RNG Poised for Growth in New Administration

RNG companies have disclosed that more than 25 new projects are set to come online by the end of 2017, and already another 15 planned RNG transportation projects slated to come online by 2020
By Marcus Gillette | January 31, 2017

By the time this issue hits your mailbox, Donald Trump will have been sworn into office as president of the U.S. With the incoming Trump administration naming appointees with strong ties to the petroleum industry, not surprisingly, there was much discussion at the RNG 2016 Conference in San Diego in early December, about how the next few years would play out for the renewable natural gas (RNG) industry.

The RNG industry is positioned to continue thriving. Johannes Escudero and David Cox, executive officers of conference host RNG Coalition, kicked off the two-day event programming by depicting the positive state of the industry. “The RNG industry has never been stronger,” they affirmed, noting that the industry has built more projects in the past five years than in the previous 25 years.

There are more than 53 RNG projects in the U.S., 43 of which inject into the natural gas pipeline system. These projects convert a portion of the more than 70 million tons of organic waste generated per year in the U.S. into ultra-clean compressed natural gas and liquefied natural gas transportation fuel and renewable heat and power.

A panel moderated by Evan Williams of Cambrian Energy assessed the factors that financiers and developers consider when evaluating the viability for prospective projects. Two other panels delved into fuel regulations that drive RNG development. During one panel, representatives from the California Air Resources Board, Oregon Department of Environmental Quality, and U.S. EPA discussed the futures of California’s Low Carbon and Very Low Carbon Fuel Standards, Oregon’s Clean Fuels Program, and the federal renewable fuel standard (RFS). The other addressed hot button issues under the RFS, including pipeline injection guidance, the Renewables Enhancement and Growth Support Rule, and prospective RNG to electric vehicle fuel pathways.

Production and use of RNG to displace gasoline and diesel in heavy-duty vehicles has rapidly grown since RNG transportation fuel became eligible to generate cellulosic biofuel RINs, the corresponding credits attached to gallons of RNG fuel under the RFS. Domestic production grew from the equivalent of 20 MMgy of petroleum fuel in 2013, to just under 90 MMgy in 2015. RNG is on pace to supplant more than 250 MMgy by 2018. 

In respective conference presentations, Paul Niznik of Argus Media and Michael McAdams of Holland & Knight Law and the Advanced Biofuels Association discussed the future of credit markets and the implications of November’s elections on RNG industry trajectory. Notably, the election had little influence on the price of cellulosic RINs; late in 2016, they were fetching higher prices than ever before. 

Significantly, Escudero and Cox also detailed how the development of RNG projects and expansion of the industry matches up with the narratives of economic growth, job creation, and domestic energy growth and security that have been pillars of the incoming Trump administration. The conference marked the release of a new white paper written by the RNG Coalition and Energy Vision that expounds on that message.

“Fueling Economic Growth with Renewable Natural Gas” is designed to equip advocates of this ultra-clean, waste-derived fuel and energy source with data-supported talking points. It provides a timely introduction to RNG for policymakers and individuals who are not already familiar with the contribution of the RNG industry to the U.S. economy in recent years. “RNG is already a billion-dollar industry,” the report highlights, adding that RNG project investments in just the past five years have totaled more than $368 million. RNG projects have added significant jobs in recent years, as the U.S. economy has gotten back on track. “Since 2014, RNG has been responsible for creating 4,000 direct and indirect jobs,” the white paper explains.

A panel moderated by Iogen’s Gordon McLennan showed that growth prospects for RNG are not limited to the U.S. Sarah Van Der Paelt (Union Gas) shared that Canada’s two largest gas utilities are advocating for a 2 percent RNG requirement for the nation’s gas utilities. 

Following the conference, the U.S. DOE Biotechnologies Office published a new report that assesses that wet and gaseous organic waste stream feedstocks represent a substantial and underutilized resource for biofuels and byproducts. It indicates that wet and gaseous feedstocks (animal and food waste, wastewater residuals, biogas, and fats, oils and greases) in the U.S. offer more than 17.5 billion gallons (gasoline gallon equivalents) of annual resources, in addition to those wastes currently used in operational landfill digesters.

RNG companies have disclosed that more than 25 new projects are set to come online by the end of 2017, and already another 15 planned RNG transportation projects slated to come online by 2020. With each new RNG project injecting an average of $16 million into jobs and construction, this growth equates to additional investment of $640 million and adds nearly another 7,000 direct and indirect jobs to the U.S. economy.
Author: Marcus Gillette
Director of Public & Government Affairs,
Coalition for Renewable Natural Gas