BILL ANALYSIS Ó
AB 1900
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2011-2012 Regular Session
BILL NO: AB 1900
AUTHOR: Gatto
AMENDED: August 24, 2012
FISCAL: Yes HEARING DATE: August 28, 2012
URGENCY: No CONSULTANT: Rebecca Newhouse
SUBJECT : BIOMETHANE
SUMMARY :
Existing law ,
1) Pursuant to Health and Safety Code (§25420 et seq.):
a) Defines terms relating to the generation, sale and
delivery of gas for the ultimate production of energy.
b) Prohibits a gas producer from knowingly selling,
supplying or transporting, and a gas corporation from
knowingly purchasing, landfill gas that exceeds a maximum
amount of vinyl chloride, specified by the Public
Utilities Commission (PUC), not to exceed the operative no
significant risk level of vinyl chloride, as specified.
c) Prohibits a gas corporation from knowingly and
intentionally exposing any customer, employee or other
person to gas from a landfill that contains any known
carcinogen or reproductive toxin without providing a
warning to the individual, except as specified.
d) Requires that every person who produces, sells,
supplies or releases landfill gas for off-site sale, to
test the gas twice a month for the presence of carcinogens
or reproductive toxins in accordance with specified
guidelines and requires the appropriate air quality
management district or the air pollution control district
to require the testing be performed at a laboratory
certified by the Department of Toxic Substances Control
(DTSC) and requires the district to transmit the results
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of testing to DTSC for the purpose of determining
compliance with maximum vinyl chloride levels. DTSC is
required to impose a fixed fee upon the gas producer to
cover costs associated with the determination of
compliance by DTSC. The results of the gas sample testing
are required to be promptly reported to the gas
corporation that purchased the landfill gas, or any person
or public agency who requests a copy of the report.
e) Specifies that the above provisions do not prohibit the
direct delivery of landfill gas for the generation of
electricity, production of steam or other industrial
application.
f) Specifies that any person in violation of the above
provisions will be liable for a penalty of up to $2,500
per day for each violation.
2) Provides that eligible renewable electrical generation
facilities must use biomass, solar thermal, photovoltaic,
wind, geothermal, renewable fuel cells, small hydroelectric,
digester gas, limited non-combustion municipal solid waste
conversion, landfill gas, ocean wave, ocean thermal, and
tidal current to generate electricity, and requires that
renewable electrical generation facilities must meet certain
requirements, as specified (Public Resources Code §25741).
3) Under the Renewable Portfolio Standard (RPS) requires
investor-owned utilities (IOUs), publicly owned utilities
(POUs) and certain other retail sellers of electricity to
achieve 33% of their energy sales from an eligible renewable
electrical generation facility by December 31, 2020, and
establishes portfolio requirements and a timeline for
procurement quantities of three product categories. By 2020,
75% of RPS compliance energy must come from category one and
include renewable energy interconnected to the grid within,
scheduled for direct delivery into, or dynamically
transferred to, a California balancing authority (i.e., the
entity responsible for the operation of the transmission grid
within its metered boundaries which may not be limited by the
political boundaries of the State of California) (Public
Utilities Code §399.11 et seq.).
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This bill as approved by the Senate Environmental Quality
Committee (August 6, 2012 version of the bill) :
1) Strikes the provision that prohibits a gas producer from
knowingly selling, supplying or transporting, and a gas
corporation from knowingly purchasing, landfill gas that
exceeds a maximum amount of vinyl chloride, specified by the
Public Utilities Commission (PUC), not to exceed the
operative no significant risk level of vinyl chloride, and
instead requires the Office of Environmental Health Hazard
Assessment (OEHHA) to identify all constituents that may be
found in landfill gas that is to be injected into a common
carrier pipeline and that could adversely impact public
health and safety.
2) Requires OEHHA to specify the maximum amount of the
constituents identified in #1 above that may be found in
landfill gas that is to be injected into a common carrier
pipeline and requires that those values not exceed the no
significant risk level, as specified.
3) Requires that the standards adopted pursuant to #1 and #2
above not expose any person to a chemical known to cause
cancer or reproductive harm without a warning and not expose
a natural gas pipeline to an unreasonable risk of harm to
integrity.
4) Strikes the existing testing requirements for vinyl chloride,
and instead requires that the PUC develop testing protocols
for landfill gas to be injected into a common carrier
pipeline that tests for all identified constituents that may
pose a health or safety risk, and requires the PUC to ensure
that the adopted testing procedures are accurate and where
needed, continuously identify landfill gas constituents.
5) Requires that gas collected at a solid waste landfill to be
injected in to a common carrier pipeline for sale offsite to
a gas corporation or noncore customer comply with the
standards and testing protocols.
6) Requires a gas producer to ensure that landfill gas they seek
to inject satisfies the PUC's standards and prohibits gas
corporations from knowingly accepting gas that does not
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satisfy the standards.
7) Prohibits a gas producer from selling, supplying or
transporting gas collected and gas corporations from
purchasing gas collected from a hazardous waste landfill.
8) Requires the PUC to adopt policies and programs that promote
the in-state production and distribution of a variety of
sources of biomethane.
9) Requires the CEC to hold public hearings to identify
impediments that limit procurement of electricity generated
from biomethane in California, including impediments to
interconnection, and report identified impediments in the
Integrated Energy Policy Report.
10)Requires that the PUC adopt pipeline access rules that will
ensure nondiscriminatory open access to each corporation's
gas pipeline system for the purpose of physically
interconnecting with the pipeline and effectuating the
delivery of gas.
11)Specifies that AB 1900 will only become operative if both AB
1900 and AB 2196 (Chesbro) are enacted.
Amendments taken on the Senate Floor (August 22, 2012 version of
the bill):
1) Require OEHHA, in consultation with the Air Resources Board
(ARB), Department of Toxic Substances Control (DTSC),
Department of Resources Recycling and Recovery (DRRR) and
CalEPA to compile a list of constituents of concern (COCs)
found in biogas at concentrations significantly higher than
natural gas and that could pose a health risk.
2) Require OEHHA to determine health protective levels for the
list of COCs and consider potential health impacts and risks
to utility workers and gas end users.
3) Require ARB to identify realistic exposure scenarios, and
health risks associated with the exposure scenarios for the
identified COCs, in consultation with OEHHA.
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4) Require ARB, in consultation with DTSC, DRRR, and CalEPA to
use the health protective levels and exposure scenarios
identified to determine concentrations of COCs, and identify
monitoring, testing, reporting and recordkeeping requirements
separately for each source of biogas, to be completed by May
15, 2013, and updated at least every five years.
5) Specify that the actions taken by the CalEPA agencies are not
regulations and not subject to the Administrative Procedures
Act (APA).
6) Require PUC, by September 15, 2013, to adopt standards for
the concentrations of COCs that may be found in biomethane to
ensure the protection of human health and pipeline facility
safety, giving due deference to the determinations by ARB
above in #4 and to adopt monitoring, testing, reporting, and
recordkeeping requirements identified by ARB above (#4). The
PUC is also required to update the standards and monitoring
requirements every five years, or earlier if new information
becomes available.
7) Require PUC to require gas corporation tariffs to condition
access to common carrier pipelines on the applicable customer
meeting specified standards and requirements.
8) Prohibit a person from injecting biogas into a common carrier
pipeline unless it satisfies specified standards and prohibit
a person from knowingly selling, transporting, supplying or
purchasing, and a gas corporation from knowingly purchasing,
biogas collected from a hazardous waste landfill gas through
a common carrier pipeline.
9) Define "biogas," "biomethane," "common carrier pipeline," and
"dedicated pipeline."
10)Make clarifying and conforming changes.
Amendments taken on the Senate Floor (August 24, 2012 version of
the bill) and subsequently referred back to the Committee on
Environmental Quality pursuant to Senate Rule 29.10:
1) Extend the deadline for PUC to adopt standards and monitoring
requirements as required by #6 to December 31, 2013,
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2) Require the California Energy Commission to hold public
hearings to identify impediments that limit procurement of
biomethane in California, including impediments to
interconnection, and report identified impediments and
potential solutions, as specified.
3) Strike the provision that specifies that AB 1900 will only
become operative if both AB 1900 and AB 2196 (Chesbro) are
enacted.
4) Change a section number to avoid chaptering out conflicts.
COMMENTS :
1) Back on a 29.10 . AB 1900 was amended twice on the floor and
subsequently referred back to committee in accordance with
Senate Rule 29.10. The amendments to AB 1900 differ from the
version of the bill approved by the Senate Environmental
Quality Committee by expanding the scope of the overhaul of
landfill biogas safety and monitoring standards to include
biogas from various sources and also requiring determinations
to be accomplished in a specified time frame with required
actions and determinations from OEHHA and ARB, in
consultation with various other agencies of CalEPA. The
provision making passage of AB 1900 contingent on passage of
AB 2196 was removed from AB 1900 on August 24, 2012.
2) Purpose of Bill . According to the author, current statute
sets strict standards for the use of landfill gas in natural
gas pipelines in California and current regulations adopted
by the Investor Owned Utilities (IOUs) and later by the PUC
ban landfill gas from entering into common carrier pipelines
completely. The author notes that restrictions against
landfill gas rose out of fear in the 1980's that landfill gas
contained harmful amounts of vinyl chloride, a chemical known
to cause cancer, but recently the Gas Technologies Institute
has since shown that vinyl chloride is not present in harmful
levels, if at all, in landfill gas. The author adds that
these statutes and regulations have stifled the growth of the
biomethane industry in California and other biomethane
producers, such as waste-water treatment facilities and dairy
farms, and have intimated that regulations surrounding
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biomethane have made it impossible to compete with other
state-subsidized renewables, such as solar, in an attempt to
develop a diverse renewables portfolio for the state.
According to the author, AB 1900 breaks down barriers to
transporting biomethane in-state by requiring the PUC to
develop new gas safety standards for nonhazardous landfill
gas and prohibiting IOUs from implementing anti-competitive
barriers to non-hazardous landfill gas once it has met safety
specifications and standards.
3) Background . Through a series of steps involving the
bacterial breakdown of organics, carbon-based material can be
converted to methane in an anaerobic atmosphere. Anaerobic
digesters, which operate with various temperatures, pH and
bacteria types, can break down organic wastes, dramatically
speeding up the natural decomposition process, and 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
natural gas. Common sources of biomethane are landfills,
dairy farms, and wastewater treatment plants. The burning of
biomethane is considered carbon neutral, in contrast to
extracted natural gas, since the carbon in biomethane was
recently removed from the atmosphere. According to the US
EPA, methane is over 20 times more effective than CO2 in
trapping heat in the atmosphere over a 100-year period.
Landfill biogas . According to the Department of Resources
Recycling and Recovery (DRRR or CalRecycle), organic
materials made up almost 33% of the total waste stream in
California in 2008. Depending on the types of solid waste,
the chemical makeup of landfill biogas can vary greatly from
the biogas produced from dairy farms and municipal solid
waste and waste water treatment facilities. Air quality
management districts regulate the emissions from landfills
and require them to have gas collection and control systems
to reduce emissions of methane, non-methane organic
compounds, volatile organic compounds and toxic air
contaminants below specified standards. Often, these systems
involve a combustion step as a way to reduce the emissions of
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methane and other organics.
More than twenty years ago, concern arose regarding the
emission of vinyl chloride at a particular Class I hazardous
waste landfill, where dangerously high levels of the
carcinogen were measured. Because Class II landfills do not
accept hazardous waste, the emissions from these landfills
were assumed to be free of hazardous chemicals, however,
subsequent analysis of Class II landfills biogas detected
vinyl chloride and other toxics in non-hazardous waste gas
emissions as well, and a 1987 report from the South Coast Air
Quality Management District identified vinyl chloride and
benzene in 90% of the Class II landfills tested. The study
concluded that the presence of the toxins resulted from
either illegal dumping, or as an intermediate of microbial
digestion of chlorinated chemicals. In response, California
adopted strict requirements regarding the allowable levels of
vinyl chloride and the required testing protocols for vinyl
chloride for the legal sale, supply or transport of landfill
gas to a gas corporation in the state. AB 1900 requires
landfill gas producers and corporations comply with standards
and testing protocols developed by the PUC for any
constituent in non-hazardous landfill gas that may pose a
risk to health and safety.
Currently, the Southern California Gas Company prohibits the
use of landfill gas in its natural gas pipelines. AB 1900
requires gas corporations to adopt non-discriminatory
pipeline access rules, and gas corporations would be
prohibited from excluding gas based only on the fact that it
was derived from certain non-prohibited sources, including a
nonhazardous waste landfill.
The Gas Technology Institute (GTI) recently released results
of analytical tests on 27 landfill gas samples processed
using one of three gas clean-up technologies. Based on their
results, GTI concluded that landfill gas can be processed to
meet typical gas quality standards, or tariffs, to be
introduced with natural gas supplies. GTI data indicates
that vinyl chloride was undetectable in all samples of
post-processed landfill gas.
4) RPS landfill eligibility . Under the California Renewable
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Portfolio Standard (RPS) electricity IOUs, other retail
sellers of electricity, and publically owned electric
utilities (POUs) are required to increase the amount of
renewable energy they procure until 33% of their retail sales
are served with renewable energy by December 1, 2020.
Current law identifies electrical generation facilities that
use digester gas, municipal solid waste conversion, or
landfill gas, among other fuels, as renewable electrical
generation facilities and can be certified, if they meet
certain requirements, by the CEC as RPS-eligible, and may be
used by IOUs and POUs to satisfy their RPS procurement goals.
As of March 28, 2012, the CEC suspended the RPS-eligibility
guidelines related to biomethane, citing the concern that the
current guidelines may not advance the environmental goals of
SB 2X (Simitian) Chapter 1, Statutes of 2011, which
established a preference for electricity generation that
provides environmental benefits to the state by displacing
in-state fossil fuel consumption, reducing air pollution
within the state, and helping the state meet its climate
change goals by reducing emissions of greenhouse gases
associated with electrical generation. AB 2196 (Chesbro)
would reinstate RPS-eligibility for facilities using
biomethane, meeting certain requirements, and will go into
effect only if both AB 2196 and AB 1900 are enacted.
5) Compatible with a 75% solid waste diversion goal ? Changes to
the RPS law by SB 2X established three portfolio content
categories within which all new RPS procurement is classified
and sets quantitative procurement limits for each category.
Renewable energy interconnected to the grid within, scheduled
for direct delivery into, or dynamically transferred to a
California balancing authority, qualifies as category one
procurement, and is required to make 75% of the portfolio in
the 2017-2020 compliance period. AB 1900 would reduce
barriers for the use of landfill biomethane by updating
health and safety standards and testing protocols and
requiring the PUC to adopt policies and programs to promote
biomethane use from a variety of sources, including,
presumably, landfill gas. If certain requirements are met,
California electricity generation from in-state landfill gas
may qualify as category one, and might therefore be in high
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demand, as California IOUs and POUs work to meet their RPS
requirements.
One concern is that AB 1900 could incentivize the continued
disposal of organic material to landfills, especially if
those landfills have negotiated long-term contracts with IOUs
or POUs, and potentially stifle progress toward developing
the necessary composting infrastructure to achieve complete
organic waste diversion. Under AB 341 (Chesbro) Chapter 476,
Statutes of 2011, CalRecycle has a goal of source-reduction,
recycling and composting at least 75% of California's solid
waste by 2020. Since organic matter makes up a large
percentage of the current waste stream in California,
significant gains in organic waste diversion are necessary
for CalRecycle to obtain that waste diversion goal.
6) Public process . The August 22, 2012, set of floor amendments
specify that the actions of CalEPA agencies required by AB
1900 are not regulatory and are exempt from the
administrative and rulemaking provisions of the
Administrative Procedures Act. The APA defines "regulation"
as every rule, regulation, order, or standard adopted by any
state agency to implement, interpret, or make specific the
law enforced or administered by it, or to govern its
procedure. (Government Code §11342.600).
The bill requires the PUC to adopt standards for the
monitoring, testing, reporting and recordkeeping requirements
identified by the ARB (page 6, lines 26-31). Because those
determinations by the ARB would be exempt from any public
process requirements, and PUC required to adopt them, the
language does not provide any flexibility for incorporating
public input into the ultimate monitoring, testing,
reporting, and recordkeeping requirements by the PUC during
their rulemaking and regulatory process. This inflexibility
is in contrast to the language on page 6, lines 22-24, which
requires the PUC to adopt standards for the concentrations of
COCs to protect human health, giving due deference to the
determinations by the ARB. This language gives PUC the room
to adjust their ultimate determinations for COC
concentrations based on their public regulatory process.
7) Striking of contingent enactment language . AB 1900, as
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passed by the Senate Environmental Quality Committee,
required AB 1900 to be contingent upon passage of AB 2196
(Chesbro). AB 2196 failed passage on the Senate floor on
August 23, 2012 (12-21), but was granted reconsideration.
Upon passage of AB 1900 and not AB 2196, PUC would be
required to promote the in-state production and distribution
of biomethane, however, the CEC suspension would remain in
effect, and the status of biomethane RPS eligibility would
remain uncertain.
8) Related legislation . The following legislation is related to
biomethane:
a) AB 2562 (Fuentes) of 2010 would have required the
testing protocols for landfill gas to apply only to
hazardous, Class I, landfill gas. AB 2562 was held in the
Assembly Environmental Safety and Toxic Materials
Committee.
b) AB 2196 (Chesbro) of 2012, grandfathers biomethane
procurement contracts executed on or before March 28, 2012
and requires that the source and delivery of the
biomethane must be verified by the CEC and additional
requirements must be met for biomethane procurement
contracts on or after that date, to be RPS-eligible. The
bill was denied passage on the Senate floor on August 23,
2012 (12-21).
SOURCE : Assemblymember Gatto
SUPPORT : Californians Against Waste
California Association of Sanitation Agencies
California Municipal Utilities Association
California State Association of Electrical
Workers
California State Council of Laborers
California State Pipe Trades Council
Cambrian Energy
Coalition for Renewable Natural Gas
Cornerstone Environmental Group
First Southwest Company
Sacramento Municipal Utility District
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South Coast Air Quality Management District
Waste Management
OPPOSITION : None on file
NOTE: The support and opposition listed are from
the June 14, 2012 version of the bill, as heard
in the Senate Environmental Quality Committee on
July 2, 2012.