Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute a Memorandum of Agreement with the Port of Oakland for Water Pollution Control Plant to sell the Port Renewable Natural Gas
Staffreport
COUNCIL PRIORITY
* Infrastructure
* Sustainability & Resiliency
* Fiscal Sustainability and Transparency
SUMMARY
This non-binding Memorandum of Agreement (MOA) states that, pending funding, the City and the Port of Oakland intend to enter into an agreement for the sale of Renewable Natural Gas (RNG) by the City's Water Pollution Control Plant to the Port of Oakland for the Port's internal uses.
RECOMMENDATIONS
Staff recommends the City Council adopt a resolution to approve and authorize the City Manager to execute the attached Memorandum of Agreement with the Port of Oakland.
BACKGROUND
In September 2020, the City entered into an agreement with Climatec, LLC for construction of resiliency and energy efficiency improvements at the Water Pollution Control Plant (WPCP). This project included the development and installation of a system to upgrade the biogas produced by the anaerobic digesters at the WPCP to Renewable Natural Gas (RNG) such that it could be beneficially used to offset the use of non-renewable natural gas.
The project economics were based on the sale of the RNG for use as a vehicle fuel, which are eligible for subsidies through the Federal Renewable Fuel Standard Program (known as RIN credits) and for the California-based Low Carbon Fuel Standard (LCFS). The value of these credits varies based on market conditions. In particular, the LCFS value is based on a "carbon intensity" that estimates the net carbon benefit compared with natural gas, with projects that have a lower carbon intensity score identified as more valuable.
Projects that capture methane (a strong greenhouse gas and the main component of natural gas) that would otherwise be released to the atmosphere are defined to have a low carbon intensity score. Examples of th...
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