BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1043 (Allen) - Biogas and biomethane
-----------------------------------------------------------------
| |
| |
| |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
| | |
|Version: April 25, 2016 |Policy Vote: E., U., & C. 7 - |
| | 0, E.Q. 5 - 1 |
| | |
|--------------------------------+--------------------------------|
| | |
|Urgency: No |Mandate: No |
| | |
|--------------------------------+--------------------------------|
| | |
|Hearing Date: May 23, 2016 |Consultant: Narisha Bonakdar |
| | |
-----------------------------------------------------------------
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:
SB 1043 (Allen) Page 1 of
?
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
SB 1043 (Allen) Page 2 of
?
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:
1)
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:
SB 1043 (Allen) Page 3 of
?
a) 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.
b) Ensure, in consultation with the Department of
Resources Recovery and Recycling (CalRecycle), that any
adopted policy recognizes declining landfill gas in future
years.
c) 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.
d) 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.
e) Coordinate with CPUC, CEC, POUs, CalRecycle, and the
Department of Forestry and Fire Protection.
2) 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.
3) Modifies the definition of "biogas" and "biomethane" as
currently used in statute concerning biogas injection into
SB 1043 (Allen) Page 4 of
?
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.
4) 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.
5) 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.
6) Amends the definition of "biomass conversion" to include
byproducts or residue from composting as eligible organic
feedstocks for combustion or non-combustion conversion
technologies.
7) Strikes "sewage sludge" from the materials prohibited from
being feedstocks under the definition of biomass conversion.
8) 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 --
SB 1043 (Allen) Page 5 of
?