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California Bill Seeks to Advance Renewable NatGas Use

A bill in the California legislature (AB 2773) that would open up the wider use of renewable natural gas (RNG) in alternative fuel vehicles moved out of its first committee in the lower house Assembly earlier this month.

The bill would eliminate current roadblocks to transporting RNG in natural gas pipelines.

RNG, or biomethane, can allow for a cleaner version of compressed natural gas (CNG) or liquefied natural gas (LNG) to be used increasingly by fleet operators (see Daily GPI, March 30), but most RNG produced in California has to be used onsite for electric generation because of existing restrictions on the co-mingling of biomethane with natural gas in the state's pipeline infrastructure. AB 2273 seeks to change that.

The legislation would expand the use of California-produced RNG, which currently must be turned into CNG or LNG at the production source for use in transportation. "If you're going to get it to the wider market, you need to be able to use the pipeline system," said David Cox, head of the Sacramento-based North American RNG Coalition. "We don't have to build new pipelines, we just need access to the existing ones."

AB 2773 would authorize the California Public Utilities Commission (CPUC) to promote in-state development of RNG by adjusting natural gas requirements for pipeline injections, such as reducing the minimum heating value requirement and siloxane (microscopic sand-like particles) standard. California is the only state that doesn't allow RNG access to existing gas pipelines.

"California is the largest untapped resource for RNG," Cox said. "California is in line to receive some substantial environmental benefits [from the legislation]."

The proposed legislation, which passed out of a policy committee unanimously (14-0) earlier this month, requires the CPUC to set heating value and impurity (siloxane) requirements for the biomethane allowed into the gas pipeline system. It would allow the CPUC to consider lowering the required heating value level from 990 Btu to 970 Btu, for example.

Landfill gas has historically been kept out of the state's gas pipeline network, but a bill (AB 1900) passed in 2012 authorized the CPUC to write rules to permit the co-mingling, and more than three years later the regulators recently completed writing the new rules to permit the co-mingling, but no landfill gas is yet to flow in the intrastate pipelines, according to Cox, whose 72-member coalition has expanded from a state focus to cover all of North America.

"The siloxane requirement adopted by the CPUC is technically infeasible, and the minimum heating value threshold withheld in the CPUC decision is extremely expensive," said Cox, noting the RNG coalition has asked the state regulators to modify their decision, but if they don't, AB 2773 would mandate a fix.

As a result, whatever landfill gas flows in California's gas infrastructure now has its origins out of state; none of the landfill supplies produced in the state have yet to make it into the gas pipeline system.

Playing a role in the RNG advocacy group's rapid growth is something called "obligated parties" among the major fossil fuel producers that are mandated to get involved under the national Renewable Fuel Use Standard, so companies like BP and Royal Dutch Shell have units that are members of the five-year-old coalition. "They're responsible for transporting substantial volumes of RNG," Cox said.

The renewable standard is part of the federal Clean Air Act (CAA) and mandates that the big oil companies have a prescribed percentage of their annual fuel volumes in renewable fuel. Under the CAA, they can procure the fuel directly or buy a renewable identification number assigned to a volume of renewable fuels, similar to carbon offset programs.

"BP and Shell have decided they are going to play a role in the production and distribution of RNG because of their market positions," Cox said. "The majority of the RNG used in California right now is imported into the state."

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