Oregon’s PUC Draft Report on the Future of Gas

In a draft report released in April, Oregon’s Public Utilities Commission failed to come to grips with the problematic gas industry of Oregon and seemingly accepted, without question, many of the absurd claims they made.

The deadline to submit comments is June 3rd to [email protected]

SOCAN’s Comments follow:

Alan R.P. Journet Ph.D.
Cofacilitator
Southern Oregon Climate Action Now
7113 Griffin Lane
Jacksonville
OR 97530-9342
[email protected]
541-301-4107
May, 16, 2022

Reference (Docket No. UM 2178.) SOCAN Future of Gas Comments

By June 3, [email protected]

Colleagues:

I write as cofacilitator on behalf of over 1500 Southern Oregonians who are Southern Oregon Climate Action Now (SOCAN) to comment on the draft Future of Gas report. SOCAN’s mission is to promote awareness and understanding of the science of climate change and its consequences and motivate individual and collective action to address the climate crisis, doing so through the lens of social justice. It is this context that I write since we are well aware that, because of the fugitive emissions of methane resulting from the fracking, processing and transmission of natural gas (better named methane gas or simply methane since it is 90% methane), this energy resource is no improvement over coal or oil.

For this reason, the future of natural gas should be no different than the future of coal and oil. This future should simply be its ultimate exclusion from the state’s energy economy and its replacement by genuinely clean renewable resources. Assuredly eliminating these fossil fuels from our energy economy will not be easy, but releases from the Intergovernmental Panel on Climate Change over the last five years clearly indicate this need. We simply do not have the time to undertake half-measures that prolong fossil fuel use. The responsibility of state agencies should not be to extend the life of fossil fuels but work towards their elimination.

According to the draft report, the Natural Gas Fact-Finding effort had two objectives (p.1): the first was to analyze the potential bill impacts from the limiting of natural gas utilities’ GHG emissions under the Department of Environmental Quality’s Climate Protection Program (CPP); the second was to identify appropriate regulatory tools to mitigate potential customer impacts and accommodate utility action.

We understand the need to assess the impact of the Climate Protection Program on natural gas supplies and consumer costs but judge that this report simply does not acknowledge or address the real problem identified above.

In relation to the role of natural gas in our future energy economy, the overarching concern shared by those of us who understand the climate crisis stems from the fact that throughout the development and discussion of the role of methane (natural gas) in our energy economy, state agencies seem to be blindly accepting whatever the gas industry claims about its interest in, and ability to, reduce emissions from its product. While the draft report notes the huge variability in the expectations that the company’s models present, there seems to be little recognition of the unreliable history of gas companies. The compliant and receptive nature of agencies to gas company misinformation was clearly evident throughout the DEQ response to gas industry submissions during the Rulemaking Advisory Committee discussions as the state Climate Protection Plan was under development. The somewhat naive acceptance of what gas companies submit, or claim, seems now to be playing out again in the PUC evaluation of the role of methane in our energy economy. The PUC seems not to recognize that evaluating the credibility of the gas company models and claims is critical to their charge.

The result seems to be yet another state agency is developing policy that assumes totally erroneous claims by the gas companies are credible. The danger is that policy will be built on the acceptance of false claims and undermine state efforts to reduce greenhouse gas emissions.

A little history is in order. The entire gas industry and its trade organizations have a track record of disinformation and misinformation regarding their product. For years we have heard the claim that natural gas is ‘the clean fossil fuel.’ Only recently have we seen this claim adjusted in some quarters more accurately to identify natural gas as ‘the cleanest burning fossil fuel.’ This adjustment reflects recognition that a wealth of recent studies of greenhouse gas emissions from the extraction, processing, and transmission of natural gas result in methane emissions (86 times worse than carbon dioxide on a 20-year basis) that negate the combustion benefits of the fuel. Of course, this subtle marketing campaign is based on gas company recognition that the public will not understand the critical significance of the statement regarding ‘cleanest burning.’ The average resident will not appreciate the impact of upstream methane emissions that make natural gas potentially as bad as coal in terms of its climate impact. If Oregon is to develop a climate response that is credible, at some point state agencies must bite this bullet and push back against the gas industry. Like the DEQ before it, the PUC is failing to address this most critical of problems. This begs the question: what state agency will confront the natural gas issue and hold the industry accountable for its ongoing inaccurate claims by asking critical questions?

It has become increasingly clear that the best route to lowering greenhouse gas emissions from the energy sector is to electrify everything. This is because electricity generation can be achieved through clean (zero emissions) renewable energy sources and many jurisdictions (including Oregon) are moving in that direction. Meanwhile, natural gas cannot possibly achieve zero emissions. Fundamentally, there is no long-term role to be played in the utility sector by the gas industry. It’s time for everyone engaged in climate-related monitoring and regulation to acknowledge this, accept it, and behave accordingly. PUC policy should, likewise, acknowledge this and promote electrification rather than promoting an energy source that has outlived its value.

Given the health impacts of gas), promoting electrification rather than supporting the gas industry would also serve Oregon public health and social justice imperatives. (e.g. https://d3n8a8pro7vhmx.cloudfront.net/oregonpsrorg/pages/1469/attachments/original/1561062581/Fracked_Gas_Infrastructure_A_Threat_to_Healthy_Communities_FINAL.pdf?1561062581; https://pubs.acs.org/doi/10.1021/acs.est.1c04707; https://powerpastfrackedgas.org/wp-content/uploads/2021/08/Methane-Gas-Health-Safety-and-Decarbonization.pdf

The key question for the PUC, then is: why does the draft fail to consider the likely ineffectiveness of GHG emission reduction efforts claimed by the gas industry? Surely, this is the key issue. I will return to this concern repeatedly.

In Table 1 p 2: the report offers the recommendation that “ETO Expand vendor training for all heat pump tech”

While we support the promotion of heat pumps, this statement implies that the PUC accepts the inappropriate claim that gas heat pumps should be encouraged. This is unjustifiable in a policy designed to reduce GHG emissions. The only kind of heat pump that ETO should be encouraging is an electric heat pump.

In section 3.1 Momentum: p 7 the report states: “These [low-to-zero carbon natural gas technology solutions] range from investments in supply solutions like Renewable Natural Gas (RNG), synthetic natural gas, and hydrogen to demand solutions like gas heat pump water heaters and furnaces.”

Interestingly, it was reported by DOE in 2018 (https://www.oregon.gov/energy/Data-and-Reports/Documents/2018-RNG-Inventory-Report.pdf) that Oregon does not have the capacity to provide the amount of RNG that the gas companies claim they will incorporate. Indeed, the state’s capacity from anaerobic decomposition was reported as less than 5% of then annual natural gas usage in the state. Even adding thermal gasification, this rises only to 17.5%. The World Resources Institute, meanwhile, estimated that the national potential for RNG from anaerobic digestion amounts to a pitiful 4 – 7% of usage (https://www.wri.org/insights/7-things-know-about-renewable-natural-gas#:~:text=Estimates%20suggest%20that%20780%2D1%2C400,such%20as%20landfills%20and%20manure.). We should acknowledge that RNG cannot replace a substantial volume of shale-fracked natural gas. Additionally, of relevance to the PUC should be the fact that RNG costs substantially more than natural gas itself by a factor of between 2 and 5 times. (https://www.sightline.org/2021/03/09/the-four-fatal-flaws-of-renewable-natural-gas/#:~:text=Today%2C%20a%20million%20BTUs%20(MMBTU,among%20those%20of%20approximately%20%2418).

Using the limited RNG to replace natural gas in the general distribution network is also contra-indicated by the fact that some industries cannot easily electrify. Thus, this limited RNG should be reserved for special use not distributed generally.

Additionally, it is noteworthy that investing in RNG from the mid-west that is inserted into distribution pipelines does not lower Oregon emissions, at best it merely offsets such emissions. It is important to understand that the Climate Protection Program limits offsets substantially: to 10% of emissions during the 2022 – 2024 cycle, then 15% through 2025 – 2027 and finally 20% from 2028 onwards. Furthermore, within the CPP funding for offsets must pass through the Climate Investment entities and be dispersed in Oregon. Investing in offsets outside Oregon is simply not permissible within the program. (https://www.oregon.gov/deq/Regulations/rulemaking/RuleDocuments/GHGCR2021Notice.pdf)

How the gas companies propose to generate Hydrogen is unclear, but the only acceptable method is via electrolysis using clean energy electricity. Of course, if that clean energy electricity is taken from the grid, the emissions resulting from dirty electricity generation replacing that used for electrolysis would have to be accounted against the Hydrogen so generated. Furthermore, if that Hydrogen is produced from either coal (brown hydrogen) or methane (blue hydrogen) Howarth and Jacobson demonstrate that it would actually be worse than just burning the methane or coal (https://onlinelibrary.wiley.com/doi/full/10.1002/ese3.956).

Finally, the suggestion that gas heat pumps will contribute to the solution flies in the face of reality. Heat pumps are extremely efficient, but if we are to wean ourselves from fossil fuels, gas heat pumps are not the answer. The only logical route to take is via electric heat pumps. Once again, the promotion of gas heat pumps by the gas industry represents their attempting to keep society dependent on their product when actually, the evidence indicates that gas use should be reduced and terminated as rapidly as possible.

The PUC should not be attempting to support the role of gas in the energy sector. Rather, the PUC should be seeking to extinguish it. Concurrently, the PUC should be providing consumers as much support as possible to reduce their gas usage costs and wean themselves from this fuel and all substitutes incorporated into the mix by the gas companies as they strive simply to maintain gas infrastructure and societal gas dependence.

On p.7 the report states: “Staff finds that it may also be the case that some combination of choices – between encouraging low-to-zero carbon gas technologic advances and regulatory actions that limit future gas customer and infrastructure growth – may best balance the various technology, cost, and regulatory risks associated with meeting the state’s GHG emission targets.”

This implies that PUC staff have accepted the absurd claim offered by the gas industry that it can achieve ‘low-to-zero carbon gas’ technology when a serious evaluation of their proposals reveals this to be a fraudulent claim. Again, rather than merely accepting the claims from the gas industry that it can achieve such a goal, the PUC staff should be undertaking a critical assessment of such claims.

The focus throughout the report is on decarbonization as though all carbon is equivalent. It is not clear in this discussion whether the PUC is making the same egregious error evident at DEQ in developing the Climate Protection Program of considering only combustion emissions. Because of the upstream fugitive emissions of methane (discussed above) it is critical that all agencies should incorporate into their planning the reality that methane emissions are 86 times more potent than carbon dioxide on a 20-yrear basis. This means that developing climate policy should incorporate full life cycle emissions assessments and not focus just on carbon dioxide from combustion as though that were the only problem. It may be that the PUC acknowledges and incorporates this consideration, but there is no evidence of this in the draft report.

In section 3.2, p 8 we learn that “As a foundation for all other analytic inquiries, staff asked the gas utilities to model how they would comply with DEQ’s CPP.” Meanwhile on p.  13 we learn that “Each of the three utilities came up with different assumptions about how much RNG they would be able to secure over time.”

I have argued above that the gas industry has no credibility in the claims it makes for its product. Given this history of the gas industry of spreading disinformation about the climate impact of their fossil fuel, it seems irresponsible for the PUC to rely on that same industry to undertake self-assessment. Any judgments regarding what the gas industry can do should be based on credible third-party assessment, where those third parties are charged with skeptically and critically assessing any claims offered by the gas companies or their trade organizations.

Section 3.3.,5 p 16 indicates that “Each utilities’ base case CPP compliance modeling relied on decarbonizing the fuel they provide through large amounts of RNG, green hydrogen, and/or synthetic gas.” And “Notably, large-scale hydrogen availability at a reasonable price is necessary in less than 15 years.”

Synthetic gas can be produced in two ways: by electrolysis and methanation or therma gasification. The essential requirements for making synthetic gas (SYNGAS) from hydrogen extracted from water seem to be the following two-step process (Gorre et al. 2019, https://www.sciencedirect.com/science/article/pii/S0306261919312681): (1) electrolysis of water to produce hydrogen (H₂) and Oxygen (O₂). (2) The hydrogen is then combined with carbon from carbon dioxide (CO₂) to produce methane (CH₄) and oxygen in a process termed methanation. As the authors noted, this product could be considered green depending on the source of the energy driving the two-step process. However, as pointed out above with green Hydrogen, the extent to which this process removes clean energy from the grid that is replaced by dirty energy, the process will have a greenhouse gas emissions cost. In reality, only about 1% of current Hydrogen is generated from clean renewable energy, the rest comes from fossil-fuel based processes (https://www.forbes.com/sites/jamesmorris/2021/03/27/synthetic-fuels-wont-save-the-planet-so-dont-say-they-could/?sh=358ba67669a4). This means that Synthetic gas produced this way is probably no improvement over the natural gas it is designed to replace.

The alternative process for producing synthetic gas involves the gasification of any carbonaceous material, coal or oil, for example (https://netl.doe.gov/research/Coal/energy-systems/gasification/gasifipedia/intro-to-gasification). Under pressure and extremely high temperature conditions, air and steam contact the carbonaceous material and, through a series of chemical reactions, produce the SYNGAS. Again, the key question concerns the energy source used to produce that steam and high temperature. If that energy source is generated by a clean renewable source, the emissions resulting from the replacement in the grid of that energy needs to be accounted. If the energy source is fossil fuels, then the SYNGAS will, again, likely offer no greenhouse gas savings over the natural gas it replaces.

As can bee seen, time and again, it becomes critical that greenhouse gas emissions assessments of energy sources are undertaken on a complete lifecycle basis; looking just at the combustion emissions produces comparisons that misrepresent the situation.

One claim offered by the gas companies during the DEQ RAC discussions was that they would acquire RNG from mid-western Confined Animal Feedlot Operations.

It is worth reiterating, however, that this only reduces Oregon GHG emissions if that RNG comes directly to Oregon. If that RNG is merely inserted into the national distribution pipeline grid, it does not result in that gas supplying Oregon. Rather it results in that gas replacing conventional fracked gas used in Oregon. It is, therefore, merely an offset and does not result in a reduction in emissions in Oregon. As such, the extent to which that RNG is permitted to count would be limited by rules in the Community Climate Investment section of the CPP regarding the amount of offsets allowed by the gas company. In particular, as noted above, OAR 340-271-9000 specifies that such offsets are limited to 10% during Compliance Period 1 (2022-2024), 15% during Compliance Period 2, and 20% during Compliance Period 3 (2028-2030 and beyond).  In addition, the only route by which the CPP permits such offsets is via purchase of offset credits through the Community Climate Investment protocol involving a Community Climate Investment entity where the credits are priced to start at $107 per ton of CO₂e reduced with the price rising by a dollar each year over time (in 2021 $)

In summary, in my view, the draft Future of Gas report largely ignores several key questions concerning the claims offered by gas companies as to how they will reduce emissions. Even if the PUC considers that life cycle assessment of claimed emissions benefits is not their responsibility, assessing the impact of the fraudulent claims by the gas industry on availability and prices should be a PUC responsibility.