What does a new contract for out-of-state landfill gas mean for climate policy in Vermont?
Last week, the Vermont Public Utility Commission approved a historic contract. It commits Vermont’s only natural gas supplier to purchasing methane from a landfill in New York for at least the next 14.5 years. Vermont Gas Systems says this deal, which is potentially worth hundreds of millions of dollars, will allow it to cut greenhouse gas emissions without big rate hikes.
But some Vermonters — and lawmakers — have raised questions about how much of that gas will get to Vermont and whether this deal is actually good for the environment.
Vermont Public’s Mary Williams Engisch got more context from climate and environment reporter Abagael Giles. Their conversation below has been edited and condensed for clarity.
Mary Williams Engisch: So really quick Abagael, can you break this down into manageable chunks for us? What’s the deal with this gas?
Abagael Giles: So this gas is called biomethane, or biogas. Vermont Gas calls it “renewable natural gas.” And it’s made from waste breaking down at landfills, but also sometimes from food scraps and cow manure. Gas companies like it because you can ship biogas in pipelines that already carry fossil fuel natural gas. And any appliance that burns natural gas? It can burn this gas too.
Proponents argue biogas is cleaner than regular natural gas because it’s siphoned from carbon-filled waste. Vermont Gas Systems says it wants this gas because it’s going to be less polluting than burning fossil gas.
But here’s the catch: very little if any of this gas will be burned in Vermont. Lots of people are pushing back on that.
OK let’s dig into that a bit. Can you talk us through the details of this contract?
So the gas will be made at the Seneca Meadows landfill in Waterloo, New York. From there, it’ll go into a pipeline, and take a meandering route hundreds of miles west, going through a huge natural gas hub in Canada and then eventually back to Vermont.
But Vermont Gas Systems isn’t just buying the gas, they’re buying these energy credits that are associated with it. The utility says it can sell those credits at a premium in these nascent marketplaces set up by California and Oregon.
Vermont Gas is purchasing the biogas from Archaea Energy, which is a subsidiary of fossil fuel giant British Petroleum.
That sounds like a long ways away and a lot of fossil gas in between that landfill and Vermont.
Yeah, so one thing that’s really important to understand here is that it’s not like there are special biogas pipelines. Natural gas, biogas — it all gets pumped into the same natural gas pipelines we already rely on. And those pipelines are notoriously leaky.
So it’s difficult to say how much of this biogas will be piped into Vermont homes.
This is the third time the commission has approved a contract for out-of-state biogas. More than 130 people filed comments with the Public Utility Commission urging them to throw out this deal, including six lawmakers, which is rare. Biogas costs more than conventional fossil gas. And these opponents say Vermont Gas Systems customers will be paying a premium for biogas they don’t get to burn.
It’s not fully clear yet how this will impact ratepayers, but the commission and state say they’ll be keeping a close eye on this.
How long has this contract been in the works?
Vermont Gas told regulators they were in talks about this contract during the last legislative session.
If you remember, lawmakers were working on this policy called a clean heat standard. Basically it was this credit system where companies that supply fossil fuel heat would have to create or buy so-called “clean heat credits.” They would create credits by funding or doing things that help their customers use less fossil fuel heat.
Vermont Gas Systems President Neale Lunderville was involved in developing that policy and testified in support of it. And Vermont Gas told the Public Utility Commission it was their understanding that this deal would have generated clean heat credits under that program.
This was a concern raised by the lawmakers who wrote to the commission.
So last year, lawmakers failed narrowly to override Gov. Phil Scott’s veto of this clean heat standard. Why does the dead bill matter now?
Vermont has committed by law to reduce emissions dramatically starting in 2026. Heating buildings is the second-biggest source of greenhouse gas emissions for us as a state.
And the clean heat standard? Vermont Gas thinks it’s coming back. I’m hearing that from lawmakers too, but with the caveat that there will be some changes, like more emphasis on making heat affordable. The Climate Caucus, a non-partisan group of legislators from both chambers, has said a solution like the clean heat standard is a priority for them this year.
There’s also some talk about the possibility of phasing certain biofuels out, over time, of whatever program comes forward.
And lastly — it’s important to note that adopting this policy is one of the key recommendations in Vermont’s Climate Action Plan. The state’s climate council just voted on Monday to recommend that lawmakers work at the very least this year on a system for how to report and count emissions
Lastly, I bet a lot of folks are wondering: will this actually cut greenhouse gas emissions?
Well Mary, it’s complicated.
Vermont Gas Systems says, "Yes it will," because this biogas is still displacing more carbon intensive fossil gas somewhere between here and Waterloo, on the pipeline.
But opponents say Vermonters will still be burning just about the same gas as before. And when the case was at the Public Utility Commission, a PhD biofuels expert hired by the ratepayer who first intervened in the case told regulators she thought Vermont Gas was being overly optimistic about how much carbon this plan will save.
In some ways, the question before lawmakers will be: should renewable natural gas burned elsewhere count towards meeting Vermont’s climate commitments?