SoCalGas Plans to Decarbonize the Pipeline—Part Two

Please demystify for our readers what the energy process “decarbonizing the pipeline” involves.

George Minter: We're talking about lowering the carbon content of gas supply. People say natural gas is a dirty fossil fuel and we've got to get rid of it. But natural gas is just methane. Methane can be fossil, renewable, or synthetic.

We should think of gas supply like we used to think of our electric supply. 30 years ago, our electric supply was predominately fossil. We said that we wanted it to be renewable, so we developed solar electric generating facilities and wind-power plants. We decarbonized our electric supply portfolio.

We need to ask how we can decarbonize our gas supply portfolio. How can non-fossil resources provide gaseous fuel for high-efficiency uses, for heat processes—space and water heating, as well as commercial thermal applications? We’re going to continue to use gaseous fuels for a long, long time. How do we decarbonize it?

You go from geologic gas to biologic gas with bio-methane. There is a lot of study being done today about what our biological resource base is and what our opportunity is here. We're looking in California at the potential to displace 20 percent of the natural gas in our pipeline today with existing biological resources—the waste stream of human civilization. That includes wastewater plants, landfills, dairy waste, ag. waste, woodland waste, and diverted organic waste such as fats, oils, and greases. This can all be utilized as biomethane feedstock, that can go into the pipeline, and be utilized as essentially zero-carbon gas. There’s a purpose-grown crop pathway that has great potential—another 20 percent. Studies suggest we have enough non-arable, non-agricultural land with non-potable water, including saline or brine water, to produce switch grasses and algae—producing biomethane that could displace another 20 percent of our pipeline gas. That’s effectively 40 percent of our pipeline gas supply no longer fossil, but renewable. We call this renewable natural gas or biomethane.

How have California energy and environmental regulators, specifically CARB, responded to The Gas Company’s championing of a decarbonized pipeline?

Regulators are mixed. There is tremendous support for harnessing biomethane resources at the CARB. The CARB is in a quandary. They've realized that methane is a real problem in terms of climate change, since it has a higher global warming potential than carbon dioxide.

In popular press everybody is focused on the natural gas system having leaks. The natural gas system—from production, to pipeline, to distribution, to the person's home—represents less than 2 percent of the nation's GHG problem. 98 percent is outside the system. So the focus on the gas system is a little misplaced.

Now, that’s all GHGs. The natural gas system supply chain is 20-23 percent of the methane problem nationally, but we suspect a lot less here in California. There is definitely a lot that needs to be done in natural gas production, transmission, and distribution to reduce methane emissions. But the bigger volumes are coming from our waste stream, agriculture, dairies. What are we going to do about that? That’s a big issue right now for the CARB. How are we going to capture that methane? There is a convergence of thinking that we ought to capture it and put it into the pipeline. This is a great opportunity.

How have other state regulatory agencies, such as the CEC, reacted?

The CEC is focused on this as a potential new renewable power generating resource and as such, an opportunity to grow the RPS. The State of California is focused on increasing its renewable portfolio standard. Over time, we expect to go from 33-40 percent maybe to 50 percent. Renewable gas in a power plant is a renewable resource under the RPS.

The PUC regulates natural gas pipelines and they have standards for what goes into those pipelines—heat content standards, BTU values. The utility can only take gas that meets that standard. They also have constituent standards—what else is allowed in that natural gas stream. Those are two challenges right now, since a lot of biogas doesn't meet the PUC’s standards. How do we change that and get them into the pipeline? PUC is now in the Order Instituting Rulemaking (OIR) phase. We expect to see a rulemaking that will establish the rules and procedures allowing biogas to come into the distribution system. It'll set the heat content standard and the constituent standard.

Several bills in recent years looked at this issue. One from Mike Gatto required the Office of Environmental Hazardous Assessment to identify problems with biomass and identify remediation. The thinking is that we'll now have a set of rules supported by the PUC, CEC, the CARB, all the environmental agencies in the state to move that gas into the pipeline system.

Elaborate on the challenges of decarbonizing the pipelines.

There is a challenge: How do we get non-pipeline gas so it is the right quality to get into the pipeline? SoCalGas has developed a PUC-approved biogas conditioning service that we now offer to get it there. We are now out working with landfill operators and dairies to condition their gas and get it into the pipeline. We’re looking at offering LNG services; and at hydrogen production services. We also have a service tariff to provide CNG to the transportation marketplace. We also just filed a Distributed Energy Services tariff to help customers site and operate fuel cells and combined heat and power systems.

Last January, you were an expert VX2014 panelist addressing: “Natural Gas in an Era of Energy Abundance: To Frack or Not to Frack—Is that the Question?” Could you speak to status of fracking policy in California today; what SoCalGas’s interests are; and, given your experience in public affairs, how this policy battle will end?

There is a short-term, a mid-term, and a long-term view. In the very, very long-term, I don’t think the battle will ever end.

The company’s view is that we need to encourage responsible recovery procedures. I think the industry is becoming more and more responsible with respect to hydraulic fracturing. It is not a new technology, although people seem to think so. We’ve been using hydraulic fracturing in oil and gas fields for 40-50 years. What’s new is the ability to reach deep and far into the resource base through horizontal drilling, and the ability to extract from very tight formations, such as the shale formations. It has opened up a tremendous opportunity for gas supply.

People argue that we need to worry about water contamination, groundwater supplies, communities, and workers. We do! We should protect the workers, we should protect communities, and water supply, and we should have stringent regulations that require responsible production procedures. We’ve done this in the past with traditional methods, and we’re now doing it with what used to be called the non-traditional methods—which, frankly, are becoming traditional methods today. There is no reason why we shouldn’t ensure clean water supplies and protect them from fluids used in fracking.

The reality, though, is that all of our extraction industries have the same challenges. Which is more environmentally responsible: puncturing the earth 40 or 50 times in a traditional recovery method, versus one time with horizontal drilling? Which is more impactful to the environment? Compare that to mountain topping or strip mining for coal, and all the materials that go into the rivers, streams, and waste-water systems with that extractive energy industry. Which is more problematic? Mineral and metals extraction has some of the same problems. The problems that we’re seeing with fracking we see in all of the extractive industries.

Over the long term, what’s happened? We’re awash in gas in this country. We’re going to replace all of those Midwestern coal plants with natural-gas powered plants. We’re going to drive the carbon content of electric generation way down. Low-priced natural gas is creating new industries and new manufacturing in the Southeastern US. Sempra is involved in moving gas there to fuel the new manufacturing economy. This country was losing manufacturing jobs and now they’re coming back to the South from abroad. This is a good thing.

People can say, “It’s cheap labor states.” As unions organize, that will all change over time. This is a good thing for this country and a good thing for the world. That’s short and mid-term what I just described.

Looking long-term, we’re going to decarbonize the natural-gas pipeline system in places where there are carbon challenges. Today in California, this is what we face. We do not face that in other states.

Where is the market? It’s going to be in California for a long time.