Natural Gas Infrastructure

In delivering natural gas to end users, utilities and other entities operate compressors and other equipment that directly combusts or releases natural gas. In its report, staff refers to these sources of GHG emissions as "infrastructure." Some parties, including NRDC/UCS, PG&E, Environmental Council, and SCE, support including infrastructure emissions within the natural gas sector for purposes of GHG emissions regulation. NRDC/UCS assert that extending regulation to this type of emissions would only cover an additional eight entities, each of which emits close to 10,000 tons of CO2e per year. PG&E believes that natural gas infrastructure is essentially an industrial process that can be regulated in the same way as other industrial processes. PG&E recommends that the infrastructure providers be considered as a single fuel-consuming entity since they can manage overall emissions by increasing the efficiency of the total system.

IP asserts that the emissions from local distribution utilities' infrastructure should be directly addressed by regulating natural gas utilities, while emissions from proprietary pipelines should be addressed by ARB directly by including those emissions into a multi-sector cap-and-trade system.

Other parties, including Kern, Lodi, Wild Goose, SDG&E/SoCalGas, and Southwest, oppose including natural gas infrastructure in the natural gas sector, stating that the incremental benefits of regulation would be relatively small. SDG&E/SoCalGas report that, other than the facilities that would be regulated as large point sources by ARB, these sources represent less than 0.03% of statewide CO2e emissions. SDG&E/SoCalGas also assert that these kinds of emissions are not easily subject to measurement or verification. Kern and Wild Goose submit that natural gas pipelines already have incentives to operate efficiently, and that further regulation could lead to restrictions in supply, which could result in the use of higher carbon alternatives. Wild Goose argues that, if these sources are capped, they should be part of a cap-and-trade system because an approach that relies on direct emission reduction measures could result in reduced natural gas availability.