Jeff Reed, Southern California Gas Company

The Promise of RNG

June 9, 2015

Rethinking Methane Symposium

2 2

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

3

We Deliver Natural Gas Virtually Anywhere in SoCal

4

Vast Storage Infrastructure – Months of Capacity

Southern California Storage Resources

Goleta

Playa Del Rey Honor Rancho

Aliso Canyon

Biggest Challenge -- Emissions

Federal Clean Air Act (CAA) – requirements to meet ozone standards in South Coast Air Basin results in regulators moving to near-zero and zero emissions.

California Climate Change Initiatives -- Assembly Bill 32 “Global Warming Solutions Act” (AB32) and Governor’s Executive Order 2050 – greenhouse gas emission reductions could eventually eliminate natural gas use in residential, commercial and industrial markets.

5

NOx is a Unique Challenge for SoCal

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

6

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

7

2050 California Air Resources Board Statewide GHG

Target

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)

Solutions – Methane for Transportation

8

ADVANCED

AFTER-TREATMENT

Low-Pressure Conformable Fuel Tanks

• Growing activity in off-road applications – marine, rail, equipment

Pressure swirl atomization

Solutions – Methane for (non-intermittent) Distributed Generation

9

Engines with Advanced Controls and After Treatment

Turbines with low Nox Technology

Fuel Cells (Virtually Emission Free)

* Relative to GTCC

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 GHG

em

issi

ons (

from

199

0 le

vels

)

10

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

Renewable Natural Gas/ Hydrogen Blends

Natural Gas Vehicles (NGV)

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

Anaerobic Digestion Thermo-chemical Electrolysis

Renewable Natural Gas Hydrogen

Reformation

Methanation CO2

Resource potential is significant

12

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

0 50 100 150 200 BCF/yr

2020 RNG Supply Potential

13

Methane emissions are an issue to address but policy needs to consider mitigation potential and marginal impacts

• Time. What is the short, medium and long-term potential for reduction in system leakage?

• Marginal Impact. How much will methane emissions increase with deployment of DG and NGV technologies and how much is not driven by throughput (event-based emissions / time based emissions)?