New Jersey sets sights on gas phase-out [NGW Magazine]

The State of New Jersey has announced an ambitious plan to eliminate man-made carbon emissions. The plan, unveiled by New Jersey Governor Phil Murphy in late January, is based in large part on a significant reduction  – 75% by 2050 – in natural gas use by homes and businesses in the state.

New Jersey is not the first state to set a goal of producing 100% clean energy, but its initiative is believed to be the most far-reaching, including one of the broadest and most specific attempts to limit emissions volumes through land-use rules that will require future construction projects to consider their impact on climate change.

It would not be surprising if at least another handful of states were to follow suit with similar measures to accelerate the adoption of clean energy, while others – perhaps with major gas production to consider – will strongly resist any such moves. However, New Jersey’s plan spells bad news for natural gas companies, including the developers of new pipelines proposed for the region. And while a number of pro-environmental public interest and business groups in New Jersey have expressed support for the plan, others have been quick to voice their opposition.

Climate concerns

New Jersey’s Energy Master Plan (EMP), outlining the state administration’s strategies for meeting its target of 100% clean energy by 2050, has been developed in response to concerns over how climate change could affect the region. In addition to releasing the plan, Murphy’s administration has embarked on a regulatory reform push aimed at modernising state environmental laws, known as New Jersey Protecting Against Climate Threats (NJ Pact).

“New Jersey is extremely vulnerable to the impacts of climate change, from sea-level rise that threatens our coastline to air pollution that harms our most vulnerable communities,” Murphy, a Democrat, said in a February 6 statement. “We are moving swiftly to enact the regulations outlined in NJ Pact to reduce fossil fuel emissions and ensure investments in our innovation economy and communities. These policies, which will make New Jersey a global leader in the clean energy transition and fight against climate change, will help propel New Jersey to 100% clean energy by 2050.”

The EMP outlines seven major strategies that the state will pursue in order to reach its goal. These include targeting the transport and building sectors in particular for reductions in emissions and energy consumption, as well as decarbonising and modernising the state’s energy system.

Shifting to electric heating and cooling systems in homes forms part of the plan for cutting down on gas use, as does plugging leaks or replacing older pipelines. According to the goals and strategies outlined in the EMP, New Jersey will seek to maintain the reliability of the existing gas pipeline system while planning for future reductions in gas demand. Gas utilities will also be asked to propose and adopt “non-pipeline solutions” for expanding or upgrading the distribution system.

Murphy’s office was not immediately able to respond to NGW’s questions, but his earlier comments suggest confidence that pursuing the outlined strategies will have a significant impact. “Successfully implementing the strategies outlined in the EMP will drastically reduce New Jersey’s demand for fossil fuels, reduce our carbon emissions, greatly improve local air quality and related health impacts,” Murphy said when the plan was unveiled.

Broader trends

The state’s plans, while ambitious, are in line with broader trends playing out across the US, with the number of homes that only use electricity on the rise. According to the US Energy Information Administration (EIA), 25% of US homes were all-electric as of 2015, the latest year for which census data are available. With the share of all-electric homes rising in each census region over the past 10 years, the next survey – due to be carried out this year – is expected to show a further increase in homes only using electricity.

The EIA attributes the rise to changes to the types of equipment used in homes, improvements to heat pump technology that make it more affordable in colder climates and faster population growth in warmer climates. US federal energy policy under Donald Trump’s presidency is also likely to be encouraging some – Democrat-controlled – states to step up climate change initiatives.

These state-level efforts are being portrayed as a bulwark against the federal rollbacks of environmental and climate change regulations. However, as such initiatives span decades and could yet be reversed by future administrations, they could be criticised for being mainly symbolic. The governors that pass relevant legislation today will not ultimately be responsible for its long-term implementation. Nonetheless, if commitment to tackling climate change strengthens in the coming years, initiatives such as New Jersey’s could come to be seen as a significant step in the right direction.

Opposition

Some opposition to the Murphy administration’s plans has already emerged, however. Republican lawmakers in New Jersey were quick to raise concerns over what the cost of implementation would be. In an opinion piece published by local media, New Jersey State Senator Anthony Bucco, a Republican, described the plan as a move to impose a “costly new energy tax” on residents with “an end-game of eliminating consumer choices”.

Speaking more broadly about the growing push in some parts of the US to move away from natural gas, the CEO of New Jersey-based utility Public Service Enterprise Group, Ralph Izzo, was cited by Bloomberg as saying that forcing homes to switch to electricity could also be wasteful.

Izzo’s argument centres on the fact that electricity is mostly still generated from fossil fuel sources, and that most of the energy value of such fossil fuels is lost when they are converted to electricity and delivered through cables. He described this process as bad for the environment, with “no thermodynamic logic” behind it.

This argument will find support among the natural gas industry, for which New Jersey is already something of a battleground. The unveiling of the EMP comes as PennEast Pipeline Co struggles to obtain approvals required to build a portion of its planned natural gas pipeline through New Jersey.

A US Court of Appeals for the Third Circuit ruled last September that ‘eminent domain’ – a compulsory purchase order – could not be used to gain access to properties owned by New Jersey. The US Federal Energy Regulatory Commission (Ferc) disagreed on January 30, ruling that PennEast can use eminent domain. But the Ferc decision alone cannot trump the Third Circuit ruling, and PennEast has said it will take the case to the Supreme Court. Against the backdrop of New Jersey’s plan to reduce natural gas use, however, it seems likely that the state will continue to oppose the pipeline, and do everything in its power to stop construction from going ahead.

The costs of implementing the plan have yet to be revealed. Around three quarters of homes in New Jersey still use natural gas, and the state is estimated to have consumed roughly 795 trillion Btu from gas in 2016, accounting for 35.8% of its primary energy consumption. Bringing these numbers down will be a big task. There is a risk that if the tax burden on residents is widely viewed as too onerous – even in the face of increasingly pressing climate change concerns – the Democrats will be punished at the ballot box.