Decarbonizing Minnesota’s Natural Gas End Uses

Stakeholders process summary and consensus recommendations

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Decarbonizing Minnesota’s Natural Gas End Uses

Why was this process needed?

The State of Minnesota and several Minnesota cities have aggressive economy-wide carbon emissions reduction goals intended to help mitigate climate change. Those goals cannot be met without addressing natural gas end uses.

Addressing emissions from natural gas-fueled end uses is particularly challenging in Minnesota due to our extreme cold weather conditions, which creates a high heating load that is primarily met by natural gas-fueled heating equipment. In addition, Minnesota has high levels of industrial end uses that are also met by natural gas-fueled technologies.

As Minnesota’s electric supply becomes increasingly less carbon-intensive, electrification offers great promise to decarbonize many fossil fuel end uses. However, natural gas will likely continue to be the lowest-cost fuel for space heating and many industrial end uses in Minnesota for quite some time. Moreover, it is not yet clear that Minnesota’s current electric system can meet heating and process loads currently served by natural gas.

Given the long-lived nature of natural gas assets, now is the time for Minnesota utilities and stakeholders to explore what a deeply decarbonized energy system means for the future of the natural gas industry and infrastructure, and what the range of pathways forward might look like. Doing so as a partnership between the industry and its key stakeholders increases the likelihood of arriving at solutions that have business merit, political will, and are technologically grounded.

Who participated?

The Great Plains Institute (GPI) and Center for Energy and Environment (CEE) co-convened a broad set of individuals and organizations to explore pathways and develop potential solutions to drastically reduce or eliminate greenhouse gas emissions from natural gas end uses in Minnesota:

BlueGreen Alliance
CenterPoint Energy
City of Minneapolis
Clean Energy Resource Teams
Ever-Green Energy
Fresh Energy
Laborers’ International Union of North America (LIUNA) – Minnesota and North Dakota
Minnesota Center for Environmental Advocacy

Minnesota Department of Commerce*
Minnesota Energy Resources Corporation*
Minnesota Housing*
Minnesota Mechanical Contractors Association
Minnesota Office of the Attorney General, Residential Utilities Division*
Minnesota Pollution Control Agency
University of Minnesota
Xcel Energy

*Organizations marked with an asterisk participated as observers only, which means they provided information to support discussions, but were not asked to agree to the final recommendations.

Deliverables

During this process, the group developed the following deliverables:

A shared understanding among stakeholders of the current situation of natural gas end uses in Minnesota, including the characteristics of the existing natural gas system and utility business models, emerging technology options, and consumer, workforce, and environmental considerations.
A set of shared guiding principles for effectively assessing decarbonization options for natural gas end uses, in consideration of the wide variety of perspectives and opinions on this matter.
A handful of possible natural gas end use decarbonization scenarios (developed by E3) for the purposes of exploring how Minnesota should approach this challenge, and to facilitate an understanding of the challenges, opportunities, and potential actions associated with each scenario.
25 consensus recommendations for what’s needed now to help Minnesota meet its aggressive decarbonization goals with respect to natural gas end uses.

What did the process look like?

In fall of 2019, GPI and CEE recruited a broad mix of stakeholders to participate in a series of conversations about decarbonizing Minnesota’s natural gas end uses. The participants included natural gas and electric utilities, utility regulators, natural gas consumers, clean energy advocates, clean energy implementers, environmental advocates, consumer advocates, workforce advocates, and state and local governments. The process was designed to accomplish the following objectives:

The stakeholder group met for 15 meetings from November 2019 to April 2021. Each meeting included participation from the stakeholder group, facilitation by GPI and CEE, and presentations by subject matter experts from within or outside the group. All meetings were five and a half hours in length, with the first three meetings in-person and the rest held virtually due to the COVID-19 pandemic.

To help guide the process, GPI and CEE also facilitated regular meetings of an advisory committee made up of representatives from CenterPoint Energy and Xcel Energy (Minnesota’s two largest natural gas utilities), Fresh Energy (a leading clean energy advocacy organization), and the City of Minneapolis (Minnesota’s most populous city). Below is a list of the meetings and topics discussed:

Meeting 1: Kick-off

November 6, 2019: The group began to build a shared understanding of the current landscape for decarbonizing natural gas end uses and the goals and desired outcomes from the process. This meeting included an overview presentation from Audrey Partridge of Center for Energy and Environment as well as a summary of the collective observations of the group on the current state and what changes would be desirable.