Concentric was engaged by the American Gas Foundation (“AGF”) to assess enabling policies that could be used to establish regulatory frameworks for incentivizing the production and use of low-carbon gas resources at scale to achieve environmental, waste management, economic development, and other objectives. The study also examines the impact of such policies on the gas utility business model and on the gas utilities’ ability to assist in achieving public policy objectives.
Expanding the production and use of low-carbon gas resources could include developing and transmitting renewable natural gas, blending hydrogen with existing natural gas supplies, or building dedicated hydrogen gas systems. Each of these potential approaches have varying technical/regulatory challenges, timelines, costs and impacts on greenhouse gas emissions. Scaling the integration of low-carbon gas resources in a safe, efficient, and effective manner will require technological innovation as well as opportunities to market such products to end-users. Expanding the adoption of low-carbon resources will require addressing concerns over resource potential and scaling, validating the environmental benefits, and moderating the costs. Where gas utilities adopt operational plans to advance low-carbon fuels and technologies, they must continue to manage consumer affordability as well as safety and reliability objectives.
Policymakers are and will continue to be influential in guiding economy-wide emission reduction pathways over time. Emission reduction efforts will necessarily evolve as pathways are refined, technologies emerge (or submerge), and best practices and lessons learned materialize. Policymakers face important issues such as who will bear responsibility for the cost of reducing emissions and balancing equitable access to energy alternatives with the tendency of higher cost energy supplies to disproportionally burden low-income customers. These policy considerations could even potentially impact the nature and extent of continued operations of gas utilities and suppliers in a lower carbon energy future.
Gas utilities have consistently provided solutions for meeting energy needs and environmental goals, and they have an important, enduring role to play. This study reviews policies that have enabled utilities to evolve to meet changing societal goals and lessons learned in other regulated jurisdictions and industries.
