Natural Gas Sector Presses CARB To Further Ease GHG Scores Under LCFS

Source: By Curt Barry, Inside EPA • Posted: Wednesday, March 4, 2015

SACRAMENTO, CA — Natural gas industry representatives will be pressing California Air Resources Board (CARB) officials over the coming months to further reduce carbon intensity levels for various forms of the fuel under pending amendments to the state’s low-carbon fuel standard (LCFS), arguing CARB is using flawed modeling in its calculations and that even the smallest change in the levels can negatively impact potential market share.

“There are several major issues associated with the current . . . model’s natural gas pathways that remain unresolved to our satisfaction,” representatives of the California Natural Gas Vehicle Coalition, NGVAmerica and Coalition for Renewable Natural Gas said in a recent letter to CARB Executive Officer Richard Corey.

“These unsettled technical issues each relate to the critical parameter of fugitive methane emissions (both upstream and downstream),” the letter adds.

And several natural gas industry representatives and utility officials reiterated these concerns during CARB’s Feb. 19 meeting.

CARB is tentatively scheduled in July to finalize a number of amendments to the LCFS, including the adoption of new carbon intensity factors for numerous fuel blends. The board passed a resolution at its Feb. 19 meeting to advance the rule changes, which were summarized by board staff.

The state’s LCFS requires fuel providers to reduce the carbon intensity of gasoline and diesel 10 percent by the end of 2020, compared with a 2010 baseline. Companies can comply by blending cleaner fuels such as ethanol and biodiesel into gasoline and diesel and by purchasing credits generated by utilities and other companies that provide natural gas for natural gas vehicles, electricity for electric vehicles, or hydrogen for hydrogen fuel-cell vehicles.

Along with a number of other regulatory amendments, CARB is proposing to update the carbon intensity levels of fuels based on an updated version of its “CA-GREET” emissions estimation model. The new “CA-GREET 2.0” model is based on the 2013 GREET 1 model developed by Argonne National Laboratory in Illinois.

One of the most significant impacts of the new model is that it shows a substantial rise in GHG emissions from natural gas compared with what is assumed under the current carbon intensity levels under the LCFS, including compressed natural gas (CNG) and liquefied natural gas (LNG) from conventional extraction and landfill capture.

According to CARB staff, the primary reasons for the jump in GHG emissions from natural gas is because of newly updated information showing higher methane leakage rates from natural gas operations, such as pipelines and extraction and processing operations at landfills, in addition to higher emission readings from vehicle tailpipes.

Last summer, CARB released a preliminary regulatory proposal estimating that the carbon intensity of CNG from landfills is 33.52 grams of carbon dioxide (CO2)-equivalent emissions per megajoule (g/MJ), nearly triple the current score under the LCFS of 11.26 for the same fuel. For LNG from landfills, CARB’s new estimate was 54.5 g/MJ, up from the current 26.31 g/MJ score.

For CNG from North American fossil sources, CARB proposed last summer a 78.37 g/MJ score; the current score under the regulation for the same gas is 68.01 g/MJ. And for LNG from North American fossil sources, CARB estimated the accurate score was 96.92 g/MJ instead of the current 83.13 g/MJ.

Relaxed Values

Since the preliminary proposal last summer, however, CARB staff has relaxed some of the draft carbon intensity scores for the fuels, according to the final regulatory amendment plan released last month. Industry groups claim that CARB staff has verbally committed to using a combined carbon intensity value of 70 g/mj for conventional natural gas, including fossil CNG and LNG, and a carbon intensity range of 15-25 for renewable natural gas (RNG).

While CARB intends to adopt these new levels in the regulatory changes slated for approval in July, they would not take effect until 2016; fuel providers would likely face a future “sunset date” on the use of the existing carbon intensity levels as part of the regulatory changes, CARB staff said last year.

But natural gas industry representatives are still adamant that the new draft scores are too high and are pressing for meetings between now and the July board meeting to convince CARB staff to lower them.

In addition to challenging the methods CARB is using to estimate methane emissions from vehicle tailpipes and various gas-production and distribution facilities, the natural gas industry groups object to CARB assuming there is a 1 percent methane leakage rate at landfill gas facilities that produce renewable natural gas.

The group argues that because of EPA and California rules, the methane leakage rate at RNG production facilities located at any North American landfill is “effectively zero.” As a result, the groups say they see “no credible or defensible basis for staff’s position that a leakage rate of one percent must be assumed.”

Regarding methane leakage from conventional natural gas processes and transport, the groups charge that CARB is wrongly using national data that do not reflect lower emissions from California facilities or locations that serve the state.

The industry groups say in the letter that CARB staff has made several commitments in the coming months to conduct further discussions to better quantify lifecycle GHG emissions from the fuels; understand and incorporate new research results as they become available over the next 12 months; continue to engage with all stakeholders on CA- GREET 2.0, “right up” until the board meeting in July; and incorporate any further updates to CA-GREET 2.0 through CARB’s normal 15-day change rulemaking process.

Nevertheless, they remain doubtful that CARB staff will stand by their commitments, and are seeking a more formal process to meet with officials, according to the letter. “We believe it is essential that CARB implements an improved process to obtain and document public input, as well as provide a timely and iterative approach to reviewing and integrating the latest technical information,” the letter says. “This should include establishment of an CARB-industry working group that can convene several times within the period between the Feb. 19-20 and July 23-24 board meetings. This will help ensure that legitimate stakeholder concerns and questions are addressed, while also improving the pipeline of useful technical inputs from industry to CARB staff.”

While the groups have been “repeatedly assured by CARB staff that ‘nothing is cast in stone’ for CA-GREET 2.0,” and that changes can routinely be made by CARB right up until the board considers adoption in July 2015, “much of the critical details remain a mystery,” the letter asserts. “For example, we have been told by staff that after the LCFS issue comes before the board at its February 2015 [meeting], ‘the public record will be closed’ until the LCFS program is again heard at the July 2015 board meeting.”

As a result, “under a worst-case scenario, our industry assumes that: 1) no formal meetings could take place between the February and July board meetings, 2) CARB staff would not continue to meet with our industry on these issues, 3) no additional data could be considered, and 4) no public testimony could be heard at the July board meeting.”

If this is the case, “we have very significant concerns that CARB’s process will not be able to accommodate further industry inputs needed for important CA-GREET 2.0 model modifications,” the industry groups add.

A CARB spokesman says that “the LCFS does not discriminate against different types of fuel . . . changes in carbon intensity are the result of new science, and we’re always willing to meet with industry to hear their concerns.”