Natural gas gets a pass in new bill to further curb local government authority

A bill before the legislature would give preferential treatment to the natural gas industry, which has embarked on a nationwide push to force local governments to keep using the fossil fuel.

House Bill 220 would prohibit cities and counties in North Carolina from adopting ordinances to limit the expansion of (or connections to) natural gas service. The measure’s primary sponsors are Reps. Dean Arp, John Szoka, Charles Miller and Jason Saine, all Republicans.

In a House Energy Committee meeting yesterday, Arp cited measures in several California cities that have prohibited natural gas from being used in new buildings. Boston, New York City and Seattle have adopted similar prohibitions as part of their clean energy goals. Natural gas contains methane, an even more potent greenhouse gas than carbon dioxide and a driver of climate change.

Arp acknowledged there are no existing or pending local ordinances North Carolina to restrict natural gas usage. “This legislation is to make sure it doesn’t happen,” he said.

HB 220 is model legislation advanced by the American Gas Association. NPR reported last month that it had obtained documents from the nonprofit Climate Investigations Center showing that in 2020, the association planned to deploy a battalion of such bills nationwide. Since then, similar bills have been introduced in at least 10 states, among them Florida, Colorado, Iowa, Kansas, Ohio and Minnesota — and now, North Carolina.

In an email to Policy Watch, a Duke Energy spokeswoman commented on HB 220: “Our customers depend on and benefit from a diverse mix of energy to power their homes and businesses. Natural gas is often the preferred option for home heating and cooking and commercial applications, and that can be provided to customers affordably and reliably.”

Arp claimed that as part of its biennial report, the state’s Energy Policy Council Infrastructure Committee recommended that North Carolina adopt the legislation. However, the committee’s recommendation is broader than what Arp is describing: The infrastructure committee’s recommendation would prevent local governments from banning any energy choices, including solar and wind, as well as natural gas.

Rachael Estes, senior manager of government and regulatory affairs for Apex Clean Energy, sits on the infrastructure committee and participated in the crafting of its recommendations. “I don’t think the legislature captured the true intent of the recommendation,” she said. “It’s focusing on only one energy source — natural gas.”

(Notably, the legislature has not taken up the infrastructure committee’s Recommendation No. 5, which would require the state’s electricity-generating utilities to use net-zero emissions energy resources by 2050. This would reduce, if not preclude the use of natural gas.)

The language in HB 220 defines “energy service” as “natural gas, renewable gas, hydrogen, liquefied petroleum gas, renewable liquefied petroleum gas, or other liquid petroleum products; or electricity by a person legally authorized to provide such service.” The renewable gas provision is important because it refers to biogas generated by manure from enormous swine and poultry farms.

A large biogas project, Align RNG, is a partnership between Dominion Energy and Smithfield Foods. Under the proposal, 19 industrialized hog farms would collect methane in special digesters, then send the gas via a 30-mile underground pipeline through Duplin and Sampson counties to an upgrading facility on N.C. Highway 24. From there, Align RNG would inject the gas into a pipeline owned by Piedmont Natural Gas, a subsidiary of Duke Energy. In turn, Duke would use the gas to generate electricity.

The proposal is controversial because it does not solve the environmental issues caused by the open lagoon and spray field system employed by large hog farms; nor does it address the methane, a significant source of greenhouse gases, that regularly leaks from natural gas pipelines.

Arp seems to be focusing on one part of the Energy Policy Council’s recommendation, put forth by another infrastructure committee member, which says, “North Carolina should consider adopting legislation, similar to that recently approved in Tennessee and Arizona, that prevents local governmental entities from banning energy choices.”

Arizona’s legislation does single out natural gas to give it political cover. But unlike House Bill 220, the Tennessee legislation does not specifically mention natural gas.

It’s also worth noting that three of the four members of the Energy Policy Council’s Infrastructure Committee are connected with the gas industry: Bruce Barkley of Piedmont Natural Gas, Diane Denton of Duke Energy, and Gus Simmons, director of bioenergy at Cavanaugh & Associates, the engineering firm working on several major swine-waste-to-energy projects, including Align RNG.

(Lt. Governor Mark Robinson oversees the entire Energy Policy Council. In a political debate last year, he said “climate change has not been proven scientifically,” according to Southeast Energy News.)

As co-chairman of  the House Energy Committee, Rep. Arp receives ample campaign money came from the energy sector and related fossil fuel interests — $38,500 in total for the last election cycle, according to state documents, equivalent to nearly 30% of all contributions. That includes $10,800 from Duke Energy’s political action committee, $7,400 from individual Duke Energy employees and $3,000 from Dominion’s PAC. Koch Industries, contributed another $1,000.

Likewise, Energy Committee co-chair Rep. John Szoka, a Cumberland County Republican, received more than $33,000 in campaign contributions from energy interests — among them $3,000 from Koch Industries. However, his campaign also received contributions from the renewable energy sector, including $2,000 from Apex Clean Energy and $10,800 from the N.C. Clean Energy Business Alliance.

Rep. Pricey Harrison, a Democrat from Guilford County, called the bill “really bad policy” because it would further limit what municipalities can do.

Local government are already hamstrung by the legislature because North Carolina operates under “Dillon’s Rule.” This rule originated from a 153-year-old court decision that said cities and counties can pass laws only if sanctioned by state government; 31 states operate under Dillon’s Rule. Under “Home Rule,” which is employed in a minority of states, local governments have more autonomy.

Lobbyists for local governments had no say-so on the bill. Arp acknowledged that he had not consulted with the League of Municipalities or the NC Association of County Commissioners for their input.

Lacy Pate, spokeswoman for the N.C. Association of County Commissioners, wrote in an email to Policy Watch that the organization doesn’t know of “any desire by any North Carolina county to limit energy options.”

She added that the association’s mission is to preserve and strengthen local decision-making. “NCACC would have concerns about this or any legislation that limits local control or otherwise undermines our core values.”

Rep. Kelly Alexander, a Mecklenburg County Democrat, said the measure is “a solution for a problem the state doesn’t have.”

“Can you guarantee that no municipality will try to limit an energy source?” Arp replied. “It’s happened in other states. And energy policy is a state issue. We need to do this before it becomes a problem. I don’t see the harm in making the clarification.”

Rep. Jimmy Dixon, a Duplin County Republican, described the bill as “forward-thinking.”

A majority of the committee voted to give the bill a favorable report; it now goes to the House Commerce Committee.