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Draft AB 1257 Natural Gas Act Report

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Title: Draft AB 1257 Natural Gas Act Report


1
Draft AB 1257 Natural Gas Act Report
  • Rachel MacDonald
  • Supply Analysis Office
  • Energy Assessments Division
  • IEPR Lead Commissioner Workshop
  • California Energy Commission
  • September 21, 2015

2
About the presentation
  • This presentation provides an overview of the
    Draft AB 1257 Natural Gas Act Report.
  • Comments are welcome
  • Produced through multi-division collaboration
    with subject experts
  • Written comments are due October 1, 2015
  • Assembly Bill 1257 (Bocanegra, Chapter 749,
    Statutes of 2013) requires the California Energy
    Commission to identify strategies to maximize the
    benefits of natural gas as an energy source.

3
Ch. 1 Introduction
  • Energy Commission staff has addressed the
    following areas relating to natural gas
  • Natural gas delivery infrastructure, safety, and
    reliability
  • Natural gas for electric generation
  • Combined heat and power using natural gas
  • Natural gas as a transportation fuel
  • Efficient natural gas use in heating and cooling,
    water heating, and appliances
  • Natural gas and zero net energy buildings
  • Other low emission natural gas resources and
    biogas
  • Methane leakage associated with the natural gas
    system

4
Ch. 2 Pipeline Safety and Natural Gas
Infrastructure
  • Pipeline safety continues to be at the forefront
  • The passage of Senate Bill 705 (Leno, Chapter
    522, Statutes of 2011), requires utilities to
    submit safety plans.
  • The CPUC ordered the gas utilities to submit
    Pipeline Safety Enhancement Plans (PSEPs) by
    August 26, 2011
  • Inspect or replace programs still underway
  • Energy Commission funding pipeline integrity
    management and inspection technologies research
  • Micro electro-mechanical sensors
  • Piezoelectric sensors
  • Ultrasonic transducers to monitor/inspect gas
    pipelines girth welds/defects

5
Ch.2 The Southern System Minimum Issue
  • The Southern System Minimum (SoSysMin) flow
    requirement ensures enough gas is delivered
    through the region to meet the load in the SoCal
    Gas southern system.
  • Necessary because of suppliers delivering
    sufficient gas to meet demand.
  • Southern system suffers from isolation, limited
    interconnection, and no direct access to gas
    storage.
  • Loss of San Onofre increases demand for gas,
    increasing curtailment risk.
  • CPUC granted SoCal Gas permission to purchase
    make-up gas intended to be infrequent small
    amounts as a short-term solution.

6
Ch. 2 The Southern System Minimum Issue continued
7
Ch. 2 Proposed solutions to SoSysMin
  • SoCal Gas has filed application with the CPUC for
    the North-South Pipeline.
  • 60 miles of 36 inch diameter pipeline with a
    capacity of 800 MMcf/d
  • Creates ability for customer gas delivered into
    northern system to reach southern system
  • Alternative projects proposed by other parties
  • Transwestern
  • TransCanada
  • Kinder Morgan
  • Evidentiary Hearings just concluded
  • The CPUC is expected to issue a decision by the
    end of 2015

.
8
Ch. 2 Pipeline Safety and Natural Gas
Infrastructure
  • Challenges
  • Need greater data exchange and transparency
    between utilities and agencies doing research.
  • Need additional analysis such as summer peak
    conditions and line-pack conditions in the
    afternoon.
  • Need continued public outreach regarding natural
    gas infrastructure and safety. One of the most
    common causes of pipeline failure is third-party
    excavation damage.

9
Ch. 3 Natural Gas Generation
  • Roughly 40 of Californias natural gas use is
    for electricity generation
  • Federal regulations expected to reduce coal and
    increase natural gas demand, mostly outside of
    CA
  • Mercury and Air Toxics Standards (MATS)
  • Clean Power Plan (111d)
  • Need to ensure sufficient gas delivery to
    electric generation in high load conditions.

10
Ch. 3 Natural Gas Generation and Renewables
  • In 2013 roughly 21 of retail electricity sales
    were from renewables.
  • Intermittent wind and solar generation varies
    hour by hour, often minute by minute
  • California ISO must operate with enough
    dispatchable natural gas resources to address
    increasing variation from renewables.
  • Natural gas generation typically meets
    reliability needs for local capacity and
    ancillary services.

11
Ch. 3 Natural Gas Generation
  • Challenges meeting changing conditions for
    renewable integration
  • Line packing can be done on a limited basis.
    Line packing is when the gas line intentionally
    holds more gas than is being used at a given
    moment. Line packing is ultimately limited by the
    Maximum Allowable Operating Pressure (MAOP) of
    the pipelines.
  • Drafting is the opposite of line packing. If
    relied on too much can lead to loss of pressure
    in the pipeline.

12
Ch. 4 The Role of Natural Gas as a Fuel for
Combined Heat and Power Systems
  • CHP policy
  • 2008 Climate Change Scoping Plan 4,000 MW of
    installed CHP capacity by 2020
  • 2010 AB 1613 Waste Heat and Carbon Emissions
    Reduction Act
  • 2010 Governor Browns Clean Energy Jobs
  • CPUC Settlement agreements D.10-12-035 (2010) and
    D.15-06-028 establishes IOU procurement
    requirements for CHP

13
Ch. 4 The Role of Natural Gas as a Fuel for
Combined Heat and Power Systems Continued
  • Economic Barriers include
  • Non-bypassable charges
  • Grid Interconnection
  • Contract difficulties
  • Research needed to better understand
  • Monetization of the cost and benefits of CHP
  • Infrastructure cost and operations
  • Regulatory and market framework to align the true
    value/benefits of CHP with utility incentives

14
Ch. 5 Natural Gas as a Transportation Fuel
  • Transportation roughly 36 of states GHG
    emissions
  • Natural gas vehicles (NGV) with low NOx engines
    can use natural gas or biomethane
  • Most NGVs are in fleet services and in the medium
    and heavy duty vehicle sector
  • Lack of NG fueling infrastructure is a challenge
    to greater NGV deployment

15
Ch. 5 Natural Gas as a Transportation Fuel
Continued
  • Research is needed to
  • Support the ARBs Low-Carbon Fuel Standard
    Intensity Value.
  • Expand natural gas and biomethane fueling
    infrastructure.
  • Understand methane leakage from infrastructure.
  • Develop and demonstrate functionality of large NG
    engines.
  • Better quantify the impacts of NGVs on the
    environment.

16
Ch. 6 Natural Gas and End-Use Efficiency
Applications Policy
  • Assembly Bill 758 (Skinner, Chapter 470, Statutes
    of 2009) Assembly Bill 758 requires the Energy
    Commission with the CPUC and stakeholders, to
    develop a comprehensive program for energy
    efficiency in existing residential and
    nonresidential buildings.
  • The Final Californias Existing Buildings Energy
    Efficiency Action Plan in September 2015
  • Includes plans prioritize to strategies and
    approaches to double the rate of efficiency
    savings in buildings in California through 2030.
  • Recognizes the importance of saving natural gas
    energy efficiency.

17
Ch. 6 Natural Gas and End-Use Efficiency
Applications
  • CAs households and small businesses consume
    about 1/3 of the total natural gas usage.
  • Residential for space and water heating
  • Commercial for process loads
  • Industrial sector consumes about 25 of total
    natural gas usage.

18
Ch. 6 Natural Gas and End-Use Efficiency
Applications
  • Research is needed to
  • Understand cost effectiveness of switching
    technologies, i.e. replacing a natural gas water
    heater with solar thermal.
  • Develop smart appliances to improve efficiency
    while reducing equipment cost and air emissions.
  • Improve space heating/cooling technology and
    efficiency to address technology cost and local
    environmental air quality requirements.

19
Ch. 7 Natural Gas Use for Zero Net Energy
Buildings
  • The simplest explanation of a ZNE building is
    that it uses only as much energy as it produces.
  • ZNE buildings have high levels of energy
    efficiency of both the structure and appliances,
    combined with clean, renewable power generation,
    typically solar photovoltaic (PV).

20
Ch. 7 Natural Gas Use for Zero Net Energy
Buildings
  • Challenges
  • Uncertainty and lack of clarity regarding natural
    gas and ZNE
  • The Energy Commission should continue to explore
    the connection between end-use natural gas
    applications and the increased electrification
    of buildings and electric appliances.

21
Ch. 8 Natural Gas and Biogas as Low Emissions
Resources
  • Biogas is the raw, untreated gas produced during
    the anaerobic decomposition of biomass and
    composed of mostly methane and carbon dioxide.
  • Biomethane is the treated product of biogas where
    CO2 and other contaminants are removed.
  • Dairies, landfills, and wastewater treatment
    facilities produce biogas as a by-product of
    normal operation.

22
Ch. 8 Natural Gas and Biogas as Low Emissions
Resources Policy
  • Assembly Bill 1900 (Gatto, Chapter 602, Statutes
    of 2012) requires CPUC to adopt pipeline access
    rules to ensure nondiscriminatory, open access
    for biomethane, regardless of the type or source
    of the biogas.

23
Ch. 8 Natural Gas and Biogas as Low Emissions
Resources
  • Challenges
  • Biogas typically contains greater levels of
    contaminates/ constituents allowed in natural
    gas.
  • Regulatory uncertainty and problems securing
    long-term contracts.
  • Location constraints
  • Interconnection costly for projects that deliver
    a relatively small quantity of gas
  • Some locations dont have enough gas in local
    pipe to allow blending
  • Processing biogas into biomethane plus
    interconnection makes it significantly more
    costly than natural gas

24
Ch.9 Greenhouse Gas Emissions and the Natural
Gas System
  • The primary source of carbon dioxide (CO2)
    emissions is combustion in
  • Power plants
  • Appliances
  • Industrial processes
  • Vehicles
  • Natural gas has the potential to reduce CO2
    emissions by shifting away from higher GHG
    emitting fuels like coal and gasoline or diesel.

25
Ch.9 Greenhouse Gas Emissions and the Natural
Gas System
  • Methane is a highly potent, short-lived GHG
  • Methane is the second most prevalent GHG emitted
    in California, with CO2 being the most dominant.
  • About 90 of natural gas is methane.
  • California imports around 95 percent of its
    natural gas from productions areas located
    outside the state.
  • Unintentional releases of methane fugitive
    emissions can come from multiple sources along
    the natural gas system, such as from leaking
    pipelines, flange seals on compressors, abandoned
    wells, or inefficient combustion.

26
Ch.9 Greenhouse Gas Emissions and the Natural
Gas System
  • Federal President Obamas Climate Action Plan A
    Strategy to Reduce Methane Emissions.
  • California has taken significant steps in
    reducing short-lived climate pollutant (SLCP)
    emissions
  • Senate Bill 1371 (Leno, Chapter 525, Statutes of
    2014) the CPUC with ARB, are developing rules to
    reduce emissions/leaks from gas transmission and
    distribution pipelines throughout the state.
  • Senate Bill 605 (Lara, Chapter 523, Statutes of
    2014), ARB developing strategies by the end of
    2015 to further reduce SLCP emissions.

27
Ch.9 Greenhouse Gas Emissions and the Natural
Gas System
  • Challenges and uncertainties estimating
    emissions
  • Measurement and sample bias
  • Quantifying super emitters
  • Attributing emissions between oil and gas sectors

28
Ch.9 Greenhouse Gas Emissions and the Natural
Gas System
  • Research to reduce the uncertainty of estimating
    methane emissions
  • Bring convergence between methods (i.e. bottom-up
    and top-down)
  • Improve allocation methods for attributing oil
    and gas emissions.
  • Improve methane emission factors or other methods
    for use in research studies and inventories.
  • Early detection technology for large methane
    leaks and source identification
  • Pathfinder a Gas Distribution Asset Management
    Project (PGE)
  • Picarro a vehicle mounted leak sensor system
    (PGE)
  • Cost effective methane mitigation/recovery
    technologies to address known emission sources,
    such as leaks from pipelines and other equipment

29
Filing Comments
  • Please submit comments to the electronic
    commenting system here http//www.energy.ca.gov_e
    nergypolicy/
  • Or submit written comments by emailing to the
    dockets office here docket_at_energy.ca.gov
  • Or handwritten comments may be submitted to
  • California Energy Commission
  • Dockets Office, MS-4
  • RE Docket No. 15-IEPR-04
  • 1516 Ninth Street
  • Sacramento, CA 95814-5512

30
Staff Contact Information
  • Rachel MacDonald
  • (916) 654-4862
  • Rachel.MacDonald_at_energy.ca.gov
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