Irving Oil’s new renewable energy partner says its agreement with the Saint John refinery would make no commercial sense without Canada’s climate policies and regulations.
Anaergia Inc. will begin supplying the refinery with renewable natural gas (RNG) from Rhode Island this summer.
The company says the gas is carbon negative because it’s made from organic landfill waste – mostly food waste – that would otherwise release methane, a greenhouse gas that contributes to climate change.
That means it will help reduce the refinery’s carbon intensity, a measure of how clean the energy is that powers its operations.
And that, in turn, helps Irving Oil comply with federal clean fuel regulations and New Brunswick’s performance-based carbon pricing system.
“The cost of this carbon-based fuel drops significantly when the carbon intensity is low,” Yaniv Scherson, Anaergia’s chief operating officer, said in an interview.
“On a carbon basis, the fuel we make from organic waste has a lower carbon cost to Irving Oil and our customers because it has a negative carbon intensity.”
New Brunswick Green Party leader David Coon said renewable natural gas is a credible technology and Irving’s decision to use it validates federal climate policy.
“It shows the power of environmental regulation because why they are doing this to me is the clean fuel standard that the federal government put in place. It causes them to use much greener energy for their operations, which is fantastic.”
Scherson said if a future federal government overturned existing climate policies, it would jeopardize future growth in carbon-negative fuel sources and complicate efforts to reduce emissions.
“Decarbonization and renewable energy in general will not happen without proper policies,” he said.
“Every great renewable wave or decarbonization effort begins with a goal or a requirement to get there.
“Then over time the market reacts and there is greater volume, better prices and over time the cost of decarbonization and sustainability goes down.”
Conservative federal opposition has attacked the Trudeau government’s carbon pricing and clean fuel regulations.
But Scherson said with a “really dangerous exponential increase” in emissions, such policies are essential to make zero-emission energy more cost-effective, faster.
“If we wait for the industry to act on its own, we see the adverse effects of what’s happening globally,” he said.
Irving Oil’s rare public comments on federal climate policies, including carbon pricing, include warnings that strict rules could hurt the company’s competitiveness.
But in 2021, the company said in a “sustainability report” it had “identified a number of potential projects for exploration focused on decarbonization of working capital.”
Irving did not respond to an interview request, but in a press release, Irving Oil President Ian Whitcomb said the company is “proud to continue to advance our energy transition,” which includes a goal of reducing emissions by 30 percent by 2030.
The Anaergia deal could also benefit Irving Oil under the New Brunswick government’s performance-based pricing system for big industry.
It requires major emitters to reduce their carbon intensity by 2 percent each year until 2030. Businesses can earn tradable carbon credits for reductions above this percentage.
Scherson said another advantage of renewable natural gas is that it’s identical to the produced natural gas that Irving is already using at the refinery, except for the source.
“It’s the exact same molecule,” he said, a “plug-and-play replacement” that avoids the need for costly new distribution systems and infrastructure that can take years to build.
Anaergia will recover biomethane from solid waste at a facility in Rhode Island and pipe approximately 350 million cubic feet of it per year to Saint John.
Capturing the gas will prevent the release of more than 40,000 tons of carbon dioxide-equivalent greenhouse gas emissions per year, which the company says is equivalent to removing 9,500 cars from the road.
“When we sell the fuel to Irving, we are selling all of the environmental attributes along with the fuel,” said Alex MacFarlane, Anaergia’s director of project development.
Province does not use opportunities, says Green leader
Michelle Robichaud, president of the Atlantica Center for Energy, an industry-backed think tank, said renewable natural gas could replace about 1.3 percent of the energy currently consumed in Canada.
“It’s a small role, but definitely an important one,” she said. “We reduce emissions going into the atmosphere by using RNG.
“I think we’re going to see more and more of that.”
Coon said his only complaint about RNG is that the current provincial government has not been willing to support the development of a local sector.
He said Laforge Bioenvironmental’s commercial biogas production facility in the parish of Saint-André in northwest New Brunswick could deliver more RNG to the provincial market if better incentives were in place.
There are “all kinds of possibilities,” said Coon, “but the province doesn’t use them.”
Former New Brunswick Premier Frank McKenna, a longtime promoter of Irving Oil’s energy projects, sits on Anaergia’s board, but Scherson said he had no role in the deal.
“He really wasn’t involved at all,” he said. “It is random.”
Officials from the two companies met at a biogas conference in Toronto last spring and began discussing a potential deal, MacFarlane said.
