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Energy Transition | Infrastructure | NGI All News Access | Regulatory
The right incentives could allow natural gas utilities to use existing infrastructure to advance low-carbon fuels and fight climate change, according to a study commissioned by the American Gas Association (AGA). AGA consulted Concentric Energy in discovering key regulatory frameworks that would encourage the production of low carbon products.
“This study leaves no doubt that low-carbon gas resources and natural gas infrastructure can be a powerful tool in lowering carbon emissions while keeping energy affordable for customers,” said AGA CEO Karen Harbert. “Taking full advantage of these promising fuels will require clarifying regulatory authority and aligning incentives for utilities with policy objectives.
“AGA will work with policymakers to ensure that these barriers do not prevent utilities from providing customers with all benefits that these fuels can provide.”
AGA and Concentric, a management consultant group that focuses on natural gas markets and the oil pipelines industry, said the main findings highlight the importance of legislative support. The report also delves into the role gas utilities play in educating policymakers on the benefits of lower carbon alternatives, such as hydrogen and renewable natural gas (RNG), aka biogas.
AGA has warned against over-emphasizing electrification to lower emissions, calling it “a narrow approach” following the White House Electrification Summit in December.
“The American Gas Association supports the goal of lower emissions but taking away the essential energy provided by natural gas and the appliances that people love is not the way to do it,” said Karen Harbert.
The Biden administration has advanced policies to promote RNG and low-carbon hydrogen, namely the Inflation Reduction Act of 2022, which expands tax incentives for both.
RNG use has been growing each year, as evidenced by official tallies of Renewable Identification Number (RIN) transactions for the fuel. RINs are tradable credits meant to incentivize the use of renewable fuels.
Harbert noted the popularity of natural gas as “a new customer signs up for natural gas service every minute in the U.S… Eliminating natural gas in homes and buildings is an inefficient and costly way to shift how natural gas is used in our energy system.”
Moving to electrification and eschewing natural gas “closes the door on high-efficiency and resilient applications like natural gas combined heat and power,” the trade group noted. Harbert said an inclusive approach would be a better option.
“Eliminating options is a narrow approach to our nation’s climate change,” she said. “The most practical, realistic way to achieve a sustainable future where energy is clean, as well as safe, reliable and affordable is to develop a plan that includes natural gas and the infrastructure that transports it.”
The study followed the Biden administration’s Federal Building Performance Standard (BPS), with the goal to achieve zero Scope 1 emissions for 30% of federal buildings and facilities through electrification. The BPS is designed to reach this goal by FY 2030.
Scope 1 emissions are the direct emissions from a company’s operations. Scope 2 refers to a company’s indirect emissions from its energy consumption. Scope 3 denotes end-user emissions.
RMI, formerly Rocky Mountain Institute, released a study that showed a link between childhood asthma and gas stoves. This prompted the U.S. Consumer Product Safety Commission researched this topic further, but Chair Alexander Hoehn-Saric said the organization is not looking to ban gas stoves.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |
Related topics: Hydrogen Rng
email gabrielle.vitali@naturalgasintel.com
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