Natural Gas Pathways: Towards a Clean and Renewable Energy Future - - PowerPoint PPT Presentation

Natural Gas Pathways: Towards a Clean and Renewable Energy Future for California

Southern California Gas Company 2017

California’s Dual Emissions Challenge

Federal Clean Air Act and California Climate Change Initiative

Measures to Reduce Smog and GHG Emissions Drive Today’s Energy and Environmental Agenda Natural Gas will Play an Increasing Role as a Solution

FEDERAL CLEAN AIR ACT

Reduce SMOG by

50-60%

before the next 20 years

CA CLIMATE GOALS (AB32)

GOVERNOR’S EO:

By 2050, reduce GHG emissions to

80% of 1990

THE TRANSPORTATION SECTOR

80%

• f the region’s SMOG

Nearly 40%

• f its GHG emissions

We have a

CLEAR FOCUS

Major Ozone (NOx) Emissions Sources in South Coast Air Basin

Heavy & Medium Duty Trucks Off Road Equipment Cars Light Duty Trucks Light-Heavy Duty Trucks 50 100 150 200

TONS PER DAY SCAQMD NOx

Top NOx Source Categories

Source: CARB Staff Report for 8-Hour Ozone State Implementation Plan Emission Inventory Submittal

Start with the BIGGEST POLLUTERS

• Heavy Duty truck engine

with 90% lower NOx emissions TODAY

• Tailpipe emissions are the

same as emissions from generating electricity to run a similar electric truck

• For Goods Movement, this

truck will meet California’s ambitious 2050 targets decades before any other technology

• RNG already delivering

greatest GHG reductions from diesel TODAY?

NGV Game Changer:

NEW “NEAR-ZERO” TRUCK ENGINE TO BE READY FOR PRIME TIME Renewable Natural Gas as Transportation Fuel

> 80% GHG

reduction

Near-Zero Emissions Natural Gas Engine

<0.02 g NOx

90% NOx reduction

Technology Transfer

and Transportation Pathways

Locomotives Short/Long Haul Transit/Fleet Vehicles Off-road High Horsepower/ Construction Equipment Marine Vessels Heavy Duty Trucks Short/Long Haul

CNG LNG

Current Focus Expanding Focus

SoCalGas’ Transportation Pathway focuses on natural gas vehicles in heavy duty sectors, which represent the largest share of both ozone/greenhouse gas problem. Technology transferrable to

• ther sectors:

» 63 LNG vessels in operation worldwide and increasing » 76 LNG vessels on order worldwide and increasing » Multiple recent trade journal announcements of new LNG vessels under contract at shipyards:

§ 20 LNG-ready Valemax ore carriers on

• rder

§ $2.3bn Company, Exmar LNG, created;

• ne-stop shop along the LNG value chain

integrating liquefaction, shipping and regasification assets

» IMO-required reduction of bunker fuel sulfur content is the predominant global driver of LNG adoption

"I think the early adopters can drive forward

LNG infrastructure…" Roger Frizzell, Carnival Cruise, June 18, 2015

OGV Sector is Moving Toward LNG

» Class 1 Railroad companies are currently evaluating NG fuelling economics & logistics » If decision is made, most likely NG scenario would be to deploy transcontinentally on a line-by-line basis. » NG bunkering availability could affect decision to switch and could attract early NG conversion of Southern California lines » Conversion of these lines could bring a higher proportion of Tier 4 locomotives to the region

8

Opportunity to Collaborate with Railroads

California is Planning to Meet Criteria Pollutant Goals: HEAVY-DUTY VEHICLE SECTOR

CARB Mobile Source Strategy follows a low NOx path for heavy- duty trucks from 2015 to 2030 SCAQMD calls for near zero emission heavy-duty vehicles SJVAPCD adopted an action plan promoting deployment of natural gas vehicles and infrastructure "In contrast, deployment of 350,000 electric trucks over the next 15 years would require technology development and cost that are well beyond what will be needed to deploy low-NOx trucks.“ “In Southern California, clean, zero- and near-zero emission vehicle technologies are critical to meeting clean air standards. Cummins Westport’s new engine provides an important tool toward reaching that goal.” “Heavy-duty natural gas vehicles provide fewer barriers to adoption than electric/hybrid.”

Comparison of Truck Deployment and Benefit ($500 million investment)

Source: “Game Changer Technical Report,” Figure 4, May 2016

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Renewable Natural Gas

Offers Lower and Lower Carbon Intensity

Source: “Game Changer Technical Report,” Figure 3, May 2016

20.4% 28.0% 37.8% 50.6% 56.4% 60.5%

0% 10% 20% 30% 40% 50% 60% Percentage of Total Volume as RNG

145 million

70 80 90 100 110 120 130 140 150 Reported NG Volumes (million DGE)

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Incentives Work

Source: ARB LCFS Quarterly Data. Available at https://www.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm

Total Natural Gas Volume % Renewable Natural Gas

Under LCFS, RNG has grown from

2% in 2011

to more than

60% in 2016

2012 2013 2011 2014 2015 2016

It’s NOT Either/Or. It’s BOTH !

California focused on electrifying end uses; and “de-carbonizing” electricity

§ Electrify energy end uses § Electrify transportation § De-carbonize generation

SoCalGas focused on “near-zero” end use technology -- “electric equivalent” ; and “de-carbonizing” the pipeline

§ Near-zero gas technology § Near-zero NGV’s § Decarbonize gas supply

• Hydrogen blending
• Renewable methane feedstocks

California Climate Change Policy

Make Room for “Near-Zero” End Uses and Low Carbon Gas

The move toward “near- zero” emission technology focuses on:

§ Distributed Generation § Small-scale, Fast-ramping Generation Matched with Renewables § Power Generation with Carbon Capture

De-Carbonizing Electricity:

Natural Gas Stationary Use Pathways

Not just Solar and Wind…

• Fuel Cells
• Micro-turbines
• Combined

Heat & Power

De-Carbonizing the Pipeline:

Waste or Biomass To Hydrogen or Biomethane

§ State organic waste reduction goals support RNG development

• 50% reduction in the statewide disposal (landfilling) of organic waste

from the 2014 level by 2020 and a 75% reduction by 2025.

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Renewable Gas Development

§ Short Lived Climate Pollution Plan -- reduce methane by 40% § SB 1383 -- ARB, CEC and CPUC to develop policies to support market:

• Establish energy infrastructure

development policies

• procurement policies
• encourage biomethane market

development.

• 5 dairy pilots by utilities

De-Carbonizing the Pipeline:

Electrolysis of Excess Renewable Electricity (Power-to-Gas)

Power-to-Gas Projects:

Provides green hydrogen pathway and grid storage

• 30 Projects Now

Launched In Europe

• 20 Projects

Launched in Germany in last 8 years, with at least 5 more in development

19

First in US:

P2G facility at UCI

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Grid Injected Projects

• UC Irvine demonstration

(hydrogen), Irvine, CA

• NREL demonstration (methanated

hydrogen), Golden, CO

• IESO large scale commercial

project (methanated hydrogen), Ontario, Canada

Current Projects In North America

Commercial and Demonstration Projects

Pipeline

Transportation

Generation / End Use Renewable H2 Renewable NG Natural Gas Methanation Blending

Gas Grid

Compress or Liquefy

Storage

20% 40% 60% 80% Timeframe

Existing Infrastructure:

Serves Multiple Low Carbon Gas Pathways

CAISO on Duck Curve DENA on Power-to-Gas as “System Solution”

• CAISO (on the “Duck Curve”)

… steps must be taken to mitigate over generation risk. These steps include increasing exports…and requiring renewable generation curtailment … the resource mix would also benefit from resources with energy storage capabilities …

• DENA Website (German Energy Agency)

With the Power-to-Gas Strategy Platform – the German Energy Agency – and its partners are supporting the use and development of the Power-to-Gas system solution.

• Pipeline de-carbonization works

together with electrification towards Climate Change objectives

• Pipeline de-carbonization offers Cost

Effective and Resilient Pathways

• De-carbonization can play an

important role Integrating Variable Renewable Generation Resources

• Pipeline de-carbonization reduces

emissions in sectors that are

• therwise difficult to electrify,

including heavy duty vehicles; residential and commercial end uses, and industrial end uses

• Managing “Energy Grid” (gas and

electric together) = efficiency and cost avoidance

Strategic use of gaseous fuels supports near- and long-term goals

• In nearer term, opportunities for

efficiency, “near zero” technology and new uses for natural gas (transportation)

• In medium- to long-term, new low-

carbon sources of gas need development and introduction

23

Expands upon 2012 Science article

E3 Study:

Integration of New Low/Zero Carbon Options

24

THANK YOU!

External Affairs and Environmental Strategy 2017

Background Slides

(Policy Challenges)

27

Governor Executive Order B-30-15

• 80% GHG reduction below

1990 level by 2050 Legislature AB 32: Climate Change

• GHG reduction to 1990 level

by 2020

• 33% RPS by 2020
• Cap and Trade -- declining

carbon cap for energy use

• LCFS -- declining carbon cap for

transportation fuels SB 32: Post 2020 Climate Change

• 40% GHG reduction below

1990 level by 2030

28

Governor Executive Order B-32-15

• 50% RPS by 2030
• 50% increase in building

energy efficiency

• 50% petroleum reduction in

transportation Legislature SB 350

• 50% RPS by 2030
• 50% increase in building

energy efficiency

• Transportation Electrification

SB 605/1383

• 40% reduction in Short Lived

Climate Pollutants (Regulation

• f Methane) by 2030

SB 1371

• Expedited LDAR. Public leak
• inventory. No Backlog.

29

ARB

Scoping Plan

• Long-term electrification

Cap and Trade

• Reduce carbon intensity of energy use.

LCFS Program

• Reduce carbon intensity of fuel supply.

SLCP Plan

• Implementation 40% Methane

reduction measures Sustainable Freight Action Plan

• Long term electrification of freight

system (trucks, rail) Advanced Clean Transit (ACT) Rule

• Mandate 100% zero tailpipe emission

buses in transit sector by 2040 Gas Storage Rules

• Onerous conditions on methane

emission measures: high cost/low benefit

30

CEC Integrated Energy Policy Report (IEPR)

• Zero Net Energy (ZNE)

definition may exclude role for gas in residential sector Energy Efficiency • Appliance standards may eliminate use of gas -- T-24 Water Heater Regulations

• Building standards may

eliminate gas end uses – regulate/eliminate venting Indoor Air Quality Study/NG use

• Micro particles/NORM

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Local Jurisdictions Air District methane regulation

• Overlap/more onerous than

state regs. Local Sustainability Plans and Ordinances

• City plans establishing future

energy goals for solar and wind and electrification targeted to eliminate gas end uses. Climate Adaptation/Resi liency Plans

• City plans to enhance

resiliency of electric infrastructure, expecting to phase out use of natural gas.