New Jersey’s growing focus on cutting building emissions and reducing natural gas use is drawing criticism from environmentalists who claim the state is not doing enough and business interests that say it’s going too fast.

With solar energy a staple in New Jersey and the offshore wind industry rapidly advancing, the state recently has put the spotlight on natural gas. Several proposed policies aimed at cutting gas emissions have exposed fierce disagreements at public forums and triggered criticism from opponents and even friendly groups, such as environmentalists.

The New Jersey Board of Public Utilities (BPU) on March 6 voted to establish a stakeholder process to develop plans to reduce emissions from the gas sector. The board’s focus will include exploring business models that could keep the “gas system intact while accounting for a shrinking customer base” and the “elimination of subsidies that encourage unnecessary investment in natural gas infrastructure,” according to the order.

The effort would also explore “alternative programs and investments that could provide natural gas utilities with new revenue streams and promote good-paying jobs, including union jobs.” The agency will also look at “electric grid readiness to handle electrification of building heating and cooling, as well as transportation.”

Gov. Phil Murphy triggered the initiative with a Feb. 15 executive order calling for the BPU to develop a natural gas utility plan that would help achieve the state’s goal of a 50% reduction in GHG emissions below 2006 levels by 2030. The same day, Murphy signed an executive order that created a policy to electrify 400,000 dwelling units and 20,000 commercial spaces by the end of 2030.

In a separate move March 9, the Senate Environment and Energy Committee posted for discussion a bill (S3672) that would pave the way for electricity to replace gas as the main fuel for building heat and hot water systems.

The bill would direct the BPU to establish a “beneficial building electrification” program that would reduce emissions, reduce costs “from a societal perspective,” and promote the increased use of electricity in off-peak hours. It would also require the state to prepare for a “change in end-use equipment from a non-electric type to an efficient electric type for any building end use, including water heating, space heating, industrial process, or transportation.”

In addition, the bill requires the BPU to develop natural gas emissions reductions targets for each utility in the state.

Next Frontier

The focus on natural gas addresses two of the state’s largest sources of GHGs, with electric generation — heavily dependent on gas — accounting for 20% of emissions and residential, industrial and commercial buildings, 34% in 2019, according to the New Jersey Department of Environmental Protection (DEP). Transportation accounted for 39%.

The discussion about reducing the role of natural gas is “the next frontier in the clean energy and climate space,” said Eric Miller, New Jersey energy policy director for climate and clean energy at the Natural Resources Defense Council.

“It’s become increasingly clear over time what a big source of emissions” the production and burning of natural gas represents, Miller said. And New Jersey, which has no domestic gas production industry, could cut those emissions by replacing the fuel with the state’s rapidly developing solar and wind electricity generation sources, which also provide local jobs and economic development, he said.

Yet fossil fuel interests say the state should explore alternatives before plunging into what they say will be a highly expensive bet on electricity. In opposition to S3672, the Fuel Merchants Association of New Jersey (FMANJ) — which represents oil heat retailers, motor fuels distributors and industry suppliers — and the New Jersey Propane Gas Association, have waged a campaign using an online advertisement under the headline “Don’t Touch My Gas Stove.”

The campaign, which goes under the name Smart Heat NJ, says the bill would create a shift that “is not only expensive, but [represents] a total overhaul of the rules for housing, environment, and energy, in short the entire economy of New Jersey.”

The Senate committee has yet to discuss the bill, which was pulled from the agenda. Sen. Bob Smith (D), the committee chairman, told the meeting that once it was posted “we got calls from a whole bunch of groups that we had not heard from before,” and co-sponsor Sen. Andrew Zwicker (D) wanted to meet with them before the bill goes forward.

Eric DeGesero, executive vice president for the FMANJ, said Smith’s quick withdrawal of the bill shows that opposition goes beyond just fuel merchants.

“There are a lot of interests in the state that have a lot of concerns about mandated electrification as the only path forward in the building sector,” he said.

But Miller said the Smart Heat NJ campaign is “misinformation in service of fossil fuel revenues at the expense of more choices and more opportunities for New Jersey’s residents and businesses.”

“This bill doesn’t go after gas stoves. It doesn’t make anyone do anything,” he said. “The onus is not on residents, homeowners, apartment dwellers, businesses; it’s on the utilities to stand up programs that provide incentive education, workforce development, to make electrification a legitimate option for individuals and for businesses.”

Cutting Generator Emissions

The state’s earlier efforts to address building emissions have also been contentious. In January, the DEP altered a package of rules aimed at cutting GHG emissions in electricity generation and elsewhere: It removed a measure that would have prevented the agency from issuing permits for new fossil fuel-fired boilers in certain situations. The DEP excised the rule after opposition from business and fuel groups. (See NJ Backs off Ban on Commercial-size Fossil Fuel Boilers.)

Opponents of the ban, including the FMANJ, are pushing a bill (S2671) that that would prohibit any state agency from adopting regulations that “mandate the use of electric heating systems or electric water heating systems as the sole or primary means of heating buildings or providing hot water to buildings.”

New Jersey has not yet made such a mandate, but the state’s Energy Master Plan, which the Murphy administration is updating, calls for the building sector to be “largely decarbonized and electrified” by 2050.

Those policies draw support from environmental groups, which question the state’s commitment to reducing natural gas use in other areas, particularly electricity generation.

State officials faced sharp criticism from environmentalists at a March 7 DEP hearing on the department’s emissions reduction priorities over the next few months. The measures include rules to limit emissions from generating units, starting with a maximum of 1,700 pounds of CO₂ per MWh of electricity generated in 2024 and reducing the ceiling to 1,000 pounds in 2035.

“These facilities would have the opportunity to put controls on to stay running, or they would have to shut down by the 2024 date,” said Paul Baldauf, a DEP assistant commissioner who presented the plans. “It’s likely many of them will make a decision to shut down because it may not be cost-effective to put additional controls” in place, he added.

The state has 32 gas-fired generators, which comprise more than 10.5 GW of capacity, according to the DEP, and generate about 45% of the state’s electricity, according to the U.S. Energy Information Administration.

The state also is seeking to cut emissions on campuses, where it may not be feasible to electrify the heating in individual buildings, but where emissions could be reduced across all structures through planning.

But environmentalists at the meeting questioned how the state can be both seeking to reduce natural gas use and allowing for development of gas-fired generation.

“We clearly need to reduce our use of natural gas,” said Ken Dolsky, a steering committee member of Empower New Jersey, a coalition created to oppose fossil fuel-fired plants. He noted that the state has seven gas-fired plants either under consideration or moving ahead.

“It just doesn’t make any sense to build new gas plants that have a 30-year lifetime, in order to pay for themselves, while at the same time you’re trying to reduce natural gas,” he said. “It just boggles the mind that we would allow ourselves to get deeper and deeper into the hole of greenhouse gases, while at the same time making these tepid efforts to actually reduce greenhouse gases.”

Doug O’Malley, director of Environment New Jersey, called it “a clear incongruence” in the state’s goals.

Baldauf acknowledged that “you’re correct” that the DEP’s upcoming projects do not include a moratorium on gas-fueled plants.

Dissatisfaction with the state’s position also emerged at a Feb. 28 public hearing for a 630 MW gas-fired plant in the Keasbey section of Woodbridge, developed by Competitive Power Ventures. Most of the more than two dozen speakers at the hearing were either local residents or representatives of environmental groups concerned that the state would allow a new plant to open in a community already designated an environmental justice area.

“We are already overburdened,” Angeline Walters, a Woodbridge resident with three children, told the hearing. She noted that the developer operates clean energy plants in other parts of the country.

“It’s completely irresponsible to keep damaging the health of our communities and the environment when we have better ways,” she said.