Oregon’s largest gas utility has missed its own goal for acquiring renewable natural gas to offset its carbon emissions for a second year in a row.
NW Natural, a Pacific Northwest gas utility that serves more than 2.5 million people, recently submitted its Renewable Natural Gas Compliance report. It showed the company acquired just 0.91% of its natural gas as RNG in 2023. That’s vastly below its own goal of 5%, highlighting some of the challenges gas utilities are facing in the renewable energy transition.
Renewable natural gas, or RNG, is a type of biogas that can be made from decomposing organic matter. It’s a big part of NW Natural’s effort to offset its carbon emissions, which gas utilities are under growing pressure to do as the burning of fossil fuels contributes to human-caused climate change. RNG is often produced by capturing byproducts from landfills, livestock operations or wastewater treatment. It’s mostly made up of methane — a greenhouse gas that is 86 times more potent at trapping heat in the atmosphere than carbon dioxide over a 20-year period.
Environmentalists say it can be complicated to quantify the benefits, and have pushed for different approaches like offering energy efficiency retrofits to customers’ homes. But Northwest Natural has doubled down on RNG.
FILE: A blue flame burns on a natural gas stove. Environmentalists are pushing gas utilities to support a transition to more electric appliances. But NW Natural has prioritized a push for alternative fuel sources, like RNG.
Cassandra Profita / OPB
“While there is much more to do, we remain committed to securing RNG supplies for our customers as the markets establish and we see more regulatory certainty,” NW Natural’s public information officer Gretchan Blum said in an emailed statement.
In 2022, NW Natural’s RNG volume was 0.15% of the company’s Oregon natural gas sales. For 2021, it was 0.21%.
Last year, a NW Natural spokesperson said the company was fully committed to meeting its climate goals and was close to meeting its goal for 2023 which was 5%.
“We continue to see a great deal of opportunity for RNG and are actively pursuing potential opportunities that best optimize resources and are cost-competitive for our customers,” Blum said Monday.
Despite missing the goals outlined in its own 2022 Integrated Resource Plan, Blum said the utility increased its renewable natural gas procurement more than fivefold in 2023 compared to the previous year.
NW Natural was one of the first utilities in the nation to push for RNG as a strategy to lower carbon emissions “as cost-effective, viable solution to lower emissions on the gas system,” Blum said.
The utility also shifted its approach in 2023 to meet the state’s Oregon Climate Protection Program requirements by prioritizing that program’s community climate investment credits, Blum said.
NW Natural expected to purchase more than $40 million in credits that would have funded renewable energy projects, energy efficiency retrofits, and lowering emissions in the state’s disadvantaged communities.
But the Climate Protection Program is on hold while the state undergoes a second rulemaking process after fossil fuel companies, including NW Natural, sued to halt it in 2022. The program would have set limits and reduced greenhouse gas emissions from fossil fuel companies like NW Natural by 90% by 2050. A court ruled last year the Oregon Department of Environmental Quality, the agency charged with creating and implementing the program, failed to comply with disclosure rules in the federal Clean Air Act.
“With the Climate Protection Program rulemaking currently underway, if it is approved as currently designed, RNG will be required to meet our compliance targets,” Blum said.
But the supply of RNG isn’t what’s keeping the company from meeting its goal, Blum said, adding “the obstacle to address is enabling policy” to help NW Natural acquire more.
Lack of RNG progress brings concerns
It’s troubling that NW Natural has not acquired enough renewable natural gas, said Bob Jenks, executive director of the Oregon Citizens Utility Board, an organization that advocates for customers in the state.
“They’ve been working to acquire RNG for a number of years,” Jenks said. “They’ve invested in a bunch of projects. They’ve gone to the Midwest, they’ve gone to New York. They’re scouring the country for how can they acquire RNG and it’s still less than 1% of their system.”
Jenks said there are currently two issues with renewable natural gas — it costs more than standard natural gas and its availability is limited. NW Natural’s recent report also shows how difficult it is to get RNG, as other gas utilities are also looking to acquire the commodity.
“When you look at their ability to cobble together what they’ve done in the last few years and still be at less than 1%, that is problematic,” Jenks said.
Currently, the utility is applying to expand its gas line system. Rather than coming up with an electrification program that could reduce its carbon emissions, like energy efficiency programs, it’s seeking to make choices that could increase those emissions, Jenks said.
“Vermont Gas in New England is actually helping customers finance heat pumps,” he said. “So, putting more electric appliances to homes to reduce the gas emissions.”
Investing in RNG fits into that broader effort by NW Natural to continue to emphasize its existing business model, rather than take a step many environmental advocates have sought by moving away from natural gas.
But Jenks also said he recognizes RNG is a commodity that will be needed in certain industries, like transportation, airline and shipping fuels and other industries that are not dependent on electricity.
“RNG should be developed and utilized but it should be developed and utilized in things that aren’t connected to the electric grid,” Jenks said.
For Charlie Spatz, a researcher with the Energy and Policy Institute, NW Natural’s failure to acquire significant amounts of RNG is a distraction and delay in electrification policies.
“We’re seeing gas utilities talk about renewable natural gas when they’re facing pressures from policymakers and regulators that want to see electrification in the building sector,” he said.
The Energy and Policy Institute is a watchdog organization that counters misinformation by fossil fuel and utility interests.
Spatz said gas utilities across the nation have made big promises about acquiring natural gas while reducing carbon emissions. But ultimately, he said, there needs to be more work done in transitioning homes and buildings away from natural gas to electrification.
“We’ve seen the lawsuits that gas utilities have filed in the Northwest, delaying implementation of climate policy, the aggressive attacks on building codes and delaying implementation of building codes,” he said. “All of those have contributed to slowing down the implementation of critically needed climate policy that would decarbonize the building sector.”