Minter: SoCalGas Champions Innovative P2G Technologies

George Minter

George, “power-to-gas” is becoming a conceptual term of art in the renewable energy marketplace that too few understand. Could you define and elaborate on what it refers to or means? 

George Minter: “Power-to-gas”—P2G—is a concept to describe deploying excess renewable electricity to produce hydrogen through electrolysis, which is stored in the natural gas delivery system.  This is undertaken to handle grid challenges around supply and demand.

Generally, we get a lot of wind power at night but not a lot of demand, so there is going to be a growing excess of wind-turbine power. Mid-day, when everybody is at work and kids are at school, we anticipate there’s going to be excess solar supply without sufficient demand. P2G is an opportunity to off-load that excess renewable power into electrolysis facilities, where you produce hydrogen by running electricity through water. This creates a stream of oxygen and a stream of hydrogen. 

Oxygen is a commercial product that has value. Hydrogen is essentially stored energy—it’s a way of turning electricity into a molecule that can be stored in a natural gas pipeline system.  The hydrogen is blended with the methane in the distribution system, lowering the carbon content of gas supply.   

In the EU nations, they’re actually taking opportunistic carbon dioxide streams from carbon capture, for example, and combining it with the hydrogen through a Sabatier reaction—creating synthetic methane. Carbon capture is something we’re talking about doing on a widespread scale to decarbonize electric generation. What do you do with that carbon dioxide? There is a lot of concern about sequestering it. Instead, you can utilize it to produce methane.

We’re seeing Europe address excess renewable energy to maintain the stability of the grid by deploying power-to-gas projects that produce hydrogen from excess power, turn it into methane, and put it in the natural gas pipeline system. It’s a storage opportunity, it’s a grid-stability mechanism, and it’s a green hydrogen pathway. We can use this green hydrogen pathway in transportation and for industrial purposes, too. 

Today in California, we talk about the “hydrogen highway.” We talk about hydrogen energy as clean energy. But 95 percent of the hydrogen we’re utilizing is produced from methane—natural gas. The carbon is oxidized from the methane and the carbon dioxide goes into the atmosphere. That means the hydrogen we’re using today that we pretend is clean has simply left the carbon dioxide back at the facility and put it into the atmosphere. It’s really not clean. Electrolysis—power-to-gas—is a way of producing truly green hydrogen. 

Put power-to-gas in the context of California’s climate agenda and implementation of AB32.

AB32 sets the parameters for addressing climate change. It establishes CARB as the agency to drive carbon dioxide and GHG levels down. AB32 requires that we reach 1990 levels by 2020. We’re on track to do that.  In fact the gas sector is already below 1990 levels and it’s only 2014. We’ve mostly done that through energy efficiency programs. 

So, in looking forward, how can we utilize the gas distribution system while lowering its carbon content.  One opportunity being explored is power to gas. That’s a way of utilizing electric-generating resources, particularly renewables, in a different way to reduce carbon.

In the next couple of years, California will face a challenge that EU nations have faced in the last four to five years. The CalISO is talking to a lot of organizations about the duck curve. We’re going to have a midday mismatch between supply of renewable electricity and demand. We’re seeing that as we deploy solar throughout the energy economy, particularly in households. California’s solar initiative—“we’re going to have a million solar rooftops”—will give us all of this generating capacity midday with nobody to use it. 

The ISO is concerned this could crash the grid. If we don’t balance the grid, we’re going to fry it. They’re looking at offloading power to other states. The same is true at night: We have wind-power resources with no demand for it. 

The EU nations are building power-to-gas electrolysis facilities. They identify where there is too much solar or wind on the grid—where there is a mismatch between time of day, renewable generation, and demand. They offload that electricity, produce hydrogen, and put that hydrogen into the pipeline. It’s another way of lowering the carbon content of the natural gas supply. Essentially you’re doing hydrogen blending. You can capture carbon dioxide streams and methanate that hydrogen to produce methane.

Please share some examples of P2G applications. Where specifically is it being relied upon?

About 5 years ago, Northern Germany had a significant challenge in the mismatch of nighttime wind near the North Sea. There was so much wind power at night that they were paying Sweden to offload electricity. The federal energy agency said, “Lets do electrolysis!” They directed capital dollars to do a power-to-gas facility, producing hydrogen and injecting it into the pipeline. In the last five years, 30 different facilities are in the planning stage of deployment throughout the EU nations—Northern and Southern Germany, with some in Spain and Holland. 

In injecting hydrogen into the pipeline, there are questions about how much hydrogen we can really blend into the natural gas delivery system. Most people say 3-5 percent, but tighter systems that have more plastic pipe and less steel pipe can handle a higher percentage. Holland just changed their standard up to 12 percent blended hydrogen. 

Now we’re seeing methanation occur, where you turn that hydrogen into synthetic methane. It’s like natural gas, but it’s a renewable resource instead of a fossil resource. We’re seeing that deployed throughout the EU nations.

Audi has one of the facilities, producing hydrogen for its hydrogen fuel cell vehicles. Some of the hydrogen can be deployed directly for industrial uses. 

Here in North America, there hasn’t been a lot of discussion about power-to-gas. Last year in March, we were able to get CEC, ISO, and PUC representatives over to Germany to visit facilities. They asked “Why aren’t we doing this in California?” I’ve been asking that question and the gas industry is starting to ask it as well. 

While we’ve been talking to regulators about how we ought to deploy power-to-gas, the Ontario ISO operators announced one of North America’s first P2G projects: a 2.5-megawatt grid storage project by Hydrogenics. When that news got around to California, the Cal ISO became very interested in power-to-gas. The CEC has become very interested, too. We’re having discussions with both. 

We just signed a contract with the National Renewable Energy Lab to do a modeling study on the Cal ISO, and also the Western States Grid to identify P2G opportunities. Where are we going to have grid constraints, excess renewables, water supply, and siteable land where we can put an industrial facility to produce hydrogen? We have to look at pipelines and pipeline injection. We’re going down the road toward deploying this technology in California. 

SoCalGas is looking at scoping a couple of R&D projects. We’re looking at one customer site with excess solar. We’re looking at deploying small-scale P2G just to get experience with the technology. We’re looking at one of our storage facilities in terms of electric generation, carbon capture, power-to-gas hydrogen production, and methanation. If you look at the EU example and the problems they encountered—essentially overbuilding renewable—this is their solution, and it can also be ours.

In fact, the German energy agency calls this the “systems solution.” That agency says they no longer have an electric grid and a gas grid. Instead, they have an energy grid—managing gas and electric together. They move power-to-gas or gas-to-power when they need to. 

As we move into the future and hear the ISO’s concerns about excess renewables, this is the technology that helps us manage our grid, balance supply and demand, produce green hydrogen, produce lower-carbon gas supply, and allow us to use gas long into the future.

You mentioned the often-referenced “hydrogen highway” leading from Canada to Mexico that Governor Schwarzenegger championed. How imminent is a Hydrogen Highway? 

We have a different governor and a different perspective. It’s interesting that now the CEC requires, for any hydrogen fueling station funded by state dollars, that 33 percent of its hydrogen be green. The hydrogen providers—Air Products, Air Liquide, or Praxair—are in the business of producing hydrogen from natural gas. They’re customers of ours. They’re not the folks interested in producing green hydrogen. But the demand for green hydrogen created by Governor Jerry Brown’s administration will probably fuel electrolysis and other green hydrogen pathways. 

We’re looking at telling some of these hydrogen producers that we’ll provide the hydrogen pathway. We’ll do CNG and hydrogen stations with green hydrogen through electrolysis. Gas companies are looking at getting back into the refueling business with green hydrogen, compressed natural gas, and even LNG. 

I think the hydrogen highway is a more complicated concept than we thought originally. I think it’s going to be a natural gas, hydrogen, electric, gasoline, and diesel highway for a long time. 

We see the hydrogen highway being quite a bit long-term. We see some short-term opportunities with green hydrogen. But we also see real short-term and mid-term opportunities that are very economic by moving natural gas into the transportation market.

How is natural gas, as a fuel, transforming transportation?

Natural gas is a low-carbon fuel, but it’s still a carbon fuel. It’s CH4. Some people call methane god’s way of delivering stable hydrogen. There is a lot of belief that we want to be utilizing more natural gas to displace dirtier fuels. People talk about, in the Midwest, eliminating coal from central power stations. People talk about moving natural gas into the transportation marketplace to get rid of diesel, which has a higher carbon content. 

As the senior director at SoCalGas, I’m in charge of a lot of policy development and environmental programs. We’re focused on deploying natural gas to displace dirtier fuels, but we’re also focused on reducing the carbon profile of natural gas. Here is the challenge: AB32 sets us on a path of reducing GHG emissions. GHGs are global pollutants. But we also have the challenge, particularly in Southern California, of air quality and air pollutants that affect public health. We have high ozone levels. In fact, Los Angeles and San Joaquin Valley are the only two extreme non-attainment regions in the nation for ozone standards. When you don’t attain those standards, you are contributing to childhood and elderly asthma. 

We see natural gas moving into the transportation sector as reducing a lot of this air pollution. But regulators are also concerned with the long-term effect of relying further on natural gas because it is a carbon fuel. So we’re looking at different pathways to reduce the carbon content of our gas supply. There are a lot of ways to do that.

One of the exciting things happening today in the transportation marketplace is the heavy-duty demand for clean fuels and for natural gas. There is a significant price difference between diesel and natural gas. Truckers, rail, and marine are all looking to move from diesel and bunker fuel to natural gas because of the price advantage. It’s a good opportunity for us. 

We met with the Port of LA, which is going to want a gas liquefaction facility to provide LNG for the ships, because they’re asking how the port is going to deliver LNG. Rail representatives heard we’ve been talking with the port about an LNG liquefaction facility and said they need it at the rail yard, because they’re going to LNG in a shorter timeframe than the port is. So this is happening, we’re moving down the line. We’re looking at LNG, CNG, and green hydrogen.

My interest—and the state’s interest in improving air quality and meeting GHG goals—is moving to natural gas, particularly in the heavy-duty sector. We can achieve significant NOx reductions. NOx causes ozone—the pollution of concern here in the South Coast and San Joaquin Valley. We can drive our GHG profile down if we move natural gas into the heavy-duty sector, trucking, transit, off-road, construction, port-handling equipment, rail, and marine. These are the largest sources of pollution in the state. We can address that using the fuels they use.

Please demystify for our readers what the energy process “decarbonizing the pipeline” involves.

George Minter: We're talking about lowering the carbon content of gas supply. People say natural gas is a dirty fossil fuel and we've got to get rid of it. But natural gas is just methane. Methane can be fossil, renewable, or synthetic.

We should think of gas supply like we used to think of our electric supply. 30 years ago, our electric supply was predominately fossil. We said that we wanted it to be renewable, so we developed solar electric generating facilities and wind-power plants. We decarbonized our electric supply portfolio.

We need to ask how we can decarbonize our gas supply portfolio. How can non-fossil resources provide gaseous fuel for high-efficiency uses, for heat processes—space and water heating, as well as commercial thermal applications? We’re going to continue to use gaseous fuels for a long, long time. How do we decarbonize it?

You go from geologic gas to biologic gas with bio-methane. There is a lot of study being done today about what our biological resource base is and what our opportunity is here. We're looking in California at the potential to displace 20 percent of the natural gas in our pipeline today with existing biological resources—the waste stream of human civilization. That includes wastewater plants, landfills, dairy waste, ag. waste, woodland waste, and diverted organic waste such as fats, oils, and greases. This can all be utilized as biomethane feedstock, that can go into the pipeline, and be utilized as essentially zero-carbon gas. There’s a purpose-grown crop pathway that has great potential—another 20 percent. Studies suggest we have enough non-arable, non-agricultural land with non-potable water, including saline or brine water, to produce switch grasses and algae—producing biomethane that could displace another 20 percent of our pipeline gas. That’s effectively 40 percent of our pipeline gas supply no longer fossil, but renewable. We call this renewable natural gas or biomethane.

How have California energy and environmental regulators, specifically CARB, responded to The Gas Company’s championing of a decarbonized pipeline?

Regulators are mixed. There is tremendous support for harnessing biomethane resources at the CARB. The CARB is in a quandary. They've realized that methane is a real problem in terms of climate change, since it has a higher global warming potential than carbon dioxide.

In popular press everybody is focused on the natural gas system having leaks. The natural gas system—from production, to pipeline, to distribution, to the person's home—represents less than 2 percent of the nation's GHG problem. 98 percent is outside the system. So the focus on the gas system is a little misplaced.

Now, that’s all GHGs. The natural gas system supply chain is 20-23 percent of the methane problem nationally, but we suspect a lot less here in California. There is definitely a lot that needs to be done in natural gas production, transmission, and distribution to reduce methane emissions. But the bigger volumes are coming from our waste stream, agriculture, dairies. What are we going to do about that? That’s a big issue right now for the CARB. How are we going to capture that methane? There is a convergence of thinking that we ought to capture it and put it into the pipeline. This is a great opportunity.

How have other state regulatory agencies, such as the CEC, reacted?

The CEC is focused on this as a potential new renewable power generating resource and as such, an opportunity to grow the RPS. The State of California is focused on increasing its renewable portfolio standard. Over time, we expect to go from 33-40 percent maybe to 50 percent. Renewable gas in a power plant is a renewable resource under the RPS.

The PUC regulates natural gas pipelines and they have standards for what goes into those pipelines—heat content standards, BTU values. The utility can only take gas that meets that standard. They also have constituent standards—what else is allowed in that natural gas stream. Those are two challenges right now, since a lot of biogas doesn't meet the PUC’s standards. How do we change that and get them into the pipeline? PUC is now in the Order Instituting Rulemaking (OIR) phase. We expect to see a rulemaking that will establish the rules and procedures allowing biogas to come into the distribution system. It'll set the heat content standard and the constituent standard.

Several bills in recent years looked at this issue. One from Mike Gatto required the Office of Environmental Hazardous Assessment to identify problems with biomass and identify remediation. The thinking is that we'll now have a set of rules supported by the PUC, CEC, the CARB, all the environmental agencies in the state to move that gas into the pipeline system.

Elaborate on the challenges of decarbonizing the pipelines.

There is a challenge: How do we get non-pipeline gas so it is the right quality to get into the pipeline? SoCal Gas has developed a PUC-approved biogas conditioning service that we now offer to get it there. We are now out working with landfill operators and dairies to condition their gas and get it into the pipeline. We’re looking at offering LNG services; and at hydrogen production services. We also have a service tariff to provide CNG to the transportation marketplace. We also just filed a Distributed Energy Services tariff to help customers site and operate fuel cells and combined heat and power systems.

Last January, you were an expert VX2014 panelist addressing: “Natural Gas in an Era of Energy Abundance: To Frack or Not to Frack—Is that the Question?” Could you speak to status of fracking policy in California today; what SoCal Gas’s interests are; and, given your experience in public affairs, how this policy battle will end?

There is a short-term, a mid-term, and a long-term view. In the very, very long-term, I don’t think the battle will ever end.

The company’s view is that we need to encourage responsible recovery procedures. I think the industry is becoming more and more responsible with respect to hydraulic fracturing. It is not a new technology, although people seem to think so. We’ve been using hydraulic fracturing in oil and gas fields for 40-50 years. What’s new is the ability to reach deep and far into the resource base through horizontal drilling, and the ability to extract from very tight formations, such as the shale formations. It has opened up a tremendous opportunity for gas supply.

People argue that we need to worry about water contamination, groundwater supplies, communities, and workers. We do! We should protect the workers, we should protect communities, and water supply, and we should have stringent regulations that require responsible production procedures. We’ve done this in the past with traditional methods, and we’re now doing it with what used to be called the non-traditional methods—which, frankly, are becoming traditional methods today. There is no reason why we shouldn’t ensure clean water supplies and protect them from fluids used in fracking.

The reality, though, is that all of our extraction industries have the same challenges. Which is more environmentally responsible: puncturing the earth 40 or 50 times in a traditional recovery method, versus one time with horizontal drilling? Which is more impactful to the environment? Compare that to mountain topping or strip mining for coal, and all the materials that go into the rivers, streams, and waste-water systems with that extractive energy industry. Which is more problematic? Mineral and metals extraction has some of the same problems. The problems that we’re seeing with fracking we see in all of the extractive industries.

Over the long term, what’s happened? We’re awash in gas in this country. We’re going to replace all of those Midwestern coal plants with natural-gas powered plants. We’re going to drive the carbon content of electric generation way down. Low-priced natural gas is creating new industries and new manufacturing in the Southeastern US. Sempra is involved in moving gas there to fuel the new manufacturing economy. This country was losing manufacturing jobs and now they’re coming back to the South from abroad. This is a good thing.

People can say, “It’s cheap labor states.” As unions organize, that will all change over time. This is a good thing for this country and a good thing for the world. That’s short and mid-term what I just described.

Looking long-term, we’re going to decarbonize the natural-gas pipeline system in places where there are carbon challenges. Today in California, this is what we face. We do not face that in other states.

Where is the market? It’s going to be in California for a long time.