(1)The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions and to monitor and enforce compliance with this program. The act requires the state board to adopt a statewide greenhouse gas emissions limit, as defined, to be achieved by 2020 equivalent to the statewide greenhouse gas emissions level in 1990. Existing law requires the state board to complete a comprehensive strategy to reduce emissions of short-lived climate pollutants, as defined, in the state.

This bill would require the state board to consider and, as appropriate, adopt policies to significantly increase the sustainable production and use of renewable gas, biogas, as defined, and, in so doing, would require the state board, among other things, to ensure the production and use of renewable gas biogas provides direct environmental benefits and identify barriers to the rapid development and use of renewable gas biogas and potential sources of funding. The bill would require the state board to develop and adopt a life-cycle accounting method for greenhouse gas gases and emissions of short-lived climate pollutants associated with biogas produced from forest biomass, as specified.

(2)Existing law requires the Office of Environmental Health Hazard Assessment, in consultation with the state board, the Department of Toxic Substances Control, the Department of Resources Recycling and Recovery, and the California Environmental Protection Agency, to compile a list of constituents of concern that could pose risks to human health and that are found in biogas, as defined, at concentrations that significantly exceed the concentrations of those constituents in natural gas. Existing law requires the office to determine the health protective levels for that list, as specified, and requires the state board to identify realistic exposure scenarios and the health risks associated with those scenarios, as specified.

Existing law requires the Public Utilities Commission to adopt, by rule or order, standards for biomethane, as defined, that specify the concentrations of constituents of concern that are reasonably necessary to protect public health and ensure pipeline integrity and safety, as specified, and requirements for monitoring, testing, reporting, and recordkeeping, as specified. Existing law requires a gas corporation to comply with those standards and requirements and requires the commission to require gas corporation tariffs to condition access to common carrier pipelines on the applicable customer meeting those standards and requirements.

This bill would revise the definitions of biogas and biomethane for these purposes.

(1)The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions and to monitor and enforce compliance with this program. The act requires the state board to adopt a statewide greenhouse gas emissions limit, as defined, to be achieved by 2020 equivalent to the statewide greenhouse gas emissions level in 1990. Existing law requires the state board to complete a comprehensive strategy to reduce emissions of short-lived climate pollutants, as defined, in the state.

This bill would require the state board to consider and and, as appropriate, adopt policies to significantly increase the sustainable production and use of renewable gas, as defined, and, in so doing, would require the state board, among other things, to ensure the production and use of renewable gas provides direct environmental benefits and identify barriers to the rapid development and use of renewable gas and potential sources of funding. The bill would require the state board to develop and adopt a lifecycle accounting method for greenhouse gas and emissions of short-lived climate pollutants associated with biogas produced from forest biomass, as specified.

(2)Existing law requires the Office of Environmental Health Hazard Assessment, in consultation with the state board, the Department of Toxic Substances Control, the Department of Resources Recycling and Recovery, and the California Environmental Protection Agency, to compile a list of constituents of concern that could pose risks to human health and that are found in biogas, as defined, at concentrations that significantly exceed the concentrations of those constituents in natural gas. Existing law requires the office to determine the health protective levels for that list, as specified, and requires the state board to identify realistic exposure scenarios and the health risks associated with those scenarios, as specified.

Existing law requires the Public Utilities Commission to adopt, by rule or order, standards for biomethane, as defined, that specify the concentrations of constituents of concern that are reasonably necessary to protect public health and ensure pipeline integrity and safety, as specified, and requirements for monitoring, testing, reporting, and recordkeeping, as specified. Existing law requires a gas corporation to comply with those standards and requirements and requires the commission to require gas corporation tariffs to condition access to common carrier pipelines on the applicable customer meeting those standards and requirements.

This bill would revise the definitions of biogas and biomethane for these purposes.

(3)The California Integrated Waste Management Act of 1989, which is administered by the Department of Resources Recycling and Recovery, requires each city, county, and regional agency, if any, to develop a source reduction and recycling element of an integrated waste management plan. With certain exceptions, the source reduction and recycling element of that plan is required to divert 50% of all solid waste, through source reduction, recycling, and composting activities. Existing law allows the 50% diversion requirement to include not more than 10% through transformation or biomass conversion, as defined, if specified conditions are met. Existing law defines biomass conversion for purposes of the waste management laws to mean the production of heat, fuels, or electricity by the controlled combustion of, or the use of other noncombustion thermal conversion technologies on, certain listed materials.

This bill would revise that definition to add to those listed materials byproducts or residue from composting.

Existing law specifies that biomass conversion does not include the controlled combustion of, among other things, materials that contain sewage sludge. of recyclable pulp or recyclable paper materials, or materials that contain sewage sludge, industrial sludge, medical waste, hazardous waste, or either high-level or low-level radioactive waste.

This bill would delete from that exclusion the controlled combustion of materials that contain sewage sludge.

(1)The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions and to monitor and enforce compliance with this program. The act requires the state board to adopt a statewide greenhouse gas emissions limit, as defined, to be achieved by 2020 equivalent to the statewide greenhouse gas emissions level in 1990. Existing law requires the state board to complete a comprehensive strategy to reduce emissions of short-lived climate pollutants, as defined, in the state.

This bill would require the state board to consider and adopt policies to significantly increase the sustainable production and use of renewable gas, as defined, and, in so doing, would require the state board, among other things, to ensure the production and use of renewable gas provides direct environmental benefits and identify barriers to the rapid development and use of renewable gas and potential sources of funding. The bill would require the state board to develop and adopt a lifecycle accounting method for greenhouse gas and emissions of short-lived climate pollutants associated with biogas produced from forest biomass, as specified.

(2)Existing law requires the Office of Environmental Health Hazard Assessment, in consultation with the state board, the Department of Toxic Substances Control, the Department of Resources Recycling and Recovery, and the California Environmental Protection Agency, to compile a list of constituents of concern that could pose risks to human health and that are found in biogas, as defined, at concentrations that significantly exceed the concentrations of those constituents in natural gas. Existing law requires the office to determine the health protective levels for that list, as specified, and requires the state board to identify realistic exposure scenarios and the health risks associated with those scenarios, as specified.

Existing law requires the Public Utilities Commission to adopt, by rule or order, standards for biomethane, as defined, that specify the concentrations of constituents of concern that are reasonably necessary to protect public health and ensure pipeline integrity and safety, as specified, and requirements for monitoring, testing, reporting, and recordkeeping, as specified. Existing law requires a gas corporation to comply with those standards and requirements and requires the commission to require gas corporation tariffs to condition access to common carrier pipelines on the applicable customer meeting those standards and requirements.

This bill would revise the definitions of biogas and biomethane for these purposes.

(1)The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions and to monitor and enforce compliance with this program. The act requires the state board to adopt a statewide greenhouse gas emissions limit, as defined, to be achieved by 2020 equivalent to the statewide greenhouse gas emissions level in 1990. Existing law requires the state board to complete a comprehensive strategy to reduce emissions of short-lived climate pollutants, as defined, in the state.

This bill would require the state board to consider and adopt policies to significantly increase the sustainable production and use of renewable gas, as defined, and, in so doing, would require the state board, among other things, to ensure the production and use of renewable gas provides direct environmental benefits and identify barriers to the rapid development and use of renewable gas and potential sources of funding.

(2)Existing law requires the Office of Environmental Health Hazard Assessment, in consultation with the state board, the Department of Toxic Substances Control, the Department of Resources Recycling and Recovery, and the California Environmental Protection Agency, to compile a list of constituents of concern that could pose risks to human health and that are found in biogas, as defined, at concentrations that significantly exceed the concentrations of those constituents in natural gas. Existing law requires the office to determine the health protective levels for that list, as specified, and requires the state board to identify realistic exposure scenarios and the health risks associated with those scenarios, as specified.

Existing law requires the Public Utilities Commission to adopt, by rule or order, standards for biomethane, as defined, that specify the concentrations of constituents of concern that are reasonably necessary to protect public health and ensure pipeline integrity and safety, as specified, and requirements for monitoring, testing, reporting, and recordkeeping, as specified. Existing law requires a gas corporation to comply with those standards and requirements and requires the commission to require gas corporation tariffs to condition access to common carrier pipelines on the applicable customer meeting those standards and requirements.

This bill would revise the definitions of biogas and biomethane for these purposes.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1043 (Allen) - Biogas and biomethane

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

1. SB 1043 directs the Air Resources Board to consider and adopt policies, as appropriate, to significantly increase the sustainable production and use of “renewable gas,” and outlines specific requirements.

Fiscal Impact:

• One-time costs of $316,000 (Cost of Implementation Fund) to the ARB for staffing necessary to develop quantification methods, conduct public and technical workshops, and coordinate with other State agencies.
• Ongoing costs of $187,000 annually (Cost of Implementation Fund) to the ARB for program administration.
• Minor costs to CalFIRE, CalRecycle, and the CEC for consultation.

Background:

Biogas, methane, and biomethane. Through a series of steps involving the bacterial breakdown of organics, carbon-based material can be converted to methane in oxygen-deprived conditions. This process occurs naturally, and is often uncontrolled in landfills and dairies, contributing to significant GHG emissions. However, capturing and utilizing the gas is facilitated through the use of anaerobic digesters, which operate with various temperatures, pH, and bacteria types. The digestion process dramatically speeds up the natural decomposition process for organic wastes to produce primarily methane, significant quantities of carbon dioxide, and trace amounts of other gasses including hydrogen, carbon monoxide, nitrogen, oxygen, and hydrogen sulfide, which, all together, is termed “biogas.” The biogas can be processed further to produce high purity, or “pipeline” quality methane, and is termed biomethane to differentiate it from fossil fuel natural gas. In addition to production at landfills and dairies, biomethane can be generated from digestion processes at wastewater treatment plants. Biomethane is also termed renewable natural gas, or RNG.

Biomethane fuel supply, markets, and barriers to use. Because of the potential climate, waste reduction, and energy benefits of biomethane, a number of bills and programs have worked to increase the supply, expand the biomethane market, and overcome barriers for its use. Various incentive programs, funded through cap-and-trade auction revenue, and by vehicle registration surcharges, provide grants and loans for the production of renewable and alternative fuels, including biomethane.

The state has also implemented several programs to create markets for low-carbon fuels, in furtherance of meeting GHG emission reduction goals. The Low-Carbon Fuel Standard (LCFS), established pursuant to authority under AB 32, requires a 10% reduction in the carbon intensity for transportation fuels used in the state by 2020. The state also has procurement requirements for “very-low carbon fuels,” established through AB 692 (Quirk, Chapter 588, Statutes of 2015). Biomethane is also considered a renewable resource under the Renewable Portfolio Standard, which was recently amended by SB 350 (de León and Leno, Chapter 547, Statutes of 2015) to require 50% of total retail electricity sales to be from renewable energy resources by 2030. Additionally, the cap-and-trade regulation allows covered entities to purchase up to 8% of their compliance obligation as offsets. To date, ARB has adopted offset protocols for four project types including dairy digesters to capture fugitive methane emissions.

Overcoming barriers. Due to concern over toxic constituents in landfill biogas, California adopted strict requirements in 1988 regarding the allowable levels of vinyl chloride and the required testing protocols for the legal sale, supply or transport of landfill gas to a gas corporation in the state. In an effort to encourage the production and use of biomethane in California, including methane produced from landfill biogas, the Legislature passed AB 1900 (Gatto, Chapter 602, Statutes of 2012), which required the CPUC to adopt health and safety standards for biomethane pipeline injection based on recommendations from Office of Environmental Health Hazard Assessment and ARB. AB 1900 also required CPUC to “adopt policies and programs that promote the in-state production and distribution of biomethane.” On January 16, 2014, CPUC adopted health and safety standards for pipeline injected biomethane.

In 2015, CPUC found that gas producers should bear all costs relating to the processing and pipeline injection of biomethane. As part of that decision, the CPUC adopted a $40 million ratepayer-funded program to offset a portion of the costs to gas producers of connecting to utility pipelines. Program funding will pay up to 50% of a biomethane project’s interconnection cost, up to $1.5 million per project.

AB 1900 also required CEC to hold public hearings to identify impediments that limit procurement of biomethane in California and offer solutions as part of the Integrated Energy Policy Report (IEPR).

Proposed Law:

2. Directs ARB to consider and adopt policies, as appropriate, to significantly increase the sustainable production and use of “renewable gas,” and requires ARB to do the following:
   1. Ensure any policy is coordinated and consistent with state policies to promote renewable fuels and renewable resources, reduce life-cycle GHG and short-lived climate pollutant emissions, increase carbon sequestration, divert organic waste from landfills, reduce air and water pollution, reduce wildfires, promote resilient and sustainable forests, and protect the environmental quality of natural and working lands.
   2. Ensure, in consultation with the Department of Resources Recovery and Recycling (CalRecycle), that any adopted policy recognizes declining landfill gas in future years.
   3. Ensure that the production and use of renewable gas provides direct benefits through helping the state meet landfill diversion goals, or avoiding or reducing criteria pollutants, short-lived climate pollutants and GHG emissions in the state, emissions that adversely affect the waters of the state, and nuisances associated with the emission of odors.
   4. Identify barriers to the rapid development and use of renewable gas and make specific recommendations to remove those barriers and identify potential sources of funding to provide incentives for renewable gas production and use.
   5. Coordinate with CPUC, CEC, POUs, CalRecycle, and the Department of Forestry and Fire Protection.
3. Requires ARB to develop and adopt a life cycle GHG and short-lived climate pollutant accounting method associated with biogas produced from forest biomass, as specified.
4. Modifies the definition of “biogas” and “biomethane” as currently used in statute concerning biogas injection into common carrier pipelines by defining “biogas” as a gas produced from organic waste through anaerobic digestion, or conversion technologies, as specified, and “biomethane” as methane derived from biogas.
5. Defines “biogas,” for purposes of the work required of ARB by this bill, to have the same meaning as above, except that it does not include gas produced from forest biomass unless it is produced from forest waste remaining after all other reasonable forest products have been produced and it meets at least one of several specified conditions.
6. Defines “renewable gas” to mean biogas or synthetic gas generated by an eligible renewable energy resource meeting the requirements of the California Renewables Portfolio Standard Program, but not including organic waste.
7. Amends the definition of “biomass conversion” to include byproducts or residue from composting as eligible organic feedstocks for combustion or non-combustion conversion technologies.
8. Strikes “sewage sludge” from the materials prohibited from being feedstocks under the definition of biomass conversion.
9. Specifies that the requirements for ARB to consider and adopt policies, as appropriate, to increase the production and use of renewable gas is not intended to affect health and safety standards adopted by CPUC prior to January 1, 2016 for biomethane that is to be injected into the pipeline.

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: SB 1043

SUBJECT: Renewable gas: biogas and biomethane

ANALYSIS:

Existing law:

1. Under the California Global Warming Solutions Act of 2006, also known as

AB 32, requires the California Air Resources Board (ARB) to determine the 1990 statewide greenhouse gas (GHG) emissions level and approve a statewide GHG emissions limit that is equivalent to that level, to be achieved by 2020, and to adopt GHG emissions reductions measures by regulation. ARB is authorized to include the use of market-based mechanisms to comply with these regulations. (Health and Safety Code §38500 et seq.)

1. Under the Renewable Portfolio Standard (RPS) requires investor-owned utilities (IOUs), publicly owned utilities (POUs) and certain other retail sellers of electricity to achieve 50% of their energy sales from an eligible renewable electrical generation facility by December 31, 2030, and establishes portfolio requirements and a timeline for procurement quantities of three product categories. (Public Utilities Code §399.11 et seq.)
2. Provides that electricity produced by certain renewable energy resources, including natural gas produced from biomass, digester gas or landfill gas, as potentially eligible for credit under the RPS (PUC §399.12, Public Resources Code §25741)
3. Requires the Office of Environmental Health Hazard Assessment (OEHHA), in consultation with ARB, and other specified agencies, to compile a list of constituents of concern that could pose risks to human health and that are found in biogas at concentrations that significantly exceed the concentrations of those constituents in natural gas and requires OEHHA to determine the health protective levels for that list, and requires ARB to identify realistic exposure scenarios and the health risks associated with those scenarios to determine acceptable threshold concentrations of those constituents. (HSC §25421)
4. Requires the California Public Utilities Commission (CPUC) to adopt standards for biomethane to be injected into a common carrier pipeline that specify constituent concentrations that are reasonably necessary to ensure the protection of human health, giving due deference to the findings by OEHHA, ARB, and other specified agencies. (HSC §25421)
5. Requires California Energy Resources Development and Conservation Commission (CEC) to hold public hearings to identify impediments that limit procurement of biomethane in California, including, but not limited to, impediments to interconnection, and requires CEC to offer solutions to those impediments as part of the integrated energy policy report. (PRC §25326)
6. Defines “biogas” as gas that is produced from the anaerobic decomposition of organic material and “biomethane” as biogas that meets the standards adopted by CPUC for injection into a common carrier pipeline. (HSC §25420)
7. Requires PUC to adopt policies and programs that promote the in-state production and distribution of biomethane. (PUC §399.24 )
8. Defines “biomass conversion” as the production of heat, fuels, or electricity by the controlled combustion or use of non-combustion thermal conversion technologies on specified organic materials, including specified agricultural crop residues, bark, wood chips, and other green wastes.
9. Specifies that “biomass conversion” does not include controlled combustion of sewage sludge, among other materials.
   

This bill:

1. Directs ARB to consider and adopt policies, as appropriate, to significantly increase the sustainable production and use of “renewable gas,” and requires ARB to do the following:
   1. Ensure any policy is coordinated and consistent with state policies to promote renewable fuels and renewable resources, reduce life-cycle GHG and short-lived climate pollutant emissions, increase carbon sequestration, divert organic waste from landfills, reduce air and water pollution, reduce wildfires, promote resilient and sustainable forests, and protect the environmental quality of natural and working lands.

• 1. Ensure in consultation with the Department of Resources Recovery and Recycling (CalRecycle) that any adopted policy recognizes declining landfill gas in future years.
  2. Ensure that the production and use of renewable gas provides direct benefits through helping the state meet landfill diversion goals, or avoiding or reducing criteria pollutants, short-lived climate pollutant and GHG emissions in the state, emissions that adversely affect the waters of the state, and nuisances associated with the emission of odors.
  3. Identify barriers to the rapid development and use of renewable gas and make specific recommendations to remove those barriers and identify potential sources of funding to provide incentives for renewable gas production and use.
  4. Coordinate with CPUC, CEC, POUs, CalRecycle and the Department of Forestry and Fire Protection.

1. Requires ARB to develop and adopt a life cycle GHG and short-lived climate pollutant accounting method associated with biogas produced from forest biomass, as specified.
2. Modifies the definition of “biogas” and “biomethane” as currently used in statute concerning biogas injection into common carrier pipelines by defining “biogas” as a gas produced from organic waste through anaerobic digestion, or conversion technologies, as specified, and “biomethane” as methane derived from biogas.
3. Defines “biogas,” for purposes of the work required of ARB by this bill, to have the same meaning as above, except that it does not include gas produced from forest biomass unless it is produced from forest waste remaining after all other reasonable forest products have been produced and it meets at least one of several specified conditions.
4. Defines “renewable gas” to mean biogas or synthetic gas generated by an eligible renewable energy resource meeting the requirements of the California Renewables Portfolio Standard Program, but not including organic waste.
5. Amends the definition of “biomass conversion” to include byproducts or residue from composting as eligible organic feedstocks for combustion or non-combustion conversion technologies.
6. Strikes “sewage sludge” from the materials prohibited from being feedstocks under the definition of biomass conversion.
7. Specifies that the requirements for ARB to consider and adopt policies, as appropriate, to increase the production and use of renewable gas is not intended to affect health and safety standards adopted by CPUC prior to January 1, 2016 for biomethane that is to be injected into the pipeline.

Background

1. Short-lived Climate Pollutants. Greenhouse gases or climate pollutants, such as CO₂, work to warm the earth by trapping solar radiation in the earth’s atmosphere. Depending on the molecule, these pollutants can vary greatly in their ability to trap heat and the length of time they remain in the atmosphere. CO₂ remains in the atmosphere for centuries, which makes it the most critical greenhouse gas to reduce in order to limit long-term climate change. However, climate pollutants including methane, tropospheric ozone, hydrofluorocarbons (HFCs), and soot (black carbon), are relatively short-lived (anywhere from a few days to a few decades), but when measured in terms of how they heat the atmosphere (known as global warming potential or GWP), can be tens, hundreds, or even thousands of times greater than that of CO₂. These climate forcers are termed short-lived climate pollutants (SLCPs).

Because SLCPs remain in the atmosphere for a relatively short period of time, but have a much higher global warming potential than CO₂, efforts aimed at reducing their emissions in the near term would result in more immediate climate, air quality, and public health benefits, than a strategy focused solely on CO₂. According to ARB’s SLCP draft strategy, “while the climate impacts of CO₂ reductions take decades or more to materialize, cutting emissions of SLCPs can immediately slow global warming and reduce the impacts of climate change.” Recent research estimates that SCLPs are responsible for about 40% of global warming to date and that actions to reduce SLCP emissions could cut the amount of warming that would occur over the next few decades by half.

According to ARB’s 2015 updated Scoping Plan, methane is one of the three short-lived climate pollutants with the greatest implications for California.

Methane (CH₄) is the principal component of natural gas and is also produced biologically under anaerobic conditions in ruminants, landfills, and waste handling. Atmospheric methane concentrations have been increasing as a result of human activities related to agriculture, fossil fuel extraction and distribution, and waste generation and processing. A 2014 Stanford University study found that methane emissions may be 50% higher than official estimates from the US EPA. In 2010, ARB approved a regulatory measure as an AB 32 (Nuñez, Pavley, Chapter 488, Statutes of 2006) discrete early action measure that requires installation of landfill gas collection and control systems. ARB has also released draft regulations to reduce fugitive methane from the oil and gas sector. Methane is 84 times more powerful as a global warming pollutant than CO₂ on a 20-year time scale.

1. Biogas, methane, and biomethane. Through a series of steps involving the bacterial breakdown of organics, carbon-based material can be converted to methane in oxygen-deprived conditions. This process occurs naturally, and is often uncontrolled in landfills and dairies, contributing to significant GHG emissions. However, capturing and utilizing the gas is facilitated through the use of anaerobic digesters, which operate with various temperatures, pH and bacteria types. The digestion process dramatically speeds up the natural decomposition process for organic wastes to produce primarily methane, significant quantities of carbon dioxide, and trace amounts of other gasses including hydrogen, carbon monoxide, nitrogen, oxygen, and hydrogen sulfide, which, all together, is termed “biogas.” The biogas can be processed further to produce high purity, or “pipeline” quality methane, and is termed biomethane to differentiate it from fossil fuel natural gas. In addition to production at landfills and dairies, biomethane can be generated from digestion processes at wastewater treatment plants. Biomethane is also termed renewable natural gas, or RNG.
2. Biomethane fuel supply, markets, and barriers to use. Because of the potential climate, waste reduction, and energy benefits of biomethane, a number of bills and programs have worked to increase the supply, expand the biomethane market, and overcome barriers for its use. Various incentive programs, funded through cap-and-trade auction revenue, and by vehicle registration surcharges, provide grants and loans for the production of renewable and alternative fuels, including biomethane.

The state has also implemented several programs to create markets for low-carbon fuels, in furtherance of meeting GHG emission reduction goals. The Low-Carbon Fuel Standard (LCFS), established pursuant to authority under AB 32, requires a 10% reduction in the carbon intensity for transportation fuels used in the state by 2020. The state also has procurement requirements for “very-low carbon fuels,” established through AB 692 (Quirk, Chapter 588, Statutes of 2015). Biomethane is also considered a renewable resource under the Renewable Portfolio Standard, which was recently amended by SB 350 (de León and Leno, Chapter 547, Statutes of 2015) to require 50% of total retail electricity sales to be from renewable energy resources by 2030. Additionally, the cap-and-trade regulation allows covered entities to purchase up to 8% of their compliance obligation as offsets. To date, ARB has adopted offset protocols for four project types including dairy digesters to capture fugitive methane emissions.

Overcoming barriers. Due to concern over toxic constituents in landfill biogas, California adopted strict requirements in 1988 regarding the allowable levels of vinyl chloride and the required testing protocols for the legal sale, supply or transport of landfill gas to a gas corporation in the state. In an effort to encourage the production and use of biomethane in California, including methane produced from landfill biogas, the Legislature passed AB 1900 (Gatto, Chapter 602, Statutes of 2012), which required the CPUC to adopt health and safety standards for biomethane pipeline injection based on recommendations from OEHHA and ARB. AB 1900 also requires CPUC to “adopt policies and programs that promote the in-state production and distribution of biomethane.” On January 16, 2014, CPUC adopted health and safety standards for pipeline injected biomethane.

In 2015, CPUC found that gas producers should bear all costs relating to the processing and pipeline injection of biomethane. As part of that decision, the CPUC adopted a $40 million ratepayer-funded program to offset a portion of the costs to gas producers of connecting to utility pipelines. Program funding will pay up to 50% of a biomethane project’s interconnection cost, up to $1.5 million per project.

AB 1900 also required CEC to hold public hearings to identify impediments that limit procurement of biomethane in California and offer solutions as part of the Integrated Energy Policy Report (IEPR).

Comments

1. Purpose of Bill. According to the author, “California is a leader in efforts to combat climate change - one of the most daunting challenges facing humanity. Currently, California’s gas sector causes one-quarter of the state’s greenhouse gas emissions, and is a major contributor to global warming.

“California uses more than 2 trillion cubic feet of natural gas per year and that amount is going up. Natural gas is used to generate more than half of the state’s electricity, the majority of its home heating and hot water, and a growing share of transportation fuels. Although cleaner and cheaper than other fossil fuels, natural gas is a major source of greenhouse gas emissions and air and water pollution. In addition, California imports 91% of its gas, making the state vulnerable to supply and price fluctuations and costing more than $9 billion per year in lost revenues and jobs as those jobs are outsourced to other states and to Canada.

“Renewable gas made from organic waste can significantly cut greenhouse gas emissions and landfilling. Increasing the use of renewable gas will create jobs and economic productivity, and strengthen California’s energy security.”

1. Confusing definitions.
   1. Definition of biogas and biomethane for CPUC standards. Under AB 1900 (Gatto, Chesbro and Hernández, Chapter 602, Statutes of 2012), CPUC was required to develop health and safety standards for biomethane for injection into the pipeline. AB 1900 defined biogas as gas produced from the anaerobic decomposition of organic material and defined “biomethane” as biogas that meets the health and safety standards developed by the CPUC for injection into the pipeline.

SB 1043 amends both of these definitions. This bill defines biogas as gas that is produced from organic waste through anaerobic digestion or eligible conversion technologies, consistent with Section 40106 of the Public Resources Code. Section 40106 of the Public Resources Code specifies that “biomass conversion” is the production of energy through the combustion, or thermal non-combustion conversion, of green waste.

The current statutory definition of biogas is very broad—gas produced when organic matter decomposes without oxygen. AB 1043 narrows the definition to specify technologies necessary for the production of biogas, namely anaerobic digestion, and conversion technologies. The new definition in the bill references a section of code that includes combustion as an eligible “conversion” technology. However, the gas produced when organic material is burned is simply steam and CO₂, and is not of any use as a fuel.

An amendment is needed to specify that biogas means gas produced from organic waste through anaerobic digestion, or eligible noncombustion thermal conversion technologies, consistent with Section 40106 of the Public Resources Code.

SB 1043 also strikes the current definition of biomethane as a biogas meeting CPUC health and safety standards for pipeline injection, and instead defines biomethane as methane derived from biogas.

As noted in the Senate Energy, Utilities and Communications Committee’s staff analysis for the bill, the effect of this change is unclear. The staff analysis states, “Recently, the CPUC, in keeping with statute, adopted standards for injection of biomethane into a pipeline. The CPUC expresses concern that the changes made by this bill to the definition of “biomethane” could render pipeline injection standards adopted by the CPUC in R.13-02-008 inapplicable or subject to a high degree of uncertainty.”

As a result, that Committee amended the bill to state that nothing with regard to ARB adopting policies for renewable gas is intended to affect the health and safety standards adopted by the CPUC prior to January 1, 2016 for biomethane injection into a common carrier pipeline.

• 1. Definition of biogas and renewable gas for ARB’s program. SB 1043 requires ARB to consider and adopt, as appropriate, policies to increase production and use of “renewable gas.”

The bill defines renewable gas as either a) biogas or b) synthetic gas generated by an eligible renewable energy resource eligible for credit under the RPS.

Author amendment. The author would like to amend the bill to strike the reference to synthetic gas in the bill to address concerns from several organizations representing various agricultural interests that argue synthetic gas creates additional methane in the environment and, for this reason, should not be given status equal to biogas.

If the author’s amendment is taken, “renewable gas” will be defined as simply “biogas.” For clarity, an additional amendment is needed with the author’s amendment to strike all references to renewable gas in the bill and replace those references with “biogas.”

1. Protecting health and safety for end users of biogas. Any policy adopted by ARB under SB 1043 is required to accomplish a number of goals, namely that the policy promote renewable fuels, reduce GHG emissions, divert organics from landfills, reduce pollution, promote forest health, and protect environmental quality of natural and working lands.

An amendment is needed to require ARB also ensure the health and safety of any adopted biogas policy.

1. Biomass conversion, sewage sludge, and compost residue? Biomass conversion in state law means the production of energy (e.g., fuels, electricity, heat) by combustion, or the use of noncombustion thermal conversion technologies of specified biomass, including, agricultural crop residues, bark, lawn, yard, garden clippings, leaves, silvicultural residue, tree and brush pruning, wood, wood chips, and wood waste and nonrecyclable pulp or nonrecyclable paper materials, when those materials are separated from other solid waste.

Current law requires jurisdictions to divert 50% of solid waste from landfill disposal or transformation (combustion of municipal solid waste) through source reduction, recycling, and composting activities. CalRecycle calculates whether this requirement is met by tracking disposal at transformation facilities and landfills.

Biomass conversion is excluded from the definition of transformation, and therefore, biomass that is combusted or “converted” at a biomass conversion facility is not counted as disposal.

SB 1043 strikes the prohibition for sewage sludge as an eligible biomass conversion feedstock. This change may allow jurisdictions to receive diversion credit for burning sewage sludge.

An amendment is needed to add back in to the bill sewage sludge as a material not eligible as a feedstock under the definition of “biomass conversion.”

SB 1043 also includes byproducts or residue from composting as an eligible biomass conversion feedstock.

It is not clear what types of materials constitute byproducts or residue from composting. These materials could consist of anything left over after the composting process, and may include plastics, glass, and other residual wastes. Combustion of these wastes would not be “biomass” conversion, but instead would be combustion of materials typically designated as municipal solid waste.

An amendment is needed to strike “byproducts and residue from composting” from the definition of biomass conversion.

1. Some overlap and potential timing issues with SB 1153 (Cannella). SB 1153 (Cannella), also being considered by the Committee at today’s hearing, requires ARB, as a part of the update to the AB 32 Scoping Plan, to provide a comprehensive overview of state efforts to encourage the development of instate biomethane and renewable natural gas and evaluate policy options to overcoming barriers or challenges for its use. The Scoping Plan is currently being updated by ARB to incorporate the Governor’s 2030 midterm target for GHG emissions in Executive Order (EO) B-30-15. However, it is not clear that the provisions of SB 1153, if approved, will be incorporated into the Scoping Plan before ARB finishes the update pursuant to the Governor’s EO. In that case, the study outlined in SB 1153 may not be included in the Scoping Plan until the next update five years from now.

SB 1043 requires ARB to consider, and adopt as appropriate, policies to significantly increase the sustainable production and use of renewable gas. If the bill is passed by the Legislature and signed by the Governor, SB 1043’s provisions will go into effect January 1, 2017.

Should the Committee deem both bills necessary, the authors should work to address potential issues associated with the timing of the evaluation in the Scoping Plan in SB 1153 (Cannella) and the activities required under this bill.

Related/Prior Legislation

SB 1153 (Cannella) would require ARB, in consultation with other state entities, as part of the AB 32 Scoping Plan update, to perform an overview of state efforts to encourage the development of instate biomethane and renewable natural gas. The bill is pending consideration by this committee.

SB 687 (Allen, 2015) would have established the renewable gas standard requiring all natural gas sellers to provide to California retail end-use customers increasing amounts of “renewable gas,” so that, by January 1, 2030, at least 10% of the natural gas supplied is “renewable gas.” The bill passed this committee on a vote of 7 to 3 and was held on suspense by the Senate Committee on Appropriations.

AB 2206 (Williams) requests that the California Council on Science and Technology study the heating value and siloxane specifications for biomethane to be injected into common carrier gas pipelines. The bill is pending consideration by the Assembly Natural Resources Committee on April 18, 2016.

AB 2773 (Quirk) requires CPUC to modify its technical standards for biomethane injected into a common carrier pipeline. The bill is pending consideration by the Assembly Committee on Utilities and Commerce on April 13, 2016.

AB 2313 (Williams) requires the CPUC to modify its monetary incentive program for biomethane projects. The bill is pending consideration by the Assembly Committee on Natural Resources.

AB 577 (Bonilla, 2015) would have required the CEC to develop and implement a grant program for projects related to biomethane production. The bill was held on suspense by the Senate Committee on Appropriations.

AB 1900 (Gatto, Chapter 602, Statutes of 2012) directed the CPUC to identify landfill gas constituents, develop testing protocols for landfill gas injected into common carrier pipelines, adopt standards for biomethane to ensure pipeline safety and integrity, and adopt rules to ensure open access to the gas pipeline system.

AB 2196 (Chesbro, Chapter 605, Statutes of 2012) ensures that biogas qualifies for RPS credit, provided its production, delivery and use meet certain conditions.

SB 1122 (Rubio, Chapter 612, Statutes of 2012) required IOUs to collectively procure at least 250 MW of generation eligible for the RPS from bioenergy generation project, including biogas projects.

DOUBLE REFERRAL:

This measure was heard in Senate Energy, Utilities and Communications Committee on April 5, 2015, and passed out of committee with a vote of 7-0.

SOURCE:

Bioenergy Association of California

SUPPORT:

American Biogas Council

Atlas ReFuel

Bioenergy Association of California

City of Fresno

Clean Energy

Climate Resolve

Coalition for Clean Air

CR&R

Environmental Defense Fund

Inland Empire Disposal Association

Kern Refuse Disposal, Inc.

Los Angeles County Waste Management Association

Pacific Forest Trust

Sanitation Districts of Los Angeles County

Solid Waste Association of Orange County

TSS Consultants

Victor Valley Wastewater Reclamation Authority

West Biofuels

OPPOSITION:

Agricultural Energy Consumers Association

Agricultural Council of California

Association of California Egg Farmers

California Dairies Inc.

California Farm Bureau Federation

California Forestry Association

California Grain & Feed Association

California Poultry Federation

Center for Biological Diversity

Dairy Farmers of America

Dairy Institute of California

Milk Producers Council

Western United Dairymen

ARGUMENTS IN SUPPORT:

Supporters state that the biogas industry offers

cost-effective technologies and projects that convert resources to renewable

electricity and renewable fuels to lessen dependence on foreign energy, increase

renewable energy’s contribution to meeting our nation’s energy needs, and to build

a home-grown bioenergy industry that creates jobs and wealth. They note that SB

1043 will fill an important gap in California’ clean energy and climate policies by

requiring the state to begin to diversify and decarbonize the gas sector.

ARGUMENTS IN OPPOSITION:

A coalition of agricultural interests oppose this bill, contending it better policy to encourage biogas production and use through financial incentives, as opposed to new mandates. The coalition notes that conventional natural gas costs significantly less than renewable gas, and that the bill could cost users considerable amounts of money. The coalition also states it is inappropriate to put biogas and synthetic gas on equal footing since, the coalition contends, the latter releases methane into the atmosphere. The California Forestry Association also writes in opposition, arguing this bill’s provisions regarding biomass should allow use of forest material that meets all requirements of the law.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Ben Hueso, Chair

2015 - 2016 Regular

Bill No: Hearing Date: 4/5/2016

SUBJECT:

DIGEST: This bill requires the California Air Resources Board (ARB) to consider and adopt policies to significantly increase the sustainable production and use of “renewable gas.”

ANALYSIS:

Existing law:

1. Directs the ARB to monitor and regulate sources of emissions of greenhouse gases (GHG) that cause global warming in order to reduce GHG emissions to 1990 levels by 2020. (Health & Safety Code §38510 et seq.) ARB instituted a low-carbon fuel standard as one element of achieving the GHG emission reduction goal.
2. Requires retail sellers of electricity – investor-owned utilities (IOU), community choice aggregators (CCAs), and energy service providers (ESPs) – and publicly-owned utilities (POU) to increase purchases of renewable energy, such that at least 50 percent of retail sales are procured from renewable energy resources by December 31, 2030. This is known as the Renewable Portfolio Standard (RPS). (Public Utilities Code §399.11 et seq.)
3. Declares electricity produced by certain renewable energy resources, including natural gas produced from biomass, digester gas or landfill gas, as potentially eligible for credit under the RPS. (Public Utilities Code §399.12, Public Resources Code §25741)
4. Defines “biogas” as gas that is produced from the anaerobic decomposition of organic material and “biomethane” as biogas that meets the standards adopted by California Public Utilities Commission (CPUC) for injection into a common carrier pipeline. (Health and Safety Code §25420)
5. Requires the CPUC to adopt standards that specify the concentrations of constituents of concern that are found in biomethane, and to adopt monitoring, testing, reporting, and recordkeeping protocols, to ensure the protection of human health and the integrity and safety of pipelines and pipeline facilities. (Health & Safety Code §25421 et seq.)
6. Requires CPUC to adopt policies and programs that promote the in-state production and distribution of biomethane. (Public Utilities Code §399.24 )
7. Requires the CPUC to adopt pipeline access rules that ensure that each gas corporation provides nondiscriminatory open access to its gas pipeline system to any party for the purposes of physically interconnecting with the gas pipeline system and effectuating the delivery of gas. (Public Utilities Code §784.)
8. Requires the California Energy Commission (CEC) to hold public hearings to identify in its Integrated Energy Policy Report impediments that limit procurement of biomethane in California, including, but not limited to, impediments to interconnection, and to offer solutions. (Public Resources Code §25326.)

This bill:

1. Directs ARB to consider and adopt policies to significantly increase the sustainable production and use of “renewable gas.”
2. Modifies the definition of “biogas” and “biomethane” as currently used in statute concerning biogas injection into common carrier pipelines. (Health and Safety Code §25420)
3. Newly defines “biogas,” for purposes of the work required of ARB by this bill, to have the same meaning in Health and Safety Code §25420 as amended by this bill, except that it does not include gas produced from forest biomass unless it is produced from forest waste remaining after all other reasonable forest products have been produced and it meets at least one of several specified conditions.
4. Newly defines “renewable gas,” for purposes of the work required of ARB by this bill, to mean biogas or synthetic gas generated by an eligible renewable energy resource meeting the requirements of the California Renewables Portfolio Standard Program, but not including organic waste.
5. Amends the definition of “biomass conversion” as currently used in statute governing waste disposal.

Background

Biogas, biomethane and natural gas by other names. Bioenergy is renewable energy produced from biomass wastes including forest and other wood waste, agriculture and food processing wastes, organic urban waste, waste and emissions from water treatment facilities, landfill gas and other organic waste sources. Biomass waste can be used to generate renewable electricity, liquid fuels and biogas.

Statute defines “biogas” as a gas produced from the anaerobic decomposition of organic material. The result is a gaseous mixture of carbon dioxide and methane. Depending on where it is produced, biogas can be categorized as landfill gas or digester gas. Landfill gas is produced by decomposition of organic waste in a municipal solid waste landfill. Digester gas is typically produced from livestock manure, sewage treatment or food waste. Biogas can be used directly to produce electricity or can be converted to biomethane by removing carbon dioxide and other impurities.

Statute defines “biomethane” as biogas that meets the standards, adopted by the CPUC in keeping with statute, for injection into a common carrier pipeline. Biomethane can replace fossil sources of natural gas in homes and factories and compressed or liquefied as natural gas used in vehicles. Biomethane can also be used to produce renewable hydrogen in fuel cells.^[1]

Biogas, is odorless, colorless and green. Combustion of biogas produces carbon dioxide (CO2), just like the combustion of natural gas. However, the combustion of biogas destroys methane, a gas which is a much more potent GHG than is CO2. And, for CO2 accounting purposes, biogas is considered carbon neutral because the carbon in biogas was so recently present in the atmosphere. In addition, biogas can be used to displace the use of fossil fuels, such as conventional natural gas, thereby further decreasing its carbon intensity.

Statute requires California to reduce emissions of greenhouse gases. The Global Warming Solutions Act (aka “AB 32”) requires a reduction in California GHG emissions to 1990 levels by the year 2020. Statute provides ARB broad authority to achieve statewide GHG reductions. In keeping with that authority, statute requires ARB to adopt a “scoping plan” of measures that will, collectively, reduce California GHG emissions, as required by law.

ARB adopted its latest update to the scoping plan in 2014. The plan includes a “cap-and-trade” program for the state’s largest GHG emitters. The plan also includes dozens of sector-specific measures, including measures to promote the development and use of natural gas derived from renewable sources. For Fiscal Year 2016-17, the administration has proposed the following ARB biogas programs, both to be funded from the Greenhouse Gas Reduction Fund (GGRF):

• Very Low Carbon Fuels Incentives Project. The proposed Governor’s Budget for 2016-17 would set aside $40 million in Fiscal Year 2016-17. The funding would pay for the production of very low-carbon transportation fuels to encourage their production in California.  ARB staff is still developing the incentive mechanisms. In any case, biomethane producers would likely qualify for program funding.
• Low NOx Engine Incentives. ARB proposes to provide $23 million in funding for trucks with certified low-NOx (oxides of nitrogen) engines.  ARB recommends requiring such trucks to operate on renewable fuel, such as biomethane, to maximize GHG emission reductions. The ARB describes the low–NOx engine incentives as complementary of the Very Low Carbon Fuels Incentives Project, described in the preceding bullet.

Statute requires California to procure half its electricity from renewable resources. Since early in the century, state law has required electric utilities to procure increasing amounts of electricity generated by renewable resources, a requirement known as the RPS (Renewable Portfolio Standard). As of this year, each of California’s electric utilities is required to procure at least 50 percent of its electricity from renewable resources. Statute lists numerous goals of the RPS program, each of which, according to statute independently justifies the program.

Statute declares a facility that uses natural gas produced from biomass, digester gas or landfill gas as a renewable energy resource, the electricity produced by which is eligible for credit under the RPS.

Statute explicitly requires state to identify and address barriers to instate biogas development and use. Statute directs the CEC to hold public hearings to identify in its IEPR impediments that limit procurement of biomethane in California, including, but not limited to, impediments to interconnection, and to offer solutions. Accordingly, in 2006, 2011 and 2012, the CEC released editions of its bioenergy action plan, which it describes as strategies, goals, objectives, and actions that California state agencies will take to increase bioenergy development in California. The 2012 Bioenergy Action Plan made the following recommendations relative to biogas:

• Increase research and development of diverse bioenergy technologies and applications, as well as their costs, benefits, and impacts.
• Continue to develop and make accessible information about the availability of organic wastes and opportunities for bioenergy development.
• Streamline and consolidate permitting of bioenergy facilities and reconcile conflicting regulatory requirements to the extent possible.
• Assess and monetize the economic, energy, safety, environmental, and other benefits of biomass.
• Facilitate access to transmission, pipelines, and other distribution networks.

Similarly, statute directs the CPUC to adopt policies and programs that promote the in-state production and distribution of biomethane. In response to statutory mandate, the CPUC, in 2014, adopted health and safety standards that limit the amounts of certain constituents determined to be harmful to either human health or pipeline integrity in pipeline injected biomethane.  The standards are to address the reluctance of energy utilities to inject biomethane into natural gas pipelines. In addition, the CPUC, in 2015, found that gas producers should bear all costs relating to the processing and pipeline injection of biomethane.  As part of that decision, the CPUC adopted a $40 million ratepayer-funded program to offset a portion of the costs to gas producers of connecting to utility pipelines. Program funding will pay up to 50 percent of a biomethane project’s interconnection cost, up to $1.5 million per project. 

Bill provides ARB with no new authority but directs it into new regulatory areas. Similar to existing law, this bill requires ARB to consider and adopt policies to significantly increase the sustainable production and use of renewable gas. One could argue that ARB, under the authority given to it by the Global Warming Solutions Act and other laws, has the authority to consider and adopt such policies today. This, in fact, is ARB’s conclusion. The bill, however, that ARB to act, not only to “consider” policies, but to “adopt” them, as well. In addition, the bill requires ARB to complete a number of specified actions as part of its mandatory consideration and adoption of policies. Among those actions, the bill requires ARB to:

Consider adopting a low-carbon gas standard, a renewable gas portfolio standard, public utility purchase requirements, purchase requirements by end-use sectors, including transportation, electrical generation, fuels refining, and public utility purchasing, and other policies to increase the production and use of renewable gas and to reduce the carbon intensity of the state’s gas supply.

The programs listed above might be effective and appropriate mechanisms to significantly increase the sustainable production and use of renewable gas. But not each of these programs is an appropriate regulatory activity for ARB. For example, it is outside of ARB’s generally recognized statutory authority to adopt public utility purchase requirements or purchase requirements by end-use sectors, including public utilities. The author and committee may want to strike the bill language cited above (Health and Safety Code §39735((b)(1) added by the latest version of the bill) in its entirety to allow ARB to identify appropriate programs and mechanisms to increase the use of renewable gas.

Similarly, it seems strange to obligate ARB to adopt biogas-related policies before ARB has considered the appropriateness of such policies. Therefore, the author and committee may want to amend the bill to require ARB to consider and, as appropriate, adopt policies to significantly increase the sustainable production and use of renewable gas.

Bill redefines “biogas;” effect is somewhat unclear. This bill modifies the existing statutory definition of “biogas.” Current statute – Section 25420 of the Health and Safety Code – defines “biogas” as gas that is produced from the anaerobic decomposition of organic material. Proponents contend this definition is not ideal and offer, instead, the following definition of “biogas:” gas that is produced from organic waste through anaerobic digestion or eligible conversion technologies, consistent with Section 40106 of the Public Resources Code.” Relatedly, the bill modifies existing statute – Section 40106 of the Public Resources Code – to include “byproducts or residues from composting” among the source material eligible to be used by technologies included in the definition of “biomass conversion.

Part of the effect of this modified definition of “biogas” is clear: inclusion of energy produced by technologies using composting byproducts within the biomass conversion program. However, it is unclear if the change in definition has any other effect.

Bill also redefines “biomethane;” possibly jeopardizes CPUC biomethane standards. Relatedly, current statute – again, Section 25420 of the Health and Safety Code—defines “biomethane” as “biogas that meets the standards adopted pursuant to subdivisions (c) and (d) of Section 25421 for injection into a common carrier pipeline.” Section 25421 of the Health and Safety Code directs the CPUC to adopt standards for the injection of biomethane into common carrier pipelines. Recently, the CPUC, in keeping with statute, adopted standards for injection of biomethane into a pipeline.^[2] The CPUC expresses concern that the changes made by this bill to the definition of “biomethane” could render pipeline injection standards adopted by the CPUC in R.13-02-008 inapplicable or subject to a high degree of uncertainty.

Bill sponsors indicate that the bill’s reference to “biomethane” is meant to indicate biogas that has been purified, leaving nearly exclusively methane, which has many applications aside from pipeline injection. The author distinguishes such uses of “biomethane” from the use of “biomethane” in current law, which is applicable to biomethane to be injected into a common carrier pipeline. Given the potential of the definition of “biomethane” proposed in this bill to jeopardize CPUC biomethane standards, the author and committee may want to amend the bill to state that nothing in the bill is intended to affect standards adopted pursuant to Section 25421 for injection into a common carrier pipeline.

Bill provides another, limited definition of “biogas” and of “renewable gas.” Only for purposes of the requirements of ARB created by this bill, the bill defines “biogas” as having the same meaning as in Health and Safety Code Section 25420, except that it includes gas produced from forest biomass only if produced from forest waste remaining after all other reasonable forest products have been produced and meets several specified conditions. In addition, only for purposes of the requirements of ARB created by this bill, the bill defines “renewable gas” as biogas or synthetic gas generated by a renewable energy resource eligible for credit under the RPS statute.

This analysis has no concern with either definition, which, as mentioned, are limited to the requirements of this bill on ARB. However, several organizations representing various agricultural interests express concern, contending that synthetic gas creates additional methane in the environment and, for this reason, should not be given status equal to biogas.

Double-referred. Should this bill be approved by this committee, it has been referred to the Senate Committee on Environmental Quality.

Prior/Related Legislation

SB 687 (Allen, 2015) would have established the renewable gas standard (RGS), requiring all sellers of natural gas to provide to retail end-use customers in California increasing amounts of “renewable gas,” so that, by January 1, 2030, at least ten percent of the natural gas supplied is “renewable gas.” The bill passed this committee on a vote of 7 to 3 and was held on suspense by the Senate Committee on Appropriations.

AB 577 (Bonilla, 2015) would have required the CEC to develop and implement a grant program for projects related to biomethane production. The bill was held on suspense by the Senate Committee on Appropriations.

AB 2206 (Williams) requests that the California Council on Science and Technology undertake and complete a study analyzing the regional and gas corporation specific issues relating to minimum heating value and maximum siloxane specifications for biomethane before it can be injected into common carrier gas pipelines. The bill is pending consideration by the Assembly Committee on Utilities and Commerce.

AB 2313 (Williams) requires the CPUC to modify its monetary incentive program for biomethane projects. The bill is pending consideration by the Assembly Committee on Natural Resources.

AB 2773 (Quirk) requires the CPUC to modify its technical standards applicable to biomethane to be injected into a common carrier pipeline. The bill is pending consideration by the Assembly Committee on Utilities and Commerce.

AB 1900 (Gatto, Chapter 602, Statutes of 2012) directed the CPUC to identify landfill gas constituents, develop testing protocols for landfill gas injected into common carrier pipelines, adopt standards for biomethane to ensure pipeline safety and integrity, and adopt rules to ensure open access to the gas pipeline system.

AB 2196 (Chesbro, Chapter 605, Statutes of 2012) ensured that biogas qualifies for RPS credit, provided its production, delivery and use meet certain conditions.

SB 1122 (Rubio, Chapter 612, Statutes of 2012) required IOUs to collectively procure at least 250 MW of generation eligible for the RPS from bioenergy generation project, including biogas projects.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Bioenergy Association of California (Source)

Anaergia

CC&R

City of Fresno

Clean Energy

Climate Resolve

Environmental Defense Fund

Inland Empire Disposal Association

Kern Refuse Disposal, Inc.

Los Angeles County Waste Management Association

Pacific Forest Trust

Solid Waste Association of Orange County

TSS Consultants

Victor Valley Wastewater Reclamation Authority

West Biofuels

OPPOSITION:

Agricultural Energy Consumers Association

Agricultural Council of California

Association of California Egg Farmers

California Dairies Inc.

California Farm Bureau Federation

California Forestry Association, unless amended

California Grain & Feed Association

California Municipal Utilities Association

California Poultry Federation

Dairy Farmers of America

Dairy Institute of California

Milk Producers Council

Western United Dairymen

ARGUMENTS IN SUPPORT: According to the author:

California uses more than 2 trillion cubic feet of natural gas per year and that amount is going up. Natural gas from fossil sources is used to generate more than half of the state’s electricity, the majority of its home heating and hot water, and a growing share of transportation fuels. Although cleaner and cheaper than other fossil fuels, natural gas is a major source of GHG emissions, and air and water pollution. In addition, California imports 91 percent of its gas, making the state vulnerable to supply and price fluctuations.

Renewable gas made from organic waste can significantly cut GHG emissions and landfilling. Increasing the use of renewable gas will create jobs and economic productivity, and strengthen California’s energy security. Renewable gas can improve forest health and prevent wildfires by providing a cost-effective end use for thinned forest material. Replacing just 10 percent of California’s natural gas with renewable gas would reduce GHG emissions by 12.6 million metric tons from fossil fuel displacement alone. The actual emissions reduction would be much greater due to upstream reductions in black carbon (from reduced wildfire) and methane emissions from dairies and other uncapped sources.

The State has adopted several policies to promote biogas development, reduce landfilling of organic waste and increase renewable fuels. To date, these policies have achieved mixed results. Recent funding programs are helping to spur new biogas projects, but many of the recent regulatory policies have yet to be implemented, are prohibitively expensive, or do not provide enough certainty to attract the investment necessary to expand the biogas market.

SB 1043 requires ARB to consider and adopt policies to increase the use and production of in-state renewable gas and requires ARB to identify barriers to increased use and production of renewable gas and potential sources of funding to incentivize the renewable gas market in California.

ARGUMENTS IN OPPOSITION: A coalition of agricultural interests oppose this bill, contending it better policy to encourage biogas production and use through financial incentives, as opposed to new mandates. The coalition notes that conventional natural gas cost significantly less than renewable gas, and that the bill could cost users considerable amounts of money. The coalition also complains it inappropriate to put biogas and synthetic gas on equal footing since, the coalition contends, the latter releases methane into the atmosphere.

The California Forestry Association also writes in opposition to the introduced version of this bill, arguing this bill’s provisions regarding biomass should allow use of forest material that meets all requirements of the law. It is unclear if the association is opposed to the most-recent version of this bill.

-- END --

1. 2012 Bioenergy Action Plan ↑

2. See R. 13-02-008. ↑