Colorado Lawmakers Eye Renewable Natural Gas Mandate

AVON, Colo. – Colorado lawmakers are planning a fresh push to make “renewable natural gas” a bigger part of the state’s energy mix, arguing the state should tap into energy generated from the methane emissions of coal mines, natural coalbeds, landfills, wastewater treatment plants and agricultural operations.

State Sen. Chris Hansen, a Democrat from Denver, says failing to productively use these emissions is a “missed opportunity” that he’s targeting with a bill to compel the capture and consumption of the gas to produce electricity and transportation fuel.

“It’s just a massive amount of greenhouse gas, particularly because methane is just so much more powerful than CO2 [carbon dioxide],” Hansen said of the Adopt Renewable Natural Gas Standard (SB20-150) legislation he plans to reintroduce when the Colorado General Assembly convenes for a delayed session in February.

Last session, the bipartisan bill passed the state Senate 24-10, with one senator excused, but never made it to the House before the previous session ended abruptly in March due to Covid-19. The new session will convene briefly on Jan. 13 to take care of urgent business, then recess again till Feb. 16 due to the surging coronavirus crisis.

“It’s been a missed opportunity up to this point and so I hope with the bill we can really catalyze that market,” Hansen said of coal methane and biogas generated from the decomposition of organic materials, which can then be refined into what’s known as renewable natural gas (RNG). RNG should not be confused with drilled natural gas—a finite fossil fuel resource in Colorado.

As states strive to meet climate change targets that require them to decrease reliance on fossil fuels, some leaders are eyeing renewable natural gas as a way to help meet those goals. Oregon, for example, last year created incentives to support investments in RNG infrastructure, like pipelines.

But some environmentalists are critical of RNG, saying biogas isn’t really green because it promotes the growth of polluting industries like factory farming. A report issued by the Sierra Club and Earthjustice over the summer argued that the push for renewable natural gas is an industry diversion away from a focus on electrifying buildings, which the groups see as a better tactic for substantially reducing carbon emissions.  

The Colorado bill would compel Xcel Energy, the state’s largest utility—and other utilities as they grow—to use 5% renewable natural gas by 2025, 10% by 2030 and 15% by 2035. The bill would also direct the Colorado Public Utilities Commission to create RNG programs for smaller utilities and mandate natural gas emissions reporting for municipal utilities.

Methane is a smaller component of the greenhouse gases released in this country than carbon dioxide, but it is even more successful at trapping heat, according to the U.S. Environmental Protection Agency. Colorado is scrambling to reduce its consumption of fossil fuels and mitigate the impacts of climate change blamed in part for record-setting wildfires over the summer and a shrinking snowpack in the Colorado River basin.

Colorado has gone from generating 76% of its electricity from coal 20 years ago to 44% coal in 2019 and producing almost no electricity from renewable sources two decades ago to getting nearly 20% of power from wind in 2019. Overall, 25% of the state’s electricity is now from renewable sources. But the state’s goal is much more ambitious, set at shifting to generating 100% renewable electricity over the next 20 years.

Drilled natural gas for electricity grew over recent decades, from 20% in 2000 to 30% in 2019.  The end result? The state still gets 74% of its electricity from fossil fuels. Colorado’s abundant drilled natural gas can be supplemented by renewable natural gas processed from biogas, Hansen argued, adding that RNG can also be used in transportation fleets.

Headquartered in Minneapolis and providing power in eight Western and Midwestern states, Xcel Energy was the first major U.S. power provider to announce a goal of providing 100% carbon-free electricity by 2050, with an interim goal to reduce carbon emissions 80% by 2030. The company also touts its plan to reduce the greenhouse gas footprint of its natural gas service.

“As part of our overall strategy to reduce emissions associated with the natural gas supply chain, we are working to bring renewable natural gas and other low carbon fuels to our customers while minimizing emissions impacts in other parts of the economy,” Xcel Energy spokeswoman Michelle Aguayo said in a written statement.

“These opportunities have the potential for significant emissions reductions without requiring customers to modify their energy use at home,” she added.

Erin Overturf, deputy director of Western Resource Advocates’ Clean Energy Program, said conservation groups like the idea of capturing and better utilizing methane but want to make sure it doesn’t create other problems.

“Colorado needs to explore all the tools available to reduce greenhouse gas emissions, including the capture of methane that would otherwise be returned to the atmosphere,” she said. “However, capturing methane and piping it into people's homes and businesses is a relatively risky and higher cost solution, compared with efforts to develop greater energy efficiency, building electrification, and other cleaner alternatives.

“Biogas policies need to be carefully designed to avoid creating counterproductive incentives and to protect against adverse environmental and community impacts," Overturf added.

Hansen, who grew up in a farm town and works in the nonprofit energy and environment sector, compares his RNG bill to Colorado’s landmark Renewable Portfolio Standard created by the voters in 2004, which incrementally took the state from 10% renewable electricity to now nearly 30%.

Some in the RNG industry, which supports Hansen’s bill, say California’s Low Carbon Fuel Standard (LCFS), which is aimed at reducing carbon emissions in the transportation sector, is a rule that should be emulated. It promotes RNG development, helping create a market for the product, by allowing companies to offset their carbon footprints with the purchase of LCFS credits.

Jay Hopper is the Colorado-based vice president of business development for Michigan-based Aria Energy, which has developed renewable natural gas projects at two Denver landfills in Erie, Colo. He says California’s LCFS is driving RNG in the state.

“We are building the largest anaerobic digester project in California, but the investment is driven by the fact that California has a Low Carbon Fuel Standard,” Hopper said. The project, which is being done with British Petroleum, is focused on the biproduct of eight dairies, which Hopper said will make the company the “largest producer of dairy gas in the country.”

But Hansen argues his bill would be even more effective in promoting RNG and creating a market than the California fuel standard.

The legislation is backed by the national Coalition for Renewable Natural Gas (RNG Coalition).

Johannes Escudero, the CEO and executive director of the RNG Coalition, noted that the first RNG project in the United States, located at the Fresh Kills Landfill in New York City, came online in 1982. But the industry in recent years has taken off, reaching 100 projects in 2019.

When Escudero first launched the coalition in 2011, he says nearly 100% of RNG was being used to produce electricity, but that has shifted dramatically with the changing policy landscape and market incentives. Now, less than 20% of RNG energy produced in North America is used for power and nearly 80% is used by the transportation fuel market.

“As diesel fleets age out, you can replace it with a natural gas engine and then fuel that natural gas engine with RNG instead of conventional natural gas,” Escudero said. “That's where you realize the greatest environmental benefit in terms of particulate matter and carbon sequestration and decarbonization of the transportation fuel supply.”

Still, some proponents argue electricity for the grid should be part of the puzzle. Mark Adams, a regional engineering manager for Waste Connections, operates the Front Range Landfill and Denver Regional Landfill, the sites of the two Aria Energy RNG projects about 20 miles north of Denver in the town of Erie.

Adams said his company’s Colorado operation is a great example of what can be accomplished with RNG.

“We're responsible for putting in a system to collect the gas from the waste that's being decomposed,” Adams said. “So we grab that gas and then we centralize that to a point where Aria takes it off our hands and then they run that gas through these engines to generate electricity. Rather than just let that gas emit through the surface or flare the gas or destroy the gas, that's what's really cool about this is that we're capturing it and doing something really good with it."