Why you need to pay attention to bio natural gas

At the bustling intersection of renewable energy mandates, carbon emissions regulation, economic growth and legacy infrastructure lies untapped potential for producers of bio natural gas (BNG).

It’s new. It’s important. It’s certainly not to be confused with plain biogas. And particularly if you work or have invested in solar, wind or energy storage, you need to know about it.

BNG is known by other names—like bioSNG, renewable natural gas and biomethane—but as a biologically-created compound chemically similar to commercial fossil-based natural gas, it’s poised to make an impact on the natural gas marketplace and as a new entrant in the world of next generation advanced biofuels.

By BNG we mean a refined biomethane, typically obtained today from sources like landfills and dairy waste in a raw form via anaerobic digestion, and, in very limited quantities today, upgraded to a quality similar to its analogous fossil natural gas. In the near future, a small cadre of emerging vendors promise large quantities of pipeline-injectable BNG using thermal gasification from agricultural and food processing waste, forestry by-products, source-separated organic municipal solid waste and biosolids from wastewater treatment facilities.

By our definition, BNG must be of a high enough quality to be:

  • Combusted in any system that would use fossil fuel natural gas, including utility-scale power plants
  • Injectable into natural gas pipelines for transportation, and
  • Compressible in LNG/CNG forms for transportation fuels

BNG is not synonymous with raw synthetic gas, or syngas. Syngas is combustible and often used as a fuel source or as a process intermediary, albeit with a lower energy concentration than natural gas or BNG, but syngas does not meet the three bulleted criteria above.

As a drop-in replacement for natural gas, the biggest impact for BNG could be on its green energy brethren—traditional intermittent renewables like wind and solar. As the installed base of intermittent renewables increases, BNG could find itself playing an intermittency smoothing role, with “green” dispatchable resources like NGCC/IGCC turbines powered by BNG forestalling the need for other renewable storage. If solar and wind are peaky today, they could be made baseload, and still 100% renewable, by combusting BNG in utilities’ existing natural gas plants.

For that matter, with wide-scale BNG, would utilities even need solar and wind? An analysis by Kachan & Co. in conjunction with three North American gas utilities suggests BNG could emerge as the lowest cost renewable power in the future, once available at scale. Utilities might be able to avoid putting steel in the ground for capital-intensive solar or wind farms if they could simply source fungible, renewable gas from their exact same pipeline today and meet or exceed clean energy standards—even if the gas costs a premium over today’s fossil-based natural gas. That’s disruptive.


Capacity Factor

Input fuel costs ($/MWh)

O&M costs ($/MWh)

Cost of Capital ($/MWh)

Unlevelized cost
of production ($/MWh)







NGCC (Fossil NG) 






Coal Plant












Coal w/CCS






Biomass to Power






Biomass Co-firing








$ -




Solar Trough


$ -




Solar PV


$ -




Table 8 from The Bio Natural Gas Opportunity by Kachan & Co. Electricity generation cost comparison by fuel/genset type. Source: Vendors, US DoE, EPRI, California Energy Commission, Kachan analysis. See Appendix 2 of the report for detailed assumptions behind this table.

We had a chance to look at leading BNG companies for a report on the topic. Some of these companies are still running under the radar and don’t yet have web sites. If BNG produced by vendors profiled in this report and elsewhere can reach scalability and indeed leverage the global natural gas infrastructure, BNG could become one of the most valuable renewable fuels for electric power generation and other applications.

While carbon emissions policies remain in flux given the world economic situation as of this writing, BNG could also represent potentially massive carbon savings for end-users of natural gas, providing a significant commercial opportunity for entrepreneurs, investors, and potential strategic partners, including natural gas suppliers and utilities.

Additionally, an opportunity exists for BNG to serve as a drop-in biofuel that can leverage new and existing natural gas and power generation infrastructure, while using renewable biomass feedstocks with little destructive exploration that satisfies existing renewable energy mandates and carbon emissions rules.

Other findings of our research include:

  • Policy support expected - Existing renewable energy mandates in the US and elsewhere already recognize biogas as an acceptable fuel source. A new Clean Energy Standard from Washington (a new US national RPS) could create an energy portfolio mix cementing natural gas as a bridge fuel. These could create a template for other countries and an incentive infrastructure for BNG.
  • Taking pressure off transmission - While coal-fired power plants will need to be modernized in most developed countries, electricity transmission lines are more problematic. Building new electrical transmission lines is litigious, costly and slow. Producing power from BNG transmitted through the existing natural gas grid would lessen the pressure to build new power transmission to satisfy renewable energy mandates.
  • Benefitting from natural gas’ growth… Both developed and developing nations are adding new gas-fired generation capacity quickly, and seeing growth in natural gas vehicles in response to rising oil and gasoline prices, and, as a result, will be turning towards natural gas more frequently.
  • … that’s not expected to slow anytime soon - Increasing exploitation of non-conventional shale gas fields onshore means that more capacity and more gas transmission infrastructure will come online in more diverse locales.
  • Inside the fossil fuel timeline - Emerging BNG technologies such as biomass gasification could still be a decade away in scale, but a new offshore gas field discovered today also takes 10-13 years to bring online, suggesting BNG has a market window.
  • New partners arise - In addition to traditional fossil fuel providers, BNG technology should incentivize a whole new cohort of “raw fuel” producers, especially in the forestry sector—hard hit by the economic downturn that dried up demand for its main products of lumber and paper, it could find new vigor as a producer of biomass fuel.

With BNG technologies still in their early stages and energy prices ramping up from increasing demand and political turmoil, there are many twists and turns ahead for this segment of the green energy market, but its positioning could be dead-center of the energy world’s sweet spot: a fungible, storable and renewable fuel that moves and burns like natural gas. 

Kachan & Co.’s new report, The Bio Natural Gas Opportunity, equips the reader to better understand the potential market impact of BNG, identifies benefits and market barriers, and makes recommendations for removing these barriers and seizing opportunities in this emerging technology.

A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. Its staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success in clean technology. Details at www.kachan.com.