RNG Growth Across the US

As the energy sector looks for any opportunity to decarbonize its operations, renewable natural gas (RNG) becomes an increasingly attractive option for gas consumers looking for a product with net negative emissions.

Major RNG producers across the U.S. have noted the continual growth of the gas, and many don’t expect that growth to end in the near future.

One of the largest transporters of RNG in North America, TC Energy has the capacity to flow over 30 Bcf annually to market through 17 interconnects across its footprint of thousands of miles of pipelines.

According to Roger Williams, director of business development at TC Energy, he expects that the company could execute an additional 15 Bcf this year.

“Last year, Trans Canada touched one in four gas molecules in the United States, so we’re a pretty big transporter of regular natural gas,” Williams told Hart Energy. “To that end, we’ve got a pretty large footprint, 40,000 miles domestically. And so our footprint is really well positioned to be in the areas where RNG is developed.”

Houston-based Archaea Energy currently has 12 operational RNG projects and 19 electric facilities across the U.S. In 2021, the company’s full year production was 5.7 MMBtu of RNG.

In addition to its current facilities, Archaea has 85 developmental projects in the works, which are anticipated to raise the company’s RNG production from 5.7 MMBtu to 50 MMBtu a year upon completion.

“Archaea Energy is one of the larger producers of renewable natural gas in the United States,” Megan Light, vice president of investor relations at Archaea Energy, told Hart Energy. “We are primarily focused on landfill gas-to-RNG projects, but we also currently have landfill gas-to-electric projects in our portfolio that we expect to convert over to RNG projects.”

Localization

In the past, a critical barrier to local RNG use, according to Williams, was a historical reputation that the gas quality of RNG was poor.

“If you have poor gas quality, and you’re putting a small amount of gas onto a large pipeline, when it blends, it becomes less of an issue,” he said. “But if you have poor gas quality, and you want to inject into a smaller pipeline that may go directly into someone’s home or business, then you have a much larger concern.”

However, as the quality of RNG and its production continues to rise, so does its trustworthiness, as well as the interest it has garnered from local distribution companies, who are becoming willing to take gas from RNG developers directly into their systems, Williams explained.

“One of the emerging trends we’re seeing is local distribution companies having increased willingness to accept this gas directly into their system,” he continued. “They’re being incentivized at the state and municipal levels with grants and subsidies to help accommodate some of these intervention costs, which also would’ve been a deterrent to them.”

In a local capacity, RNG has primarily been used in the transportation sector in the past in the U.S., but its uses have grown to include power generation, thermal generation and potentially sustainable aviation fuel, Light said.

“Over the past couple years, we’ve seen the development of what we call the voluntary market for RNG,” she added. “That is a market that is driven by decarbonization initiatives in our target customers. In that voluntary market is any entity that uses natural gas in its infrastructure today and either has a mandate or a goal to decarbonize.”

“There’s this growing pool of demand of entities that want to use RNG, which is great news because it really outstrips supply, from a supply-demand dynamic,” Light continued.

Light predicts that local uses of RNG will expand beyond its current capabilities due to the positive impact it has on the environment and based on its current rate of growth. From a sustainability standpoint, she said, RNG makes more sense to use than traditionally produced natural gas in the long term.

“One of the emerging trends we’re seeing is local distribution companies having increased willingness to accept this gas directly into their system.”—Roger Williams, TC Energy

“When we look at gas and renewable natural gas, which are chemically identical, you should say that if society is going to use any natural gas, it should use RNG first and then use fossil natural gas second from a purely environmental standpoint,” Light said. “I personally also think that on a global scale, there’s going to be immense natural gas demand, including fossil natural gas, through at least the rest of our lifetimes.”

Role in the energy mix

With energy insecurity playing a large role in the decision-making processes within the energy industry, RNG was considered as a means to reduce pressure on the U.S. energy supply. However, since RNG currently comprises such a small percentage of the U.S. energy mix, it isn’t predicted to help much in that regard.

That being said, it is one of the most efficient ways for energy companies to reduce emissions output, since it is a net negative solution.

According to Williams’ predictions, RNG will only account for 2% of the American energy mix due to the high cost to produce the gas. However, he maintained that it was worth producing because of its copious positive environmental impacts.

“I personally like it as a commodity because … it is capturing something that is a net negative, no matter what,” Williams said. “It’s as a result of an ongoing business via dairy farming or chicken farms or whatever, the source or waste water or all the different RNG sources⁠—all that gas is just going to atmosphere. I’m always a big fan of efficiencies and capturing things that are harmful to the environment before they get there.”

Light was more optimistic on the outlook of RNG’s role in the energy mix. From a decarbonization standpoint, Light believes that RNG is “the most economic and reliable way” for companies focused on environmentally friendly energy solutions. Additionally, from an energy security standpoint, she believes it will play an important, albeit small, role in the global energy mix.

“I think we’ve seen over the past few months, with [critical] geopolitical events, that an energy shortage anywhere becomes a global energy shortage, and adding RNG production in the U.S. just adds to global energy security,” she added.

“There’s this growing pool of demand of entities that want to use RNG, which is great news because it really outstrips supply, from a supply-demand dynamic.”— Megan Light, Archaea Energy

While RNG distribution and usage is already expanding at a rapid rate, Light anticipates further growth, both in the U.S. and globally.

“There’s so much opportunity in the U.S.—that’s where our focus is now—but especially in large urban areas, population dense areas, there’s a lot of landfill potential internationally that could [be used] to produce RNG,” she said. “Compared to traditional natural gas resources, it’s a very small piece of the pie, but I think that there is a lot of potential in the coming decades for this to play a role across the globe.”