Why is eco-conscious California spending millions to support natural gas?

Floodlight Media Publications

Read the story at The Guardian

In the course of an hour, more than a hundred big rig trucks chug through the aptly named city of Commerce. The heavily Latino community in Los Angeles intersects Interstate 710 – the main highway that moves cargo shipments from the nearby ports to their final destinations.

Along with the merchandise they deliver – Amazon shipments, produce and Mitsubishis – the trucks emit significant amounts of air pollutants. As do the dozens of cargo ships that cluster outside the ports and the freight trains that transport goods.

California has touted its green reputation worldwide, even though the southern part of the state has some of the worst air pollution in the US, particularly here at the ports of Los Angeles and Long Beach. Los Angeles has the worst smog pollution of any city in the country, and the region is still struggling to meet national smog standards from 1997. Transportation has been the biggest hurdle.

Transportation contributes at least 40% of California’s greenhouse gas emissions, and as regulators grapple with how best to reduce air pollution in the region, they are pouring millions of dollars into a controversial solution: natural gas.

The regional air regulator that oversees Los Angeles, Riverside, San Bernardino and Orange counties, the South Coast air quality management district, has for years dedicated a significant potion of its clean air grants – millions of dollars – toward natural gas trucks and infrastructure through its various incentive programs meant to clean up the air, according to data on two of the agency’s main grant programs. One of its biggest grant programs spent more than 90% of funds on diesel and natural gas incentives – rather than on electric vehicles. Much of that funding has flowed to very large, private companies like Disneyland Resort and Waste Management Inc to replace diesel vehicles with natural gas.

The agency has also contributed hundreds of thousands of dollars to an industry-focused partnership that runs a pro-gas website.

South Coast argues that the electric alternatives available are too expensive, in part because they require additional spending on charging station infrastructure. The board argues that some of the equipment the grants replace – for marine, construction and agricultural uses – doesn’t have a widely available electric alternative. But it says it’s working with Volvo, Volkswagen and other manufacturers to help bring more cost-effective options to the market.

Climate advocates worry, though, that if South Coast continues to operate on the belief that natural gas can be part of the state’s pollution solution, southern California will never meet federal emissions standards.

“If you look at [South Coast], we’ve never reached attainment for national ambient air quality standards, ever. You can say we have tougher environmental laws – but we aren’t even hitting federal policy,” said mark! Lopez, a community organizer and special project coordinator at East Yard Communities for Environmental Justice, a group that organizes communities near the Los Angeles ports and in East Los Angeles.

Critics question why the agency is investing so many public dollars into helping large private corporations clean up their businesses and why it is doing so by investing in gas at a time when the world is calling for a shift toward renewable power.

“You have this kind of deep investment in the gas industry and it helps prop up the opposition to zero emissions. And that’s what we fear is happening,” said Adrian Martinez, senior attorney at the environmental group Earthjustice.

“At some point it’s got to stop … I think where it gets strange is when the government is so entangled in pushing and selling [the gas industry’s] product for them.”

Choosing the right vehicles

One of South Coast’s community-focused incentives grants, the community air protection program, distributes funding aimed at lowering emissions in low-income neighborhoods.

That program paid out more than $210m over the past four years to encourage mostly private businesses to upgrade their diesel trucks. Most of that money – more than 90% – has been spent on either newer diesel engines or natural gas trucks and infrastructure.

While the Obama administration lauded gas as a bridge fuel in the transition away from coal, the science in the years since has made clear that gas has a much bigger climate impact than previously understood and is not a permanent solution.

Trucks powered by natural gas cause less smog than those that run on diesel – natural gas emits about 29% less planet-heating carbon dioxide than diesel fuel – but electric vehicles can more significantly reduce air and climate pollution as the state’s power grid shifts toward renewable power.

South Coast argues its disproportionate support of gas is because there aren’t enough heavy-duty electric vehicles available for purchase – which the board attributes to a lack of public interest and skepticism over electric vehicle reliability.

“Many of the participants in the incentive programs do not want to take a risk on unfamiliar new technologies, especially when their livelihood relies upon this equipment,” said Nahal Mogharabi, an agency spokesperson.

“As with most new technologies, the battery electric trucks are expensive, have limited range, and require the addition of infrastructure that makes them much less cost-effective in providing the criteria pollutant emission reductions,” Mogharabi said.

But a recent study from California’s air resources board – which oversees South Coast – concluded that zero emissions vehicles are the cheapest option to own and operate because they save so much in fuel and maintenance costs. The study also found that replacing diesel trucks with natural gas trucks can actually be worse for the climate, because the venting and flaring associated with producing natural gas emits so much methane.

Incentivizing natural gas

California is at the frontlines of a debate that is quickly following in the rest of the country – when is it time to step away from gas?

In 2017, California’s then governor, Jerry Brown, traveled to Europe on what was dubbed a climate “crusade”, pledging to lead the US response on climate change since the Trump White House had vowed to pull out of the Paris climate accords. California has since made good on its promise, setting goals to obtain net zero emissions by 2045 and enforce zero-emission new car sales starting in 2035.

But those goals are at odds with the gas vehicles and programs California is funding through its incentive programs.

In late 2002, South Coast’s then chair, Norma Glover, established the California natural gas vehicle partnership to partner with energy and gas stakeholders, transit authorities and vehicle and engine manufacturers to promote messaging on the need for “greater deployment of natural gas vehicles in California”.

Glover was the first chair of the partnership and ran it for two years before establishing a related consulting firm, according to her LinkedIn. The industry members of the partnership today include the gas distributor Clean Energy Fuels and SoCalGas, the main provider of natural gas to southern California.

Since 2002, South Coast has paid at least $250,000 in dues to the partnership, including hiring the consulting firm Gladstein, Neandross & Associates to run its website, organize meetings and fulfill other administrative duties. GNA also does marketing and finds grants for clients that work in the low and zero emissions vehicle industry, which include Clean Energy Fuels and SoCalGas, as well the utility Pacific Gas and Electric (PG&E). It also represents the oil and gas companies Shell Energy and ConocoPhillips. GNA manages the partnership’s communication strategy, including its social media, newsletter and website. The partnership’s website highlights gas-industry arguments that investments in gas trucks will ultimately reduce pollution more than investments in electric ones.

South Coast’s dues for the partnership have come from California’s clean fuels program fund, which is run by South Coast and funded by department of motor vehicle registration fees, according to contracts obtained by Floodlight.

South Coast also spent about $17,000 between 2020 and 2021 to oversee the partnership, according to the agency’s budget.

The partnership has worked closely with the California Natural Gas Vehicle Coalition, which is backed by west coast gas companies and the oil and gas producers Chevron, BP and Shell. The coalition has fought climate policies, including by filing a lawsuit against the California air resources board in 2020 for failing to consider the role gas vehicles could play in mitigating emissions.

This March, South Coast moved to distance itself from the partnership by voting to turn it into a non-profit. South Coast will remain a dues-paying member, however.

Mogharabi said the decision was made “to relieve the agency and its staff of the financial and administrative responsibilities related to the [partnership]”.

Grant winners and losers

Since 2007, South Coast has additionally paid GNA $3.4m to help it evaluate applications for its state and federal incentive programs as well as to “provide analyses” of new policies and the cost-effectiveness of alternative fuels. A case study GNA has since removed from its website said it helped South Coast allocate $100m a year in incentive funds.

Some of the money South Coast paid to GNA – $80,000 – was to co-sponsor the 2020 and 2021 Renewable Gas 360 symposium and host a webinar in conjunction with it. The symposium describes itself as a way to educate “policymakers nationwide of the important role that renewable gases can and should play”. SoCalGas and PG&E were also hosts, according to the symposium’s website.

GNA’s paying clients have also been some of the biggest beneficiaries of South Coast’s incentive programs. They include BNSF Railway, one of the largest freight railroad companies in North America – and the United Parcel Service (UPS), which received $44m and $32m respectively between 2007 and 2022 for projects that included buying “9 CNG heavy duty trucks to replace diesel models”, according to annual budgets.

A spokesperson for South Coast said it was not aware that BNSF and UPS were GNA’s clients but said they received their grants “based on the cost-effective nature of their projects”.

Other GNA clients that received grants include Waste Management Inc, Ralph’s Grocery, and Carnival Corporation & PLC, which owns Carnival Cruise Lines.

Disneyland Resort received nearly $1.7m between 2007 and 2013 from South Coast to pay for gas infrastructure upgrades and related construction, including converting 24 of its diesel trams to natural gas and upgrading a natural gas fueling station. Disneyland Parks and Resorts in fiscal year 2013 alone made $14bn in revenues, according to its budget report.

The gas distributor Clean Energy Fuels received more than $12m in South Coast grants between 2007 and 2021 to deploy 20 natural gas taxis and construct two natural gas fueling stations among other greenlit projects, according to an analysis of the air agency’s annual budget. Clean Energy Fuels is also a GNA client.

SoCalGas has since 2018 helped its customers secure grants for 409 “near-zero” emissions trucks and 34 natural gas fueling stations through one of the largest clean vehicle incentive programs run by South Coast– the Carl Moyer memorial air quality standards attainment program– according to its press release. Those grants have in turn helped SoCalGas sell more of its product.

Lopez, the community organizer, said: “The agency has over the years really shifted away from being a regulator towards being a funding body, being a pass-through for funds for polluters, in hopes that they do better.

“Essentially it’s just about shifting dollars around and really it’s just creating a cycle where polluters pay and then they get their money back for their infrastructure,” Lopez said.

Smart investing or playing favorites?

At least one other South Coast program has been flagged for giving most of its money to natural gas projects. At a board meeting this year, a staffer, Matt Miyasato, noted that just 17% of the total $141m in grants the board went on to approve in 2022 for the Carl Moyer program went toward purchasing “true zero”, or electric, technologies.

Two of the board’s 13 members recused themselves from the vote on the funding approval because they have received campaign contributions from the companies on the funding list, including Clean Energy Fuels.

A campaign last year by the environmental justice group California Environmental Voters criticized several board members for being in the pocket of the fossil fuel industry. They largely targeted the LA city councilmember Joe Buscaino for protecting the interests of the oil and gas industry.

Buscaino recently stepped down from the council to run for mayor of Los Angeles, but he has since dropped out of the race.

In a statement, he said that during his time at South Coast, the air basin saw a 55% reduction in inhalation health risks from contaminants.

“I would love to have electric. Please. Now. Today. But that is not available. Gas is the next best thing,” Buscaino said.

Though environmentalists are encouraged by some of the progress recently made by California, they say they have serious concerns about what they see as California officials’ close working relationships with the gas industry.

“Even as the world is moving to zero emissions, they are still very much promoting combustion in trucks,” Martinez, the Earthjustice attorney, said.