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 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 Measures to Reduce Smog and GHG Emissions Drive Today’s Energy and Environmental Agenda Natural Gas will Play an Increasing Role as a Solution
We have a CLEAR FOCUS THE TRANSPORTATION SECTOR 80% of the region’s SMOG Nearly 40% of its GHG emissions Major Ozone (NOx) Emissions Sources in South Coast Air Basin
Start with the BIGGEST POLLUTERS Top NOx Source Categories SCAQMD NOx Heavy & Medium Duty Trucks Off Road Equipment Cars Light Duty Trucks Light-Heavy Duty Trucks 0 50 100 150 200 TONS PER DAY Source: CARB Staff Report for 8-Hour Ozone State Implementation Plan Emission Inventory Submittal
NGV Game Changer: NEW “NEAR-ZERO” TRUCK ENGINE TO BE READY FOR PRIME TIME • 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 Renewable Natural Gas Near-Zero Emissions • RNG already delivering as Transportation Fuel Natural Gas Engine greatest GHG reductions > 80% GHG <0.02 g NOx from diesel TODAY? reduction 90% NOx reduction
Technology Transfer and Transportation Pathways 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 other sectors: Current Focus Expanding Focus Transit/Fleet Heavy Duty Locomotives Off-road High Marine Vessels Short/Long Vehicles Trucks Horsepower/ Haul Short/Long Construction Haul Equipment CNG LNG
OGV Sector is Moving Toward LNG » 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 order § $2.3bn Company, Exmar LNG, created; one-stop shop along the LNG value chain integrating liquefaction, shipping and regasification assets " I think the early adopters can drive forward » IMO-required reduction of bunker LNG infrastructure …" Roger Frizzell, Carnival fuel sulfur content is the Cruise, June 18, 2015 predominant global driver of LNG adoption
Opportunity to Collaborate with Railroads » 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
California is Planning to Meet Criteria Pollutant Goals: HEAVY-DUTY VEHICLE SECTOR "In contrast, deployment of 350,000 electric trucks over the next 15 years would require technology CARB Mobile Source Strategy development and cost that are well follows a low NOx path for heavy- beyond what will be needed to duty trucks from 2015 to 2030 deploy low-NOx trucks.“ “In Southern California, clean, SCAQMD calls for zero- and near-zero emission vehicle near zero emission technologies are critical to meeting clean heavy-duty vehicles air standards. Cummins Westport’s new engine provides an important tool toward reaching that goal.” SJVAPCD adopted an action plan promoting deployment of natural gas vehicles and infrastructure “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
Renewable Natural Gas Offers Lower and Lower Carbon Intensity Source: “Game Changer Technical Report,” Figure 3, May 2016 11
Incentives Work 56.4% 60.5% 60% Under LCFS, 50.6% RNG has grown from 50% Percentage of Total Volume as RNG 2% in 2011 37.8% to more than 40% 60% in 2016 28.0% 30% 20.4% % Renewable Natural Gas 20% 10% 2011 2012 2013 2014 2015 2016 0% 150 140 Reported NG Volumes 130 Total Natural Gas Volume (million DGE) 145 million 120 110 100 90 80 70 Source: ARB LCFS Quarterly Data. Available at https://www.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm 12
California Climate Change Policy Make Room for “Near-Zero” End Uses and Low Carbon Gas 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 • It’s NOT Either/Or. It’s BOTH !
De-Carbonizing Electricity: Natural Gas Stationary Use Pathways The move toward “near- Not just zero” emission technology focuses on: Solar and Distributed Generation § Wind… Small-scale, Fast-ramping Generation § Matched with Renewables § Power Generation with Carbon Capture Fuel Cells • Micro-turbines • Combined • Heat & Power
De-Carbonizing the Pipeline: Waste or Biomass To Hydrogen or Biomethane
Renewable Gas Development § 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. § 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 16
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
First in US: P2G facility at UCI 19
Current Projects In North America Commercial and Demonstration Projects Grid Injected Projects • UC Irvine demonstration (hydrogen), Irvine, CA • • NREL demonstration (methanated hydrogen), Golden, CO • IESO large scale commercial project (methanated hydrogen), Ontario, Canada 20
Existing Infrastructure: Serves Multiple Low Carbon Gas Pathways Transportation Renewable H2 Methanation Gas Grid Blending Compress or Pipeline Liquefy Renewable NG Natural Gas Generation / Storage End Use Timeframe 0 20% 40% 60% 80%
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.
E3 Study: Integration of New Low/Zero Carbon Options Expands upon 2012 Science article 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 Strategic use of gaseous fuels Pipeline de-carbonization reduces • emissions in sectors that are supports near- and long-term goals otherwise difficult to electrify, In nearer term, opportunities for • including heavy duty vehicles; efficiency, “near zero” technology residential and commercial end uses, and new uses for natural gas and industrial end uses (transportation) Managing “Energy Grid” (gas and • In medium- to long-term, new low- • electric together) = efficiency and carbon sources of gas need cost avoidance development and introduction 23
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THANK YOU! External Affairs and Environmental Strategy 2017
Background Slides (Policy Challenges)
Governor • 80% GHG reduction below Executive Order B-30-15 1990 level by 2050 Legislature • GHG reduction to 1990 level AB 32: Climate Change by 2020 • 33% RPS by 2020 • Cap and Trade -- declining carbon cap for energy use • LCFS -- declining carbon cap for transportation fuels • 40% GHG reduction below SB 32: Post 2020 1990 level by 2030 Climate Change 27
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