The Restaurants That Don’t Want to Break Up With Gas Stoves

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When the City Council of Berkeley, California, voted on a law banning gas hookups for new buildings in twenty nineteen, it passed unanimously.

That's er Dabla, Yes, Martlett, Yes, Robinson, there's so many cameras.

Yes, motion carriage.

The idea behind the landmark legislation wasn't to rip out existing gas pipes just to ensure new Berkeley buildings couldn't rely on gas for power. The city saw the law, the first of its kind in the US, as a way to limit future fossil fuel consumption.

It was really groundbreaking.

Ben Elgin is a Bloomberg Green investigative reporter who covers climate and business.

The idea is that the combustion of gas inside of homes and buildings, restaurants, et cetera, is a huge contributor to climate change in California. It's about ten percent of the state's emissions, and California is such a big emitter. That's basically the equivalent of the entire climate footprint of Hong Kong.

But the ban wasn't going to go into effect without a fight. Besides, gas companies who opposed it for obvious reasons. One industry group in particular came out swinging the California Restaurant Association.

They argued that, hey, look, our members are trained on using gas. Chefs use gas all the time. They want to see the flame in terms of being able to gauge how they're cooking.

The California Restaurant Association also argued that replacing gas with induction ranges would cost them. Induction ranges are two to

There's long been suspicions. This has been bandied about in the press since the Berkeley filing. The lawsuit was filed in twenty nineteen, people have wondered, you know, is the gas industry involved with this lawsuit? And Jock Kandy at the California Restaurant Association has dismissed these questions, but they have refused to say then, and they refuse to tell us during our own reporting on this who paid for the litigation?

Today on the show, the restaurant led fight against California Gas bands and what Ben's reporting tells us about who is really funding it, Plus what this legal battle means for the one hundred plus other localities all over the US who have tried to follow Berkeley's lead. This is the big take from Bloomberg News. I'm Sarah there. In California, gas is king. The state's homes and businesses are more reliant on gas power than any other state in the country.

The reason why I say baby step is they were merely focused on stopping the expansion of gas. Right now, the gas industry in the US, they add about one new customer to the grid every minute, and of course this is making the climate problem that we'll have to dig out of even bigger. And so what Berkeley was trying to do is say, OK, let's just stop digging the hole deeper.

But to the California Restaurant Association, also known as the CRA, Berkeley's law seemed to pose a threat to their members. As an industry group, their stated mission is clear making it easier for restaurants to do business, and that often means protecting their profits.

They've been around for more than a century. Typically they'll weigh in on issues like minimum wage hikes or bands on polystyrene takeout containers, these types of things.

So in November twenty nineteen, the California Restaurant Association set their sights on this gas ban in new buildings. Along with challenging the band with a lawsuit, the CRA also started posting videos like this on their YouTube channel.

Cooks and chefs in Berkeley will have to use electric stoves instead of natural gas powered flame. Try doing three or four hundred covers a night on an electric stove. Let us know how that goes.

The CRA had several concerns with gas, like the fact that chefs are more familiar with cooking with a flame, and that transitioning to induction or electric powered appliances can be expensive.

I hauled around to these various board members to get their input on all of this, and they felt that, hey, look, we are some of the most civic minded businesses out there. We pay more than anybody to the local little leagues. We really truly care about the environment, but we have to have gas. And when I would ask about well, look this Berkeley rule, it was only going to limit

Ben also talk to restauranteurs who are not members of the CIRA about their opinions on gas, like Sammy Monsieur, a chef and the co owner of Joyce, a Southern style seafood restaurant in Los Angeles.

I've been in the restaurant industry geeesh for twenty seven years now.

Wow.

Yeah, lucky for me. I started washing dishes when I was thirteen at my parents' restaurant. Love the kitchen environment, stuck with it.

Sammy is quick to say the CIRA does not represent his interests, but he agrees that, especially for smaller restaurants, cost is a huge barrier to giving up gas in the kitchen.

You know, I'm a member of organizations that are focused on food sustainability, food justice, food activism. But this is an industry of margins, low profit percentage. So what you need to do is think about your output. Right, an electric fryer that can keep up like a gas one, it's going to cost a lot more induction from what I've seen. If you want a good one, a credible one, it's going to cost wise as much, so instead of

So there's that economic aspect. But the California Restaurant Association also came up with a legal one that Berkeley couldn't pass a ban like this because regulating appliances like stoves is the federal government's turf.

They've basically said, the federal government regulates appliances, and so what this Berkeley law basically does is in a way regulates it from a back door, if you will.

The legal battle went back and forth for years, but in twenty twenty three the CRA won, and in early twenty twenty four, the city's last ditch request for rehearing was rejected, and.

So in March they basically waved the white flag and said, Okay, we're going to back off. We're going to pull the plug on the country's first ban on on gas extension into new buildings.

After Berkeley officially pulled its ordinance, the California Restaurant Association declared that it was a quote significant triumph for chefs and restaurant urs unquote, but it was also a big triumph for the gas industry. And that's when things got interesting because there was still a big unanswered question looming over the drawn out legal case. Who paid for the

In nonprofit tax filings, they have a section where they disclose outside contractors to whom they pay one hundred thousand dollars or more in a year.

Ben knew that a firm called Reichmann Jorgensen Lehmann and Feldberg LP spearheaded the Berkeley case and fought on the restaurant group's behalf, But when he looked at cira's filings.

They have never disclosed a penny of payment to Reikman Jorgensen, which ran the Berkeley lawsuit.

But at the same time as the Berkeley court case was unfolding, at least one major gas utility was paying the firm. According to regulatory filings and reporting by the Sacramento b so cow Gas, the nation's largest gas utility, paid Reikmann jorgan In more than four million dollars between twenty twenty and twenty twenty two. When asked about it by state regulators, so Cal Gas denied it was for challenging the Berkeley ban.

They say it was not for the California Restaurant Association suit in Berkeley. They say it was for exploring various legal matters, including federal preemption of local laws, which is of course at the crux of this Berkeley case.

So Ben started digging and he listened to a recording of a private meeting that started to offer some answers.

All right, thanks everyone, we're going to get started here with the fireside chat.

So after the break, what Ben heard in the recording of that private meeting and what it may mean for the future of gas regulation around the country.

So there was a board meeting of the National Propane Gas Association and this took place in February in Monterey, California.

Bangs, everyone, and to get started here with fireside chat.

So I think I know pretty much everyone in the room.

For anyone who don't know me, I'm Steve Minsky.

I'm the president and CEO of the National Propane Gas Association, and it is my absolute pleasure today here to welcome Sarah Jorgans.

Sarah Jorgensen is a founding partner at the firm that led the opposition against the Berkeley ban on gas hookups and new buildings. She was at the National Propane Gas Association board meeting to talk about legal strategies for cases like.

These, and so during it, somebody asked, what is a what is a lawsuit? Like this cost. What does a legal challenge cost? And Steve Kaminski, who runs the National Propane Gas Association, first took that answer. He said, look, it's a roughly three hundred to four hundred thousand dollars and another couple of hundred thousand dollars for an appeal.

And then Sarah Jorgensen chimed in.

And I can say that with a word, we spent more than that Apparrely.

It was a blink and you miss it moment. Jurgensen wasn't saying who paid her firm for their work in Berkeley, but what she was saying was that they had spent more than four hundred thousand dollars, maybe even half a million dollars for the fight. And remember, because the California Restaurant Association is a nonprofit, it has to disclose any payments it's made over one hundred thousand dollars to outside

It felt very meaningful. At the same time, it didn't answer the question clearly of who is paying this legal tab? Is it the gas industry, isn't somebody else? And so the fact that they're not disclosing it. We know the cost was significantly hired. Someone else is paying the legal bills here.

The Public Advocate's Office, an independent watchdog for California's utility regulator, said in a filing last year, quote, it strains credibility to suggest that the utility did not fund research that supported the California Restaurant Association's litigation unquote. Chief executive officer of CRA dismissed questions about the gas industry funding the legal challenge when he was asked by kqed about this back in twenty.

Nineteen, she said, odds like looking for monsters under the bed, but they have refused to say then, and they refused to tell us during our own reporting on this who paid for the litigation.

Kandi declined to be interviewed by Bloomberg and would not say who funded the suit, but in written responses to questions, he said, quote the decision to fight the illegal city ordinances was ciras alone, unquote, and that it supports California's climate goals. Ben says that even though the recording doesn't definitively answer who paid for the litigation, it does point to strong ties between the gas industry and the California

It really isn't. I mean, if restaurants were only advocating for their own use of gas, that's one thing. But these legal challenges are basically fighting for everybody's ability to use gas and new buildings. So it's a really an outsized impact. And that's what surprised me going into this. I mean, you would think of all of the opposition to climate action, all of the setbacks that have occurred,

Remarkable, and it's not just Berkeley. More than one hundred other cities, counties, and states have followed Berkeley's lead and tried to pass similar legislation, including around seventy five localities in California. And now many of those gas bands risk getting snuffed out in certain parts of the country. That risk is even greater because of where this ruling happened in a circuit court, the Ninth Circuit, so.

That means the westernmost nine states of the United States. It's sort of the rule of the land. And so they're saying anybody with this type of ordinance, California, other western states, they have to pull the plug on this.

And after the ruling, Ben says, a number of those places have already backed down.

They said, look, okay, we can't defend this. We don't want some costly lawsuit we're going to have. We regretfully, are going to have to pull the plug on this.

So it's had a chilling effect already.

Most definitely a chilling effect.

Ben says some other cities have held firm to their gas bands despite the threat of legal pushback, including big ones like San Francisco and Los Angeles. But in not recording from that Propane Gas Association meeting where Ben heard the cost of the Berkeley suit discussed, Ben learned that the industry isn't going to rest until more are rolled back.

They were saying, Okay, what are our next steps. We've won this Berkeley case, how do we wield that legal victory to get others to fall in line, and so as they were discussing it, Sarah Jorgenson discussed, Okay, we need to start with a letter writing campaign to basically ask these cities are you going to you need to enforce this, to basically get them on the record, and she mentioned that if some do not say they're going to walk this back, then we may need to file a couple of lawsuits.

Jorgensen was talking to NPGA President Steve Kaminski, who is pretty frank about the plan.

I know you've had some conversations with the restaurant folks, and we're trying to bring in state executives and the propane industry from those affected states about a strategy of basically reaching out, for lack of a better word, strong army those municipalities into following the law of their jurisdiction.

That's really the crux of this. I mean, it's not just Berkeley and a few dozen new building permits. They are really worried about these one hundred plus other cities who basically followed suit.

When asked about the remarks, Jorgensen replied in writing that any efforts to enforce the Court's decision are quote confidential client matters, and Kaminsky said in a statement that quote NPGA does not strong arm, unquote, but rather is floring whether local governments are continuing to enforce gas bands despite the outcome of the Berkeley suit, and around the country, other restaurant groups, one in Washington, d C. For example,

What I consider opening up a new restaurant all electric, Absolutely, why wouldn't I? I would want to work in some sort of a pilot situation to help figure out how we can do it together. And so it does need to happen, but it needs to happen with more people, more stakeholders, more conversation happening, more voices.

Thanks for listening to the Big Take podcast from Bloomberg News. I'm Sarah Holder. This episode was produced by Adriana Tapia. It was edited by Caitlin Kenny and Emily Buzo with help from Aaron Edwards. It was mixed by Blake Maples. It was fact checked by Jessica Beck. Naomi Shavin and Kim Gittleson are our senior producers. Our senior editor is Elizabeth Ponso. Nicole beamsterbor is our executive producer. Sage Bauman is Bloomberg's head of podcasts. Please subscribe and review The