Economic Benefits of Renewable Natural Gas
Developing renewable natural gas projects enables us to diversify our fuel supplies, which ultimately increases fuel security, while at the same time providing economic benefits to local communities (for example, employment opportunities) and end users. It also provides environmental benefits by improving air quality and reducing greenhouse gas emissions responsible for climate warming. We will explore these benefits over a series of articles, focusing on the economic benefits of renewable natural gas in this first article.
Diversifying Fuel Sources for Improved Fuel Security
Feedstocks used for biogas projects that produce renewable natural gas consist of a continual stream of waste materials originating from a wide range of sources (such as food waste, animal manure, wastewater sludge, for example). Since these sources are continually being generated, they are completely renewable. This constant supply not only makes them a sustainable source of inputs, but also ensures they are readily available, even in times of crisis. Renewable natural gas production allows for the diversification of domestic energy production and increases the availability of fuel. This can be a huge boon in times of crisis when conventional fuel supplies are limited due to disruptions in production or transportation. Having an alternative source of fuel readily available allows business and transport activities to continue unhindered, which is important for the economy.
Economic Benefits of Renewable Natural Gas to Local Communities
The economic benefits of developing renewable natural gas projects start with the benefits offered to local communities, for example through job creation and business opportunities that arise from the construction of RNG infrastructure and/or the sale of new vehicles that can run on RNG fuel.
Having a source of renewable fuel readily available to run vehicles can potentially draw vehicle fleets from further afield into the community, as the selling price of CNG fuel produced from biogas is typically cheaper than conventional fossil-based vehicle fuels, due to government incentives promoting renewable fuel sources, or companies may simply be looking for greener alternatives to fuel their vehicle fleets to improve their corporate sustainability.
A recent study conducted on behalf of the California Natural Gas Vehicle Coalition to assess the economic benefits of converting heavy-duty trucks running on diesel in California to RNG fuel, including the construction of RNG infrastructure such as processing plants and fueling stations, and sales of CNG vehicles, found that California-based RNG production facilities (supplied with a mix of dairy, landfill and wastewater sludge feedstocks) would create between 8.5-11.2 jobs per million diesel gallon equivalent of transportation fuel produced. Fossil fuel refineries, by comparison, provide an estimated 1.6 jobs per million diesel gallon equivalent of transportation fuel.
RNG projects whose owners run their vehicle fleets on RNG produced by their own facilities have the added benefit of having access to a secure long-term fuel source that is constantly available at a stable price, rather than having to contend with volatile market-related price hikes of fossil fuels. This can be a huge economic incentive that can result in significant financial savings, especially for companies with large fleets.
As we can see, the economic benefits of renewable natural gas provide a good incentive to switch from conventional fossil-fuels. However, this is not the only incentive, as RNG offers environmental benefits too, which will be discussed in the next article.
An Overview of Renewable Natural Gas from Biogas. July 2020, EPA 456-R-20-001.
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