Renewable gas deserves federal tax credits, incentives: AGF

Washington (Platts)--13Sep2011/436 pm EDT/2036 GMT

Federal policymakers should find ways to enhance the production, distribution and use of US-produced biomass gas, the American Gas Foundation said in a report released Tuesday.

"With the right policies, renewable gas could meet half the natural gas needs of all the homes in America," AGF Executive Director Kathryn Clay said in a statement. "Despite its great potential to help us meet our greenhouse gas emissions goals, renewable gas is probably the least discussed renewable energy option available to us as a nation. We need policies that promote renewable gas on par with renewable choices like wind and solar."

The report, "The Potential for Renewable Gas," recommended renewable gas be "supported and incentivized in ways equal to renewable electricity or liquid transportation fuel." As a first step, Congress should create an investment tax credit for facilities that produce renewable pipeline quality gas.

The foundation also said the nation's pipeline infrastructure "should facilitate the purchase and transfer of renewable gas in order to more easily meet local, state or federal goals for renewable fuels."

Renewable gas can be produced from a variety of biomass sources including wastewater treatment plants, animal manure, landfills, woody biomass, crop residuals and energy crops.

The AGF said renewable gas has the potential to meet between 4 to 10% of 2010 natural gas usage in the US. Reductions in greenhouse gas emissions could top 146 million tons of CO2/year. The report also said that developing renewable gas can create up to nearly 257,000 new jobs under scenarios of high biomass utilization.

There is plenty of feedstock, the report noted. Roughly 721 million tons/year of livestock manure and about 1.8 trillion gallons/year of wastewater are produced in the US and available for conversion through anaerobic digestion. Another about 3.8 billion tons of municipal solid waste in landfills are available for conversion to landfill gas through natural processes of degradation that occurs within a landfill.

--Rodney White, rodney_white@platts.com

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