This story was produced in partnership with Outlier Media.
State regulators have hired a consulting firm with financial ties to DTE Energy and Consumers Energy to assess whether Michigan should scale up production of renewable natural gas, a controversial fuel of questionable economic and environmental value.
Renewable natural gas (RNG), or biogas, is touted by the utility industry as a fuel that burns cleaner than fossil fuel natural gas. It’s being pushed as an alternative to wind, solar, and electrification. But mounting evidence has cast doubt on its viability.
Consumer groups say the selection of a company with “deep and enduring” ties to the gas industry represents an apparent conflict of interest in a high-stakes process. Billions of dollars in DTE and Consumers revenues hinge on how Michigan proceeds with biogas. Critics fear expanding the unproven gas’ use could inflate customers’ bills while only marginally reducing emissions compared to wind and solar.
“Concerns loom about the legitimacy of not only this resource but the state’s evaluation process,” said Karlee Weinmann, a researcher with utility industry watchdog Energy and Policy Institute.
Last year, GOP State Sen. Rick Outman authored legislation requiring the Michigan Public Service Commission, which regulates the state’s investor-owned utilities, to organize and monitor a study of RNG’s potential. Outman received $14,500 in campaign donations from gas industry contributors like DTE, Consumers, and Marathon over the last two years.
The Commission hired ICF, a prominent energy industry consulting firm, to facilitate multiple stakeholder meetings and issue a report on how RNG compares to other alternative fuels by October. Lawmakers will use the findings to guide a new RNG policy.
The company has at least five contracts with DTE and Consumers to design and implement various technologies and tools. At least one company manager has served as an expert witness for DTE in regulatory cases. ICF has produced reports for the American Gas Association that make what critics view as unreasonably pessimistic assessments about wind and solar and overly optimistic analyses of RNG’s potential, one of which was partially funded by DTE.
Commission spokesperson Matt Helms noted ICF was one of two respondents to its request for proposals to run the study. He stressed the agency would incorporate environmental groups’ concerns into the study, which will involve at least two stakeholder meetings. He added: “The study process will continue to be done in a public, transparent way.”
ICF did not respond to requests for comment.
Utilities currently burn natural gas, a fossil fuel, to generate about 40% of the nation’s electricity, but the process emits high levels of methane and carbon dioxide. By contrast, biogas is captured from organic sources, like landfills or manure on commercial farms, and emits lower greenhouse gas levels, though how much lower depends on several variables.
Utility companies have invested heavily in building gas plants and pipelines to transport and burn natural gas. These large projects net a high return on investment for private utility companies’ investors, making them attractive to shareholders. DTE and Consumers have spent and earned billions of dollars by building natural gas plants and pipelines in recent years.
But the nation’s shift to wind and solar threatens to render this gas infrastructure obsolete. Industry views electrification – the process of implementing wind and solar to electrify the power grid and transportation sector – as an existential threat. Many gas proponents pitch RNG as a lifeline, claiming it could entirely replace natural gas in its infrastructure.
‘A false solution’
By the end of 2020, more than 300 biogas projects were under construction, operational, or planned – a 40% increase from the previous year. The operational projects generated the equivalent of 459 million gallons of diesel fuel, or enough to fuel 40% of the nation’s garbage trucks.
But consumer and environmental groups charge that utilities oversell the benefits and scalability of biogas. They point to independent research that casts doubt on industry’s claims, including a Georgia Institute of Technology study published in Environmental Letters that found “RNG is not inherently climate-friendly” because of the high amount of methane leaks.
Meanwhile, the California Energy Commission, which guides the state’s clean energy transition, found wind and solar much cheaper than RNG, and consumer groups note that the additional costs of producing RNG are passed on to customers. They also fear that biogas would generate demand for landfill or commercial farm waste, which have their own set of environmental problems like soil, air, and water contamination.
“RNG is a false solution for decarbonization,” said Mike Berkowitz, an organizer with Sierra Club Michigan’s Beyond Coal campaign, which is also participating in the state’s study process.
“It’s a bad deal for ratepayers, and it’s kind of infuriating because solutions that exist right now are cheaper and better – solar energy, wind energy,” he added. “These will truly decarbonize our energy grid.”
Moreover, even the utility industry’s best estimates say RNG could only replace up to 10% of the nation’s current natural gas usage by 2040 and that biogas isn’t fully compatible with natural gas infrastructure.
Some industry executives and groups have publicly or privately doubted RNG’s viability. An ICF report generated for the American Gas Association noted that the RNG could likely only replace about 5.4% of the nation’s natural gas usage by 2040, while a board member with a utility-connected group in 2019 admitted RNG doesn’t “pencil out” or “make all that much sense from an environmental standpoint.”
“There’s a mismatch between what the gas industry is projecting and what we know through honest examination of data,” Energy and Policy Institute’s Weinmann said.
Gas industry mobilizes
Amid mounting evidence of RNG’s drawbacks, gas utilities are still working to drum up support for RNG. Energy and Policy Institute compiled media reports, leaked utility documents, and comments from industry executives that reveal a coordinated campaign to push RNG as a climate solution. The industry is dispatching consultants, like ICF in Michigan, to help convince state regulators and community leaders of RNG’s viability.
At a 2020 meeting convened by the “Consortium To Fight Electrification,” a group of 15 major gas utilities that includes DTE, industry acknowledged that it’s “in for [the] fight of its life,” (sic) with wind and solar, while SoCalGas SEC told regulators electrification will have a “material adverse effect on [SoCalGas’] cash flows, financial condition and results of operations.”
A slide in the Consortium’s presentation stated that RNG would “likely save” the gas industry, and it laid out strategies to expand its use, including fanning power outage fears, creating front groups, and targeting “some key Latino leaders” to help push RNG.
Still, private utilities are forging ahead with natural gas projects that they justify with the claim that the infrastructure will eventually carry RNG. The nation’s 16 largest investor-owned utilities project spending nearly $100 billion on updating and expanding gas infrastructure over the next five years. In a recent presentation to the Edison Electric Institute trade group, DTE noted that RNG would help drive up to $1.5 billion in investment during the next five years.
In a statement to Planet Detroit/Outlier Media, a DTE spokesperson said addressing climate change will require “a holistic approach.”
“Renewable natural gas, along with other solutions like nuclear, wind, and solar, is expected to play a critical role in providing clean, reliable, and affordable energy to our customers,” she said.
But consumer and environmental groups say gas will become technologically and environmentally obsolete as wind and solar generation improves and becomes cheaper. That could ultimately be a problem for customers, as utilities need to get decades of use out of gas infrastructure to be cost-effective.
“Ratepayers are going to be on the hook for retiring [obsolete infrastructure],” Berkowitz said. “It’s the exact opposite of what we’re trying to accomplish.”
The first Michigan workgroup session ICF convened on Jan. 10 didn’t inspire confidence that its study would accurately compare scaling up RNG to electrification, Berkowitz said.
Berkowitz said he didn’t know anything about ICF going into the meeting, but he left “concerned that they won’t give electrification or alternative solutions to biogas a fair shot.”
The company’s staff weren’t “outwardly biased,” he added, but were “narrowly focused” on RNG and “generally dismissive” of concerns raised by environmental groups and residents in attendance.
Weinmann said ICF revealed its intentions in its response to the MPSC’s request for proposals, in which it defined the study’s objective as to “provide information and facilitate a discussion that advances the strategic direction for RNG as a viable decarbonization resource.” That seems a shade different from the study’s stated aim “to assess the theoretical, feasible, and achievable potential” of RNG, she said.
“It kind of begs the question ‘Is this an exploration of the potential?’” Weinmann added. “It feels like strong wording for an exploration of potential.”
Michigan is primarily focused on capturing RNG from landfills and manure at concentrated animal feeding operations (CAFOs). Among those challenging an RNG scale-up at the ICF-led meetings are CAFOs’ neighbors, who endure water and air pollution that presents a health threat. CAFO waste is “chock-full of pathogens, microorganisms, and bacteria that are capable of causing human disease,” said Cheryl Ruble, a public health advocate and infectious disease doctor in West Bloomfield.
She and others working on the issue say increasing RNG production would increase demand for industrial animal waste when it needs to be reduced.
“A by-product could become a cash crop, and all those problems with CAFOs will be amplified,” Ruble said.
The process of capturing gas through anaerobic digestion of waste is expensive, prone to methane leaks, and requires the addition of water and chemicals, so the amount of waste left to dispose of grows, Berkowitz noted. Similar problems and concerns exist with capturing landfill gas.
Michigan Public Services Commission spokesperson Helms said that stakeholders at the first meeting “raised concerns about environmental, public health, environmental justice, and equity issues relative to RNG.”
“As part of the study process, the MPSC is working out how to incorporate those concerns into the study,” Helms added.
ICF will hold at least one more stakeholder meeting before producing the report in September. Berkowitz said it appeared at the first meeting that the MPSC would be listening to residents’ concerns, even if ICF is not.
“MPSC seemed to see that ICF wasn’t doing well enough with stakeholder engagement,” he said.
The next stakeholder meeting is planned for some time in June. Updates can be found at the MPSC’s website.