January 2023

Guest Commentary

APGA Perspective: Policymakers Need to Incentivize Natural Gas Innovations

PERSPECTIVE

By Dave Schryver, President & CEO,  American Public Gas Association (APGA) 

(P&GJ) — Energy security, affordability and efficiency remain top-of-mind for American consumers. As such, the role of natural gas in our country’s future energy mix has sparked continuous debate among voters and policymakers.

At the local and state levels, those conversations often center around the future of natural gas utilities and potential bans on natural gas hookups in new and refurbished homes and office buildings. At the federal level, policies incentivizing homeowners to engage in fuel- or appliance-switching to electric sources like heat pumps are receiving greater attention. 

While generally rooted in a well-intentioned desire to reduce emissions, policies that shift Americans to a single source of energy could exacerbate our already-overburdened electric grid.  

Recent brownouts and rolling blackouts across the country underscore this challenge and create vulnerabilities for utility customers who require reliable and affordable energy for their safety and well-being, particularly for older customers and individuals with disabilities. 

In large part due to its reliable distribution infrastructure, natural gas consistently helps meet Americans’ energy needs efficiently and sustainably. While unplanned service outages affect 0.125% of gas customers each year, electric customers experience an average of 1 outage per year, costing consumers around $150 billion annually. 

Eliminating access to affordable energy options like the direct use of natural gas – particularly at a time when solar and wind are not able to meet energy demand – is not a wise path forward. However, if we can step back and think practically, we’ll find obvious, winning solutions that don’t sacrifice climate goals, won’t negatively impact energy resiliency, nor place an undue burden on the electric grid and the customers who would be forced to depend on it. 

For natural gas utility companies, it’s what’s underground that really counts –  the efficiency, reach and reliability of our existing natural gas distribution infrastructure have made it the most resilient way to energize American homes and businesses.  

By combining that proven system with promising advancements in renewable natural gas, or RNG, hydrogen and geothermal technologies, we can make progress toward a cleaner energy future without depending on a single energy source and the challenges that come with it. 

Today’s System 

Recognizing that climate action is needed immediately, but that innovation and system transformation take time and investment, the gas industry must prioritize the use of best practices as we all work to implement broader system changes. This includes short- and medium-term efforts by gas utilities to increase efficiency, limit environmental impacts, and tighten systems by replacing gas distribution infrastructure – especially older cast iron and steel pipes – with the latest technology to reduce methane leaks.  

Following best management practices for leak surveys can complement these efforts by exceeding industry standards and showing our commitment to eliminate leaks. The industry should also develop consensus standards around the use of responsibly-sourced gas, including working with independent organizations to verify that utilities’ environmental footprint is minimized. 

Fortunately, federal policymakers are creating pathways for communities to achieve these goals, and many municipal utilities have taken advantage of several new programs. For example, the Natural Gas Distribution Infrastructure Safety and Modernization grant program, established in last year’s Infrastructure Investment and Jobs Act, supports utilities’ infrastructure replacement projects.  

The EPA’s Methane Challenge Program facilitates information and technology sharing to help reduce methane emissions at the local level. And absent any regulation or mandate, ongoing efforts like GTI Energy’s Veritas initiative support advancements in appliance and pipeline efficiency measurement, helping systems minimize emissions while saving consumers money on their energy bill. 

Promising Innovations 

However, many not-for-profit gas systems – particularly ones that serve smaller and rural communities – face funding constraints and require support, investments and incentives from policymakers to enact these best practices and advance the game-changing innovations that can drive progress toward our shared climate goals.  

Emerging technologies like RNG, hydrogen and geothermal energy can expand and diversify our energy mix, helping shield utilities and their customers from the impact of market volatility and price spikes while ensuring the reliability and efficiency that they expect. Several pilot programs already underway provide an early roadmap for others to capitalize on these innovations. 

Renewable – In North Carolina, Duke University is partnering with GreenGasUSA to capture emissions from a local commercial cannery and convert harmful, potentially polluting gases into usable, carbon-neutral, if not carbon-negative, energy in the form of RNG, or biogas.  

The newly converted RNG is then blended into the interstate gas distribution system, thus limiting emissions from the cannery, reducing overall environmental damage from methane, and lowering Duke’s emissions. Cities and private actors can build on this model to contribute to systemwide sustainability improvements while mitigating pollution from farms, landfills and industry. 

Geothermal – In collaboration with Eversource Energy, the city of Framingham, Massachusetts, is piloting a project that would replace natural gas in homes with geothermal energy, using the city’s existing underground gas infrastructure to provide low-emissions heating and cooling for families and businesses.  

While drilling holes and laying pipes can be a hurdle in connecting homes to ground-source geothermal energy, gas utilities have a proven track record of maintaining a reliable underground distribution system and are well-equipped to support the development of networked geothermal systems in cities elsewhere in the Northeast and across the country. 

Hydrogen – To explore the viability and challenges associated with integrating hydrogen gas into existing natural gas distribution systems, natural gas utilities across the country have launched 26 pilot programs. Hydrogen is a clean alternative that can be produced with natural gas, nuclear, solar, wind, biogas, etc., and blended with natural gas to sustainably energize homes.  

If successful, utilities could begin regularly blending hydrogen with natural gas, which would ultimately reduce greenhouse gas emissions and improve efficiency and sustainability. 

Moving Forward 

With a trove of promising developments, we don’t know what technological advances will be made over the next few decades – making it critical to take an even-handed approach that does not pick winners and losers and allows all ideas to maximize their full potential. Policies that provide parity in tax incentives would help level the playing field between these options and sources of electricity like wind and solar, helping diversify our mix of low-emissions energy from “all the above” sources. 

Fresh thinking, finding common ground, and continued innovation will be fundamental to our ability to make meaningful advancements for communities, utility customers, and the environment. It falls on policymakers to create a pathway for all utilities, including not-for-profit utilities who are most accountable to their communities, to finance innovative projects that can foster a cleaner, more affordable, sustainable and reliable energy system. 

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