A major fossil fuel group has a plan to sue Denver over its climate-minded building policies

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A bunch of downtown Denver skyscrapers on a sunny, blue-sky day.
Kevin J. Beaty/Denverite
Downtown Denver on a sunny day. May 8, 2024.

After wildfire smoke and smog smothered Denver in the summer of 2021, the city approved an ambitious plan to tackle its largest source of planet-warming pollution: big buildings.

Local advocates and climate officials knew the Mile High City wouldn’t reach its lofty climate targets without an aggressive plan for its office towers, businesses and apartment blocks, especially since those types of buildings account for nearly half of the city’s greenhouse gas emissions.

To help fix the problem, Denver updated its building codes and passed ordinances to reduce natural gas usage. The codes banned gas furnaces and water heaters in new commercial and multifamily buildings starting in 2024. In existing buildings, the rules required property owners to install electric systems whenever replacing gas equipment in 2025. While those regulations don’t prohibit natural gas equipment, any remaining gas-powered furnaces or boilers can only support a primary electric heating system. 

Denver’s landmark climate policy is now threatened by legal challenges. 

A coalition of landlords and building operators fired the first salvo in April 2024, filing a lawsuit arguing that part of Denver’s building rules ran afoul of a federal energy efficiency law and placed an unfair financial burden on an already beleaguered real estate industry.

Another potential lawsuit could soon join the fight to dismantle Denver’s climate-minded building policies. A powerful fossil fuel trade group, the National Propane Gas Association, plans to file a separate legal challenge, which could drag the city into a well-funded national effort to stop local governments from limiting gas in buildings.

A legal strategy laid out in a leaked document

A meeting agenda obtained by CPR News shows the National Propane Gas Association — an organization representing propane manufacturers, distributors and retailers — recently considered setting aside $20,000 to challenge Denver’s codes in federal court.

While it’s unclear if the organization approved the funding, the agenda for the Zoom meeting held on May 30 notes the association’s Colorado chapter had already put $7,500 toward the potential lawsuit. The document further reveals the group has retained Baker Botts, a corporate law firm based in Houston, to lead the potential legal challenge. 

Neither the law firm nor the local chapter of the propane association responded to CPR News’ requests for comment. In an emailed statement, a spokesperson for the propane group said the organization does not comment on “active, pending or potential lawsuits.”

But the document suggests the organization has weighed the benefits of suing to block Denver’s climate-minded building codes. In a letter to the executive committee accompanying the meeting agenda, Jacob Peterson, the National Propane Gas Association’s director of state advocacy and affairs, wrote that Colorado’s recent focus on all-electric buildings has turned it “into a problematic state from a marketplace competitiveness standpoint.”

Downtown Denver skyscrapers stretch into a cloudy sky.
Kevin J. Beaty/Denverite
A view of the building that houses the Colorado Department of Labor downtown. June 14, 2024.

While city data show none of Denver’s commercial or multi-family buildings rely on propane, Peterson noted that other Colorado communities have pursued “anti-gas policies” over the last few years. A sustainability advisory board in Golden, for example, recently recommended an all-electric building code for new construction. 

“If this Denver code goes unchallenged and is allowed to stand, there is concern that other Colorado communities, including areas where our core customers reside, will follow suit,” Peterson wrote to the executive committee. 

Denver is far from the only Colorado community trying to use local rules to encourage residents to switch from natural gas to all-electric heat pumps and induction stoves. In 2022, Crested Butte became the first Colorado municipality to ban natural gas in new construction. A recently finalized code in Boulder also requires all-electric new buildings starting in December 2024, though it includes narrow exceptions for gas hookups in commercial kitchens and laboratories. 

Across the country, more than 140 state and local governments have approved measures encouraging residents to ditch gas, according to an analysis by the Building Decarbonization Coalition, a pro-electrification advocacy group. 

In his letter, Peterson told the National Propane Gas Association’s executive committee he expects the trade group will be a plaintiff in the potential Denver lawsuit — but neither the letter nor the meeting agenda indicate when lawyers might file it.

The potential lawsuit would expand on a successful case in California.

The meeting agenda reveals the explicit aim of a potential lawsuit: If filed, the overall goal is to replicate a legal victory in California, which forced the city of Berkeley to stop enforcing its first-in-the-nation ban on natural gas pipelines in new construction earlier this year.

Berekely’s 2019 ordinance marked the opening shot in a battle for all-electric buildings. By limiting access to natural gas, the city’s leaders and climate advocates hoped to take full advantage of a grid increasingly powered by zero-carbon resources like wind and solar.

The decision to scrap the law followed a successful lawsuit from the California Restaurant Association. A three-judge panel on the U.S. Court of Appeals for the Ninth Circuit agreed that the city’s ordinance violated a federal law giving the U.S. Department of Energy sole authority to set efficiency standards for appliances.

Restaurants Sue Berkeley
Thomas Kienzle/AP File Photo
In this file photo, a gas-lit flame burns on a natural gas stove. A successful lawsuit from the California Restaurant Association forced the city of Berkeley to stop enforcing its first-in-the-nation ban on natural gas pipelines in new construction.

The National Propane Gas Association’s potential lawsuit would rely on the same argument to challenge Denver’s climate-minded building codes, according to the agenda obtained by CPR News. If a lawsuit is filed and prevails, the court ruling could block similar rules across the Tenth Circuit, which includes Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming. 

The propane group has backed similar lawsuits in other parts of the country. In October 2023, it sued New York City and New York state to challenge laws banning fossil fuels in new buildings starting at the end of 2025. Recent reporting by The Boston Globe also suggests the propane association’s New England affiliate is considering a lawsuit against Massachusetts over its pro-electrification policies. 

If any of those lawsuits fail, the propane industry and its allies think it could have a counterintuitive upside: A split between federal court circuits could attract the attention of the majority-conservative U.S. Supreme Court. In a recording obtained by The Boston Globe, a lawyer representing the propane association noted the nation’s highest court could intervene to settle any disagreement, potentially imposing a nationwide prohibition on local gas bans. 

Meanwhile, environmental advocates doubt the legal reasoning behind the lawsuits. The cases rely on the Energy Policy and Conservation Act, a federal law born from the 1970s oil crisis giving the U.S. Department of Energy sole authority to set appliance efficiency standards. 

Amy Turner, the director of the Cities Climate Law Initiative at Columbia University’s Sabin Center for Climate Change Law, said cities aren’t trying to regulate the companies making furnaces or water heaters, but rather shift homes and offices away from a type of energy use driving global warming. 

“What's happening is that very well-funded, very well-organized interest groups are taking this law that had a particular purpose — helping protect manufacturers from a patchwork of technical requirements for their products — and using that to push back on state and local climate laws,” Turner said.

The National Propane Gas Association could have some powerful allies behind its lawsuit against Denver

In the initial lawsuit filed by Colorado landlords and property owners, the plaintiffs argue federal law invalidates Colorado’s and Denver’s building performance standards, which cap the amount of energy used in existing large buildings. 

The documents obtained by CPR News suggest the propane industry’s potential lawsuit would rely on the same argument to take on a slightly different piece of the city’s green building policies. Rather than challenging Denver’s building performance standards, it would ask a court to throw out the city’s building codes, which require a shift to electric systems in commercial and multifamily buildings in new construction or during a major renovation project.

A view looking up at a very tall building; the blue sky is reflected in its windows.
Kevin J. Beaty/Denverite
A view of the building that houses the Colorado Department of Labor downtown. June 14, 2024.

There’s also no indication the initial lawsuit is linked to the National Propane Gas Association. Andrew Hamrick, a general counsel for the Apartment Association of Metro Denver assisting with the first legal challenge, told CPR News he wasn’t aware of a second potential lawsuit planned by the propane industry.

That doesn’t mean the propane industry lacks allies. The meeting agenda obtained by CPR News suggests the National Association of Home Builders and the American Gas Association are part of a coalition backing the propane industry’s potential lawsuit. The document, however, doesn’t indicate whether either trade group has pledged any financial support. 

A spokesperson for the American Gas Association told CPR News the group is “not engaged in a lawsuit seeking to invalidate any Denver building codes and has not provided financial support.” A media representative for the National Association of Home Builders declined to comment. 

Both groups, however, have a track record of trying to deter climate action and public health initiatives. The home builders group has used its political muscle to block other state and local rules designed to improve energy efficiency and reduce the climate footprint of new homes, including changes to building codes to require wiring to accommodate electric vehicle chargers.

A recent NPR investigation found the American Gas Association spent decades casting doubt on scientific studies showing gas stoves threaten indoor air pollution. More recently, the trade group has successfully lobbied for state laws to prohibit towns and cities from restricting gas in new buildings. Those prohibitions are now in place in nearly half of all U.S. states, according to an analysis published by S&P Global last year. 

Despite high-profile opposition to its climate plans, a spokesperson for Denver Mayor Mike Johnston, who took office last year, insists the city is committed to following through with its buildings policy. Denver attorneys on June 24 also filed a motion to dismiss to the suit from landlords and property owners on Monday, arguing it has clear authority under federal law to move buildings away from fossil fuels.

“We’ll continue to work closely with the development community to make sure everyone has the resources they need to meet these goals and succeed,” said Jordan Fuja, a spokesperson for the mayor’s office.