We’re pleased to announce the publication of another new LPDD model law, enacting a model state renewable gas standard. This document was drafted principally by Julia Kindlon of Arnold & Porter with oversight and assistance by Jennifer Sklenar and Chase Raines of that firm, and peer reviewing was contributed by Romany M. Webb of the Sabin Center. It is available here.
Excerpted from the introductory memorandum to the model law:
Renewable gas production costs can be up to 10 times higher than natural gas prices which can discourage investors who are worried about recouping their costs. If states adopt standards requiring a minimum percentage of their gas supply to be fulfilled by biogas, synthetic methane, and/or hydrogen, this will help increase the market for these renewable gases which will increase prices and encourage investments.
The accompanying annotated model legislation includes language for model state legislation addressing renewable portfolio standards with respect to renewable gas. The model legislation was prepared based on California’s proposed SB 687, which would have established a renewable gas standard requiring an average carbon intensity reduction of 1% in 2020, increasing to 10% by 2030. See Renewable Gas Standard, SB 687, California Legislature (2015). The annotated model legislation includes ranges for potential standards because different states will have different availability, feasibility, and costs associated with producing renewable gas in state.
States may want to consider conducting a study first to determine their supply capacity. See Relating to Renewable Energy, SB2818 SD2 HD1, 30th Hawaiian Legislature (2020). For instance, states with more livestock may have more potential. Potential factors for states to study and consider include: (1) “The potential quantity and cost of renewable gas that could be produced in the State and delivered for use, and, if necessary, could be produced out of the State and delivered to the State for use” by industrial, commercial, and residential consumers and as a transportation fuel; (2) “The identification and inventory of feedstock and acreage for renewable gas production currently available in the State;” (3) The identification of commercial conversion technologies for renewable gas production and economic scalability of capacity;” (4) “The identification of incentives that are currently available to develop renewable gas resources and the identification of incentives available to develop renewable gas resources in other jurisdictions;” (5) “The potential for the use of renewable gas in the State to measurably reduce greenhouse gas emissions;” (6) “The potential for renewable gas in the State to measurably improve air quality;” (7) “The technical, market, policy and regulatory barriers to developing and utilizing renewable gas” and the potential solutions; and (8) “The identification of available renewable alternatives, such as the procurement and importation of renewable gas.” Id. While each state will need to determine its own capacity, the legislation below provides a model.