“Bad economics required the DOE furnace mandate in the first place: replacing gas furnaces are much cheaper than a new electric heating refit even with a longer-term, back-end savings. Why? Because consumers, given the choice, chose gas.”
The mandatory energy efficiency movement (conservationism vs. market conservation) arose alongside oil and natural gas shortages in the 1970s. It began prior to the Arab Embargo as President Nixon’s price control order of August 1971 was having its predictable, undesirable effect.
In March 1973, wholesale oil shortages and dire resource predictions led Congress to hold a full-fledged energy conservation hearing. The first fuel conservation hearing in decades, a new movement was begun not seen since World War II’s fuel rationing program.
Within DOE, existing energy conservation agencies were consolidated as the Office of Conservation and Solar Applications (CSA). CSA became the Office of Conservation and Solar Energy (CSE) and then the Office of Conservation and Renewable Energy (CRE).
CRE was renamed the Office of Energy Efficiency and Renewable Energy in 1993. It is this agency that is the center of conservationism on the demand side.
In 2011, U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) finalized stringent energy efficiency standards for natural-gas-fueled furnaces, mandating 90% (condensing) efficiencies. As proposed, consumers in 30 “northern” states would have been all but prevented from replacing their worn-down (non-condensing) furnaces using their existing furnace exhaust system.
Make no mistake: this mandate was intended to drive natural gas out of the market, leaving electric substitutes as the ‘choice’ for consumers, like it or not. Such forced electrification is part of a broader federally directed “decarbonization” of the U.S. economy.
Bad economics required the furnace mandate in the first place: replacing gas furnaces are much cheaper than a new electric heating refit even with a longer-term, back-end savings. Why? Because consumers, given the choice, chose gas.
APGA to the Rescue
Fortunately, a small trade association for publicly-owned gas utilities, the American Public Gas Association (APGA), appealed this Final Rule and settled in early January of 2013 (see MasterResource here and here). The news was still not good.
Alas, under new (Trump) management, EERE effectively reneged on its (Obama-era) 2015 settlement agreement with APGA (see here). What EERE had proposed was a 92% minimum efficiency for gas furnaces that would have covered all 50 States. They even bragged they could have gone higher.
In 2018, the “gas industry” petitioned EERE for an “interpretative rule” that would recognize that forcing consumers from non-condensing to condensing furnaces would violate certain legislative provisions governing EERE’s appliance regulations (see Master Resource here).
Good News .… but Biden Moves In
The petition was granted and finalized on January 15, 2021 (see here). Additionally, as requested in the petition, EERE withdrew their 2015 proposed furnace rule along with another similarly flawed proposed rule for commercial water heaters (see here).
Not surprisingly, the “energy efficiency” coercionists claimed “foul play” and geared up for payback (see here). Expect a small victory for consumers to be challenged and reversed by the (anti-gas) Biden Administration.
Early action includes:
Directing agencies to consider revising vehicle fuel economy and emissions standards, methane emissions standards, and appliance and building efficiency standards to ensure that such standards cut pollution, save consumers money, and create good union jobs (emphasis added)…
… a regulatory freeze memo that will pause any new regulations from moving forward and give the incoming Administration an opportunity to review any regulations that the Trump Administration tried to finalize in its last days. The memo directs all agencies to confer with the Director of OMB before renewing any regulatory activity. This action will allow the Biden Administration to prevent any detrimental so-called “midnight regulations” from taking effect, while ensuring that urgent measures in the public’s interest can proceed.
This is a very fluid situation; Master Resource will continue its diligent coverage as events occur.
For more background: