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SoCalGas’ Reckless Strategy to Keep California Tied to Combustion

July 26, 2019
By
Sasan Saadat Research and Policy Analyst
Office

Through a network of front-groups, lobbyists, and PR firms, SoCalGas is funding and coordinating a misinformation campaign to greenwash gas and stoke local opposition to building electrification.

For gas-only utilities, decarbonization is an existential threat.

Gas has slipped under the climate radar for decades, hiding behind its mythical status as a “bridge” fuel. But study after study indicates that to slash building emissions—responsible for 1/4 of California’s greenhouse gases—we need to stop combusting gas in our buildings and power them with electricity from an increasingly renewable grid.

Now, gas companies are seeing how real climate action, like the first-of-its-kind gas ban in new homes that just passed in Berkeley, will write them out of business—and they are responding with deception. Across Southern California, one utility is trying to protect its business model by blocking the transition to zero-emission buildings. Through a network of front-groups, lobbyists, and PR firms, SoCalGas is funding and coordinating a misinformation campaign to greenwash gas and stoke local opposition to building electrification.

Crafting a Narrative for “Renewable” Gas

SoCalGas argues that rather than electrify our buildings, we can continue expanding our gas infrastructure, because eventually we can run it on alternative forms of gas—“renewable natural gas” as they call it.  It’s part of a strategy on display wherever the gas industry is threatened by clean energy transitions. In Europe, the director of Oxford’s Natural Gas Programme advised the industry bluntly:

The industry has a choice. Either accept that gas demand in Europe is going to decline after 2030…or take a positive step towards developing and implementing decarbonization narratives which will convince European politicians that gas should be taken seriously as a significant part of energy balances post-2030.

So what has the UK gas industry done? New research highlights the “significant efforts by heat incumbents [gas networks in particular] associated with lobbying and regulatory pressure, with the aim of maintaining a gas based heating system. These efforts were primarily based around promoting the approach of ‘decarbonizing the gas grid’.”

The study goes on to recommend that the government should support a “careful comparison of the economic and environmental measures” of decarbonized gas with more established zero emission technologies.

Fortunately for us, California has already commissioned such a study. 

A recent analysis by Energy and Environmental Economics (E3) and University of California, Irvine, came back with the clearest results yet:

  • Any scenario which meets California’s climate targets requires substantial declines in gas demand.
  • The scenario with high levels of building electrification saves Californians billions, and offers significant air quality and health improvements, compared to the scenario relying on alternative gases.
  • We need a targeted gas transition strategy to avoid huge costs being placed on low-income customers.
According to E3, a scenario with high levels of building electrification is the lowest-cost path to meet our climate targets (including the best-case gas scenario).
According to E3, a scenario with high levels of building electrification is the lowest-cost path to meet our climate targets (including the best-case gas scenario).
Image Courtesy of E3

In contrast, the E3 study found that alternative gases, such as biomethane, hydrogen, and synthetically produced methane, are extremely expensive and limited in supply. When you add them all up, there isn’t nearly enough to displace all of the fossil gas we use. And the study was generous with what got counted. Earthjustice opposes sources of biomethane that rely on factory farming practices with severe air and water quality impacts for local communities. We need to end these practices, not commoditize their pollution. We should also avoid creating methane from forest and agriculture residue, which produces more methane than would have otherwise occurred. Since methane is such a potent greenhouse gas, and the entire supply chain is so prone to leaks, creating new methane always runs the risk of increasing overall emissions. If you count only the sources that don’t put communities or the atmosphere at risk, you end up with an even smaller pot of truly sustainable gas, significantly raising the cost of the fuel. 

If proponents of renewable gas really believe in—and can demonstrate—the integrity of their product, they should focus on deploying them in areas where they can serve the highest value. There is plenty of decarbonizing to go around! Rather than have this limited fuel compete in sectors where electrification already offers a clear path to decarbonization, we should reserve it for sectors that are harder to decarbonize, like the chemical, industrial, or maritime sectors, where studies suggest they could play an important role.  

Delay is the New Deny

For SoCalGas, this was never about a sudden concern with another path to meet GHG reductions.  As was the case with climate denial, the debate itself is a strategy to delay action. Contrary to all independent studies, SoCalGas has even argued repeatedly to state agencies that electrification would “impede” California’s climate objectives. 

SoCalGas’ tactics to stall the transition track closely with what’s been happening in the UK. Researchers there noted that “we have also discovered the emergence of networks and coalitions of incumbents working together to promote the idea of decarbonised gas – interestingly, one key network, the ‘decarbonised gas alliance’ has strong links to the shale gas lobby.”

Stateside, we have our own version of the gas alliance. It’s called Californians for Balanced Energy Solutions (C4BES), a front group started and funded by SoCalGas to stoke opposition toward electrification. Greenwashing gas and creating a front group are parts of an increasingly aggressive campaign to keep California reliant on fossil fuels. Other SoCalGas efforts include:

  • Crisscrossing city councils across Southern California to push approval of pre-drafted “balanced energy” resolutions that oppose state electrification efforts. 
  • Attempting to undermine efficiency standards for residential furnaces because they would “raise the cost of some gas furnaces and thereby encourage fuel switching away from natural gas.” Then ignoring orders by the California Public Utilities Commission to cease doing so.
  • Sending misleading mailers to its customers comparing the most efficient gas furnace available on the market to an electric option so inefficient it could not legally be sold in California

And there are worrying signs of their success. More than 10 cities and counties have signed on to SoCalGas’ resolutions designed to resist the transition off of gas.

Low-Income Customers Will Be Left On the Hook

It’s not just the urgency of climate crisis that makes this effort so damaging. The E3 report highlights another concern. The costs of all our gas infrastructure is baked into customer rates—spread across millions of users over several decades. Meeting our climate obligations means fewer users and far less gas. The pool of customers left paying for the entire system will be smaller, and their rates will get way higher. Unless more cities follow Berkeley’s lead, thousands of new homes will be connected to the gas grid each year, expanding the size and cost of a system that we need to wind down. If we don’t immediately halt expansion and implement an equitable transition strategy, the system’s costs will fall on low-income customers least able to electrify.

Components of a gas transition
Image Courtesy of E3

This is what makes the gas industry’s efforts so reckless. Delaying the transition from combustion-based buildings will undermine our climate efforts and will leave low-income customers footing the bill for the system. While Earthjustice is working at the State and local level to accelerate the equitable transition to zero-emissions, we’re also countering efforts by SoCalGas to hijack these conversations in the Public Utilities Commission by exposing their ties to groups like C4BES posing as consumer advocates. With its negligence resulting in the Aliso Canyon disaster, SoCalGas has already proven why it should not be treated as an equal partner in creating an energy system that values communities and the environment.

SoCalGas’ efforts to put its profits over climate progress might be expected, but it should not be tolerated. What we’re seeing from SoCalGas is what we can expect from the fossil fuel industry anywhere climate targets are being taken seriously—a coordinated effort to stall action and insist on business-as-usual. The consequences are too dire to let them.