Energy Co-op program offers frack-free gas alternative
Short of switching home-heating systems, residential natural-gas customers who are opposed to hydraulic fracturing have few means to express their sentiments in the marketplace.
Short of switching home-heating systems, residential natural-gas customers who are opposed to hydraulic fracturing have few means to express their sentiments in the marketplace.
But now the Energy Co-op, the member-owned Philadelphia energy-buying group, has launched a "renewable natural gas" product derived from landfill gas for customers who are willing to pay a premium price for a frack-free alternative.
The co-op has devised a "Renewable Natural Gas Credit" modeled after similar credits that reward producers of renewable electricity and motor fuel. It has even filed for a patent for the natural-gas credit, or RNGC (pronounced "rink").
"We do envision the RNGC becoming more popular," said Eric Kravitz, the co-op's director of business development. "So by patenting the RNGC, it gives us the opportunity to expand our service territory and to help other regions to take advantage of this unique way to source a different kind of natural gas."
Initially, the renewable-gas option will be available to customers of Peco, which has about 500,000 gas customers in the Philadelphia suburbs. Kravitz said that about 120 of the co-op's 6,000 members signed up for a pilot project last year.
The co-op says it may expand the program to other utilities, including Philadelphia Gas Works, which has about a half-million customers in the city.
The program takes advantage of Pennsylvania's competitive gas markets, in which retail customers can shop for an alternative supplier to their local utility. Few suppliers have emerged that can differentiate their products, either on price or by some other distinction, and so only 13.3 percent of residential customers have switched, according to the state Public Utility Commission.
The co-op's renewable product would be similar to green-energy products that successfully have captured about 12 percent of the 2.1 million customers who have switched to competitive electricity suppliers, according to the PUC.
The co-op's renewable gas will cost a typical Peco customer about $12.80 more a month. The co-op's price for landfill gas is 46.49 cents per hundred cubic feet, or almost 47 percent more than Peco's current standard rate of 31.67 cents. The co-op also assesses a flat fee of $1.70 a month.
The renewable-gas credit the co-op buys will provide a payment to producers of landfill gas who are not already using the energy to generate electricity or to fuel vehicles, for which renewable-credit systems already exist.
The aim of the new credit is to provide an incentive to landfill operators to expand the capture of gas produced from buried waste, or to develop markets for surplus gas that may now be flared off.
"I feel like it makes a stronger connection between our consumption and how your money is going to change the production cycle," said Clay Bedwell, the co-op's director of energy operations and creator of the credit.
For decades, landfills have been capturing gas to reduce the leakage of methane, which is naturally produced from the decomposition of organic waste like food scraps and yard clippings.
Landfill gas contains about half the methane of natural gas, so it must be dehydrated and stripped of carbon dioxide and nitrogen if it is piped into the gas-distribution grid for general use.
The purification process is expensive, as is building a pipeline to connect the gas to a utility. So most landfill-gas operations burn the fuel at on-site electrical-generation plants that have been modified to use low-energy gas.
Some landfills pipe the gas directly to industrial end-users, who use the fuel in boilers for heating or manufacturing.
Of the nation's 650 operating landfill-gas energy projects, about 482 produce electricity, 35 produce pipeline-quality gas, and six produce compressed natural gas for vehicle fuel, according to the Environmental Protection Agency's Landfill Methane Outreach Program. About 127 pipe their gas directly to industrial users.
The EPA has identified about 440 other landfills that are candidates for gas-recovery projects.
About 1.3 billion cubic feet of landfill gas is recovered every day, which would contain the equivalent energy of about 520 million cubic feet of natural gas from fracked wells.
Landfill gas, as well as smaller amounts of biogas from livestock waste or sewage plants, will never replace natural gas - the nation consumes an average of 73.2 billion cubic feet of gas a day. But experts say it is better to capture and beneficially use the methane than to allow it to escape as a greenhouse gas.
"It's a better alternative to flaring, so we should be embracing these projects," said Michael Bedley, a landfill-gas specialist with Apex Power Services Corp., a Florida energy consultancy.
"The credit program can reduce the consumption and increase the conservation of fossil fuels, and provides all of the environmental benefits that result when renewable energy sources are used," said John Hambrose, a spokesman for Waste Management Inc., which captures methane at 134 landfills in North America, producing enough renewable energy to power 500,000 homes.
The initial buyer for the Energy Co-op's renewable-gas credit is Granger Energy Services, which operates a system that captures gas from the Lanchester Landfill in Narvon, Pa., and the Conestoga Landfill in Morgantown, Pa. The fuel is used by seven Lancaster County industrial users, which otherwise would be using natural gas.
"The important thing is we are displacing the consumption of pipeline natural gas," said the co-op's Bedwell.
Kravitz hopes that the renewable-gas credit concept will appeal to states that have opposed natural-gas development, and that it might be included in a government mandate, much as credits for solar and wind energy have helped to build up renewable-power markets.
"We hope the product will create the market," he said.
215-854-2947 @maykuth