The Fuel Merchants Association of New Jersey is the latest trade lobby to challenge Gov. Phil Murphy’s Energy Master Plan.
The FMA, which represents some 150 distributors of heating oil, gasoline and diesel fuel, is criticizing a portion of the plan that calls for the electrification of New Jersey’s buildings. In September, the trade lobby launched SmartHeatNJ, a public relations campaign aimed at voters.
“If we continue to follow this misguided plan in its current form, New Jerseyans will be forced to convert their homes to inefficient electric heat at a cost of $20,000 or more,” SmartHeat spokesperson Jeanette Hoffman said.
The Governor’s Office has not released complete estimates of the Energy Master Plan, which was introduced 21 months ago. But spokesperson Darryl Isherwood disputed the cost of potential switches to electrification — and whether such a switch will be mandated.
“There is no mandate on electrification,” he said. “The report does say that, in order to meet the goals, electrification is key. But it focuses on new construction first.”
The Energy Master Plan estimates the average cost of installing an electric heating system at $4,000 to $7,000 for a typical residence.
The FMA said that estimate fails to account for everything that’s needed to retrofit and heat a New Jersey home.
The FMA said its $20,000 estimate comes from an analysis of Massachusetts and New York data that was conducted by Diversified Energy Specialists, a biofuels company based in Boston.
Economic models and studies conducted for the New Jersey Board of Public Utilities indicated that the state’s building sector would need to be decarbonized and electrified to reach Gov. Phil Murphy’s goal of 100% clean energy by 2050.
The plan acknowledges that this will take a few decades to accomplish, given that New Jersey is largely built out. It suggests beginning new construction of all-electric buildings by 2025 and transitioning existing buildings during natural stock rollover events beginning in 2030.
The plan also calls for incentivizing the transition to electrified heat pumps and prioritizing buildings with oil and propane heating systems, “given the cost benefits and pollution reduction potential.”
Isherwood said the state is exploring options to improve upon programs and incentives to accelerate this transition.
“Incentive programs, when drafted, will be open to the public for comment,” he said.
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Eric DeGesero, director of the Fuel Merchants Association of New Jersey, readily admits that converting New Jersey’s building stock to electric would deal a significant economic blow to the oil and gas industry.
“The Energy Master Plan is putting the fuel merchants out of business,” he said.
The association is not alone in its criticism of the plan, however. Union leaders, as well as other trade groups and business organizations, have criticized the Murphy administration for a lack of transparency related to the costs of achieving 100% clean energy by 2050.
The nonprofit organization Affordable Energy for New Jersey estimated that the plan in total will cost the state $525 billion to implement — thus costing each resident an estimated $52,500.
Members of the governor’s own party also have voiced concerns over the administration’s approach to achieving those goals, namely the reliance on electrification.
State Sen. Vin Gopal (D-Ocean Twp.) told WOBM-FM 92.7 late last month that he planned to introduce legislation that would limit the rules state agencies could make regarding electrification of homes.
Last Friday, speaking at Manufacturing Day in Somerset, Gopal reiterated his worries about the Energy Master Plan, both in cost and potential job disruptions.
“I have significant concerns on the energy master plan calling for 100% electric,” he said. “We can reach 100% clean energy without getting there. It could cost households up to $20,000, some estimates have shown. It could put a lot of people out of work.
“We’ve got to find that balance. I’m a strong environmentalist; I live on the Shore. We have to get a balance where we can get to 100% clean energy, and not just get these things to check a box.”
State Sen. Mike Testa (R-Cape May Court House) offered other concerns.
“Obviously I have a significant Shore community — and I’ve got a significant shellfish, oyster fishing industry,” he said. “Those boats don’t run on electric. They can’t.
“There’s whole industries that are being somewhat ignored in his Energy Master Plan. Obviously, I want to preserve our environment. But we also have industries that have a couple hundred million dollars in an economic multiplier — just from my legislative district, not the state.”
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Proponents of the master plan argue that it’s necessary to avoid a climate catastrophe, and other states should immediately begin implementing similar plans.
A recent report from the United Nations Intergovernmental Panel on Climate Change warned of increasingly extreme weather, something U.N. Secretary General António Guterres described as a “code red for humanity.”
Guterres has proposed that, among other things, investments must accelerate the decarbonization of all aspects of the global economy, and fossil fuel subsidies must end.
The FMA said it agrees with Murphy’s goal of 100% clean energy, and suggested that heating sources like natural gas, propane and heating oil were beginning to transition to zero-carbon solutions.
A scenario without electrification was modeled for the Energy Master Plan, and it indicated that total final energy demand would increase, there would be increased reliance on costly biofuel and limited flexibility for further emissions reductions.
Pankaj Lal, director of the Clean Energy and Sustainability Analytics Center at Montclair State University, said that, while there may be a technology in New Jersey that he is unaware of, fossil fuels will not achieve the reductions needed to combat climate change.
“Carbon-neutral and fossil-based fuels are dichotomies,” he said. “It is like talking about clean coal. There are a lot of assumptions that go into that.
“When you condense the data too much, it will start speaking the language you want it to.”
