ATCO Future Fuel is to supply renewable natural gas from a plant in Alberta to Pacific Northern Gas. (Photo courtesy ATCO Future Fuel)

ATCO Future Fuel is to supply renewable natural gas from a plant in Alberta to Pacific Northern Gas. (Photo courtesy ATCO Future Fuel)

Northern natural gas utility to tap into renewable fuel

Renewable natural gas is more environmentally friendly but will cost more

Pacific Northern Gas (PNG) is offering its customers a chance to buy a more expensive kind of natural gas as their personal contribution to climate change.

Called renewable natural gas (RNG), also known as biomethane and produced from organic material such as agricultural waste, it’s considered far cleaner with far fewer greenhouse gas emissions than the kind of natural gas PNG regularly buys that’s pumped from the ground in northeastern B.C.

Customers choosing RNG from an Alberta supplier that PNG has already lined up would avoid the current provincial carbon tax of 8.82 cents per cubic metre for burning conventional natural gas but its cost would still be more expensive, said Laura Cropper who speaks for PNG.

“PNG intends to deliver a portion of the RNG to those customers willing to pay more to receive those environmental benefits to meet their own greenhouse gas emission reduction targets,” she said.

Starting small in 2022 but to grow in the years beyond, PNG’s deal with Alberta biomethane producer ATCO Future Fuel is for an eventual 230,000 gigajoules a year, equivalent for the needs of 2,300 homes or approximately five per cent of PNG’s 42,000 residential, commercial and industrial customer base.

ATCO Future Fuel’s RNG will come from a new plant taking in decomposing waste from farms and forestry operations, landfills and wastewater treatment plants that’s located just northeast of Edmonton in Two Hills County, Alta. The company is getting a $7.9 million Alberta government subsidy.

Exactly what the price differential will be between RNG and conventional natural gas isn’t yet known but PNG will be filing detailed plans soon when it seeks permission from the B.C. Utilities Commission, the provincial government’s utility regulator.

RNG will be mixed in with PNG’s regular gas so that a customer choosing the more expensive option will burn a combination of the two fuels.

But since that customer has said they want to burn only RNG they will be charged as if what they use is 100 per cent RNG. And they won’t be charged the provincial carbon tax at all.

PNG makes its money by charging for the transport of natural gas through its pipeline system and delivering it to its customers. It buys the gas it transports but cannot charge its customers more than what itself pays, something that will also apply to RNG.

Even if a PNG customer doesn’t choose to burn RNG, there will be an increased cost to that customer. That’s because RNG will be pumped through a series of pipelines for a fee before entering PNG’s own distribution system and because PNG will be burning RNG itself to run its own operations. Those costs are then passed onto its customers.

PNG’s RNG purchase follows on the provincial government’s overall plan, called CleanBC Roadmap to significantly reduce emissions by 2030 and eliminate them completely by 2050.

A key element of the plan is to keep raising the price of conventional energy such as conventional natural gas and motor fuels so that alternatives become more attractive or to reduce overall consumption.

Specific to PNG, the province has put a cap on natural gas utilities emissions so that by 2030, those emissions should be roughly half of what they were in 2007. For now the province is leaving it up to the utilities to reach that goal.