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Study finds renewable natural gas could meet ~85% of current natural gas use in transport in California by 2020s; much higher volumes possible with right policies

5 December 2016

A study by a team from UC Davis for the California Air Resources Board (ARB) has found that the state could produce 14 bcf (billion cubic feet) per year of renewable natural gas (RNG) (biomethane) by the 2020s, meeting roughly 85% of current natural gas use in transport California at LCFS (Low Carbon Fuel Standard) credits of $120 per metric ton of CO2.

In addition, RNG use could be much higher if the LCFS credits were combined with US federal RIN credits (Renewable Identification Number, part of the Renewable Fuels Standard, RFS), the study found. Given the appropriate policy and market measures, the state’s RNG production potential is 90.6 bcf/yr (≈ 750 million gasoline gallons). The main barriers to large-scale RNG use are the state’s high cost of pipeline interconnect and the cost of upgrading to pipeline standards.

RNG is produced from organic materials or waste streams; the lifecycle emissions for RNG have the potential to be lower than the emissions of fossil natural gas. There are multiple potential technology pathways for capturing RNG, each with different economics, including landfill gas to energy (KGTE); anaerobic digestion (AD), wet (dairy waste) and dry (food waste); and gasification, standard and plasma.

The possible development of California’s renewable natural gas resources comes at a time when the traditional fossil fuels natural gas industry is expanding its supply and infrastructure into the transportation sector. Liquefied natural gas (LNG) fueling stations for heavy trucks now exist in over a dozen locations around the state of California and continue to expand. California represents about 71% of US LNG truck refueling facilities and about 200,000 gallons/day of LNG were trucked into California in the mid-2000s.

California has the potential to produce approximately 90.6 billion cubic feet (bcf) per year (750 million gasoline gallon equivalents (gge) per year) of renewable natural gas from dairy, landfill, municipal solid waste, and wastewater treatment plant sources.

—“Final Draft Report on The Feasibility of Renewable Natural Gas as a Large-Scale, Low Carbon Substitute”

The team from the STEPS (Sustainable Transport Energy Pathways) Program, Institute of Transportation Studies, UC Davis, produced cost curves for California RNG using technical estimates of resource availability and technology performance.

They incorporated those cost curves into a spatial model by determining the quantity of renewable natural gas that could be supplied under different competitive landscapes. They first considered scenarios that begin in 2013 at commodity natural gas prices of roughly $3.00/mmBTU and extended over a decade or two into the future when the competing fuel is fossil natural gas at prices available in the natural gas futures and derivatives market. Those derivatives prices generally ranged from $2.80 per mmBTU and $4.15 mmBTU over the modeling period. (All costs and prices in the model are in 2015 constant dollars.)

The calculations considered the most commercially optimal combination of technologies, equipment, feedstocks, and size/scale of facilities to meet rising demand for transportation fuel for major trucking routes in the state.

They found that RNG can achieve significant market penetration of 14 bcf into the transportation fueling infrastructure by the 2020s with California’s Low Carbon Fuel Standard (LCFS) credits at current levels of $120 per metric ton of CO2. Higher volumes are possible, as LCFS credits become more valuable and technological learning and scale economies lower upfront capital costs.

Of the 14 bcf projected total, 6.3 bcf would come from landfill, 1.5 from waste-water treatment, 1.75 from municipal solid waste (MSW), and 4.3 from dairy. Adding in credits from the Federal Renewable Fuels Standard of $1.78 per gallon of ethanol equivalent ($23.32 per mmBTU), all four sources of gas increases from 0 bcf to 82.8 bcf, which would be equal to five times the current transportation natural gas used in California, of which 50.8 bcf would be from landfill and 5.6 bcf from waste-water treatment, 16.3 bcf from municipal solid waste, and 10.1 bcf from dairy.

The cost differentials for various RNG pathways reflect differences in the level of specialized technology and infrastructure that is needed to bring the biogas to commercial commodity quality standards. For RNG from dairies and municipal solid waste, greenfield AD facilities must be constructed from scratch whereas the collection and upgrading equipment needed for landfill and WWTP is less capital intensive. The relatively low methane yields of manure also contribute to making manure RNG less competitive. Capital costs of AD are about a third of total capital requirements while the other two thirds are upgrading and injection infrastructure costs. The gas from landfills and waste water treatment plants may require more upgrading or more expensive monitoring equipment than we have assumed in our estimates in order to meet California gas quality standards.

—Final Draft Report

The STEPS team also found that the level of landfill tipping fees—the charge on a given quantity of waste entering the landfill—is an important factor. Landfill tipping fees vary widely; any change in the level of landfill tipping fees will have a material impact on the quantity of RNG from MSW that could be economically diverted to a digester, the authors found.

If tipping fees were raised 20%, RNG production from MSW sources that could be used in a municipal digester would increase from 1.75 to 12.4 bcf per year under a $120 per metric tonne of CO2e LCFS credit price. In other words, the authors found, increased tipping fees and carbon credits could create an incentive to produce more RNG since the municipality could save both the cost of the tipping fees and receive a LCFS credits with the combined value providing more than $13.00 per mmBTU of price support subsidy.

Overall, this study demonstrates that regulatory policy, combined with market pricing of environmental externalities, should be sufficient to attract new entrants to the renewable natural gas business in California.

—Final Draft Report

Resources

December 5, 2016 in Biomethane, Policy | Permalink | Comments (7)

Comments

Renewable fuels do not scale globally. There is not enough biomass to process. It may only scale to 15% of what is needed to power the world. Renewable fuels also pollute the air just as much as fossil fuels. Only advantage is potential CO2 neutrality.

We need to transition to 100% pollution free energy. That is wind and solar power. Individually both solar and wind power scales to 100s of times more energy than the planet consumes. Considered in isolation both solar and wind power is already less costly than nuclear and coal and it is on par with natural gas in the USA. However, the needed battery, hydrogen and heatsink stores to deal with intermittencies will double the cost per kwh for wind and solar power when it is the only source of energy we allow on the planet. Still the cost curve for solar and wind is going one way only and that is down unlike the one for gas and coal and nuclear that rises. Eventually clean energy will be cheaper in all regards including the cost of dealing effectively and reliable with intermittencies.

My point is that renewable fuels are a wrong policy choice because it does not get us where we need to go and that is a 100% pollution free future.

Bomass does scale up and currently, mostly, underutilized. Current estimates of U.S. biomass 1-1/2 Billion tons. That would meet the majority of our energy needs. International estimates enough to supply entire planet's energy needs by 2030.

This article gives the reader a taste of the potential to work within nature's side of emissions. The reason biogas is rated so high? Because the biological open air decomposition of matter creates CO2 and or methane. Note, that farming and forestry works to accomplishes the same benefit. Reduce the decomposition of plant matter to methane and CO2 only these sectors have yet to receive the high environmental rating for the benefit. For example farm ethanol has no accounting of removing debris that would generate methane. Same for forestry. So, actually these two feed stocks not only convert and store CO2 while growing, but can be managed to mitigate the decomposition of plant matter that naturally generates CO2 and methane. This combination should surpass the rating of merely converting dead waste to biogas.

These feeds stocks produced at the farm or forest can be managed to generate biofuel, biomass, and AD biogass energy. In fact the ethanol plants are upgrading to AD processes to reduce waste and generate CHP power. They could be managed to process local cattle waste and municipal organic waste as well. Keep the landfill dedicated to solid waste. Also, ethanol plants are experimenting with algae production of ethanol since they generate the ideal feed stock. You put these process plants and farms on a footing of utilizing renewable power and, again, they generate a very convenient fuel. An energy source that is very cost effective and easy to adapt to. It is solar energy, wind energy, and organic energy.

The US can under a best case scenario make 1 billion ton of biomass per year. It contains less energy than the one billion ton of coal that the us burns through every year for electricity production and that is likely to be less than 10% of total us energy consumption.

[Remainder removed by moderator due to unacceptable language.]

Lighten up, you haven't the facts. Energy department is currently implementing the "One billion ton" project. They estimate 1-1/2 billion tons available and I've read reports as high as two. International studies with the catch phrase "2030" have biomass energy about equal to our energy needs, at least on a btu basis.

Cellulosic ethanol currently sits at 70 gallons/ton yield. The yield can go to over 100 or just sit at 70 with the coproduct of high energy biocoal for power plants or plastic feed stock.

So yes, we could achieve over half (the majority) of our energy from biomass per our national resources. Certainly, when adding the starch, waste, and sugar cane ethanol. Nonetheless, the biofuel generated by palm, grain, waste, and algae oils. We have a tremendous resource that directly impacts the GW harm on the good side. There is a lot of work to refine the supply chain, efficient farm and forestry methods, process improvements, yield improvements, and GMO technology.

Biomass works well within the gasification process and efficient cogen power production. If you utilize the energy park distribution, the low grade heat becomes a valuable coproduct as well. Ethanol plants can use this low grade heat as well as those that need space heating.

Biomass improves coal combustion emissions more than just the substitution of feed stock would suggest. The black biocoal process may prove to generate a popular and convenient product for power plant use.

This biomass/biofuel energy sector has a very wide birth or latitude to improve. Many different paths to make a huge difference. I do think were sitting within a biological revolution times. It is an interesting read upon the development of new coproducts including feed for livestock, chemicals, and food.

Forestry practices can multiply the growth rate of our current forests. Read the reports of basic management practices that maximize timber growth and value. It is amazing and a better return on average than the stock market. Cities are starting to understand they have municipal forest within, that can add much revenue.

The field of study for treatment of liquid waste is starting to discovering the wastes value for plant growth and conversion of waste per the natural biological process that is way cheaper, automatic, and of high quality. The waste again will maximize tree growth rate by a multiple. I've witnessed this myself with silver maples. About 6x growth rate as compared to the benchmark trees.

Henrik,
Keep insulting and you WILL be reported.
Just because it can not do it all does not mean we should not do it.

California is hypocritical, applying the $120/ton LCFS credit to motor fuels but not electric generation fuels.

$120/MT CO2 is about 6¢/kWh for power generated in simple-cycle gas turbines.  This would make nuclear plants wildly profitable, even if they had to dump steam to accomodate the vagaries of the unreliables (dumping steam would let them get money by providing spinning reserve).  California excludes nuclear from such incentives specifically to kill it and replace it with carbon-emitting natural gas.

USA should plan to switch to REs and replace coal, NG and bio-gas ASAP. Nuclear is a good clean energy option whenever the initial construction cost can be reduced by 60% to 75%. Would smaller mass produced nuclear plants do it?

Recent Solar plants efficiency are up to 40% and rising.
Total 24/7 cost is now close to 8 cents/KW in very sunny places and dropping. Wind energy cost is not far behind.

Could coal miners and fossil + bio-fuel workers be retrained and transferred to clean REs production, storage and distribution, with higher pay?

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