SoCalGas secures landmark renewable natural gas contract under California’s clean energy mandate

Southern California Gas Company (SoCalGas) has taken a significant step toward advancing California’s renewable energy goals by finalizing its first renewable natural gas (RNG) procurement contract under the state’s Senate Bill 1440 (SB 1440). The agreement, executed with Organic Energy Solutions (OES), will enable the utility to inject RNG derived from organic waste into its pipeline system, supporting California’s ambitious efforts to reduce methane emissions and decarbonize its energy infrastructure.

This milestone agreement represents the first contract to receive approval from the California Public Utilities Commission (CPUC) under the state’s renewable gas standard. The RNG will be sourced from a facility in San Bernardino and is expected to contribute to California’s long-term climate targets by capturing methane from organic waste and converting it into a viable, low-carbon energy source.

What Is Senate Bill 1440 and How Does It Shape California’s Energy Future?

Senate Bill 1440, signed into law in 2018, is widely regarded as the first renewable gas standard in the United States. It set a precedent for requiring natural gas utilities to procure biomethane, commonly referred to as renewable natural gas, to replace a portion of fossil-based natural gas supplies. The legislation led the CPUC to establish defined procurement targets for biomethane, with the primary goal of mitigating methane emissions from agricultural waste, wastewater treatment, landfills, and forestry residues.

The state’s short-term target requires natural gas utilities to secure at least 17.6 billion cubic feet of RNG annually by 2025, with a long-term goal of reaching 72.8 billion cubic feet per year by 2030. These figures equate to replacing approximately 12% of traditional natural gas used by residential and small business customers. By diverting millions of tons of organic waste from landfills and repurposing it into a renewable fuel, SB 1440 serves as a key driver in California’s broader climate strategy, which seeks to reduce methane emissions by 40% before the end of the decade.

How Does SoCalGas Plan to Integrate Renewable Natural Gas into Its Pipeline System?

SoCalGas has positioned itself at the forefront of RNG integration by committing to replace 12% of its conventional natural gas supply with renewable alternatives by 2030. Through its collaboration with OES, the company will receive RNG produced via anaerobic digestion, a process that accelerates the natural breakdown of organic material and captures the resulting methane emissions.

The San Bernardino-based RNG project will process organic waste sourced from food waste and industrial byproducts, preventing it from decomposing in landfills where it would otherwise release methane—a potent greenhouse gas. Instead, the captured methane will be purified and injected into the SoCalGas distribution network, reducing the state’s reliance on fossil fuels while supporting California’s push for a cleaner energy mix.

OES, a subsidiary of BioStar Renewables, specializes in converting organic material into sustainable energy resources. Company executives view this partnership as a critical advancement in California’s transition to a more resilient and environmentally responsible energy system.

What Are the Environmental Benefits of RNG Compared to Traditional Natural Gas?

Renewable natural gas offers a substantial environmental advantage over conventional natural gas by repurposing methane emissions that would otherwise be released into the atmosphere. Methane, the primary component of natural gas, is over 25 times more potent than carbon dioxide in terms of its global warming potential, making its capture and utilization a vital component of climate mitigation efforts.

Unlike fossil-derived natural gas, which contributes to carbon emissions when burned, RNG can achieve net-negative emissions under certain conditions. This occurs when the process of capturing and repurposing methane offsets more greenhouse gases than are emitted when the fuel is combusted. The California Air Resources Board (CARB) has recognized some sources of RNG, particularly from dairy farms and landfills, as carbon-negative fuels due to their ability to remove greenhouse gases from the environment.

RNG also plays an important role in the transportation sector, where it is already replacing diesel fuel in heavy-duty trucks and buses. SoCalGas began incorporating RNG into its vehicle fueling stations in 2019, and since 2020, the fuel supplied at its 37 fueling sites has been classified as carbon-negative. This transition aligns with the state’s broader clean air initiatives, which aim to phase out high-emission fuels in favor of sustainable alternatives.

How Does This RNG Contract Fit Into California’s Broader Decarbonization Strategy?

California has set some of the most aggressive climate targets in the country, with the goal of achieving carbon neutrality by 2045. The state’s Integrated Energy Policy Report has identified RNG as a key component in reducing greenhouse gas emissions across multiple sectors, including industrial processes, building heating, and heavy transportation.

The CPUC has also emphasized the role of RNG in achieving decarbonization goals, particularly as a means of displacing fossil-based natural gas while maintaining grid reliability. Unlike solar and wind energy, which depend on weather conditions, RNG provides a consistent and dispatchable source of renewable energy that can be injected into existing natural gas infrastructure. This allows utilities to transition toward cleaner energy sources without requiring extensive modifications to distribution networks or customer equipment.

Industry leaders anticipate that SoCalGas’ progress under SB 1440 will be closely monitored by other states exploring similar policies. If successful, California’s RNG procurement model could serve as a template for expanding renewable gas mandates nationwide, accelerating the transition toward a lower-carbon energy future.

What Impact Will This RNG Agreement Have on California’s Energy Landscape?

The introduction of RNG into SoCalGas’ pipeline system marks a significant step toward aligning California’s natural gas supply with its long-term climate objectives. The OES project is expected to begin delivering RNG in the latter half of 2026, preventing an estimated 15,300 tons of greenhouse gases from entering the atmosphere each year—an amount equivalent to the emissions generated by nearly 3,000 residential homes or 1.7 million gallons of gasoline consumption.

As the largest natural gas distribution utility in the United States, SoCalGas’ efforts in RNG adoption could influence broader industry trends, potentially driving increased investment in waste-to-energy solutions across the country. By turning methane emissions from organic waste into a valuable energy resource, the company is demonstrating how utilities can play a proactive role in advancing sustainability while maintaining energy security.

The SoCalGas-OES contract represents a pivotal moment in California’s clean energy transformation, showcasing how regulatory frameworks, corporate commitments, and technological innovation can work together to reduce emissions and promote a more sustainable energy future. As additional RNG projects come online, the state is poised to make significant strides toward its ambitious climate goals while setting an example for other regions looking to follow suit.