In an April 7 letter to Virginia Governor Ralph Northam, the Virginia Council on Environmental Justice is asking for a moratorium on all new fossil fuel projects and permits in the state. The Virginia Council on Environmental Justice (VCEJ) was established via EO-29 by Governor Northam on January 22, 2019, and it serves as an advisory board for the Governor. While it is unclear whether Northam has the legal authority to issue the moratorium, fossil fuel projects in Virginia are having trouble. The Mountain Valley Pipeline, for example, is a 303-mile natural gas pipeline from the Marcellus and Utica shale fields crossing into Virginia, which is having trouble obtaining permits. Because of environmental violations, the Mountain Valley Pipeline has been fined $2.15 million by the state and has lost multiple permits, which it must regain. The pipeline could also be subject to the moratorium requested by the VCEJ if the moratorium is deemed legal. It could then fall into the fate of the Atlantic Coast Pipeline, which was canceled, but in that case due to ballooning costs and lengthening timelines in obtaining permits, against a backdrop of relentless opposition from anti-energy groups.
The moratorium could also result in a ban on residential use of natural gas in the state. Major cities including San Francisco, Seattle, Denver and New York have either enacted or proposed measures to ban or discourage the use of natural gas in new homes and buildings, two years after Berkeley, California, passed the first such ban in 2019.
The Consumer Energy Alliance (CEA) released a report, “The Hidden Costs of a Virginia Natural Gas Ban,” that indicates that a natural gas ban could cost every household in Virginia as much as $26,000 if the ban were forced onto families. The findings dovetail with previous research by CEA which found that the cost to replace just major gas appliances in homes nationwide would be more than $258 billion. The report also found that attempts to “electrify everything” would require a massive infrastructure buildout of over $100 billion in the state.
With one in three Virginia households using natural gas for home heating, banning natural gas would be financially devastating to families who would have to pay as much as $26,132 to involuntarily retrofit existing appliances. A recent CNBC survey found that only 41 percent of Americans had enough savings to cover a $1,000 emergency, much less than the amount needed to cover the costs for a natural gas ban. A ban on natural gas would also disproportionately harm the 9.9 percent of Virginians who live at or below the poverty level, those on fixed incomes, and businesses still recovering from the economic hardships of COVID-19; as energy bills will inevitably increase. A study by the Dragas Center Economic Analysis and Policy at Old Dominion University reported that the pandemic had negatively impacted 75 percent of Virginia businesses by November.
Natural gas-fueled 60 percent of Virginia’s electricity net generation in 2019. A recent CEA report found that Virginia families, seniors, small businesses, and manufacturers saved more than $7 billion over the past decade because of the increased availability of natural gas because of horizontal drilling and hydraulic fracturing and its pipeline infrastructure. A natural gas ban would result in significant costs for new appliances, wiring upgrades and potential remodeling, and would probably lead to higher monthly energy bills for home heating. Conventional natural gas furnaces are less expensive to operate compared to other heating sources, including advanced heat pumps. One study found a 40 percent difference in the average cost to heat a natural gas home in January compared to a similar home with a heat pump and an electric furnace for backup heat.
Impact on Residential Costs
CEA developed its cost calculator by examining open-source information from consumer websites that detail average cost information for the replacement of natural gas appliances, remodeling, construction, wiring, and labor–costs that would be forced on homeowners and landlords, the latter of whom would pass them on to renters. According to the consumer website Homewyse, a new heat pump in Richmond, Virginia, would currently cost homeowners between $4,017 and $5,008. The consumer website HomeAdvisor indicates that after labor, fees and permits, costs could total over $20,000, not including ducts, to replace a furnace and does not include other appliance replacement costs nor the rewiring needed for conversion, especially if a homeowner’s circuit breaker box was insufficient for the higher electricity demand. Depending on the models chosen, mandates requiring the replacement of major appliances like hot water heaters, furnaces, gas stoves, gas dryers could reach more than $26,132 for a Richmond household reliant on natural gas, as follows:
- Total Cost for Heat Pump Installation: $20,000 potentially depending on labor, fees and permits
- Electric Panel Upgrade (200 Amps): $373 – $1,171 (Richmond, VA price range)
- Electric Hot Water Heater: $1,325 – $1,660 (Richmond, VA price range includes material, labor and supplies)
- Electric Range: $800 – $1,653 (Richmond, VA price range includes material, labor and supplies)
- Electric Dryer: $798 – $1,648 (Richmond, VA price range includes material, labor and supplies)
Impact on Transmission and Distribution
Princeton University’s Net-Zero America Study provided a multi-scenario look at how the United States could achieve net zero carbon policies by pursuing electrification and other strategies. To execute the study’s “E+ high electrification scenario” by 2050, utilities will have to make massive infrastructure investments to manage the increased load and connected costs of adding electric vehicle charging stations, heat pumps, all-electric appliances and more to Virginia’s electricity grid. A high electrification (and net-zero) scenario would increase peak system demand by 50 percent and require the replacement of nearly 21,000 megawatts of traditional-fuel generating capacity, which currently meets over 60 percent of Virginia’s electricity demand.
In addition, by 2050 the study estimates nearly $42.7 billion will need to be invested in utilities’ distribution systems to support the electric load increases at a cost of $12,400 per household. Add that to an estimated $103.5 billion in capital investment for wind and solar results in per-household costs for electrification at $42,500.
The study also suggested that electric transmission capacity across the country may need to increase by 60 percent (2030) to 300 percent (2050). There are approximately 1,600 miles of electric transmission lines in Virginia. If Virginia were to increase its transmission infrastructure by 60 percent at a cost of $350,000 per mile, it would cost approximately $336 million; an additional 4,800 miles would be nearly $1.7 billion. Elon Musk has estimated that the world would need to double electricity generation in order to electrify transportation.
As is too often the case when it comes to energy policy, low- and fixed-income communities will be most affected by forced electrification.
Conclusion
A ban on natural gas use in Virginian homes could cost as much as $26,000 per household for retrofitting all gas appliances to electric or renewable appliances. As natural gas use has grown across Virginia, emissions have fallen dramatically. Energy-related carbon dioxide emissions in Virginia dropped 13.1 percent from 2000 to 2018. These reductions came as natural gas use grew, pipeline infrastructure expanded and Virginia’s economy increased. It seems unwise to require homeowners to abandon natural gas for renewable or electric appliances as some cities are requiring for new hookups.
