Dominion Energy net-zero goal undercut by pipeline expansion, “renewable natural gas” offset scheme
February 13, 2020

The utility joins wave of peer companies setting new emissions targets – but stops short of meaningful fossil fuel curtailment.

 

Kelly Roache  •  February 13, 2020

 

Dominion Energy debuted on Tuesday a new “net-zero” goal, committing to offset its carbon dioxide and methane emissions by 2050. But this announcement was tempered by the company’s acquisition on the same day of an additional stake in the Atlantic Coast Pipeline, rendering Dominion the majority owner of the now-$8 billion fossil gas behemoth.

Dominion’s continuing expansion of its gas business – from its electric and gas utilities to the Atlantic Coast Pipeline to its liquid natural gas (LNG) assets – calls into question its intent to truly decarbonize. Instead, the company seems intent to rely upon offset programs that will allow it to continue to pollute the atmosphere with greenhouse gases that cause climate change. The net-zero pledge “covers all of [its] businesses including electricity generation and gas infrastructure.” Because the company is continuing to invest in new long-lived fossil fuel infrastructure, its ability to achieve the pledge hinges on the use of offsets afforded by “renewable natural gas,” industry advocacy for which is part of a documented political strategy to temper policymakers’ and investors’ demands for the reduction of fossil fuel use.

The details of Dominion’s goal also leave open questions about how quickly it intends to decarbonize. Last year, the company committed to its first-ever carbon emissions target, an 80% reduction by 2050 and a 55% reduction by 2030, both from 2005 levels. That goal in fact constituted a significant slowdown in the pace of Dominion’s decarbonization. Between 2005 and 2017, Dominion’s carbon emissions fell by an average of four percent annually, compared to a one percent annual average decrease between 2017 and 2030 under last year’s goal. The company’s new pledge increases the 2050 carbon target to “net zero,” but did not include a new interim carbon target for 2030, leaving open the possibility that it will continue on its slow near-term decarbonization trajectory.

Dominion’s new pledge also includes a methane reduction of 65% by 2030 and 80% by 2040 from 2010 levels. The company touts that it has already cut methane emissions by 25% since 2010. That means that its 2030 methane reduction goal actually represents a 33% reduction from current levels.

Dominion’s gas plays expose faux commitment to decarbonization

Within hours of unveiling its new net-zero ambitions, Dominion announced on a quarterly earnings call that it was acquiring Southern Company’s five percent stake in the Atlantic Coast Pipeline (ACP), raising Dominion’s ownership share to a controlling 53%. Beleaguered by permitting woes and ballooning costs, the 600-mile ACP would transport fossil gas from West Virginia into Virginia and North Carolina, and potentially further south.

Dominion further announced Tuesday that it was acquiring “certain modestly sized gas transmission and storage assets from Southern Company,” namely Pivotal LNG. Pivotal LNG liquifies and delivers LNG, principally from a new Jacksonville, FL production facility, for transportation use in the Southeast.

Dominion has also recently signaled its intent to develop four to seven new gas peaker plants according to its last integrated resource plan, which was approved by the Virginia State Corporation Commission in March 2019. (These plants may now be imperiled by pending state legislation, but Dominion’s new commitments would not preclude their development.) Notably missing from Dominion’s net-zero goal is a pledge to forego new gas plant development, as several peer electric utilities, including PSEG, Consumers Energy, and NIPSCO, have adopted.

At heart of Dominion’s net-zero goal, “renewable natural gas” canard 

Dominion’s net-zero pledge relies extensively on “renewable natural gas” (RNG)  as an offset scheme in lieu of electrifying homes and businesses with a truly decarbonized energy supply. RNG is methane captured from biogenic sources like animal manure, food waste, or the breakdown of organic materials in landfills. Dominion has previously shared plans to inject four percent RNG by volume into its gas infrastructure by 2040. The company posits that one percent of RNG by volume accounts for a 25% reduction of net greenhouse gas emissions because methane is 25 times as powerful as carbon dioxide. Dominion thus claims that a four percent RNG injection will offset 100% of the greenhouse gas emissions caused by its remaining 96% fossil gas usage.

RNG slide from a 2019 Dominion ESG investor day presentation

Dominion is a member of the American Gas Association (AGA), a trade association that has evangelized for RNG as a political strategy to quell demands for decarbonization – an existential threat to gas utilities – from investors, regulators, and advocates. Internal notes from a 2018 AGA meeting, obtained by the Climate Investigations Center, suggest member organizations “[c]onsider how technologies to decarbonize the pipeline can serve as a conduit to environmental organizations, thereby seeking to mitigate the opposition’s fervor against infrastructure expansion.” Other utilities like SoCalGas have also actively pursued this strategy, as detailed by Earthjustice

In a revealing turn, Dominion CEO Tom Farrell – unprompted – addressed the threat of electrification to the company’s gas-invested business model on Tuesday’s quarterly earnings call:

“Recently, we have begun to hear of investor concern that at least in some states, municipal level ordinances could limit overall demand growth for natural gas utility service. While that may be true elsewhere, we simply do not see any evidence of slowing customer or investment growth in the states in which we operate gas utilities, Utah, Idaho, Wyoming, Ohio, West Virginia, North Carolina and South Carolina.”

Dominion’s chosen path to decarbonize is needlessly expensive

In addition to being used as a political cudgel, RNG is uneconomic and does not exist in quantities to be implemented at scale, raising concerns about Dominion’s undue reliance on the technology to decarbonize. A California dairy lobbyist and former anti-electrification front group board member, Michael Boccadoro, told the Guardian that RNG “doesn’t pencil out and it doesn’t make all that much sense from an environmental standpoint…It’s a pipe dream.”

Mark Krebs, an Energy Policy Specialist at Spire Energy in St. Louis, MO, expressed concerns that RNG “will not sustain our industry at its present size,” according to an email obtained by the Climate Investigations Center via a public records request.

Moreover, Dominion has intimated that technologies like carbon capture and storage (CCS) – which are currently prohibitively expensive – will be necessary to meet its net-zero targets. This is a common refrain from peer utilities who have continued to invest heavily in gas while giving renewables short-shrift, such as Duke Energy and DTE Energy.

Photo: Part of the proposed path of the Atlantic Coast Pipeline in Buckingham County, Virginia. Taken by the author in December 2019.