An innovative use of existing pipelines is a win-win
In a pioneering move that required regulatory approvals, commercial relationships, contract revisions and some creative thinking, PG&E successfully changed utility operational practices to receive renewable natural gas in a new way—through an intermediary pipeline.
Historically, access and a lack of cost-effective alternatives to transport RNG to PG&E’s pipeline system hindered otherwise viable partnerships with dairies, according to PG&E. But in January, PG&E began receiving RNG from two dairy projects through an existing interconnection with California Energy Exchange, a midmarket gas-gathering pipeline. Both dairy projects are distant from PG&E’s pipelines, and without CEE, the utility would be unable to deliver the RNG.
Many more dairies are expected to come online in the next two years and deliver significant volumes of RNG to PG&E, the utility said. These projects effectively divert methane that would have been released into the atmosphere from dairies in the Central Valley and convert the gas into RNG.
“Projects like this are an absolute win for everyone involved,” Janisse Quiñones, senior vice president of gas engineering, PG&E, told American Gas. “The dairy receives revenue for a waste stream—manure—and reduces on-farm greenhouse gas emissions. The project developer earns revenue and expands its project portfolio. The midmarket pipeline gains a new business model based on RNG. ... The utility advances on its mandate to support the state’s climate goals. ... And finally, everybody wins by having a cleaner environment.”
The project is primarily funded through the California Public Utilities Commission’s Dairy Biomethane Pilot Program, established as part of the state’s strategy to reduce emissions of short-lived climate pollutants, including methane.
Throughout California’s RNG regulatory proceeding, PG&E continually advocated for inclusion of third-party interconnections to bridge the distance between remote dairies and PG&E customer demand centers, the utility said.
Midmarket pipelines, such as this one, provide a necessary solution to make methane capture a cost-effective source of RNG for California, according to the utility.
