BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: SB 1153 Hearing Date: 4/5/2016
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|Author: |Cannella |
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|Version: |3/29/2016 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Jay Dickenson |
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SUBJECT: Greenhouse gases: scoping plan: biomethane
DIGEST: This bill requires the Air Resources Board to provide
a comprehensive overview of state efforts to encourage the
development of instate biomethane and renewable natural gas.
ANALYSIS:
Existing law:
1.Directs the California Air Resource Board (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.)
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
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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 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.)
7.Requires CPUC to adopt policies and programs that promote the
in-state production and distribution of biomethane. (Public
Utilities Code §399.24 )
8.Requires the California Energy Commission (CEC) to hold public
hearings to identify in its Integrated Energy Policy Report
(IEPR) 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.Requires ARB, as part of the "AB 32" scoping plan, to provide
a comprehensive overview of state efforts to encourage the
development of instate biomethane and renewable natural gas.
2.Prescribes specific information and analysis to be included in
the overview.
Background
Biogas, biomethane and natural gas by other names. Bioenergy is
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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 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>
This bill references "biomethane" and "renewable natural gas."
However, this bill defines neither term specifically for
purposes of this bill.
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.
Many policies, programs and directives to encourage use of
biogas and biomethane. The legislature has repeatedly mandated
actions to promote the use of biogas. 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
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<1> 2012 Bioenergy Action Plan
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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. Among the
measures included in ARB's scoping plan is the Low Carbon Fuel
Standard, which calls for a reduction in the carbon intensity of
California's transportation fuels by 2020. The administration
reports that biofuels, such as compressed biomethane, will play
an important role in reducing the lifecycle GHG impact from the
transportation sector. The proposed Governor's 2016-17 Budget
includes additional programs to provide financial incentives for
biogas and biomethane.
Relatedly, statute requires each of California's electric
utilities to procure at least 50 percent of its electricity from
renewable resources. 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 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.
In addition, the CEC reports the awarding of more than $49
million on 13 biomethane feasibility, demonstration and
production projects throughout the state.
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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.
May as well know what we are doing. The author contends this
bill seeks to address two primary obstacles to greater
"renewable" natural gas development in California - high costs
of interconnection and lack of long-term contracts - though it
is unclear how the bill addresses with of those obstacles.
Nonetheless, given the state's many biogas-related efforts, as
well as the to-date limited development of instate biogas, it
seems appropriate to ask the administration to catalogue and
assess the state's biogas-related policies and programs. It
seems appropriate, too, to task ARB with the undertaking, given
the board's lead role in implementing the state's GHG emission
reduction program. The ARB, however, is not alone in
implementing the state's biogas-related policies and programs,
as demonstrated above. Presumably, ARB will consult with other
state agencies in conducting the comprehensive overview required
by this bill. The author and committee may nonetheless want to
amend the bill, as shown below, to ensure ARB consults with
other state agencies responsible for implementing biogas-related
policies and programs:
38561.5 As part of the update to the scoping plan required
pursuant to subdivision (h) of Section 38561, the state
board, in consultation with the California Public Utilities
Commission, the State Energy Resources Conservation and
Development Commission, the Department of Recycling and
Resources Recovery, and any other relevant state agency,
shall provide a comprehensive overview of state efforts to
encourage the development of instate biomethane and
renewable natural gas.
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Double-referred. Should this bill be approved by this
committee, it has been referred to the Senate Committee on
Environmental Quality.
Prior/Related Legislation
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.
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.
SB 1043 (Allen) requires ARB to consider and adopt policies to
significantly increase the sustainable production and use of
"renewable gas." The bill is pending consideration by this
committee.
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
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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: No Fiscal
Com.: Yes Local: Yes
SUPPORT:
Agricultural Energy Consumers Association (Source)
Agricultural Council of California
Association of California Egg Farmers
California Dairies Inc.
California Grain & Feed Association
California Poultry Federation
Dairy Farmers of America
Dairy Institute of California
Los Angeles County Solid Waste Management Committee/Integrated
Waste
Management Task Force
Milk Producers Council
Western United Dairymen
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: According to the author:
According to ARB, California must immediately reduce
emissions of Short-Lived Climate Pollutants (SLCPs),
including methane (CH4). Methane from biological
processes, such as farms, food processing and urban waste,
can also be a significant source of clean energy if
captured and upgraded to renewable natural gas (RNG). RNG
can be utilized to supplement conventional natural gas in
existing pipelines and can be utilized as a low- or
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negative carbon transportation fuel in heavy duty freight
trucks. To date, capturing and converting methane from
landfills, wastewater treatment plants, dairies and other
sources has proved elusive in California in large part due
to obstacles and cost barriers related to pipeline
interconnection and injection and lack of long-term
contracts for RNG.
SB 1153 seeks to address these obstacles to the development
of RNG projects in California by directing ARB to develop,
in the update to its GHG scoping plan, an analysis of steps
necessary to encourage development of biomethane and RNG
from instate projects, such as landfills, wastewater
treatment plants and dairy operations. SB 1153 seeks to
address two primary obstacles to greater RNG development in
California - high costs of interconnection and lack of
long-term contracts.
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