Two bills in the Legislature would significantly boost demand for biomethane generated by dairy digesters. But agricultural groups contend that cows are not producing enough methane to keep up with such a demand and that it would lead to soaring gas prices beyond the existing increases.
Gas utilities have sponsored a measure that would require the California Public Utilities Commission (CPUC) to adopt renewable hydrogen procurement goals. This process for generating hydrogen involves capturing biomethane at dairies and landfills through anaerobic digesters. It can also come from renewable electricity or biomass plants that convert forest debris or agricultural waste into energy. Utilities would then mix the hydrogen with natural gas to pump into the existing system.
Plumbers and pipe fitters, who stand to lose thousands of jobs by phasing out natural gas in California, are strong proponents of using renewable hydrogen to lower the fuel’s carbon footprint rather than replace it entirely.
In January the Air Resources Board approved an update to its Climate Scoping Plan that described renewable hydrogen as crucial for the state to meet its climate goals. It called for implementing Senate Bill 1440, passed in 2018 to set procurement targets for investor-owned utilities.
In presenting Assembly Bill 342 to a policy committee last week, Assemblymember Blanca Pacheco stressed that it would only authorize the CPUC to consider a procurement target for renewable hydrogen and not set a mandate for the utilities commission.
Asm. David Alvarez, D-San DiegoScott Wetch, a lobbyist for the California State Pipe Trades Council, added that the only alternative for bringing hydrogen to Californians is to deliver it by truck as if it were propane, which would undermine the climate goals. He noted that Saudi Arabia is seeking to build the world’s largest hydrogen production facility and ship it to rising consumer markets in places like California.
“We have to move the ball forward on hydrogen,” said Wetch. “California has to show a signal that we're serious.”
With the potential for raising natural gas costs, he reasoned that solar generation was once costly as well, and rates came down as the technology was broadly adopted.
Michael Boccadoro, executive director of the Agricultural Energy Consumers Association, countered that hydrogen can be 10 times more expensive than conventional gas. He also called the measure unnecessary, pointing out that companies are already developing hydrogen pipelines without gas companies involved, and he worried about the safety of hydrogen.
“This is an entirely different gas that—when put into an existing pipeline not designed for hydrogen—can go boom,” said Boccadoro. “It's very dangerous.”
Hydrogen, he explained, is a smaller molecule and prone to leakage, and the state’s existing pipelines are old and brittle. He worried about re-creating the famous San Bruno gas explosion in 2010 that killed eight people. CPUC has held off on establishing procurement targets for renewable hydrogen until further studies can determine its safety.
Pacheco responded that the CPUC would still govern the safety, regardless of the bill. Wetch added that Southern California Gas Co. and Pacific Gas & Electric Co. have upgraded nearly the entire distribution network since the pipeline burst, while other regulations ensure the safety as well.
In an uncommon alliance, the often-combative environmental group Earthjustice agreed with agriculture’s concerns that the measure is premature. Lobbyist Mark Fenstermaker estimated that even if the gas blend incorporates as much as 20% hydrogen, it would only result in a 7% reduction in greenhouse gases.
The same gas companies are pushing a similar but separate measure that would expand the CPUC’s biomethane procurement goals. Proponents argued it would simply close a loophole in SB 1440 by incorporating the smaller companies that contract with utilities for gas distribution, known as core transport agents (CTAs).
Julia Levin, executive director of the Bioenergy Association of California, argued that biomethane offers the opportunity to reduce or eliminate short-lived climate pollutants from landfills, compost facilities, dairies, and the open burning of agricultural waste and forest debris. The Legislative Analyst’s Office has found that investments in converting this waste into energy have been the most cost effective for reducing emissions.
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Boccadoro, however, raised a red flag that it would allow companies to purchase biomethane produced out of state, undermining the goals of SB 1440.
As with AB 342, he worried about adding more costs to ratepayers. The CPUC, he explained, is already considering a way to share the existing SB 1440 costs among CTAs and other parts of the sector without setting a new goal for procurement, which would hurt customer bills.
Boccadoro, who is also the executive director of Dairy Cares, pointed out that dairies produce more biomethane than landfills, wastewater treatment plants and other sources, but the industry cannot generate enough biomethane to meet the procurement targets set in SB 1440. Layering on another procurement goal would raise demand for a finite supply and lead to higher prices for all consumers, he argued.
The bill’s author, Asm. David Alvarez of San Diego, countered that not passing the measure would come at the cost of falling behind on climate goals. Asm. Rebecca Bauer-Kahan of Orinda lauded the bill, arguing “we need to create the market for this in order to produce a system where we will use these wastes to produce energy.”
Adding to that sentiment, Levin cited “an enormous potential” for creating biomethane and renewable hydrogen from forest waste, owing to the severe wildfire crisis. She pointed to California’s agreement with the U.S. Forest Service to thin a million acres a year to reduce fuel loads. Left to rot, that debris would emit methane and black carbon into the atmosphere.
“This is infinitely better from a climate and air quality and a sustainability standpoint,” said Levin, adding: “I don't think we're facing a risk of the CPUC adopting a program that's going to cause spikes in gas prices.”
Both measures passed the committee.
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