Hot Air? Vermont Gas Says It’s Reinventing Itself to Help the Climate. Critics Call Its Strategy ‘Greenwashing.’ | Environment | Seven Days | Vermont's Independent Voice

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Hot Air? Vermont Gas Says It’s Reinventing Itself to Help the Climate. Critics Call Its Strategy ‘Greenwashing.’ 

Published July 27, 2022 at 10:00 a.m. | Updated August 3, 2022 at 9:33 a.m.

click to enlarge LUKE EASTMAN
  • Luke Eastman

To heat her drafty old Vergennes home, Constance Swinton switched from oil to natural gas last year for two main reasons: to save money and help the environment.

Swinton grew up in the two-story house, which her parents bought in the 1940s. A retired real estate agent, she moved back into it in 2020 to care for her aging father, who died last year.

Over the decades, the home has been heated with wood, coal and, most recently, oil. When Swinton, 69, heard her boiler kicking on during the summer, she called in a service technician and began contemplating work on the aging system.

Vermont Gas Systems began offering service in Vergennes in 2018 after extending its pipeline south into Addison County. The company offered deep discounts in order to sign up local residents.

"They said, 'We're bringing gas up your street already, and we'll hook you up for free,'" Swinton said. "What's not to like?"

So she had the company convert her boiler to burn gas. Then she paid for a Vermont Gas partner to insulate her dank basement with spray foam and install moisture protection. She is contemplating other upgrades, including a new furnace, efficient windows and solar panels.

She saved about $2,000 in fuel costs last year and will likely pocket even more this winter as heating oil prices — which have nearly doubled in the roiling global market — outpace natural gas increases.

As for saving the planet, though, Swinton's less sure she made the right call. Much of what she initially read about natural gas made it out to be a far greener choice than the oil she was burning. Vermont Gas billed it as more efficient and cleaner in terms of carbon dioxide emissions, which accelerate the climate crisis, and touted the biogas — methane captured from waste — in the mix as renewable.

She has since learned that the environmental ramifications are more complicated. While she doesn't exactly have buyer's remorse, she regrets not having looked more closely at climate-friendlier options.

"I didn't realize it was still a fossil fuel," Swinton told Seven Days.

click to enlarge Constance Swinton and the old oil burner removed from her basement - KEVIN MCCALLUM ©️ SEVEN DAYS
  • Kevin Mccallum ©️ Seven Days
  • Constance Swinton and the old oil burner removed from her basement

Vermont Gas has gone to great lengths to convince lawmakers, regulators and the public that it is rapidly transforming itself from the state's largest fossil fuel seller into a diversified green energy business helping its customers fight climate change.

"We're committed to a brighter, greener future," the company's website proclaims. Job ads lure prospective applicants with "a chance to do meaningful work to help transform the climate."

"The time to act is now," Don Rendall, the company's former president and CEO, announced in 2019.

But beneath the lofty rhetoric about "renewable" gas and "homegrown energy," the Canadian-owned utility continues to sell a product that is 98.7 percent imported fossil fuel.

The gas flowing through its nearly 1,000 miles of underground pipe in Vermont is mostly extracted from shale deposits in Alberta, Canada, through a drilling process called hydraulic fracking. Water and chemicals are injected at high pressure into the ground to crack shale to release trapped gas; environmental concerns include gas leaks, groundwater contamination and wastewater disposal.

The product, mostly the potent greenhouse gas methane, is funneled thousands of miles through the TC Energy pipeline, making its way south of Montréal to Philipsburg, Québec, on the eastern shore of Lake Champlain, just north of the U.S.-Canada border.

From there, it travels south to Vermont Gas' pipeline for distribution to 55,000 homes and businesses in Franklin, Chittenden and Addison counties.

click to enlarge DON EGGERT ©️ SEVEN DAYS
  • Don Eggert ©️ Seven Days

For now, the company has abandoned plans to extend its pipeline beyond Middlebury, but its efforts to add gas service to more homes and businesses continue within its existing territory. A current promotion offers up to $1,500 in cash to Addison County residents who switch to gas and a new appliance by September 30.

Vermont Gas has hooked up so many new customers in Vergennes that local Jackman Fuels has been forced to expand its service to rural areas the pipeline doesn't reach in order to make up for lost fuel oil sales, according to Jesse Jackman, its president and manager.

Vermont Gas has pledged to reinvent itself through technological innovations and increased use of alternative gas. Even more importantly, the company says, it's helping customers such as Swinton perform more routine upgrades that are needed on a massive scale to make Vermont more energy efficient.

But Vermont Gas critics remain deeply skeptical of its strategies — and motives.

Bristol attorney Jim Dumont, who has litigated against the company, said he considers its climate-friendly claims to be little more than a smoke screen to help it continue profiting from the sale of fossil fuels.

"It's greenwashing by Vermont's best greenwasher," he said. "Nobody should switch to Vermont Gas or continue on Vermont Gas if they are concerned about our climate."

Pipeline dreams

click to enlarge Vermont Gas energy auditor Wayne Thompson inspecting the foam insulation added to Swinton's basement - KEVIN MCCALLUM ©️ SEVEN DAYS
  • Kevin Mccallum ©️ Seven Days
  • Vermont Gas energy auditor Wayne Thompson inspecting the foam insulation added to Swinton's basement

Vermont Gas has billed itself as a cheaper, cleaner alternative to heating oil since it first began offering service in 1966.

The utility grew steadily and, spurred in part by the oil crisis of the 1970s, displaced much of the heating oil industry in western Franklin and Chittenden counties.

In 2012, Vermont Gas sought to extend its pipeline south to Rutland. Then-governor Peter Shumlin saw it as a vital economic development project for the region. The Public Service Board approved the first phase of the project in 2013, based in part on anticipated savings for homeowners and businesses, as well as the company's pledge to invest heavily in energy efficiency.

Activists decried the expansion of "fracked gas" deeper into the state and fought the project at every turn. A proposal to extend the pipeline beneath Lake Champlain to serve a massive paper mill in Ticonderoga, N.Y., further galvanized opponents.

The company's complex ownership structure didn't help its case. Vermont Gas is owned by Énergir, formerly known as Gaz Metro, the largest natural gas company in Québec. Énergir, which is also the majority owner of Green Mountain Power, is a subsidiary of Montréal-based Noverco, which is itself owned by Trencap, an investment company.

Until December, Noverco was partly owned by Enbridge, a publicly traded Alberta-based company that has drawn the ire of environmental and Indigenous groups for pipeline projects that threaten watersheds and exacerbate climate change.

The first phase of the company's 41-mile pipeline project in Vermont stretched from Colchester through Hinesburg and Monkton to Middlebury. As opposition flared and construction costs soared from $87 million to $165 million, the project became a PR nightmare for the company.

Protesters chained themselves to construction equipment and the company's headquarters on Swift Street in South Burlington. Banners branded construction sites a "climate crime scene" and company leaders "climate criminals." Regulatory wrangling about the construction continues to this day.

The company abandoned the proposed pipeline under the lake in 2015 after the paper mill backed out, effectively killing any chance of the project reaching Rutland. The extension to Middlebury was completed in 2017. So far, it's led to about 1,060 new customers, but more are signing on.

Since the pipeline project, Vermont Gas has worked hard to transform itself from a gas company to a diversified energy services enterprise, its leaders say.

It hired Neale Lunderville, a former top official in governor Jim Douglas' administration, as its new president and CEO. He had been general manager of the Burlington Electric Department, where he implemented policies aimed at helping the city meet its goal to eliminate fossil fuel in buildings and transportation by 2030.

Vermont Gas Systems rebranded itself as VGS in 2019, though the moniker hasn't really stuck. VGS better reflects the company's diverse suite of services, said Dylan Giambatista, a former state representative from Essex Junction hired by the company last year to handle public affairs.

Its leaders emphasize that the company's expertise in energy markets, well-trained workforce and large customer base mean it needs to be part of any state climate solution. Instead of resisting the change, the company has embraced it, Lunderville said.

DON EGGERT ©️ SEVEN DAYS
  • Don Eggert ©️ Seven Days

"In order for us to make the big strides around fighting climate change, we need to turn these industries to be climate change fighters instead of climate change contributors," Lunderville said. "And that's what we're doing."

Nationally, gas companies face withering criticism for their environmental impacts. The shift at Vermont Gas mirrors the industry's scramble to highlight lower-carbon portions of its portfolios, said Matt Cota, executive director of the Vermont Fuel Dealers Association, which represents propane and heating oil companies such as Jackman's that dominate other parts of the state.

"The conversation in the heating sector has evolved very quickly in the last 15 years from one based on which sources cost less to which one is renewable and which one is not," Cota said.

Vermont Gas acknowledges that natural gas is a factor in the climate crisis, Lunderville said, and that it must switch to sources with lower emissions. Natural gas, Lunderville said, is "better than oil and propane [but] not as good as it needs to be."

Natural gas emits about 117 pounds of carbon dioxide per million British thermal units, compared to 161 pounds for heating oil and 139 pounds for propane, according to the U.S. Energy Information Administration.

"It is possible for something to be better and still not actually be good," said Ben Edgerly Walsh, climate and energy program director at Vermont Public Interest Research Group.

Meet the new gas

click to enlarge Danielle Goodrich Gingras (left) leading a ceremonial turning of the spigot to start the flow of natural gas at her family farm's renewable energy facility - COURTESY OF VANGUARD RENEWABLES
  • Courtesy Of Vanguard Renewables
  • Danielle Goodrich Gingras (left) leading a ceremonial turning of the spigot to start the flow of natural gas at her family farm's renewable energy facility

In July 2021, Vermont Gas' brass headed to a dairy farm in Addison County and met up with Gov. Phil Scott, Lt. Gov. Molly Gray, Middlebury College officials and others for a ceremonial opening of a gas line. They mugged for photos around a giant valve, grinning broadly.

The reason for the glee: The gas in question was not fracked in Canada. Instead, it was methane captured from dairy and food waste in a digester at Goodrich Family Farm in Salisbury. A company called Vanguard Renewables had built the largest such facility in New England on the 900-cow dairy along Otter Creek. The project consists of large black-and-red digester buildings that produce greener renewable natural gas (RNG) — also called biogas.

The facility can accept 180 tons of food waste and 100 tons of cow manure every day and "cooks" it in an oxygen-free environment. It produces enough methane to heat more than 2,100 homes. Middlebury College has a long-term contract to buy 55 percent of the gas; Vermont Gas gets 22 percent, or enough to heat nearly 500 homes.

Unlike natural gas trapped deep in the earth when ancient organic material decomposed, RNG is methane created by the decomposition of today's waste. Methane has, by some measures, 27 times the heat-trapping capacity of carbon dioxide, making it a serious threat to the climate. So burning it instead of letting it escape into the atmosphere is considered better than drilling and extracting "natural" methane. The more RNG that is captured and burned, the better, the industry maintains — even though burning it releases carbon dioxide.

While not a "silver bullet" in the company's transformation, RNG is key to its shift from fossil fuel, Lunderville said. To date, that fuel accounts for only 1.3 percent of Vermont Gas' total supply.

The company is working to gradually increase — by about 2 percent of its total supply per year — the amount of RNG it purchases from both in-state and out-of-state sources, Lunderville said. RNG is more expensive than fossil gas, and the company is sensitive to increasing costs for its customers, he said. The company declined to share the financial details of its RNG contracts. The state's 2021 Annual Energy Report said RNG can cost four to eight times as much as fossil gas.

Critics nevertheless charge that the company is adding so little renewable gas that it is misleading consumers and effectively locking them in to fossil fuel use for decades.

Bristol attorney Dumont and a number of prominent environmental groups such as the Sierra Club and 350.org argue that the natural gas industry's shift to renewable gas sources ignores several inconvenient truths. One is that even if every dairy, landfill and wastewater treatment plant in the country started capturing the methane that it discharges — a wildly expensive and impractical step — it would only offset about 14 percent of the nation's current natural gas usage, according to the industry's own studies.

Another is that landfills are expected to produce less methane over time as communities increasingly shift to zero-waste policies that keep methane-generating materials such as food scraps out of the ground.

And recent studies show that methane leaks from natural gas wells and pipelines are worse than previously understood, making claims that natural gas is "clean" more questionable than ever. Methane leaks risk erasing the emissions savings of switching from oil to gas and undermine the case for RNG, critics argue.

Electric heating options, especially efficient cold-climate heat pumps and water heaters, are as carbon-free as their sources of electricity, which in Vermont are relatively clean and can be made cleaner over time, Walsh said. With such options readily available, supporting the natural gas infrastructure in the state is a bad idea; expanding it would be "preposterous," he said.

Vermont Gas is scaling up RNG anyway. In addition to the Salisbury farm, the company already buys RNG produced by waste flushed down toilets in Dubuque, Iowa, and processed. A new contract for gas from food waste in London, Ontario, is coming online soon. And the company plans to sign a contract for methane collected from New York State's largest landfill — Seneca Meadows, east of Rochester — if regulators approve. The Vermont Public Utility Commission is currently considering Vermont Gas' proposed 14-year contract with a company operating at the landfill.

In energy and environmental circles, debate is raging about the impact such gas sources might have on climate. Supporters argue that landfills are going to produce methane for decades to come, regardless of waste reduction policies. Critics counter that capturing and burning that gas is a half measure at best.

"The real solution is to reduce methane sources to begin with," said Chase Whiting, a staff attorney at Conservation Law Foundation.

This includes keeping organic matter out of landfills and pursuing agricultural practices that reduce methane emissions — not using small amounts of RNG to justify continued fossil fuel use, he contends.

"We simply cannot burn our way out of the climate crisis," he said.

Gassing up

click to enlarge The anaerobic digester at Goodrich Family Farm in Salisbury - COURTESY OF ELODIE REED/VERMONT PUBLIC
  • Courtesy Of Elodie Reed/Vermont Public
  • The anaerobic digester at Goodrich Family Farm in Salisbury

Vermont Gas' partnership with Vanguard Renewables represents "proof of concept" for RNG in Vermont, the company has said in regulatory filings. But while shifting Vermont Gas' supply toward RNG is important, Lunderville ranks it as a lesser factor when explaining the company's transition.

"We are not going to transform on the back of RNG," he said.

He agrees that there is not enough RNG for the company to reduce its emissions on that alone. Nevertheless, Vermont Gas wants RNG to make up 20 percent of the gas it sells by 2030 and 90 percent by 2050.

The state's dairy farms are generally too small and far-flung to accommodate cost-effective digesters tied to the company's pipeline network, Lunderville said. The Salisbury project, originally envisioned to generate electricity, took a decade to complete.

Still, real opportunities exist to expand the Vermont supply of RNG, he said. The company has commissioned a $75,000 feasibility study to determine how many farms or farm clusters — most likely in Franklin County — might be worthwhile sites.

Whatever the study shows later this year, the reality is, the company will have to continue to look outside the state for RNG supplies to meet its goals.

The company is also seeking additional financial backing from customers willing to pay more to support its RNG purchases, while acknowledging that the same mix of gas continues to flow into the furnaces of those who sign up.

In 2018, when the program began, 51 customers signed up to pay extra. Four years later, that figure stands at just 168. Lunderville said the program has been valuable to businesses that want their customers to know they are doing their part for the climate.

Middlebury's Vermont Coffee is one. Green stickers on its coffee declare it "Roasted with 100 percent Renewable Energy."

Founder Paul Ralston said the program provided an opportunity for the coffee company to switch from more expensive propane to natural gas and support Vermont Gas' since-discontinued purchases of methane from a landfill in Québec.

"We believed it was a solid environmental move, and guess what? Our customers agreed with us," said Ralston, who sold the company last year to Stonewall Kitchen.

Not everyone is buying it.

Selling Vermonters renewable gas in Iowa that never actually makes it to Vermont is "a farce," said Kevin Jones, director of the Institute for Energy and the Environment at Vermont Law & Graduate School. 

"This is something that's just making us feel good about Vermont Gas and making it easier for them to keep hobbling along for another decade or two, when what we really should be doing is having a tough discussion about transitioning off gas," Jones said.

"It's false advertising," charged Rachel Smolker, a Hinesburg resident and codirector of Biofuelwatch, which is critical of fuels such as RNG. "They are paying someone else to do it and then maybe trading some paperwork to take credit for it."

The company purchases the actual gas from the faraway facilities, but, as with electrons on the power grid, tracking the path of the RNG molecules is not possible, Lunderville explained. In essence, Vermont Gas pays for the RNG; it is fed into a pipeline that theoretically has a pathway to Vermont; and Vermont Gas takes credit for the RNG's renewable attributes.

Vermont Gas pioneered this approach, and the gas industry has taken note. Explaining it to consumers can be tricky, Lunderville acknowledged, but it is an accepted feature of electricity markets, similar to carbon credits.

During a legislative hearing in January, Lunderville struggled at times to explain the system to befuddled lawmakers. When Rep. Mike Yantachka (D-Charlotte) asked how the company tracks the RNG customers sign up to buy, Lunderville stammered for a bit before saying, "We are purchasing a renewable supply, and it's being delivered to Vermont." He quickly clarified, however, that the gas wasn't really being "delivered" to Vermont at all.

"Like, the RNG molecules don't make it directly to their home," he said.

Tom Murray, Vermont Gas' vice president of decarbonization technology, a title conferred on him in 2019 as part of the company's rebranding, oversees the RNG program. The system enables utilities in one region to support renewable energy sources elsewhere, he said.

"Any time that you're putting a renewable molecule into the system and it's displacing a fossil molecule, you're doing a good thing," Murray said.

Vermont Gas regularly gets inquiries from other utilities about how the company has developed its RNG program. The market it's created incentivizes the development of more RNG over time, Murray said.

And the sector is growing. Vanguard Renewables, the Massachusetts-based developer of the Salisbury digester, was sold last week to investment fund powerhouse BlackRock for $700 million.

This year, Vermont legislators attempted to create more incentives for fossil fuel companies to transition to cleaner operations. The clean heat standard bill, which Vermont Gas supported, would have required fuel wholesalers to purchase or generate "clean heat credits" to offset fuel sales — or pay steep carbon pollution fees.

Distrust of what is effectively a carbon-reduction system contributed to the bill's defeat. Critics of RNG worried that fossil fuel companies would profit from transitioning to other fuel sources that pose environmental hazards.

The debate isn't over, though. Vermont Gas said it continues to support a clean heat standard, and lawmakers say they plan to make another run at passing one next session.

Partners in clime

click to enlarge A Vermont Gas worker installing sevice in a new South Burlington neighborhood - JAMES BUCK
  • James Buck
  • A Vermont Gas worker installing sevice in a new South Burlington neighborhood

In January, Vermont Gas invited the news media to a large conference room at the University of Vermont to announce what the company pitched as a technological marvel. The concept: Use green energy, such as wind and solar, to split water molecules to extract hydrogen. That, in turn, would be added to the natural gas that powers the boilers that heat GlobalFoundries' massive campus in Essex Junction, displacing some of the natural gas the chip manufacturer uses.

"This project will show the rest of the state and the world that zero-carbon thermal energy is possible," Lunderville declared.

Officials from Vermont Gas, UVM and GlobalFoundries said they would collaborate on the pilot project, which would be funded in part by ratepayers. U.S. Sen. Patrick Leahy (D-Vt.) appeared via teleconference to offer his congratulations and assistance.

The push to create "green hydrogen" as well as "synthetic gas" this way is cutting-edge stuff, and many experts see such fuels playing a role in the energy mix of the future.

But environmental groups quickly panned the idea, charging that the project was just another attempt to burnish the image of a fossil fuel dealer. Capturing hydrogen requires lots of energy, so the fuel is only green if that energy comes from new renewable sources.

"You can't create green hydrogen with dirty electricity," Whiting, the CLF attorney, said at the time.

What's more, critics noted, only a limited amount of hydrogen could be added to the natural gas. Some studies suggest a max of 20 percent hydrogen, unless expensive upgrades were made to the systems that deliver and utilize the gas.

Just how much hydrogen Vermont Gas' pipes could handle is unclear, but Lunderville said the volume could be significant because VGS infrastructure is relatively modern. The company will soon issue a request for proposals to build the project, and Lunderville expressed hope that it could be up and running by next year.

The focus on technological leaps, energy markets and fuel sources tends to dominate discussion about Vermont Gas' future. But the primary way the company will reduce its emissions is through far more routine energy efficiency work, according to Lunderville.

The company has deepened its investment in home energy audits and is offering generous rebates — especially to low- and moderate-income Vermonters — for weatherizing homes.

Even as Vermont Gas expands its customer base, it is also aggressively promoting devices that lower customers' gas use, such as electric-powered cold-climate heat pumps and electric heat pump water heaters. "We are actively looking at things that are going to make us sell less of our traditional core product," Lunderville said. "That should be a telltale that we are fully invested in this."

These upgrades are consistent with the company's strategy of helping people not only switch to greener fuels but also use less energy overall, Lunderville said. That's just one reason the greenwashing charge is off base, he asserted.

"That is the opposite of what we are doing," he said. "We've literally rolled up our sleeves and got into the work of doing this, both in our company and at the state policy level."

Closing the valve

click to enlarge Ross Conrad (right) gathering signatures for a petition related to Vermont Gas in Middlebury - CALEB KENNA
  • Caleb Kenna
  • Ross Conrad (right) gathering signatures for a petition related to Vermont Gas in Middlebury

Burlington is in the heart of Vermont Gas' service area — and at the heart of an effort to heat buildings with renewable sources. Burlington City Councilor Jack Hanson (P-East District) readily articulates a common goal: "I want a complete ban on new fossil fuel infrastructure," he said in an interview.

Hanson is one of a growing number of local officials and legislators who argue that new buildings should use electricity, geothermal or advanced wood-burning systems for heat — not gas, oil or propane. Existing structures also need to switch as quickly as possible, mostly by electrifying everything, Hanson argued.

A Queen City charter change last year created rules to discourage heating buildings with fossil fuels, and future rules — which voters would need to approve — could go further and require fees on building emissions.

With U.S. climate legislation stalled and concerns about the climate crisis growing as a result of powerful storms, forest fires and record-breaking heat waves, state and local governments are under increasing pressure to curb heat-trapping emissions. Bans on new fossil fuel-reliant buildings are spreading across the nation; more than 80 have taken effect to date.

Vermont is struggling to achieve its aggressive climate goals, especially given the collapse of high-profile efforts to rein in transportation emissions and provide cleaner heat.

Gov. Scott has often cited the risk of higher energy costs in opposing emission-reduction policies. Supporters, meanwhile, argue that doing nothing will leave lower-income Vermonters exposed to the most price-volatile fossil fuel heating sources.

Vermont Gas may no longer face the spirited protests its pipeline expansion drew. But in a warming world, its continued push to convert new customers to natural gas is drawing criticism in more traditional settings.

In June, the Middlebury Selectboard considered a request to grant an easement across city property so that a downtown property owner could connect to gas service. Members of the town's energy committee urged the selectboard to say no.

Committee member Ross Conrad cited the paltry percentage of renewable gas in Vermont Gas' pipeline as he attempted to persuade the board to deny the easement. The selectboard granted the request, however, saying to deny it would be unprecedented.

Now, Conrad is mounting a petition drive to block the easement, calling it inconsistent with town and state energy goals.

In an interview, he asked: "Do we really want to keep building out fossil fuel infrastructure when we know that we need to abandon fossil fuel very soon, or nothing else will really matter?"

Correction, July 28, 2022: The clean heat standard bill is effectively a carbon-reduction system. A previous version of this story had an incorrect description.
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About The Author

Kevin McCallum

Kevin McCallum

Bio:
Kevin McCallum is a political reporter at Seven Days, covering the Statehouse and state government. He previously was a reporter at The Press Democrat in Santa Rosa, Calif.

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