electricity from the generating plant to the consumer requires three times as much natural gas as simply burning the natural gas in the house. New residential units constructed after January 1, 2020, will consume 39.5% more natural gas than existing units. The city of Berkeley will reduce its greenhouse gas emissions at the cost of bumping up statewide emissions.

When considering the overall impact of Berkeley’s regulation it’s important to account for the number of existing housing units compared to the number of new units.  The US Census Bureau compiles data on housing units by city.[i] The most useful measurement for assessing energy impact is the total number of rooms available. Thus a house with two bedrooms, two bathrooms, a living room, a kitchen, and a dining room would count as seven rooms.

The Census Bureau reported that in 2017 Berkeley had 47,286 rooms.[ii] Using Berkley’s reports of new permits for construction in 2018, I was able to calculate the number of rooms permitted for new construction in 2018. Permits were issued for construction of 210 additional rooms.[iii]  Anticipated new construction from these permits will add less than ½ of 1% to Berkeley’s housing stock (0.44% to be precise). According to Berkeley’s own statistics residential natural gas accounts for 15% of the city’s greenhouse gas emissions. Thus the new construction permitted in 2018 will reduce greenhouse gas emissions for the city by 0.07 percentage points.

Bottom Line

But consider this. There is no way to really make a near-term  dent in that 15% of GHG emissions from residential sources without requiring retrofitting of existing housing. Waiting for teardowns and new construction is too slow. If you own a house in Berkeley, beware. The city Council has plans for you that they haven’t told you about yet. . For example if you just want a new gas stove that will probably be grandfathered in. But if you want to remodel your whole kitchen for $50,000+ the city council may not grandfather that and you’ll be using an induction stove.

Leave it to Berkeley to adopt a plan that will have the tiniest impact on GHG emissions while ignoring the elephant in the room, transportation. It’s the ultimate NIMBYism to adopt a plan that will increase overall statewide emissions, continue to outsource a major part of greenhouse gas emissions to another city, and reduce your city’s GHG emissions by a trivial amount.

[i] Ravani, Sarah. “Berkeley becomes first U.S. city to ban natural gas in new homes.” San Francisco Chronicle, July 21, 2019. Available at https://www.sfchronicle.com/bayarea/article/Berkeley-becomes-first-U-S-city-to-ban-natural-14102242.php. Accessed July 21, 2019.

[ii] If you’re curious about the exact text of Berkeley’s new law, it’s available here. https://www.cityofberkeley.info/Clerk/City_Council/2019/07_Jul/Documents/2019-07-16_Revised_Packet_2019-07-16_Item_C_Adopt_an_Ordinance_adding_a_new_Chapter_pdf.aspx. Accessed July 22, 2019

[iii] California Energy Commission “2018 Total System Electric Generation in Gigawatt Hours” June 24, 2019. Available at https://ww2.energy.ca.gov/almanac/electricity_data/total_system_power.html. Accessed July 21, 2019.

[iv] Schonek, Jacques. “How big are Power line losses?” Schneider Electric, March 25, 2013. Available at  https://blog.se.com/energy-management-energy-efficiency/2013/03/25/how-big-are-power-line-losses/. Accessed July 21, 2019.

[v] US Census Bureau, American Community Survey ACS_17_1YR_DP04. Available via a link from https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?fpt=table.  Accessed July 22, 2019.

[vi] Ibid.

[vii] Permit Service Center, City of Berkeley Department of Planning and Development. Permit Statistics 2018. Available at https://www.cityofberkeley.info/Planning_and_Development/Permit_Service_Center/Permit_Statistics.aspx. Accessed July 22, 2019. Monthly data in PDF format converted to Excel and analyzed by the author.

Berkeley bans natural gas with footnotes

 

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About Tony Lima

Retired after teaching economics at California State Univ., East Bay (Hayward, CA). Ph.D., economics, Stanford. Also taught MBA finance at the California University of Management and Technology. Occasionally take on a consulting project if it's interesting. Other interests include wine and technology.