T. Boone Pickens has been a visionary in using natural gas to fuel America. (Photo credit: Wikipedia)  The T. Boone Pickens-backed Clean Energy Fuels has launched a “new” kind of clean and green automotive fuel called Redeem. You wouldn’t know it from the breathless coverage of this product in the New York Times, but there’s nothing new in the chemical and physical composition of this — it’s simply compressed natural gas. CNG has been marketed in the U.S. since at least 1980. Around the world there’s some 17 million cars and heavy vehicles that run on the stuff.  So what’s different about Redeem? Because of where the natural gas ostensibly comes from, it’s greener than your average CNG. This is landfill gas, a byproduct of rotting trash. They like to call it “biomethane” to somehow distinguish this gas from methane drilled and fracked out of the earth. Nevermind that all that more common methane was also formed by the biological decomposition of dead plants that lived millions of years ago rather than garbage entombed a couple years ago.  Does it make sense that landfill gas is greener than regular natural gas? When burned to make a vehicle go it generates just as much carbon dioxide. But state regulators in Calfornia have determined that landfill gas is the absolute greenest fuel there is. This is based on the assumption that were it not captured and used, this landfill gas would simply escape the dump and waft up into the atmosphere — where pound-for-pound the methane has a global warming impact 24 times worse than carbon dioxide.  Consider New York City’s Fresh Kills landfill. Once the world’s biggest dump, it used to emit an estimated 15 billion cubic feet of greenhouse gases a year, perhaps 2% of world methane emissions. But now that methane is captured — on the order of 10 million cubic feet of natgas per day, enough to heat about 22,000 homes. Waste Management turns gas from the Altamont landfill in California into about 13,000 gallons of fuel a day — enough to keep 300 garbage trucks running. (Good story on those efforts, here.)  How much of a premium to Redeem buyers have to pay for this green benefit? Nothing. Clean Energy (NASDAQ:CLNE) says they’ll sell the stuff at the same price as CNG from conventional natural gas — which is about 50 cents cheaper than buying the equivalent energy in the form of gasoline or diesel.  But here’s the little secret: it only makes sense that Clean Energy is selling Redeem at the same price as “regular” CNG — because it is the same stuff. Don’t be fooled into thinking that most of the molecules of Redeem CNG really came from a landfill.  Sure, Clean Energy is procuring landfill gas from dump operators across the country, and it owns and operates two plants, in Texas and Michigan, that process landfill gas. But as the company states in its fact sheet, that gas is simply injected into the nation’s natural gas pipeline grid, where it’s intermingled with all the other conventional gas flowing down the pipes to plants that turn it into CNG.  The ultra-green nature of Redeem is really just an accounting gimmick. The more gas that Clean Energy’s traders can procure from landfills (as well as methane-rich wastewater plants and dairies) across the country, the more CNG it can slap with the Redeem label. But on the molecular level, it’s exactly the same stuff.  “In effect,” says Clean Energy, “the process is equivalent to depositing $100 at an ATM in New York and withdrawing it the next day at an ATM in California.”  These are the kind of green gimmicks that grow out of carbon cap-and-trade schemes like the one managed by the California Air Resources Board. It costs Clean Energy Fuels more to procure and process and market this landfill gas, but the company makes up that difference by generating and selling carbon credits, both under California’s system, as well as the federal Renewable Fuels Standard. A spokesman says that as of now only Clean Energy is benefitting from the credits, but if a big fleet operator wanted to forge a long-term supply deal, the company could figure out how to share the green benefit.  I applaud Clean Energy for figuring out the angle and taking advantage of it.  A natural gas-powered trash truck. (Courtest Clean Energy Fuels)  So how green is this artificially green fuel? According to data used by California regulators, gasoline generates 95.86 grams of carbon dioxide equivalents per megajoule of energy released. Compressed natural gas averages about 68 grams per megajoule. Ethanol made from corn grown in America averages about 65 grams of CO2 per megajoule. Ethanol from Brazilian sugarcane does about 25 grams per megajoule. Then we get down to landfill gas. According to California, when you take into account the methane prevented from escaping into the atmosphere, compressed landfill gas emits just 11.26 grams of CO2 per megajoule. In terms of carbon footprint, no automotive fuel is better.
It's worth knowing when a "green" product is really just the same old thing in a new label.