Oregon Gov. Kate Brown signed Senate Bill 98 into law on July 31, creating the path for renewable natural gas to become an increasing part of the state’s energy supply.
Renewable natural gas is a zero-carbon resource produced from local organic materials like food, agricultural and forestry waste, wastewater, or landfills, which can be added into the existing natural gas system.
SB 98 outlines goals for adding as much as 30% renewable natural gas into the state’s pipeline system. There will be limits on the total amount paid for renewable natural gas that is overseen by regulators, protecting utilities and ratepayers from excessive costs as the market develops.
“Oregon has long been a place for innovation in environmental protections, and this legislation continues that tradition,” said Brown. “Allowing our natural gas utilities to acquire a renewable product for their customers brings us one step closer to a clean energy future.”
“This is the first piece of legislation of its kind in the nation and we couldn’t be more pleased to lead the way,” said David H. Anderson, president and CEO of NW Natural, a gas pipeline company. “This is an important step in supporting our region’s move to more renewable energy, closing the loop on waste and investing in homegrown solutions that address climate change.”
The new law sets voluntary renewable natural gas goals for Oregon’s natural gas utilities. Additionally, it:
- Allows utility investment in the interconnection of renewable natural gas production;
- Supports targets of 15% by 2030, 20% by 2035 and 30% by 2050;
- Establishes an overall spending limit for renewable natural gas supply; and
- Provides local communities a potential revenue source to turn their waste into energy.
“SB 98 is a groundbreaking piece of legislation,” said Nina Kapoor, director of state government affairs for the national Coalition for Renewable Natural Gas. “Several states have advanced policies in recent years to support renewable natural gas, however, the Oregon law goes further than any other by setting clear goals for renewable natural gas procurement.”
Natural gas utilities are regulated by the Public Utility Commission of Oregon and under current rules have an obligation to deliver the least-cost commodity to customers. This has been a barrier to purchasing and distributing renewable natural gas to Oregon customers, which can cost more in the same way that renewable electricity can cost more.
The market for renewable natural gas is fairly new but growing quickly. There are about 100 projects nationwide, and that’s expected to increase by 50% over the next year. Renewable natural gas is being prioritized as a main energy source for space heating in places like SeaTac Airport, and is being used in fleets like UPS and Waste Management. UPS recently made the largest commitment yet to use it for 40% of its total ground fuel purchases by 2025.
Renewable natural gas is a zero-carbon resource produced from local, organic materials like food, agricultural and forestry waste, wastewater, or landfills. As these materials decompose, they produce methane. That methane can be captured, conditioned to pipeline quality and delivered in the existing pipeline system to vehicles, and homes and businesses where it can be used in existing appliances and equipment. This closes the loop on waste and provides a renewable energy option for the natural gas system, in the same way that wind and solar are used to generate renewable electricity.