Natural gas has become a contentious issue in the United States, particularly in the city of Boulder, Colorado. Environmental groups and the city of Boulder are opposing Xcel Energy’s plan to cut greenhouse gas emissions associated with its natural gas distribution. The dispute revolves around the use of certified gas and carbon offsets to meet state-mandated climate targets.
Certified gas, also known as responsibly sourced or differentiated gas, is gas that has been tested and verified at the wellhead to meet specific emission intensity requirements and other standards. Carbon offsets, on the other hand, refer to emissions reductions achieved through investments in projects that remove or sequester greenhouse gas emissions.
The disagreement in Colorado stems from Xcel Energy’s “Clean Heat Plan,” which aims to reduce the carbon footprint of its natural gas system. The plan sets out strategies to meet a state law that mandates gas utilities to reduce planet-warming emissions by 22% below 2015 levels by 2030. However, a coalition of climate and renewable energy organizations has filed a motion to block the plan, questioning the inclusion of certified gas and carbon offsets.
Xcel Energy argues that certified gas and carbon offsets are necessary to achieve their emissions reduction goals in a cost-effective manner. Critics, however, argue that these resources do not align with the law’s definition of emissions reduction. They claim that the strategies focus on emissions reduction upstream and in unrelated sectors, which goes against the intent of the law.
The dispute has broader implications for other gas utilities in Colorado, such as Atmos Energy Corp., Black Hills Corp., and Summit Utilities Inc. These utilities are preparing their own clean heat plans, and the outcome of the dispute could significantly impact their strategies.
Xcel Energy contends that the opposition misinterprets the law, arguing that it allows for the use of “available tools” beyond those explicitly named in the legislation. The utility believes that excluding certified gas and carbon offsets limits the options available to achieve the state’s climate goals. Their clean heat plan also includes electrification, leak prevention, energy efficiency programs, recovered methane, and hydrogen blending.
The Colorado Energy Office and the Colorado Department of Health and Environment’s Air Pollution Control Division agree that Xcel’s preferred portfolio complies with the state law. However, they suggest that certified gas and carbon offsets do not meet the definition of clean heat resources.
Despite criticism, Xcel Energy has garnered support from energy companies like Chevron, Occidental Petroleum, and Williams Cos. Emissions measurement company Project Canary PBC and other stakeholders also agree with Xcel, emphasizing the importance of a thorough investigation before rushing to judgment.
This conflict over Xcel Energy’s clean heat plan is not unique to Colorado. Similar debates have occurred in New Jersey, where natural gas distributors argue that policymakers are too focused on building electrification and should consider a range of decarbonization solutions. They suggest that a clean heat standard, similar to Colorado’s, should be an option for the New Jersey Board of Public Utilities to consider.
In conclusion, Xcel Energy’s clean heat plan, which includes certified natural gas and carbon offsets, remains a contentious issue. The effectiveness of these strategies in contributing to emissions reduction efforts in the industry is still to be seen.