Does Virginia’s renewable future have space for alternative forms of gas?

After the Virginia General Assembly passed legislation in 2022 allowing natural gas companies to use biogas, a form of gas made from waste, state regulators have approved the first project developed under the new law. 

This month, the State Corporation Commission approved plans by Roanoke Gas Company to construct a facility that will convert biogas sourced from a wastewater treatment facility to pipeline-quality natural gas.

The approval came as the General Assembly this winter sent a bill to Gov. Glenn Youngkin making it Virginia’s policy “to encourage the capture and beneficial use of coal mine methane.” The bill initially sought to define that type of gas as a renewable energy source but was scaled back to have the Department of Energy evaluate ways to encourage its use while considering its environmental benefits and economic development potential. 

The 2022 and 2023 bills tap into a broader discussion roiling Virginia policymakers as the state transitions its electric grid from fossil fuels to renewables in an effort to reduce the carbon and methane emissions driving climate change: How much investment in gas infrastructure should Virginia continue to encourage?

Gas and oil companies say legislation like the biogas and coal methane bills offer a way for the industry to reduce and make use of existing methane emissions while also opening up new economic opportunities. 

“We think that is a resource that should be better utilized and really provide an economic catalyst in Southwest Virginia,” said Chris Nolen, a lobbyist for CNX Resources, a natural gas producer that has been capturing methane emissions from Virginia’s largest coal mine, the Buchanan Mine, since the 1980s.

But many environmental groups say such projects encourage the use of a fuel that is counter to a clean energy transition while diverting funds and resources from tried-and-true renewables like wind and solar.

“Even though we need to deal with the methane emissions problem, stuff that’s just escaping into the atmosphere from the coal mine today, we don’t want you to have an incentive to combust that to produce electricity,” Peter Anderson, Virginia policy director for environmental and economic development nonprofit Appalachian Voices, told the Mercury. “That’s not clean electricity.”

The issue sparked debate at last year’s Virginia Clean Energy Summit in Richmond, which devoted a panel to “sustainable natural gas.”

Stewart Leeth, chief sustainability officer for Smithfield Foods, which uses biogas derived from farm waste, during the panel called it exciting “to see a revenue stream that wasn’t available before.” 

“It’s not only good for the environment. You’re taking methane emissions out … but you’re also actually increasing the economic value to the farm,” he said.

But Cale Jaffe, director of the University of Virginia’s Environmental Law and Community Engagement Clinic, said that with the Intergovernmental Panel on Climate Change calling for rapid emissions reductions, further gas investment could serve as “a wall that’s preventing the transition.”

“The urgency involved is so intense. Where are the highest values, quickest ways to have zero carbon?” Jaffe said. “Investing so much in that existing infrastructure that we create a barrier to other options, whether that’s wind, whether that’s solar, whether that’s zero-carbon green hydrogen, whether that’s a small modular reactor, that’s my worry. Over-relying on a sustainable definition of fossil gas may end up doing longer term harm because it slows down the transition.”

Roanoke Gas project

The project approved by the State Corporation Commission this winter will allow Roanoke Gas Company to build a facility that will turn digester gas, or biogas, from the Western Virginia Water Authority’s Roanoke sewage treatment plant into usable natural gas.

Biogas, which is mostly methane along with some carbon dioxide and small amounts of other gases, is produced by the decomposition of solid waste in an environment without oxygen. 

Roanoke Gas says using the converted biogas as part of its system will let the company reduce its greenhouse gas emissions by 13,700 metric tons per year. It will also allow the utility to sell credits for each metric ton reduced.

The project has a price tag of $7.7 million, but Roanoke Gas says the sales of credits mean it will cost customers only $21,000 over the first nine months. That’s expected to add $0.04 cents to residential customer’s monthly bills.

“For the foregoing reasons, the Company has shown its plan is in the public interest, will result in a decrease of methane or carbon dioxide equivalent emissions, and will result in rates that are just and reasonable,” Brian Greene, an attorney representing Roanoke Gas Company, wrote to the SCC in December.

Not everyone agreed the project was a good idea.

Appalachian Voices argued the company is overestimating both the amount of emission reductions and revenues it could get from sales of the credits.

“When the General Assembly set a 180-day deadline for the Commission to approve or deny biogas infrastructure projects, legislators likely did not envision, in the typical case, an incomplete and inaccurate application and a discovery process extending like a trail of breadcrumbs,” wrote Claire Horan, an attorney with the Southern Environmental Law Center representing Appalachian Voices.

The SCC, though, found the project stood up to “rigorous” review and approved it.

Quoting an earlier conclusion by a hearing examiner, the SCC concluded the project “has the potential to achieve a rare combination of increasing local fuel supply, reducing greenhouse gas emissions, and increasing a utility’s profit while also lowering customer rates.”

‘A problem that needs to be dealt with’

Around the time the SCC was handing down its decision on the Roanoke Gas project, the General Assembly was considering legislation that would define methane released from underground coal mines through ventilation holes as renewable energy. 

Virginia has “dozens” of mines that emit methane into the atmosphere, said Department of Energy Acting Director Will Clear Jan. 26. “This is a problem that needs to be dealt with.”

Early in the session, one of the bill’s patrons, House Majority Leader Terry Kilgore, R-Scott, reworked the proposal to remove the renewable energy changes and instead declare the state will encourage the use of captured coal mine methane.

The bill directs the Department of Energy to evaluate policy options, with a report due Nov. 15.

“What this would do is give us a road map so that we could use this coalbed methane as an energy source instead of letting it be vented into the atmosphere, where it does cause some issues for the environment,” Kilgore said.

The changes led to Appalachian Voices withdrawing its opposition to the bill after voicing concerns that the original version incentivized the use of a non-clean source of energy and continued operation of coal mines.

“That gas wouldn’t be escaping in the first place if we weren’t coal mining in the first place,” Anderson said.