NW Natural misses emission targets again

Oregon’s largest gas supplier missed its goal of acquiring renewable natural gas to offset carbon emissions for the second year in a row.

NW Natural, a Northwest gas utility that serves more than 2.5 million people, recently filed a Renewable Natural Gas Compliance report that showed the company sourced just 0.91% of its natural gas as RNG in 2023. That’s well below its own 5% goal, underscoring some of the challenges gas utilities face in transitioning to renewable energy.

Renewable natural gas, or RNG, is a type of biogas that can be made from decaying organic matter. It’s an important part of NW Natural’s efforts to offset carbon emissions, which gas companies are increasingly facing as burning fossil fuels contributes to human-induced climate change. RNG is often produced by capturing byproducts from landfills, livestock farming, or sewage treatment. It’s mostly methane, a greenhouse gas that’s 86 times more effective at trapping heat in the atmosphere than carbon dioxide over a 20-year period.

Environmentalists say quantifying the benefits can be complicated and have pushed for different approaches, such as offering customers energy-efficient home upgrades. But Northwest Natural doubled down on RNG.

“While there is more work to be done, we remain committed to securing the supply of RNG to our customers as markets stabilize and we see greater regulatory certainty,” Gretchan Blum, public information officer at NW Natural, said in an emailed statement.

In 2022, NW Natural’s RNG volume was 0.1, representing 0.15% of the company’s natural gas sales. In 2021, it was 0.21%.

Last year, a spokesperson for NW Natural said the company was fully committed to its climate goals and was close to meeting its 2023 target of 5%.

“We continue to see a lot of opportunity for RNG and are actively pursuing potential opportunities that will best optimize resources and be cost-competitive for our customers,” Blum said Monday.

Blum said that despite falling short of its 2022 Integrated Resource Plan targets, the company increased its purchases of renewable natural gas more than five-fold in 2023 compared to the previous year.

NW Natural was one of the first utilities in the country to promote RNG as a carbon reduction strategy, “as a cost-effective, feasible solution to lower emissions in the gas system,” Blum said.

Blum said the utility also changed its approach in 2023 to meet the requirements of the state’s Oregon Climate Protection Program, prioritizing community climate investment credits under that program.

NW Natural expected to purchase more than $40 million in credits to be used to finance renewable energy projects, energy efficiency upgrades and emissions reductions in disadvantaged communities across the state.

But the Climate Protection Program is on hold while the state goes through a second rulemaking process after fossil fuel companies, including NW Natural, sued to stop it in 2022. The program would set limits and reduce greenhouse gas emissions by fossil fuel companies like NW Natural by 90% by 2050. A court ruled last year that the Oregon Department of Environmental Quality, the agency responsible for creating and implementing the program, had failed to follow disclosure rules under the federal Clean Air Act.

“Given the ongoing work on the Climate Protection Program regulations, if they are approved in their current form, RNG will need to meet our compliance goals,” Blum said.

But it’s not the RNG supply that’s keeping the company from achieving its goal, Blum said, adding that “the hurdle that needs to be overcome is enabling the policy” that will help NW Natural acquire more.

Lack of progress in RNG raises concerns

It’s concerning that NW Natural hasn’t acquired enough renewable natural gas, said Bob Jenks, executive director of the Oregon Citizens Utility Board, an organization that represents the interests of customers in the state.

“They’ve been working on getting RNG for years,” Jenks said. “They’ve invested in a lot of projects. They’ve gone to the Midwest, to New York. They’ve scoured the country for ways to get RNG, and it’s still less than 1% of their system.”

Jenks said there are two problems with renewable natural gas right now — it’s more expensive than standard natural gas and it’s limited in availability. A recent report from NW Natural also shows how difficult it is to get RNG because other gas companies are looking to acquire the commodity as well.

“When you look at their ability to piece together what they’ve done over the last few years and still stay below 1%, that’s problematic,” Jenks said.

The utility is currently looking to expand its natural gas pipeline system. Instead of coming up with an electrification program that could reduce carbon dioxide emissions, like energy efficiency programs, it is looking to make decisions that could increase those emissions, Jenks said.

“Vermont Gas in New England actually helps customers finance heat pumps,” he said. “So putting more electric appliances in homes to reduce emissions.”

The investment in RNG is part of a broader effort by NW Natural to continue to promote its current business model rather than take the step many environmentalists have called for by moving away from natural gas.

Jenks, however, said he recognizes that RNG is a raw material that will be needed in some industries, such as transportation, airline and shipping fuel production and other industries that do not rely on electricity.

“RNG should be developed and used, but it should be done in places that are not connected to the electrical grid,” Jenks said.

According to Charlie Spatz, a researcher at the Energy and Policy Institute, the fact that NW Natural has failed to acquire significant amounts of RNG is distracting and delaying the implementation of electrification policies.

“We see gas companies talking about renewable natural gas even as they face pressure from policymakers and regulators to electrify the building sector,” he said.

The Energy and Policy Institute is a watchdog organization that counters disinformation spread by fossil fuel and utility companies.

Spatz said gas utilities across the country have made big promises about getting natural gas while reducing carbon emissions. But ultimately, he said, more work needs to be done to transition homes and buildings from natural gas to electrification.

“We’ve seen lawsuits filed by gas companies in the Northwest, delaying climate policy, aggressive attacks on building codes, delaying building codes,” he said. “All of these factors have contributed to slowing down the implementation of much-needed climate policy that would decarbonize the building sector.”

by Monica Samayoa, OPB, Oregon Capital Chronicle