Cutting carbon has become a priority for policy and business interests as demand grows for climate action. One major emitter of focus is buildings — the industrial and building sectors saw the largest carbon emissions spike of any sector in the U.S. in 2018.

Cities in California have begun to look at cutting greenhouse gases (GHGs) from the commercial and residential building sector by eliminating natural gas from new buildings and focusing on electrification instead. But some argue such solutions to heating are less realistic in extreme weather regions like the Midwest. 

Centerpoint Energy in August 2018 proposed a unique solution to cutting heating-related emissions in Minnesota — a green tariff program that would have given customers the option to purchase renewable natural gas (RNG), or gas produced by concentrating the methane from the breakdown of organic landfill waste or livestock manure to natural gas standards.

The program was rejected by the Minnesota Public Utilities Commission (PUC) in July, but RNG remains a priority for the utility, Nick Mark, manager of conservation and renewable energy policy for CenterPoint told Utility Dive.

"Even as we've seen a lot of strides toward reduced emissions in the electric sector ... there hasn't been the same reduction in the building sector," he said. "And there is no future in which we meet the carbon emission goals that science tells us we have to meet that doesn't involve a transition away from the use of fossil sources of natural gas in buildings."

RNG is one potential solution — it doesn't use fracking, it captures methane that would otherwise be emitted from landfills and manure, and it burns at a lower carbon level. But questions of scalability, economics and overall GHG impact remain, say clean energy advocates. 

Measuring the hit to GHGs

One issue with RNG is that there is no federal or state definition of the fuel, and depending on what burns, the carbon impact may vary.

Burning organics from capped landfills is a "worst case scenario" in that it's not necessarily carbon neutral, said Mark. Methane produced by the natural breakdown of organic waste is trapped in a capped landfill, which prevents that fuel from escaping into the atmosphere, but also keeps that gas unused when it could be offsetting fracked natural gas.

By contrast, open manure and uncapped landfills represent a much more obvious emissions trade, because the methane produced would otherwise be released into the atmosphere, rather than remaining in storage.

Some argue the varying carbon benefits among feedstocks are a sign the industry needs more scrutiny and caution when it comes to tracking carbon offsets, or lack thereof, produced by these resources.

"It's really important that you have robust carbon accounting along the entire lifecycle of this fuel source to make sure that there really is this carbon mitigation potential associated with it," Director of Beneficial Electrification at Fresh Energy Margaret Cherne-Hendrick told Utility Dive.

Landfill-to-gas is currently the more economic RNG option compared to dairy waste, said Mark, but policy mechanisms should "value the RNG based on the emissions impact it can have."

Another concern with burning organics is scalability, which was a factor in the Minnesota PUC's rejection of CenterPoint's program.

"When you're taking a product that is produced from waste streams, you are limited in your production by the number of those waste streams, the volume of waste that they're producing," said Cherne-Hendrick. "So at a certain point, there needs to be a good, robust national assessment of scalability, because if every utility is looking at this to be sort of a silver bullet to bring down the carbon intensity of the fuels that they're selling, there's just not enough to go around."

One way to potentially scale RNG is to inject it with electrically-produced hydrogen, offsetting the amount of gas burned. Some companies, including General Electric, see huge potential for that process in a carbon-free future, but the technology remains in its nascent stages.

So, what is the silver bullet?

RNG is not the end-all solution to dramatically reducing building emissions by 2050, said Mark, and more growth is needed for the resource to reach full viability. 

Energy efficiency will play a huge role and increased electrification will likely play a role as well, though stakeholders diverge on where investments should be prioritized. 

Clean energy advocates believe the quickest path to lower carbon emissions in the building sector is to clean up the power grid, then electrify everything. That approach potentially leaves a critical lag time where regions that have not yet transitioned from fossil fuels are potentially heating their homes with coal-fired power. But that assumption is why there needs to be a more robust look at hybrid systems where, again, emissions levels are prioritized, said Mark and Cherne-Hendrick.

The question then becomes how much electric, how much gas and how quickly can utilities shift?

Minnesota's extreme weather temperatures make it a high-stakes experiment.

A little less than 18% of the state's households used electricity for heating in 2017, and the rest came from natural gas, propane and fuel oil. Approximately 10% of the state's economy will likely still need to rely on combustion fuels in a 2050 deep decarbonization scenario for industrial applications, said Cherne-Hendrick.

"At a certain point when we've reached a high enough penetration of wind and solar energy, there's going to be a need for dispatchable electricity," she said. "If we can use that renewable natural gas to generate dispatchable electricity, we see that as a valuable good."

Centerpoint: We're not 'going to be done talking about RNG'

A huge market exists for biofuels within the transportation sector, and the incentives for those fuels remain a key debate in the Midwest as they provide critical income for farmers. But those same incentives don't exist for RNG as a heating option, and that's where the focus largely lies for utilities aiming to explore the fuel's use more.

Southern California Gas is aiming for up to 20% more renewable gas after a 2016 study from the University of California Davis found it could reduce building emissions the same as full electrification at a third of the cost.

CenterPoint is "weighing [its] options" on next steps for RNG, but has its eyes on Oregon, where the legislature this session passed a bill that directs state regulators to create a small- and large-scale RNG program. "That created essentially a renewable portfolio standard for the gas utility. It's a really interesting model and we know that that model works really well on the electric side," said Mark.

The utility hasn't decided whether to continue pursuing the green tariff option, or to start exploring an interconnection tariff, which would allow producers to put more RNG directly on the system.

"What we've said throughout the process is that whatever the PUC decided, we weren't going to be done talking about RNG," said Mark.

The best path forward for RNG is for decentralized producers providing onsite gas services, "rather than interconnecting to the larger infrastructure system that, as we're necessarily going to have to start scaling back our natural gas usage, is going to become less and less valuable," said Cherne-Hendrick. 

And at the end of the day "methane is methane ... even if you are offsetting emissions over here, you're still combusting those gases. And so the offset starts to matter less," she said. In the long-game for decarbonizing Minnesota, electrifying new buildings is "the low hanging fruit."