I recently saw a bus in Santa Monica that claimed to be powered by renewable natural gas. I took a photo with the intention of researching and debunking this claim and ended up with interesting answers but also more questions. Here’s what I found:
Can natural gas be renewable?
Let’s start with what renewable energy means and why it’s an important term. “Renewable energy” became code for being the savior of the planet in a different era. As a comparison to fossil fuels that took millions of years to form, renewable sources of energy have the charm of getting regularly replenished, like the sun coming out every day or water flowing through a hydro-powered plant.
Renewable natural gas is produced by capturing methane from decomposition of organic waste in landfills and farms, so it is renewable in the sense that the source will get replenished regularly. Even burning wood is technically using a renewable source (trees) that can grow back in a relatively small amount of time (especially in comparison to the millions of years it took to form fossil fuels).
In the context of climate change, the more important question to ask about energy sources is whether it’s clean or not. In this case, renewable natural gas also claims to be a clean energy source because it captures methane that would have otherwise been a more potent (compared to carbon dioxide) greenhouse gas in the atmosphere. This led to the following question:
Should I burn wood to save the planet?
Imagine there’s a pile of twigs and branches in your backyard. As someone who cares about the environment, should you be setting fire to that pile?
Like the previous clean energy logic, when organic waste decomposes, it produces methane which is more potent than carbon dioxide in terms of warming the climate. So, burning the wood here and now would avoid that future release of methane and produce a less potent greenhouse gas today.
While this does set up a similar trade-off, conventional wisdom holds its ground. It’s still better to let the wood decompose based on the timing and amount of methane in question, the kind of carbon emissions burning wood would generate, as well as accounting for the possibility of technological innovations in the future that can counter methane present in the atmosphere.
This led me to think about how electric cars also have the present loss versus future gains logic working for them, so the next question was:
Are electric cars really greener than conventional cars?
While electric cars have no tailpipe emissions, the carbon emissions from manufacturing the car (especially the lithium batteries) and generating the electricity consumed, might mean that electric cars today do not end up having a lower carbon footprint than their gas-powered counterparts. This would be especially true if a significant portion of the electricity is generated by coal, or if the car isn’t driven around that much (to divide the manufacturing emissions over a large number of miles).
If the energy is coming from clean sources and electric vehicles are driven as much as gas-powered cars, electric vehicles do have a lower lifetime carbon footprint.
More importantly, electric cars provide the possibility of greener transportation as the grid gets greener. This is where the most potential to decrease our carbon footprint and dependence on fossil fuel lies.
The Big Answer
The big answer that came out of these three questions was that for a complicated problem (climate change), the solutions, too, will be complicated. There are few home runs or clear wins, but many small steps toward a cleaner future that work for all of us.
As investors who want to have the highest returns on our investments, in terms of potential environmental benefits, we are constantly consulting with asset managers and entrepreneurs. Our assessment criteria weight different strategies for their long-term potential to reduce carbon scalability and cost-effectiveness, with the goal being for our investment dollars to help bring the best solutions and technologies to market and to scale.
