SoCalGas CEO Bret Lane on How Renewable Natural Gas Advances California's Climate Agenda

SoCalGas recently unveiled plans to become the “cleanest natural gas utility in North America” and advance California’s aggressive climate goals using renewable natural gas. Comment on this announcement.

 Bret Lane: We are proud of our bold and ambitious goal of becoming the cleanest natural gas utility in North America. As one of our strategies, we’ve set a target of serving 20 percent renewable natural gas to our customers by 2030. Between dairy, landfills, wastewater, and even waste from deforestation, this target is definitely achievable. And to measure our progress along the way, I’ve set an internal objective of achieving 5 percent by 2022.

We are the largest gas utility in North America and one of the largest in the world, with more than 100,000 miles of distribution pipe. We have a very robust program focused on enhancing the integrity and safety of our pipeline system, as well as further tightening the system to reduce methane emissions. In 1993, we became the first utility to sign onto EPA’s Natural Gas STAR program, which was one of the first efforts at voluntary methane emissions reductions in the industry. Reducing methane emissions has been a part of our operations for over 20 years.

We also are proud of the work we’ve been doing for decades related to energy efficiency. One of our research labs, for example, works to help certify energy-efficient gas appliances. And energy efficiency played a major role in the decline in our greenhouse gas emissions that enabled us to reach our 2020 goals ahead of schedule.

We will continue all of these efforts, of course. But we wanted to do more—beginning with our commitment to renewable natural gas.

As we move ahead, it’s important to ensure that whatever we do in California is scalable and adaptable by others. Climate change is a global issue; a solution that only works in California will not address it. The question is: What can we do that others can replicate? To that end, we’re working closely with colleagues all over the world—in Canada, France, Germany, the UK, Japan, and Korea. Neither SoCalGas nor California has all the answers. We can learn from one another as we all pursue different paths to decarbonizing our energy portfolios.

As California moves to lessen its reliance on natural gas, speak to the all-of-the-above energy agendas in place in Canada, Europe, and Japan.

Companies around the world understand that cleaning up our energy system requires an all-of-the-above approach. We need to look at how different forms of energy are used in different sectors, and find solutions to reduce the carbon content in each of those sectors.

A good example is transportation, which is one of the largest contributors to greenhouse gas emissions in California and the United States. When Governor Brown and the Legislature mandated that the state boost adoption of zero-emission vehicles, many people immediately turned to battery-electric vehicles as the only solution. But there are other good options, and other countries have adopted them. Auto manufactures in Asia, for example, are focused on hydrogen fuel cells as another pathway.

We believe that you can achieve greater customer adoption—which is ultimately what has to happen—if you present choices for cars and appliances. Additionally, you have to keep affordability in mind.

One place to look is Germany. Germany went down a pathway similar to the one California is on today—prioritizing electrification and renewable electricity—and they ran into serious issues. They’re actually using more coal today than when they started electrification. Now they’re taking a step back, along with France and others in Europe, and looking again at the value of renewable natural gas and hydrogen.

Germany suffers some of the highest electricity rates in the world; California has some of the highest electric rates in the United States. There has to be a balance: How do we address our climate goals in a way that is affordable to most people?

What steps need to be taken, both by the company and the regulatory agencies of California, to allow you to achieve your goals? 

It’s important to understand that renewable natural gas is not a science problem. The science is very well understood. It’s a matter of driving costs down and creating a market. Just like the solar industry a few decades ago, this industry needs help getting started, and there needs to be legislative action on that front.

We are currently working with state legislators to create a Renewable Gas Standard, similar to the Renewable Portfolio Standard, which really helped kickstart the renewable electricity market in California. A Renewable Gas Standard would require the procurement of renewable natural gas from production points within and outside of California. This would create certainty of demand, which would enable financing of production projects to fulfill demand, which would drive the renewable gas market forward.

We recently received approval from the California Public Utilities Commission to procure renewable natural gas for our natural gas vehicle fueling stations. That’s a small step, but an important first step. Now, we’ve taken a second step: filed with the Public Utilities Commission for our Green Tariff program, which would allow customers to designate a preference for renewable natural gas—but they would incur a higher cost when we procure it for them. We need to offer incentives for using renewable natural gas in homes and businesses, as we do now in the transportation sector. We also need to look at making our gas supply more renewable, as we did for electricity.

One important step is to utilize our universities. California has some of the world’s greatest campuses and greatest minds. We should encourage them to continue researching how to drive efficiency up and costs down. UC Riverside, for example, has established an RNG Research Center and study area on campus. UC Irvine is doing phenomenal work on the potential of hydrogen storage and fuel cells. The state should incentivize our universities to continue this push, rather than looking only at how to electrify everything with batteries, for example.

Batteries have an important role to play, but—particularly lithium-ion—they don’t play across all sectors, nor do they meet all the requirements. They have limitations, particularly large-scale storage and duration. California is entering an era in which we will need large-scale and long-term energy storage. UCI’s work to produce electrolytic hydrogen from excess renewable electric generation as a form of renewable energy storage is the kind of work that can make a difference for California.

There is a strong policy movement in California to decarbonize the built environment—chiefly through electrification. What are the opportunities for natural gas to help achieve a zero-emission building stock?

The building sector is an important component of our 2030 goal. Studies show that powering the economy with 20 percent renewable natural gas by 2030 achieves a reduction in greenhouse gas emissions equivalent to 100 percent building electrification. It’s also much cheaper to do, and has no impact to the customer. The customer doesn’t have to change out all their appliances to electric. They don’t have to upgrade the wiring in their house. Nor do we have to figure out how to upgrade the electric distribution system to handle that incremental load.

When it comes to decarbonizing buildings, there is an achievable solution sitting right in front of us. Frankly, it’s puzzling to me that we’re so focused on electrifying buildings—at enormous cost—just to achieve reductions of less than 9 percent, when there are other avenues we could be pursuing.

Many people believe our building stock is a big problem in terms of climate-changing emissions. But the state’s inventory shows that buildings account for only 12 percent of overall GHG emissions, with only 9 percent related to use of natural gas. Electricity generation is still a much larger problem, at 16 percent of all emissions, while transportation tops the list at 41 percent. Vehicles, not buildings, are still far and away our biggest challenge.

Japan’s 2020 Olympic Games are framed as the Hydrogen Games. In 2028, Los Angeles will have the Olympics. What role will energy play and how will it be characterized in 2028, in your opinion?

We hope to play a role in continuing that clean energy tradition. We have a long relationship with the utility in Tokyo, and we’re going there this summer to talk to them about the work they’re doing. It really is amazing: The athletic villages, as well as the buses that transport the athletes, will all be powered by hydrogen fuel cells. My vision is to bring this back to Los Angeles. If we are to achieve California’s climate goals and position California to demonstrate to the world how this can be done everywhere, hydrogen will have to play a huge role.

Further use of distributed energy is also part of this vision. In Japan, hydrogen fuel cells delivering distributed energy are being coupled with renewable natural gas at the Olympic venues. This is a tremendous opportunity for Los Angeles and California to showcase its commitment to achieving a net carbon reduction by keeping all ideas and technologies on the table, because electrification alone will not get us there.

And the flame? Why, a renewable gas or hydrogen flame, of course!

A recent report from the Energy Futures Initiative—led by Dr. Ernest Moniz, former U.S. Secretary of Energy—looked at what it would take for California to achieve its 2030, 2045, and 2050 climate goals. They identified 33 different workstreams that have to happen across different sectors, including transportation, building and construction, industry and manufacturing, agriculture, etc. Each may require a different form of energy and technology.

Their work shows that renewable gas and hydrogen are needed to help California meet its goals. One of its findings is the need for utilization of existing energy distribution systems, like gas pipeline systems.

The task for California is to think broadly and keep everything on the table. Electrification and electric vehicles are going to play a critical role, and more than likely, they will achieve a large percentage of our target reductions. But will they get us to 100 percent? I don’t think so. We use too much energy in too many other forms. So what additional options do we have?

Our 2045 target is 26 years away. Think back to 26 years ago. Cell phones were the size of a shoe; there was no such thing as a livestream. Given the sometimes unpredictable ways that technology develops, it’s naïve for us to rule out any future technologies from our standpoint today. We have to be open to the different pathways that might take us where we need to go. I think the opposition to natural gas excludes some robust opportunities for consumer choice and affordability.

You’ve been with the Gas Company for many years, and you’re well acquainted with how natural gas is powering economies in Europe, Japan, and Canada. Yet in California, you’re confronted with a politic that insists there is no role for natural gas going forward. How frustrating is that for you?

It’s frustrating that we’re closing our minds and potentially creating problems for California. I was here during the energy crisis of 2000 and 2001. I also know that underpinning California’s remarkable results with renewable energy is natural gas. It is gas that delivers electricity when the sun goes down, not batteries. It is gas that has enabled the grid to operate with higher and higher levels of renewable generation. And this will continue to be the case as we move to our 60 percent RPS goal in 2030 and beyond. We are not going to achieve our target emissions reductions without natural gas and renewable gas, and we need to acknowledge that.

Natural gas is going to be needed and around for decades. The California Council of Science and Technology, which is California’s equivalent of the Department of Energy’s National Labs, has looked seriously at the role of natural gas storage, concluding that we will continue to need gas storage capacity. Even the state’s scientists understand and acknowledge the value of natural gas.

Having been with SoCalGas this long, mainly in operations, I’ve seen that reliability is something that our customers expect. They don’t want to think about it. When you flip the switch, you expect your lights to come on. When you turn on the stove, you expect it to work. With many of the green energy options California is pursuing, we’re going to encounter major issues related to reliability—as well as resiliency. Gas delivers both.

After the storms that hit the Northeast and Southeast coasts, we’ve seen that where there is only one form of energy, people can be without that energy for a long time. As the risk and severity of climate disasters increase, do we really want to put all our eggs in one basket? That’s a question that, not only California, but the whole country is going to have to grapple with as we move to more forms of renewable energy. My view is that the electric and gas systems are going to become more integrated than they have ever been before, because there is such interdependency between them.

What other new or ongoing initiatives at SoCalGas would you like to highlight?

SoCalGas is participating in some marvelous work with different institutions, universities, and research groups on renewable gas and hydrogen as well as on carbon capture.

The most familiar form of this technology is carbon capture and sequestration. If you have an old, depleted oil or gas reservoir, for example, you can capture the carbon from the combustion process from industry or electric generation, and then inject it back into the ground. Some universities are also doing fascinating work to sequester carbon in plant life instead. The Salk Institute, for example, is exploring slight genetic modifications to plants to transform them into “superabsorbers” that absorb, two, four, or even 10 times as much CO2 as they do today. This is a way to use what exists today in nature to literally suck carbon out of the air, while possibly even improving the productivity of plants and crops. We need to be talking about this more, because it is a great opportunity for us from a global perspective.

Personally, I am fascinated by a new take on sequestration: utilization. Instead of storing carbon, why not use it for carbon-based products instead? This emerging field is sometimes called carbon-to-value, and its goal is to capture CO2 and then strip the carbon for use.

Carbon is a critical element for the maintenance of life. Our bodies are composed of it. But many goods are also produced from it, ranging from construction materials to pharmaceuticals—and, ironically, electric vehicle bodies and even batteries. If we could capture it from the atmosphere or combustion processes and turn it into useful products, then instead of being an enemy, it could become a tremendous benefit. There is a new future for carbon-capture technologies ahead of us.