RNG is already in use at major facilities like WM (formerly Waste Management) and the Seattle-Tacoma (SEA) Airport, which is helping the Port of Seattle halve its GHG emissions by using RNG to heat the airport and power the Port’s bus fleet. As of November 2023, there are 800 RNG facilities online, under construction or being planned in the U.S. today[3]. In Europe, RNG is part of a multi-solution approach to achieving climate goals and increasing energy independence. Denmark is a great example. Country-wide development in turning organic waste streams into a climate solution has allowed Denmark to achieve close to 40% of its total gas use in homes and businesses as RNG, with a goal of completely displacing fossil fuel use by 2030[4] .

[3] The RNG Coalition, available at: https://www.rngcoalition.com/infographic.

[4] Bioenergy Insight, Biogas takes up 40% of methane in Denmark’s natural gas grid, 2022, available at: https://www.bioenergy-news.com/news/biogas-takes-up-40-of-methane-in-denmarks-natural-gas-grid/.

50 billion cubic feet was the identified technical potential by the Oregon Department of Energy. Giving a frame of reference on what’s possible is exactly what is needed to articulate the potential for an emerging technology or supply source. 

We have repeatedly stated that to reach this potential we need both public policy support and technological improvements to reduce costs. A useful analogy is the potential for battery storage – just because there is extremely limited battery storage capacity in the U.S. today doesn’t mean there isn’t future potential.

Well over half of the natural gas used in Oregon is for power generation. However, in Oregon, under HB 2021, electric utilities have a mandated direction to move away from fossil resources, albeit with offramps associated with cost increases. With these 100% clean electricity targets in place, it is appropriate to assume that new RNG would go to direct-use gas applications.

Of the remaining gas used in Oregon, about 35% is used in the residential sector. When trying to convey how much biogas was available in Oregon, it was useful to point to the consumption of a single sector in order to help people understand the magnitude of the resource.

Importantly, during the time referenced, NW Natural fully expected the passage of cap and invest (supported in 2019 and 2020 by NW Natural). Under cap and invest, NW Natural would have held compliance responsibility for sales customers, the majority of whom were, and remain, residential; in contrast, large industrial gas users and electricity generators held their own compliance obligations.

According to the RNG Coalition, the scope of the organic waste problem is huge. The World Bank projects the total volume of solid waste to grow 69% by 2050[5]. According to the International Energy Agency, the organic feedstocks that can be used to produce sustainable RNG will grow 40% by 2040[6].

In the U.S., EPA estimates decomposing waste accounts for about a quarter of America’s methane emissions. That’s roughly the same amount of methane emissions associated with both the oil and natural gas production sectors combined[7] . There are vast opportunities to take organic waste, clean it to pipeline quality and displace conventional natural gas on our system – for substantial carbon savings.[8] 

[5] Kaza, Silpa; Yao, Lisa C.; Bhada-Tata, Perinaz; Van Woerden, Frank. 2018. What a Waste 2.0: A Global Snapshot of Solid Waste Management to 2050, World Bank, available at: http://hdl.handle.net/10986/30317.

[6] IEA; Outlook for Biogas and Biomethane, available at: https://www.iea.org/reports/outlook-for-biogas-and-biomethane-prospects-for-organic-growth/.

[7] EPA; U.S. Methane Emissions, By Source; all emission estimates from the Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2021,available at: https://www.epa.gov/ghgemissions/overview-greenhouse-gases#methane.

[8] An American Gas Foundation Study Prepared by ICF, Renewable Sources of Natural Gas: Supply and Emissions Reduction Assessment, December 2019, available at: https://gasfoundation.org/2019/12/18/renewable-sources-of-natural-gas/.

The work to add RNG to our system began in 2017, but there was a tremendous amount of work to do before we were even permitted to purchase RNG. In fact, we did not have legislative or regulatory approval to allow us to begin RNG procurement until late 2020.

At that time, we immediately began due diligence on RNG supply options after finally receiving those approvals. We have only had three purchasing years during which to participate, and during much of that time, policy and regulatory treatment was uncertain.

Here is an overview of our efforts, actions and the relevant developments that speak to our commitment:

• 2017 – Research from Europe shows promise of RNG with new cleaning technology; NW Natural creates technical team to investigate equipment options, configurations, performance, etc. Determines benefits of new technology and that we can add RNG to our system immediately. Also took learnings from Canadian and West Coast gas utilities already active in RNG. Team first focused on RNG interconnects to our system.
• 2018 – NW Natural technical team works with several RNG projects to interconnect onto our system. The team also turns to assess policy needed to support renewable development through European learnings and by assessing subsidy support for wind and solar energy.
• 2019 – We work with many stakeholders to pass first of its kind RNG legislation that allows us to procure RNG for customers, which we were unable to do under our regulatory construct prior to this passing.
• 2020 – Rulemaking for SB 98 concludes, and NW Natural develops regulatory methodology for procurement. Stakeholder review process to approve methodology begins, under Docket UM 2030. Methodology is adopted by Oregon Public Utility Commission (OPUC) order in November.
• 2021 – With stakeholder and regulatory approvals finally in place, NW Natural issues first RFP for renewable supply and ultimately contracts with two resources from RFP.
• 2022 – NW Natural adds an Action Item (this is a formal term under Oregon PUC process) into its long-term Integrated Resource Plan identifying a plan to procure up to 5% RNG for customers utilizing SB 98. A docket to discuss and evaluate the Integrated Resource Plan is opened.
• 2023 – Oregon PUC issues final order in 2022 Integrated Resource Plan docket and does not acknowledge the RNG Action Item and requests more analysis be brought forward to use RNG compared to other options. This resulted in NW Natural ceasing negotiations with multiple parties that had responded to the 2023 RNG RFP and we paused our pursuit of new RNG options for that year to try to get further regulatory clarity. NW Natural continues to receive RNG from resources with which they are already contracted.
• 2024 – NW Natural receives new RFP results for the purchase of RNG with a strong response of 53 proposals from 34 vendors, our largest response to an RFP so far. This indicates the RNG industry continues to grow and develop, and RNG supply is plentiful. Once the proposed CPP rulemaking is complete, NW Natural will evaluate how best to achieve our emission reduction targets while providing the least cost/least risk resources for our customers.

Uncertain support from policy makers and regulators, coupled with ongoing barriers created by certain climate advocates, have made this process unnecessarily challenging.

At the federal level, the absence of meaningful policy that facilitates utility delivery of renewable gas from waste methane, with any parity to renewable electric resources, is the limiting factor in more completely addressing emissions from waste streams and offsetting conventional fossil resources.  

Denmark, for example, has taken steps to incorporate renewable natural gas (biomethane captured from waste sources) into its national supply. As a result, RNG makes up 40% of their total deliveries. That’s not because Denmark has more waste than the United States—it’s due to smart policies. Policy support and certainty are needed for the market to further develop and mature. 

NW Natural, despite advocating since 2017 for the advancement of RNG as a supply source for our system, did not have legislative or regulatory approval to allow us to begin RNG procurement until late 2020. We immediately began due diligence on RNG supply options after finally receiving those approvals.

Our results reflect just three years of purchasing.

Wind and solar are four decades into development supported by billions of dollars of public investment. To date, wind and solar represent about 14% of electric generation across the U.S., which puts our three years of RNG interconnects and supply acquisition progress into the proper perspective.  

We continue to see a great deal of opportunity for RNG and we are actively pursuing potential opportunities that best optimize resources and are cost-competitive for our customers.

In March 2024 NW Natural issued a “Request for Proposals” for the purchase of RNG. In response, we received 53 proposals from 34 vendors, which was the largest response to any of our RNG RFPs to date. This indicates the RNG industry continues to grow and develop, and RNG supply is plentiful.

NW Natural has been an early adopter throughout our history, with examples including decoupling profit and operating revenue from the amount of natural gas customers use, and best-in-class efficiency programming. There are ample RNG resources available for it to be a meaningful part of NW Natural’s decarbonization strategy.

Our priority is to procure RNG supply at the lowest possible cost to our customers, an approach that is consistent with that of electric utilities. Our regulators and regulatory stakeholders have also consistently focused on NW Natural procuring and developing the least-cost RNG supplies. To date these resources have been largely outside of the Pacific Northwest.  So, just as an electric utility in Oregon will purchase wind from Wyoming if it’s lower cost, we won’t hesitate to pursue larger, lower cost RNG for customers out of state if we need to.

This is not the case in all jurisdictions. California policy and regulations, for example, direct natural gas utilities to prioritize RNG from California in their procurement, and they can pay for those resources even if they are more expensive than RNG from outside of California. We do not have similar policy or regulatory constructs in Oregon yet.

NW Natural has been an active facilitator and partner in regional RNG and hydrogen project development. The company has two interconnections in the state that allow regional RNG development and delivery to market. Longer term, and with facilitative policy support, we are optimistic about continued growth and availability of regional resources.

The reported lifecycle emissions of RNG depend on the underlying policy present in the state and the structure of whatever policy or program in which the RNG is being used. For instance, if a state mandates that all landfill gas is collected and destroyed, an RNG project is only additive to that baseline, as opposed to an RNG project in a state where not all landfill gas is mandated to be collected and destroyed. The CI score will then reflect whatever baseline is stipulated in that state or program.

On a lifecycle emissions basis, RNG projects range in CI score widely, depending on details of the project itself (feedstock, source of electricity, etc.) as well as the underlying policy landscape. The RNG purchased under SB 98 must include a CI score. Typically, these CI scores must utilize a GREET calculator that does not always account for all the avoided methane.

Emissions reporting required of us by the Oregon DEQ uses a methodology that relies only on a combustion basis. Therefore, the emissions we report in our annual Oregon DEQ GHG Report associated with RNG do not consider CI, even though starting in 2024 CI will be reported for informational purposes.

Under the previous state carbon program in Oregon, the Climate Protection Program (CPP), and as proposed in the current draft of the new CPP, RNG is treated as carbon neutral. Emissions from the combustion of RNG are exempt from the rule, because the carbon emitted during combustion of RNG is originally biogenic. These are not NW Natural’s rules, but rather the rules Oregon DEQ has adopted for all entities that are required to measure and report emissions.

It is well established that we need all decarbonized energy resources to deliver on our shared goal of a low carbon future. Waste streams that can be used to make RNG exist and will continue to exist for centuries. Capturing that waste methane and putting it to productive use is a quantifiable emissions benefit.

RNG is an immediate, clear, and verifiable environmental and emission reduction benefit, which is why even without a compliance requirement to do so, NW Natural advocated for SB 98 to create greater opportunity to deliver RNG to all customers.  

There’s a misconception that by shifting to electricity, you somehow stop using natural gas. Our goal, and one we share with the Northwest Gas Association (NWGA) and other energy providers in the region, is to ensure that conversations about energy are based on facts and data. Enacting policies that ignore these realities lead to people not having the energy they need in extreme conditions, putting public health and safety at risk.

The electrify everything approach is simply unrealistic, and in some cases, is much more expensive and with little to no climate benefit. It also ignores the critical role that natural gas generation is playing in electric utilities’ future resource plans (even as they continue to rely on coal while at the same time heavily investing in wind, solar and battery storage).

The latest data from the U.S. Energy Information Administration shows that the amount of natural gas used to generate electricity for Oregon continues growing, reaching an all-time high in 2023:

The increased use of natural gas for power generation is occurring now and does not include the massive amounts of new generation that would be required to support electrification of direct use of gas.