This week’s Pipeliners Podcast episode features Scott Martin discussing natural gas, the different types of emissions, and the process of getting RNG ready to be used as fuel.
In this episode, you will learn why natural gas use is increasing, the difference between cellulosic biofuels and advanced biofuels and how to benefit from them, and how the natural gas industry will improve in the coming years due to better technology and more projects.
Renewable Natural Gas: Show Notes, Links & Insider Terms
- Scott Martin is the engineer and project manager specializing in biogas utilization and environmental engineering at Burns & McDonnell. Connect with Scott on LinkedIn.
- Burns & McDonnell is a family of companies bringing together an unmatched team of 10,000+ engineers, construction professionals, architects, planners, technologists, and scientists to help those who work in critical infrastructure sectors deliver on their imperative responsibilities. With an integrated construction and design mindset, the company offers full-service capabilities with more than 60 offices, globally. With a mission unchanged since 1898 — make clients successful — Burns & McDonnell partners with companies on the toughest challenges, constantly working to make the world an amazing place. Learn more at burnsmcd.com.
- Renewable Natural Gas (RNG) is a pipeline-quality gas that is fully interchangeable with conventional natural gas. The quality of RNG is similar to fossil natural gas and has a methane concentration of 90% or greater.
- Biogas is a renewable fuel produced by the breakdown of organic matter, such as food scraps and animal waste. It can be used in a variety of ways, including as vehicle fuel and for heating and electricity generation.
- Cellulosic biofuel is renewable fuel derived from any cellulose, hemicellulose, or lignin that is derived from renewable biomass and that has lifecycle greenhouse gas emissions, as determined by the Administrator, that are at least 60 percent less than the baseline lifecycle greenhouse gas emissions.
- Advanced biofuel are liquid fuels that are generally derived from non-cellulosic food-based feedstocks and yield a lifecycle reduction in greenhouse gas emissions of at least 50% compared with fossil fuels
- California’s Low Carbon Fuel Standard (LCFS) Program requires a reduction in the carbon intensity of transportation fuels that are sold, supplied, or offered for sale in the state through at least 2030.
- Emissions means the release of greenhouse gasses and/or their precursors into the atmosphere over a specified area and period of time.
- RIN Credit (Renewable Identification Numbers) are credits used for compliance, and are the “currency” of the RFS program. Renewable fuel producers generate RINs. Market participants trade RINs. Obligated parties obtain and then ultimately retire RINs for compliance. Obligated parties are refiners or importers of gasoline or diesel fuel.
- EPA (Environmental Protection Agency) is an independent organization within the federal U.S. government designed to take measures to protect people and the environment.
- ESG (Environmental, Social, and Governance) refers to the sustainability movement in oil and gas to continue operating safely, in compliance, and in a responsible manner to do no harm while achieving business objectives.
- Scope 1 Emissions – direct emissions from sources owned or controlled by a company
- Scope 2 Emissions – indirect emissions from purchased electricity, steam, heat, and cooling for production of goods
- Scope 3 Emissions – all other emissions associated with a company’s activities including transport of products produced and usage of products
- MMBtu (Metric Million British Thermal Unit) is a unit traditionally used to measure heat content or energy value.
- RFS (The Renewable Fuel Standard) is a federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels.
- CNG (Compressed Natural Gas) is produced by compressing natural gas to support its use – dictated by local pipeline interconnects and compressed at the fueling station.
- VOC (Volatile Organic Compounds) are chemicals that are released into the atmosphere when coatings are applied.
- AGA (American Gas Association) represents companies delivering natural gas safely, reliably, and in an environmentally responsible way to help improve the quality of life for their customers every day. AGA’s mission is to provide clear value to its membership and serve as the indispensable, leading voice and facilitator on its behalf in promoting the safe, reliable, and efficient delivery of natural gas to homes and businesses across the nation.
- Biogenic is the fraction of any fuel derived from living organisms, such as renewable plant and animal biomass that would normally emit carbon dioxide.
- Anthropogenic is environmental change caused or influenced by people, either directly or indirectly. Anthropogenic emissions include methane generated from landfills and digesters.
Renewable Natural Gas: Full Episode Transcript
Russel Treat: Welcome to the “Pipeliners Podcast,” Episode 248, sponsored by Burns & McDonnell, delivering pipeline projects with an integrated construction and design mindset connecting all the elements, design, procurement, and sequencing at the site.
Burns & McDonnell uses its vast knowledge, the latest technology, and an ownership commitment to safely deliver innovative qualitative projects. Burns & McDonnell is designed to build and keep it all connected. Learn more at burnsmcd.com.
Announcer: The Pipeliners Podcast where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations. Now your host, Russel Treat.
Russel: Thanks for listening to the Pipeliners Podcast. I appreciate you taking the time. To show that appreciation, we give away a customized YETI tumbler to one listener every episode. This week, our winner is Josh Berkel with WEPI Energy. Congratulations, Josh. Your YETI is on its way. To learn how you can win this prize, stick around until the end of the episode.
This week, Scott Martin with Burns & McDonnell joins us to talk about renewable natural gas and the relevant issues. Scott, welcome to the Pipeliners Podcast.
Scott Martin: Hey, Russel. Thanks for having me.
Russel: Glad to have you. Before we dive in, why don’t you tell us a little bit about who you are, what you do, and how you got into that role?
Scott: My name is Scott Martin with Burns & McDonnell. Been working for Burns & Mac for about 15 years now. Started my career in the environmental space doing primarily biogas projects in and around electricity generation, direct use, biogas collection systems, etc.
In recent times, the last couple of years, I’ve been very heavily focused on helping develop Burns & McDonnell’s renewable natural gas business line. We’re very active in the space doing a number of different types of projects for different feedstocks, and really enjoy the variety of work associated with the project types.
Russel: That’s a really interesting background. Certainly, I would say that RNG is picking up velocity in our space. More interest, more projects. It sounds like you’re in a good place with a good background. Maybe a good place to start is what is the definition of renewable natural gas?
Scott: Renewable natural gas is essentially a gas that’s derived from a renewable resource. Biogas in its normal state comes from landfills, municipal wastewater treatment plants, industrial wastewater treatment plants, agricultural facilities like dairy and manure digester facilities. There’s a few other types as well in the agricultural space. Swine manure is another one.
At any rate, you start with a biogas in its raw form. You essentially eliminate all the impurities and remove the carbon dioxide to create pipeline quality natural gas. Essentially, a plug-and-play solution, plug and play quality for what’s being delivered to the pipeline.
Russel: I’ll tell you a funny story. I graduated high school in 1976. In high school, my senior year project was to capture methane off of cow manure into an inner tube, and then use it to run a Bunsen burner. That was my high school science project. I did it with a buddy of mine. He was an FFA dude and is still a rancher.
Scott: Nice, and you still got burnt fingers, I’m guessing?
Russel: Yeah. What I would say is it’s not new technology. It’s been around for a long time. What’s different is people are trying to scale it. Tell us what is driving this increasing velocity in renewable natural gas?
Scott: Market interest started around the 2014 time frame with some modifications at the federal renewable fuel standard, which is the same standard that requires that we blend a certain amount of ethanol in our traditional gasoline.
With rule changes, essentially, they identified biogas as one of two types of fuel, either a cellulosic biofuel or an advanced biofuel. Those two types of fuels within the federal renewable fuel standard command a premium in terms of the overall market.
In addition to that, California adopted a low carbon fuel standard around the same time frame. Essentially, what that program does is it incentivizes the use of alternative fuels. It’s based upon reduction in overall carbon intensity. It’s more project specific. Essentially, those are the two programs that to date have driven the overall market within the United States.
There’s emerging markets now you are hearing about utilities that are able to get cost recovery or offer to their customers a voluntary renewable natural gas tariff. There’s different mechanisms in which people are able to monetize renewable natural gas.
Russel: This technology has been around a long time. It’s really quite mature. I remember doing landfill projects 20 plus years ago. What’s different is people are saying, “Well, we’ve got this mature technology, we need to make it economically viable in a lot more places.”
Russel: That’s what’s driving it is like, “Here’s a technology. Why aren’t we using it?” “It’s not economically viable for us.” “OK, how do we change things up so that it becomes economically viable?”
Scott: Right. To that point, the federal market really stood up landfill projects, for example, to start with. Typically, landfill renewable natural gas projects tend to be the cheapest because all you’re looking at doing is just the gas processing, the pipeline, and the interconnect.
Whereas with an agricultural facility, you also have all the material handling up front, the digester construction, which is the vessel that makes the biogas, and then you have the downstream gas treatment, upgrading, and pipeline. There’s more capital involved in the agricultural space, but there’s also more value in the agricultural space.
When you look at state markets, like California, Oregon, or some of the emerging markets out there, those types of programs tend to incentivize the agricultural feedstocks a bit more. That’s why you’re hearing more about dairy and swine manure facilities popping up because states like California put a very hefty premium on carbon intensity.
For all intents and purposes, those types of projects generate a lot more emissions offsets than, say, a landfill project.
Russel: The other thing I would say, when you start talking about water, wastewater and sewage treatment, which, when I was in the Air Force back in early ’80s, my first job in the Air Force was overseeing the bases, hazardous waste and standard waste treatment plants.
We looked at renewable natural gas back then. One of the big challenges was all of the physical construction necessary to contain the emissions. Once you had all that done, the cost of the piping and the rest was trivial in comparison. That’s my recollection of economics.
Scott: Very true.
Russel: Let’s talk a little bit about the emissions benefit that this is creating. You mentioned you got a background in environmental. Talk to us a little bit about the kinds of emissions that get measured and the value of measuring and offsetting those emissions.
Scott: I’ll talk about it in abstract terms because if we start using units, it gets a little complicated here. [laughs] We’d have to go back to using the metric system, which I haven’t done in a long time. [laughs] Essentially, at the federal level, the emissions offsets are basically a RIN credit. That’s a gallon equivalent of fuel. That’s easy to measure.
You have basically two different project types within the federal market. You have the cellulosic RIN credit, which is from feedstocks, such as municipal wastewater treatment plants. Landfills are considered cellulosic, and agricultural facilities are also considered cellulosic.
The advanced fuel subset would be your industrial wastewater treatment plants and food waste digestion facility. When you think about it, the cellulosic component is, generally speaking, not the corn kernel, but the husk, the stock, and all those harder to digest components.
Essentially, EPA separated the two and basically said cellulosic credits generate a carbon offset of about 60 percent or greater, and advanced is about 50 percent or greater. That’s the two subsets. The values associated with those credits, it’s probably a 50 percent reduction for the advanced biofuel credits versus cellulosic.
Right now, the cellulosic credits are trading about three dollars a RINs, so three dollars a gallon equivalent. Then the advanced biofuels are about $1.50. In California, in Oregon, or other locations, it’s much more project specific. What you do is you look at the baseline carbon intensity of diesel fuel or gasoline fuel.
Then you look at your project boundary specifically, and you figure out what emissions you’re able to offset. If you’ve got an open lagoon at a dairy facility that’s emitting methane, if you put a cover over it, you get an offset, which really helps your carbon intensity score and drives the overall credit value of the project.
What you do is you take your baseline fuel and carbon intensity and you subtract it from whatever carbon intensity you develop for your particular project. In the case of agricultural facilities, a lot of times, they have a negative carbon intensity because you’re offsetting emissions from the project. You’re taking a positive number minus a negative number, so you get an even bigger offset.
Typically, agricultural facilities, let’s just say in the state markets, are typically somewhere between 5 and 10 times more valuable than a municipal wastewater or landfill project.
Russel: Interesting. Anybody who’s been around large-scale beef production, pork production, chicken production or any of that kind of stuff, you have a sense of just the amount of waste and what that does.
Some of those in terms of their use of fuel are pretty low compared to their output of those emissions. Some of those projects actually create credits they could sell to others. Have I got that right?
Scott: That’s correct.
Russel: Those industries that are doing emitting, we talked about this before we got on the podcast, but you were talking about scope 1, 2, and 3 emissions, and how they’re tracked and captured. Can you walk us through what that is and such?
Scott: This is more in the ESG framework of carbon accounting, which is a new form of carbon accounting. Your scope 1 emissions are the emissions that you’re generating from your operations. If you own a coal-fired power plant, you are generating emissions from that facility, those are your scope 1 emissions.
Your scope 2 emissions, let’s say you’re a downstream customer of that utility that’s giving you the electricity, your scope 2 emissions are the emissions based upon the amount of electricity or heat that you purchase. Typically, most companies are focused on those subsets.
Then your scope 3 emissions include things like your individual employees driving to the work, downstream impacts associated with transportation and distribution of the products that you manufacture, purchase goods, services that you require to operate your business.
Scope 3 tends to get a bit more convoluted, which is why scope 1 and 2 tend to be the focal point for most organizations at this point in time.
Russel: Wouldn’t it be true that from an overall industry or operating standpoint, when you start getting the scope 3, aren’t you double dipping? Because those things could be the result of scope 1 and 2 operations of others.
Scott: Exactly. That’s part of the cause for confusion. Part of it is to help an individual organization identify potential cost reductions or efficiencies that they could bring with respect to their overall supply chain or reduce their carbon intensity.
The reason why people are talking about this in the context of renewable natural gas is because, in addition to the transportation fuel market, which I’ve spent a lot of time talking about, the voluntary markets or the feed in tariff programs or just a developer developing a project and selling the RNG contractually to another organization.
Those primarily in the voluntary space, there’s a lot of companies out there that are looking at renewable natural gas as a way to reduce their scope 1 and scope 2 emissions in certain circumstances. That’s really where, I’d say, the overall market interest lies, if that’s helpful.
Russel: It is. For me and probably for most people that listen to the Pipeliners Podcast, this is out on the edge. It’s on the fringe of the things we get close to. It’s a big conversation in the boardrooms because of the ESG. It’s a big conversation for those companies that said, “We’re going to do this much more RNG in the next 5 years or 10 years.”
Everybody down the chain is trying to figure out what that means. Hopefully, this helps people build context and understanding around what’s driving this. My take on all this, I would just say I’m old school hardcore in my thinking about a lot of these things because I’m always asking the question, is this actually going to work in practice?
Having said that, I would consider myself somebody who believes in conservation. In other words, I grew up in scouting. I loved scouting as a kid. I’m active in scouting now, and one of the big principles in scouting is to leave no trace.
This is driving at an industry level, how do we go about doing our business without leaving a trace? From that standpoint, I get behind it. I have a hard time often wrapping my head around what feels to me to be abstract and convoluted often. Does that make sense to you, Scott, or does that sound wackadoodle?
Scott: No. It does. There’s room for a lot of different perspectives. Like I said, I grew up doing biogas projects. I’m used to, essentially, my personal and business interests being somewhat subsidized by different programs. I’m used to it.
I get excited when there are new grant opportunities or funding mechanisms that help these projects go because they can tend to be challenging. We’re talking about small amounts of gas. They’re much smaller than…You know.
Russel: The other thing that’s interesting too is that these projects have paybacks, they’re just very long.
Scott: Yes and no. I would say right now, the California market pricing is a bit down, but in terms of the federal market, it’s very strong still. Depending on the type of projects you’re looking at, depending on the size, you can have a simple payback of less than three years on some of these projects.
A client that I’ve worked for, for a long time, here in the Midwest, they put in an RNG facility in 2017 at a landfill. I think it took them 20 months to pay it back.
Russel: Not knowing the details of that project, I would assert that if I had a project like that, it paid back in 24 months, and it had subsidies or programs supporting it, I could still do that project. It would still pay back. It’s just not going to pay back as quickly. Is that right?
Scott: Well, no. With the price of natural gas, I would say you might make a compelling argument, but the typical cost of just processing RNG historically – I’m just using the index rule of thumb here – is about four to six dollars in MMBtu. If wholesale prices of natural gas are at three dollars, then you’re not paying yourself back. You’re digging yourself a hole, right?
Russel: Oh, OK.
Scott: Some of the first projects that were developed, that were true renewable natural gas upgrading projects in the late ’90s, where they did take biogas and converted it to pipeline gas, they did so absent of any grant programs.
They did it because, at the time, natural gas was $12 or $13 in MMBtu, so there was a payback back then. We’re seeing natural gas prices come up again, but I would say that you definitely need some form of subsidy to make these projects work.
Russel: I remember looking at these projects in the mid ’80s. What I was doing at that time, primarily, was looking at waste treatment facilities. There’s a lot of other additional benefits to the community that have no direct economic return.
Man, I put a cover over a waste treatment plant, I don’t have that sour smell when things are running outside of normal limits, so it’s got other benefits.
Scott: Yeah. The way that I’d said the anaerobic digestion agricultural market grew is not through renewable natural gas initially. They were renewable electricity at the time, you were fetching a premium. This is in the early 2000’s. Biogas to electricity was competitive with solar and wind at that time, which it’s not really anymore.
Those projects were receiving grants for cleaning up entire watersheds associated with dairy runoff or nutrient overloading. There were credits that were being generated from that or grant funding. Wisconsin had a large program that did that. Other states did the same. That’s how the agricultural AD market got started in the US.
Then, fast forward to 2014 when the RFS said, “Hey, biogas can be used,” and people started using CNG trucks, I would say it was a slow adoption, and it continues to be somewhat slow. It’s not necessarily a very universal fuel, but you’re starting to see it pop up a lot more frequently in terms of transportation.
California is a very good example of this success story there because when you look at, within their LCFS program, how much of the CNG that’s deployed as part of that program is renewable, it’s close to 100 percent at this point. It’s a good success story.
If you’re driving around California and you see a trash truck, I’ll bet you a dollar that that trash truck is going to be a CNG vehicle. There’s different market segments that have really taken to it.
Russel: Boone Pickens, he was a big name in oil and gas, and an investor, a wildcatter, and big promoter of CNG vehicles for years and years, he’s passed now.
I think CNG has got pretty good adoption in fleets, particularly where if I’m running trash trucks and I’m going back to the waste facility, it’s pretty easy to take that waste gas and turn it into a transportation fuel. Those economics are straight line, that’s pretty line of sight.
Scott: Right now with diesel being five dollars plus a gallon, if you’ve got a big enough fleet, it would stand up on its own two feet.
Russel: Oh sure, absolutely. Look, I want to pivot a little bit and talk about the commercial incentives market. I’m just going to ask you to give us a quick walkthrough of that. Give us a walkthrough of the commercial carbon incentives market for pipeliners who don’t know a whole lot about it.
Scott: You all have heard me talk a little bit about the state and federal carbon fuel markets. I think maybe what I could do is just from a contextual perspective, help with defining what some of those prices might look like. Traditional natural gas is about five dollars in MMBtu right now.
We talked about the cellulosic renewable natural gas at the federal level, which is your landfill, wastewater treatment plant, and agricultural feedstocks. Right now, that’s about $3 a gallon equivalent, which when you do the math, turns roughly into about $40 in MMBtu. Roughly eight times the value of traditional natural gas there.
If you’re able to play in the state market which, on the agricultural side, and on the food waste side, those types of projects are the projects that generate your lowest carbon intensity score, or give you the most credits. I mentioned that California’s already pretty close to 98-99 percent renewable in terms of the overall CNG that’s deployed.
Well, what’s happening in that market space is essentially, the agricultural projects are starting to displace your more traditional biogas feedstocks, your landfill gas, or wastewater treatment plant biogas, because the value is so high.
Even though the market is down in California right now versus last year when the prices were hitting their peak at $200 a ton of carbon offset, they’re about half that right now. The value is still about $40 to $50 in MMBtu, which is additive to that other $40 that I talked about.
Now, you’re talking more than 10x the value of traditional natural gas for those agricultural feedstocks, which a lot of these projects generally tend to need because the capital cost is pretty high, the amount of biogas that you produce is pretty low. You need to have those credits to make the projects move forward.
Russel: That makes sense. Who manages these exchanges where people are trading this stuff?
Scott: That’s a great question. In terms of how the credits transfer change hands, both platforms use what’s called a book-and-claim accounting system. You don’t necessarily need to get the physical molecules to the CNG fuel pump. It’s managed contractually, meaning that you need to inject it into a pipeline.
From there, once it’s injected into the pipeline, you have a chain of custody that’s started, and then you have an off-taker that buys that. The way that credit is generated is that the off-taker tends to be ultimately a CNG fueling entity. From there, when you’re fueling up a vehicle, fuel quantity’s tract credits are essentially generated from that.
You have your supplier, and then your off-taker is your fueling station company. There can be lots of points in between in terms of brokers, marketers, etc., for these credits.
Russel: The credit’s an open market just like any other commodity that would be traded. Would that be the wrong way to understand it?
Scott: I think so. Contextually, I will say that the market’s not as liquid as some, trading natural gas. In a general sense, yes, the market does act in terms of commodities.
Russel: Interesting. I’m sure we could go way down the rabbit hole in that conversation. One of the things I want to talk about, because I think this would be of interest to pipeliners, particularly those guys working around gas utilities, is what’s the process for getting this RNG gas into the pipeline system, ready for use of fuel?
Scott: Like I said at the beginning, biogas is anywhere from 50 to 60 percent methane, typically, sometimes it can be higher. The balance is carbon dioxide and some other impurities. Typically, your first stage of treatment is hydrogen sulfide removal. We’ll use landfills as the example here, just because the overall treatment process tends to be the most rigorous.
Landfill gas has some contaminants that not necessarily all the other text biogas do. First stage, your gas is saturated. That’s when you’re removing hydrogen sulfide. All of these biogas sources are sour gas sources. Typically, you’re removing H2S. That can be done through media, caustic, biological, or any combination thereof.
Russel: Most people that are working in the gas business, particularly near the wellhead are going to be familiar with all those processes.
Scott: Yeah. A lot of these are just adapted processes from oil and gas processing. Schlumberger plays in this market. They sell the same iron oxide media to biogas projects that they do to wellhead operations. Very similar in that respect.
From there, you have subsequent polishing for VOC removal. With landfills and wastewater treatment plants, VOCs are present just because of the nature of the feedstock. You’ve got jumbled messes of stuff that comes in, that gets digested. Part of the decomposition, you generate different forms of VOCs, chlorinated, fluorinated.
You remove those. From there, your gas is clean enough to go through your carbon dioxide removal process. There’s a couple of different ways you do that. Pressure swing absorption, which is another adapted technology from oil and gas processing.
Russel: It can be scaled down really small.
Scott: Amine-based scrubbing system, again, another oil and gas based technology. Then membranes are, I would say, newer, but they’ve been around for a while and becoming a lot more commonplace. Of all the different technologies, membranes tend to be the highest in terms of how much methane you can recover or how much methane you don’t have slipping through the process.
That’s the primary upgrading process. In certain circumstances, you can have additional downstream requirements. We’re working on a project in Michigan right now where in the state of Michigan, you have a five-parts-per-million oxygen limit. Now we’ve got an oxygen removal system that we have to add into the project to be able to meet that spec.
Russel: Fundamentally, this is all the same stuff that you would do to process produced gas. You’re just doing it at very low pressure and with very small flow, comparatively.
Scott: Yeah. The pressures that you’re running through a PSA or membranes are 100 to 200 pounds. You’re much lower than that. In a sense, you’re pretty low pressure.
Russel: I actually had a conversation, gosh, probably been seven or eight years ago with one of the big waste handling companies. They were rolling out RNG to all their facilities. They were trying to build up an automation and scaling capability. They were talking about their high pressure gas. I’m like, “What pressure are you specifically?” “35 pounds.” I’m like, “Oh, come on.”
Russel: Let me tell you, some places we’re running gas 3,500 pounds, then we talk about high-pressure gas.
Scott: When you get to the fueling station, that’s about where it sits. You know you got that.
Russel: Fundamentally, what I know is that the utilities themselves, they want to make sure they take good clean gas. I would assume, I don’t know, I’m looking for your take on this. There’s some level of concern in the public utilities around how much we should invest in this, and for how long? How real is this as a supply?
Scott: I guess maybe to talk about concern in a different sense, and then I’ll address that question. With these projects, you have process monitoring at every stage. Your hose has an off ramp if your gas is out of spec. If you have breakthrough past H2S removal, everything’s going to a flare.
Same if you’re not generating the Btu content that you need off of your upgrading system, it’s going to a flare. There’s ways in which you manage the off-spec gas at the plant. In addition to that, you’ve got your traditional utility interconnect.
I’ll say it’s probably more robust, but a lot of utilities have developed their own requirements with interconnecting to their pipeline. What’s required to be monitored, etc.
Russel: I know they have their own monitoring equipment. They’ll shut the provider in if they go off spec. That’ll be typical.
Scott: Absolutely. To answer your other question, in general, a lot of the big projects have already been developed. It’s not to say that there’s not more opportunity out there for development. A lot of these projects have long development cycles. They take time and creativity to put together. I do think there’s ample opportunity out there. One of the bigger emerging markets in the United States is going to be the food waste digestion market.
When we talk about scale, that’s a massive scale. The AGA had put out some projections, I think last fall in terms of maybe a realistic and then maybe an optimistic scenario for how much renewable natural gas could be deployed and how much of the overall supply it could take up by 2050. The high level was 50 percent. Certainly, where I sit doing what I do, I think that’d be great because it would mean that I would have a job for a long time to come.
A lot of the market intel or the market statements out there aren’t necessarily backed up by what’s real in terms of market. You need subsidies to basically help these projects stand up. It’s a tough question to answer. In terms of available resources to make renewable natural gas, I’ve done work at landfills for most of my career. I know what they look like. I point them out to my kids. They nod at that.
At any rate, there’s lots of stuff that goes in there. Really, we’re generating more waste every day, especially from a food waste perspective where we can capture that food waste energy content. It’s really high value feedstock. There’s a lot of opportunity there for market growth, I think.
Russel: Yeah, I think you’re right. Absolutely, Scott. I think that what you see is these technologies begin to mature. They’ll optimize. The more of them they do, the more they’ll drive the costs down. They’ll become more economic. As energy prices go up, they become more economic.
Anyways, I do have one last question for you that has come up for me as we’ve had this conversation. You’re talking about, I’ve got a heap of trash, I’ve put renewable natural gas there, and I’m stripping out the CO2. Do I get charged for the CO2 I’m stripping out?
Scott: No. That’s a really good question. The CO2 that’s generated from these biological processes from biogas production is considered biogenic, which is like if you took the material…
Russel: Biogenic versus anthropogenic, if I said that word right, meaning it comes out of a natural process versus when it’s man made.
Scott: It’s the same thing as if you were to compost, those emissions would occur anyways, is the way they look at them. Now, what I will say is, and I don’t think we’re there yet from a commercial perspective, that people are starting to talk about ways in which we can capture carbon off of these upgrading systems. There’s a few folks that are doing it, like I said, it doesn’t necessarily…
Russel: The mechanism for capturing, it’s easy. It’s not that, it’s how do you sequester it? That’s the problem.
Scott: If you’re able to clean it up and generate commercial grade CO2, I think there’s a lot of people that are interested in that particular supply, especially if you tell them it’s coming from a renewable resource. There are some opportunities, but like I said, the economics might not be there just yet.
Russel: That makes sense. Listen, this has been great. I’ve learned a ton. I probably have to listen to this episode two or three times just to make sure I capture everything that you said because this is way outside of my domain. Yeah, but it’s great. I love learning, and you’re certainly very knowledgeable on the subject.
Scott: Like I said at the beginning, thanks for having me, Russel. It’s good to spend a Friday afternoon with you.
Russel: Great. Thanks. I recommend you take the rest of the day off and go have a cocktail.
Scott: Sounds good. Talk to you later.
Russel: Take care, Scott. I hope you enjoyed this week’s episode of the pipeliners podcast and our conversation with Scott. Just a reminder before you go, you should register to win our customized Pipeliners Podcast YETI tumbler. Simply visit PipelinePodcastNetwork.com/Win, and enter yourself in the drawing.
Russel: If you have ideas, questions, or topics you’d be interested in hearing about, please let me know on the contact us page at PipelinePodcastNetwork.com or reach out to me on LinkedIn. Thanks for listening. I’ll talk to you next week.
Transcription by CastingWords