Is ‘renewable’ natural gas really renewable?

Source: By Miranda Willson, E&E News reporter • Posted: Sunday, November 29, 2020

As natural gas faces pressure from climate advocates, one Northwestern state has embraced a decarbonization tool favored by the gas industry.

Oregon is making a push for renewable natural gas, or pure, naturally occurring methane derived from organic waste sources such as dairy farms and sewage treatment plants. Advocates say RNG could serve as a low-carbon or carbon-neutral alternative to wellhead gas for residential and commercial heating.

In July, Oregon’s Public Utilities Commission completed rulemaking to implement S.B. 98, a measure that encourages gas utilities to procure and gradually replace some natural gas with RNG. NW Natural, Oregon’s largest gas provider and a supporter of S.B. 98, says it expects to begin delivering a small amount of RNG to customers within the next year.

“Oregon is being viewed as the model,” said David Cox, director of operations at the Coalition for Renewable Natural Gas, an advocacy organization whose members include oil companies, utilities, pro-biodiesel groups and others. “When we talk to regulators and legislators across the country, the Oregon bill is the bill that they are not only asking about, but also are wanting to dive into and understand.”

While RNG has yet to be used on a large scale as a natural gas alternative, Oregon’s rule may be the most aggressive biomethane target for utilities of any state. Beginning this year, natural gas providers can swap 5% of gas with RNG under state law, and that number increases incrementally to 30% by 2045.

But the Beaver State’s pivot toward RNG has drawn criticism from some environmental groups, which say biomethane is costly, impractical and not as clean as it sounds, embodying the national debate about the future of gas as states try to reduce emissions in buildings.

Critics say RNG is being promoted by gas utilities to prolong the life of natural gas, rather than phase out the carbon-emitting gas altogether and make buildings all-electric, as some environmentalists would prefer.

Analysts say the gas alternative does have the potential to improve long-term natural gas outlooks. Oregon’s RNG support, for example, could provide “incremental growth opportunities” for the gas industry in the state, according to a September natural gas analysis by Moody’s Investor Relations.

“RNG overall can be a way to increase the outlook for pipeline systems and maintain their relevance as our economy and society move to a lower-carbon future,” said Jade Patterson, natural gas analyst at BloombergNEF. “Without it, it makes it looks like we’ll cast [natural gas] off sooner than with it.”

Oregon policymakers see RNG as one of many necessary tools for reducing greenhouse gas emissions, said Rebecca Smith, senior energy policy analyst at the Oregon Department of Energy. The state’s support for renewable gas, however, doesn’t mean officials have ruled out other gas-heating alternatives, such as all-electric buildings, she said.

“[NW Natural], as a large stakeholder in Oregon, is suggesting this is one way to go, but I would not say that Oregon has made policy that indicates a preference for either approach,” Smith said.

In addition to RNG, S.B. 98 permits utilities to invest in green hydrogen and blend it incrementally with gas. Green hydrogen — which is produced by splitting water molecules in a process powered by carbon-free electricity — could eventually serve as another fossil gas alternative for NW Natural, said Anna Chittum, director of renewable resources at the utility company.

The benefit of RNG is that it’s interchangeable with natural gas, she said. In contrast, blending hydrogen with gas to heat homes and businesses could require retrofits to the grid, and some experts caution that hydrogen could increase the risk of ignition in pipes.

“[Hydrogen] is definitely behind RNG in terms of the timing of when it will physically be in our system,” Chittum said.

RNG could potentially serve as a “bridge” to green hydrogen in Oregon or elsewhere, as it’s already being produced, Patterson said.

“RNG is sort of what they’re turning to as a quick win,” Patterson said.

A climate problem?

Skeptics, however, say there isn’t enough renewable gas available for it to be a meaningful, long-term solution for the climate. Oregon’s target of 30% RNG by 2045 is a far cry from the net-zero emissions goals favored by climate advocates and experts, said Angus Duncan, Pacific Northwest consultant at the Natural Resources Defense Council.

“This is a good thing to do in specific circumstances,” Duncan said. “It’s certainly better than simply venting the gas and flaring the gas, but it’s not nearly at a level where it becomes a reasonable fuel for widespread use.”

NRDC estimates that biogas and synthetic gas — another form of methane produced by alternative means — could only replace about 3% to 7% of today’s gas use.

RNG also still has the potential to leak into the environment, environmentalists say, and it’s costly to produce. A 2019 report from the American Gas Foundation and the consulting firm ICF International Inc. found that RNG currently costs more than twice as much as natural gas.

Oregon’s measure sets a cap on how much gas utilities can pass those costs on to ratepayers, and some factors may partially negate the high price of RNG, Chittum said.

“RNG that goes onto our system is replacing gas we’d otherwise buy and have to transport from further away gas basins, so customers don’t have to pay for long transport fees,” she said.

While RNG is more expensive than natural gas and not plentiful enough to fill the entire gas system, it represents one of many tools for decarbonizing emissions sources that are challenging to electrify, said Cox of the RNG Coalition. And Oregon isn’t the only state to see its potential: Lawmakers in Colorado, Massachusetts, California and Missouri are interested in RNG and in passing policies that could support it, Cox said.

For those states and others that see potential in biomethane, Oregon’s new policy offers a helpful and practical path forward, he said.

“We’re talking about using a sustainable resource in place of a fossil fuel. I think that’s a beneficial contribution to decarbonization,” Cox said.

“There is this concept that one size will fit all for all end-use applications, all energy sources, all fuels,” he continued. “The reality is, it’s a bit far-fetched.”