Jeff Reed, Southern California Gas Company

The Promise of Renewable Gaseous Fuels

June 24, 2015

DOE Bioenergy Summit

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Southern California Gas Company

» The nation’s largest natural gas distribution utility 20.9 million consumers 5.8 million meters 500 communities

» Subsidiary of Sempra Energy (SRE)

» Affiliated with SDG&E

» Leader in customer satisfaction,

pipeline safety and environmental solutions

NOx is a Unique Challenge for SoCal

Over 80% of Southern California is in “Extreme” non-attainment areas for meeting federal ozone standards:

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Source: US EPA Green Book, 8-Hour Ozone Nonattainment Areas (2008 Standard), published 7/31/2013.

1 Air Quality Management District (AQMD)

(1)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030 2035 2040 2045 2050

Rem

aini

ng E

mis

sion

s R

elat

ive

to 2

010

Need 80%+ Reductions in Both NOx and GHG

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2050 California Air Resources Board Statewide GHG

Target Statewide GHG

80 ppb ozone standard (2)

75 ppb ozone standard (2)

Projected Statewide GHG reduction

SCAQMD co-benefit NOx reduction from statewide GHG program (1)

SCAQMD needed reduction to meet federal ozone standards (1)

1 South Coast Air Quality Management District (SCAQMD) 2 parts per billion (ppb)

Methane as a transportation fuel can address 2050 goals through total vehicle system improvements and RNG fuel blends

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ADVANCED

AFTER-TREATMENT

Low-Pressure

Conformable Fuel Tanks

Pressure swirl atomization Pressure swirl atomization Pressure swirl atomization

Renewable Natural Gas

Methane pathways are complementary to hydrogen pathways and may serve different vocations

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Renewable Natural Gas is a necessary part of the path to 2050

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Petroleum Fuels

Compressed Natural Gas & Liquefied Natural Gas

2050 Goal GH

G e

mis

sio

ns

(fro

m 1

99

0 le

vels

)

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NGV Efficiency Improvements --Aerodynamics, Advanced Engines, and Hybridization

Renewable Natural Gas/ Hydrogen Blends

Natural Gas Vehicles (NGV)

Fuel economy improvement will be critical for all vehicle platforms -- Natural Gas platforms have similar fuel economy potential to diesel platforms

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Fuel Economy Contributor

Highway Urban Vocation

Engine 15% - 20% 15% - 20%

Hybridization 10% 30% - 35%

Aerodynamics 12% 0% - 6%

Transmission 7% 4%

Rolling Resistance 11% 2% - 3%

Weight 1% 1% - 4%

Breakdown of Energy Loss for Long Haul Sources of Fuel Economy Improvement

Source: National Petroleum Council Source: Department of Energy “Super Truck” program

Vehicle economics and fuel price have the potential to meet emissions goals without the need for long-term subsidies

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Long Haul Heavy Duty Truck Prices (2015$)

Total Vehicle Price

LNG + Compression Ignition (HPDI)

CNG + Spark Ignition

Diesel

Sources: NPC and GNA; internal estimates for NOx control

Renewable and zero-carbon pathways are key Natural Gas w/ CCUS Organics Conversion Power-to-Gas Artificial Photosynthesis

Anaerobic Digestion Thermo-chemical Electrolysis

Renewable Natural Gas Hydrogen

Reformation

Methanation CO2

Renewable Fuel Pathways and the Gas Grid

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We Can Deliver Natural Gas Virtually Anywhere in SoCal

N

S

EW

LINE 235

LINE 335

LEGEND

NOT TO SCALE

RECIPROCATING COMPRESSOR STATION

CENTRIFUGAL COMPRESSOR STATION

PRESSURE LIMITING STATION

STORAGE FIELD

4/00

PACIFIC GAS & ELECTRIC

LINE 225

LINE 235

LINE 4000

ALISOCANYON

HONORRANCHO

KERN RIVERSTATION

WHEELERRIDGE

(680 MMCFD)

GOLETA

PLAYADEL REY

KERN/MOJAVE

ADELANTO

VENTURASTATION QUIGLEY

DANAPOINT

YORBA

KELSO

COLO

RADO

RIV

ER

LINE 235

LINE 3000

KERN

CALIFNEV

NORTHNEEDLES

(750 MMCFD)

TOPOCK(540 MMCFD)

MOJAVE

TRANSWESTERN

EL PASO

SAN DIEGO

DESERTCENTER

BLYTHE(1210 MMCFD)

ARIZONA

EL PASO

LINE 2001LINE 5000

LINE 1030

Southern California Gas Company Facilities

GREATER LOS ANGELESMETROPOLITAN AREA

MORENOSTATION

LIN

E 6

902

LIN

E 6

000

CHI NO

LINE 2000

LINES 3000, 3003, 3008, 1180, 1181, 1192

LINE 1185

LINE 4002

LINE 85

LINE 119

LINE 800

LINE 7000LINE 7039

LINE 7200

NEWBERRY

LIN

E 6

903

LINES 1003,1004,1005

LINE 1010

LINE 247

CACTUSCITY

LINES 404/406

LIN

E 6

900

LIN

E 1

028

LIN

E 1

027

LINE 2000

LINE 5000LINE 2001

TRANSMISSION BACKBONE

HECTOR RD.(50 MMCFD)

COASTAL SYSTEM(120 MMCFD)

VALLEY SYSTEM(150 MMCFD)

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Vast Storage Infrastructure – Months of Capacity

Southern California Storage Resources

Goleta

Playa Del Rey Honor Rancho

Aliso Canyon

Bio-derrived RNG is the low-cost pathway – energy crops offer further potential

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In-state resources only, 50% resource conversion, no energy crops

0 50 100 150 200 BCF/yr

2020 RNG Supply Potential Right side of the stack becomes wider and less expensive over time

52

47

35 (-33%)

17 (-63%)

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10

20

30

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0

100,000

200,000

300,000

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600,000

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800,000

2015

2016

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2019

2020

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2022

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NO

x Em

issi

on

s (t

pd

)

Ve

hic

le P

op

ula

tio

n

NZE NGV (0.02 g/hp-hr NOx)Conventional NGV (0.2 g/hp-hr NOx)DieselGasolineReference NOxRemaining NOx (Scenario)

Note: 1. Analysis includes T7 Drayage, T7 Single, T7 Solid Waste Collection Vehicle, T7 Tractor, T7 Tractor Construction, T7 Agriculture, T7 Single Construction, T7 Public, T7 Utility, T7 IS, T6 Instate Heavy, T6 Instate Small, T6 Utility, T6 Public, T6 TS, T6 Agriculture, T6 Instate Construction Heavy, T6 Instate Construction Small, LHDDT, and LHDGT. 2. Maximum incentives range from $15,500 - $35,000/Truck depending on the vehicle type and engine size 3. Assumed penetration rates after the incentive period ends remain at the 2023 level due to some mechanism 4. Incentive Program ends in 2023; post-2023, mechanism maintains new sales penetration of NZE NG trucks at 2023 levels

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Major Nox co-benefit potential

RNG could be a drop-in fuel by 2025

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Opportunity Areas

» Use of dedicated energy crops to produce methane

» Co-production of methane and hydrogen with other products

» Joint deployment analysis and planning for all three primary renewable biofuels Liquids Methane Hydrogen

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