NW Natural told Oregonians it had a new source of clean energy: renewable natural gas derived from decomposing organic waste at sites like landfills or dairy farms. In 2017 the company helped to write a law promoting the development of the new fuel, with the promise that it could replace fossil natural gas in our pipelines.
Internal documents obtained by ProPublica reveal that the company paints a picture of going green while it continues to sell as much fossil natural gas in an average year as it did before. NW Natural maintains that it has been stymied in its efforts by lack of support from regulators and too many barriers.
McKenzie Funk, reporter for ProPublica, joins us to explain.
Note: The following transcript was created by a computer and edited by a volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. For years now, NW Natural has told Oregonians it had a new source of clean energy: renewable natural gas derived from decomposing organic waste at sites like landfills or dairy farms. Now, new internal documents obtained by ProPublica reveal how the company painted a picture of going green, while it continued to sell as much fossil natural gas in an average year as it did before. McKenzie Funk is a reporter for ProPublica. He joins us to explain. It’s good to have you back on the show.
McKenzie Funk: Thank you for having me.
Miller: We’ve talked in the past on this show about NW Natural’s response to reports about the dangers of natural gas and about their public relations campaigns, including things like materials for school kids. But what was in the trove of industry documents that you received not too long ago?
Funk: These are documents spanning four years – from 2017 to 2021 – from the Northwest Gas Association, which is a trade group of which NW Natural is a part. Included in these documents were some presentations made by NW Natural, and meeting minutes. What they represent more than anything is this moment where the gas industry – regionally, and with NW Natural being a leading member of this group – came to understand that they were now a target of the environmental movement, that natural gas had been seen as a bridge fuel. We’d understood that it’s cleaner than coal, it’s cleaner than diesel, when it comes to climate change. And with the big boom in fracking, there was suddenly plentiful gas in this country. It was cheap. And the concern is, of course, that methane is a much more harmful greenhouse gas than is carbon dioxide. And environmental groups began to realize that if we get stuck on natural gas, if this bridge just keeps on going forever, then we are stuck on fossil fuel.
That moment is when the regional trade group, and NW Natural, specifically, began to think about, how do we grapple with this? How do we grapple with this in a state, in a region, where people really do want us to do something about climate change? And I think the company itself liked the idea that it was helping the climate versus, say, coal.
Miller: Can you remind us what this Northwest Gas Association was referring to when they said, internally, that they faced an existential challenge?
Funk: The existential challenge, especially for a company like NW Natural … which historically, have done one thing: they have sold gas to people and companies through pipes. They don’t have a division that sells electricity. They are a gas company. And the existential challenge is, environmentalists were saying, we need to electrify everything. The best way to reduce the footprint of the natural gas industry is for it to simply shrink, for there to be no new gas hookups in cities, for us to simply start selling and burning less natural gas. And for a company that, that’s what they do, that is the existential challenge.
Miller: What was the playbook that gas executives developed?
Funk: It was multifaceted. And one of those was looking at psychological research that undergirds a lot of advertising, which says people respond to emotion, not just facts. And so one of the things that the trade group did, was they said, we’re going to start speaking more to the heart than to the head. We’re going to start advertising that really speaks about that, and talks about energy choice, and really talks about natural gas’ role in our lives, in keeping our homes warm in the winter.
So it was a lot about … some of the positioning was simply about, we’re not just going to be a trade group that says, when journalists or public policy makers come to us, will we give them the facts? No, we’re going to start talking more about, what does this energy do for us? That was one facet of it. And, then if you talk specifically about NW Natural, they were, by one definition, the first in the country to really go after renewable natural gas in a big way. And I can tell you what that is, in case that’s a term that is unfamiliar to listeners.
Miller: Yeah, please do. And then we can listen to one of the ads that they put out, this was seven years ago. But what exactly is renewable natural gas?
Funk: Well, first understand that even traditional fossil fuel natural gas is mostly made of methane. And methane, you can get it from the ground as a fossil fuel, but it also is emitted when waste decomposes. Landfills emit a ton of methane if unchecked; piles of manure at cattle farms can emit a ton of methane. Depending on how we deal with our garbage, our food waste, it can emit a ton of methane. And there is thought that potentially some of our forest waste could at least be turned into methane.
So, renewable natural gas is going to these organic sources that may, in many cases, be emitting methane already, if unchecked, capturing the methane on site and upgrading it to a fuel that could go into the pipelines and replace the fossil natural gas on a one-to-one basis. The idea is that we could have this … it’s about the avoided emissions of methane. If we have this unchecked methane going up into the atmosphere, why not capture that and burn that instead of the fossil natural gas we’d otherwise be pulling out of the ground?
Miller: Let’s listen to an ad that the company put out about this in 2017.
NW Natural Ad [Recording]: Renewable natural gas is produced from organic materials like wood and food waste, agricultural waste, and well, human waste. When these materials decompose, they produce methane, which can be converted to renewable natural gas, sustainably reducing emissions and closing the loop on waste. NW Natural: less we can.
Miller: How does that messaging fit into the overall communication strategy that they started employing?
Funk: Well, I don’t question their motives. They wanted to be part of the climate solution, and they wanted to be in partnership with customers. And of course, the idea that you could get renewable natural gas, and not have to make too many changes to your home heating or to your cook stove was very appealing. And it turns out the renewable natural gas, when they went out and did customer surveys and focus groups, it tested very, very well with customers and consumers writ large.
The idea of it was something that, time and time again, did well in these surveys. So I think that was part of it, as they talked about other goals to be climate efficient – because this is not the only program that NW Natural has pursued. Their efficiency measures and new technologies such as hydrogen, that could potentially green their mix. But, renewable natural gas was something that tested very well, so this was front and center of a lot of the ads that they ran.
Miller: What did you find when you looked into NW Natural’s claims, including to lawmakers when they did lobbying – lobbying that proved to be successful in 2017 and 2019 – about the potential capacity of renewable gas in Oregon?
Funk: Well, this is interesting. In 2017, NW Natural wrote and then pushed a bill that passed without really any opposition through the state legislature, to do a survey of all the potential methane and renewable natural gas supplies across Oregon. And what they found was that the theoretical potential, if money were no object, was very significant – it was 50 billion cubic feet. And that number happens to be about as much gas as is used in Oregon residences on an annual basis. 50 billion cubic feet of technical potential sounds like a lot. And they leaned on this number going forward for further legislation, to say, “Hey, look at all this. If we can just start tapping into this potential, we can forget all that fracked gas, forget all those fossil fuels.”
Now, what’s interesting about that is that only about 10 billion cubic feet of that is reasonably economically viable. About 40 billion was stuff we would have to go up and get all this woody debris, all this forest waste, find a way to get it to market. Use this gasification technology that is very nascent, is not on an industrial scale. So, the logistical challenges of most of that gas make it so far sort of “pie in the sky.”
What’s more reasonable is this 10 billion cubic feet – that would do a chunk of Oregon residences, if we could gasify all that. Now, the reality is that residential use is not the bulk of the state’s gas use. So, even that number was itself much smaller than it seemed. But the idea of this huge source …
Miller: Accurate, but an incomplete picture of the total gas usage, is what you’re saying.
Funk: That has been the charge, yes.
Miller: But there’s another piece here, which is that all of this was about the potential for capturing this gas within the state of Oregon. But, as you write in your article, that’s actually not what’s happening right now. So where is the small amount of renewable natural gas that the company is using? It’s about 1% of its total right now. Where is it coming from?
Funk: Yes, and that’s 1% of the residential use, by the way. That’s not accounting for some commercial use, and it’s 0.91% of residential. Well, all of it is coming from out of state, and a very significant part is coming from Tyson Foods, the big meat processing plants in Nebraska. The cows there, before they enter the slaughterhouses, do produce a lot of waste. That waste is put into these big devices called digesters and upgraded and put into the pipelines over there.
It turns out that, despite the idea that we’d be putting renewable natural gas in Oregon homes, the number of gas molecules that might be entering Oregon homes from Nebraska is quite small. It’s more like the idea of it is what we can claim in Oregon.
Miller: I mean, the company told you essentially that the CO2 saved anywhere is significant, or a greenhouse gas reduction anywhere is meaningful, that it doesn’t matter where the savings happened. If that’s the case, then why do you think they made such a big deal about renewable gas possibilities in Oregon?
Funk: Well, I think that was simply part of selling the idea of renewable natural gas being this resource for Oregon. And then it also could bring business, a new revenue stream to, say, Oregon dairies, or to Oregon sewage treatment plants. So the idea that there would be local benefits to local businesses was something that helped get this legislation through. And part of the sales pitch, I think it helped very much.
In talking to NW Natural, I think they would like to use Oregon sources if they are economically viable, but so far what’s been cheapest and best for their customers, in their reckoning, is to go to places like Nebraska. So those local benefits, those knock-on benefits, have not yet been seen in Oregon.
Miller: I want to play another ad. This one is from 2021.
NW Natural Ad [Recording]: There has been a shift in how we think about our energy and the challenge of climate change. Pursuit of renewables and new technologies is the way forward, and NW Natural hasn’t stood idle. We have begun to convert waste into renewable natural gas to help reduce emissions from the air and provide a net zero carbon energy for the future. With renewable natural gas, we’re creating a better energy by design. NW Natural: less we can.
Miller: What have you learned about that “net zero” phrase?
Funk: That’s an interesting one. There is no generally agreed upon accounting for how much renewable natural gas actually helps the environment, actually cuts greenhouse emissions. There are some more widely used methods, including the one used for the renewable fuel standard in California. And by most of those measures, by that California standard which comes from Argonne National Labs, it’s called “GREET,” and what NW Natural has reported so far from its Nebraska projects, in fact, it is not net zero, if you use that standard. It is better than traditional fossil fuel, natural gas, but it is still emitting the equivalent of lots of carbon into the atmosphere.
And that’s one thing, and in defense of NW Natural, it was not written into the law that they would have to source their gas from Oregon. It was not written into the laws that they would have to have a certain “carbon intensity,” is the term of art, for these projects, to make them viable. And other states have focused more on those two factors than Oregon did. And, it’s hard to actually go out and prove that this is having a real benefit, or that this or that project has a much better benefit for the climate than another without the standard.
Miller: And just briefly, one of the points a NW Natural spokesman made to you is that, “uncertain support from policymakers and regulators, along with ongoing barriers demanded by certain climate activists are to blame here” for the relatively slow roll out of renewable natural gas – now below 1% of deliveries to retail customers, as opposed to 5% that was part of a voluntary goal that the company itself had lawmakers pass, or pushed for them to pass. So what exactly was he referring to when he was talking about “barriers demanded by certain climate activists,” or “uncertain support from policymakers or regulators?”
Funk: Well, NW Natural, I think can understand their response. They say that the Public Utilities Commission, which does regulate them as a utility, has been skeptical of their efforts to meet certain climate targets using renewable natural gas. Keeping in mind that there may be cheaper methods to get similar emissions reductions, according to the Utilities Commission.
Because of that, in recent decisions, the Utilities Commission has not fully embraced those goals that NW Natural set for itself. It failed to recognize … Now, it’s technical, but the idea is basically, NW Natural Investors, as opposed to customers, might be on the hook for these renewable natural gas investments if the Utilities Commission doesn’t back these in full. And so NW Natural is saying, “Well, hey, you’re not letting us pass along these costs to our customers. So how can we go out and get all this renewable natural gas?”
That’s the lack of support they’re talking about. And the demand from the environmental side is the demand that we electrify all things, as opposed to keep on running this gas system. And that’s the pushback NW Natural has been facing.
Miller: McKenzie, thanks very much.
Funk: Thank you.
Miller: McKenzie Funk is a reporter for ProPublica.
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