BILL ANALYSIS Ó
AB 2206
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Date of Hearing: April 18, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 2206
(Williams) - As Introduced February 18, 2016
SUBJECT: Biomethane: interconnection and injection into common
carrier pipelines: research
SUMMARY: Requests that the California Council on Science and
Technology (CCST) complete a study analyzing issues relating to
minimum heating value and maximum siloxane specifications for
biomethane injected into common carrier gas pipelines.
EXISTING LAW:
1)Requires the Public Utilities Commission (PUC) to adopt
pipeline access rules to ensure gas corporations provide
nondiscriminatory open access to the pipeline system for
biomethane, regardless of the type or source of the biogas.
2)Requires the California Energy Commission (CEC) to identify
impediments that limit procurement of biomethane in
California, including, but not limited to, impediments to
interconnection and offer solutions to those impediments.
3)Directed the Office of Environmental Health Hazard Assessment
(OEHHA) and the Air Resources Board (ARB), in consultation
with other state agencies, to perform certain tasks related to
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the human health effects of biogas and biomethane.
THIS BILL:
1)Requests CCST to undertake and complete a study analyzing
issues relating to minimum heating value and maximum siloxane
specifications adopted by the PUC for biomethane before it can
be injected into common carrier gas pipelines.
2)Requires each gas corporation operating common carrier
pipelines in California to proportionately contribute to the
expenses to undertake the study with the cost recoverable in
rates if CCST agrees to undertake and complete the study.
3)Authorizes the PUC to modify certain available monetary
incentives to allocate some of these incentive moneys to pay
for the costs of the study.
4)Requires, if CCST agrees to undertake and complete the study,
the PUC, within six months of its completion, to reevaluate
requirements and standards adopted for injection of biomethane
into common carrier pipelines and, if appropriate, change
those requirements and standards or adopt new requirements and
standards, giving due deference to the conclusions and
recommendations made in the study.
5)Requires CCST to:
a) Consider and evaluate other states' standards, the
source of biomethane, the dilution of biomethane after it
is injected into the pipeline, the equipment and technology
upgrades required to meet the minimum heating value
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specifications, including the impacts of those
specifications on the cost, volume of biomethane sold,
equipment operation, and safety.
b) Consider whether different sources of biogas should have
different standards or if all sources should adhere to one
standard for the minimum heating value and maximum
permissible level of siloxanes. The study shall develop
the best science reasonably available and not merely be a
literature review.
c) Complete the study within nine months from entering into
a contract to complete the study.
6)Requires the PUC to reevaluate its requirements and standards
for biomethane injection in common carrier pipelines and, if
appropriate, change those requirements and standards or adopt
new requirements and standards, giving due deference to the
conclusions and recommendations made in the study by CCST.
FISCAL EFFECT: Unknown
COMMENTS:
1)Background. In implementing the requirement to adopt pipeline
access rules for biomethane [pursuant to AB 1900 (Gatto),
Chapter 602, Statutes of 2012], the PUC issued Decision
14-01-034 adopting concentration standards for 17 Constituents
of Concern (these include ammonia, biologicals, hydrogen,
mercury, and siloxanes), and the monitoring, testing,
reporting, and recordkeeping protocols for biomethane to be
injected into the gas utilities' pipelines.
In June 2015, the PUC adopted D.15-06-029, and concluded that
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the costs of complying with the standards and protocols
adopted by D.14-01-034 should be borne by the biomethane
producers. However, consistent with AB 1900 and to provide
initial support to the developing biomethane market, the PUC
included a five-year monetary incentive program to encourage
biomethane producers to design, construct, and to successfully
operate biomethane projects that interconnect with the gas
utilities' pipeline systems so as to inject biomethane that
can be safely used at an end user's home or business. As
described in this decision, each biomethane project that is
built over the next five years, or sooner if the program funds
are exhausted before that period, can receive 50% of the
project's interconnection costs, up to $1.5 million, to help
offset these costs upon the successful interconnection and
operation of the facility.
According to the author, since the new standards were adopted,
not one new pipeline biogas project has been built and the
only one currently in operation - the Point Loma Wastewater
Treatment facility in San Diego County - has said that it
could not meet the new standards.
2)Author's statement:
California is a leader in the fight against climate change. The
state has adopted dozens of policies to increase low carbon
fuels, renewable energy, energy efficiency, recycling, carbon
sequestration and more. But, California must reduce emissions
from the gas sector and encourage in-state refining of biofuel
to meet long term climate goals. Natural gas use has been
increasing in recent years and will likely to continue to do so
given the rapid increase in gas fired power plants and the
historically low price in natural gas. Alternatively,
biomethane, which can be produced from biological material, can
provide immediate and significant greenhouse gas reductions and
other benefits. However, the cost to comply with pipeline
regulatory requirements make pipeline biomethane
cost-prohibitive.
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The (PUC) recently adopted the regulatory requirements for
biomethane injected into the natural gas pipeline. These
include both chemical contaminant and thermal heating value
requirements. However, the standards apply to biomethane even
when dilution in the pipeline means the biomethane will only be
1% of the total gas that reaches the first end user. As such,
the contaminant and thermal values could be very different than
if the biomethane is 100%. AB 2206 directs the PUC to contract
with (CCST) to analyze the contaminant and thermal requirements
including standards in other states as well as the different
sources of biomethane and the impacts on cost and safety.
3)Issues with heating value and siloxanes. It is unclear
if the lower heat content of biogas will adversely impact
end use equipment (such as gas turbines, water heaters,
cook stoves, furnaces, etc.) which were not designed to
be used with lower heat gas. Current utility heating
values are 990 British thermal units per standard cubic
feet (btu/scf). Biomethane proponents prefer a heat rate
of 950 to 970 btu/scf. In an earlier decision the PUC
relied on to reach its decision on heating value in this
proceeding, the PUC found that heating value could have
an effect on auto-ignition, flashback, and combustion
dynamics (D.06-09-039). The PUC also relied on a
National Gas Council (NGC) paper done in conjunction with
representatives of liquefied natural gas (LNG) suppliers,
natural gas pipelines, utilities, power generators,
industrial process gas users, appliance manufacturers,
and natural gas processors. This paper found that
understanding the historical composition of gas in a
region is essential to establishing acceptable
interchangeability standards, and that for home
appliances, that "(a)ppliance performance degrades when
the appliance is operated with gas that is not
interchangeable with the gas used to tune the appliance
when it was first installed."
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The PUC went on to state:
The proponents of biomethane have not introduced any
scientific evidence in this proceeding to demonstrate that
lowering the heating value to 950 or 970 btu/scf will not
cause end use equipment problems. Instead, the biomethane
proponents rely on the argument that since other states
allow biomethane to have a minimum heating value of 950
btu/scf, or close to that number, that California should
likewise lower its minimum heating value. That argument is
insufficient justification to lower the heating value when
such a change could affect the integrity and safety of end
use equipment. As the 2009 GTI (Gas Technology Institute)
Report notes, 'Low BTU gas may have detrimental effects on
end use equipment and may not be compatible with many
systems.'
Siloxane is found in gas produced at wastewater facilities and
is a waste product of detergents and cosmetics. During
combustion of biogas containing siloxanes, silicon is released
and can combine with free oxygen or various other elements in
the combustion gas. Deposits are formed containing mostly
silica or silicates but can also contain calcium, sulphur,
zinc, and phosphorous. These deposits can accumulate and must
be removed by chemical or mechanical means.
According to the PUC decision setting standards for pipeline
biomethane, "(t)he biomethane proponents have not provided any
evidence to substantiate the argument that these 17
constituents of concern will not harm human health, or affect
the integrity and safety of the pipeline and pipeline
facilities."
To the extent that CCST is able to "develop the best science
reasonably available and not merely be a literature review" as
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specified in the bill, then this study may aid in settling
these issues.
4)Double referral. This bill passed the Assembly Utilities and
Commerce Committee by a vote of 15-0 on April 6, 2016.
REGISTERED SUPPORT / OPPOSITION:
Support
American Biogas Council
Atlas ReFuel
Bioenergy Association of California
Central Coast Forest Association
Clean Energy
CR&R Incorporated
Sanitation Districts of Los Angeles County
TSS Consultants
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West Biofuels
Opposition
None on file
Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)
319-2092