A report from the Sierra Club and Breach Collective alleges that NW Natural, Oregon's largest gas utility, has exploited state legislation to redirect over $60 million in ratepayer funds toward biomethane projects outside Oregon. The investigation claims Senate Bill 98, a law the utility backed, enables the company to pursue investments that greenwash fossil gas infrastructure while missing Oregon's climate commitments.
Senate Bill 98, passed by Oregon legislators, created mechanisms allowing utilities to invest ratepayer dollars in renewable gas projects. NW Natural, which authored and championed the legislation, has used this authority to funnel capital into biomethane ventures located primarily outside the state. Biomethane—methane captured from waste like agricultural manure or landfills—burns in existing gas pipes identical to conventional natural gas, producing identical carbon emissions at point of combustion.
The Sierra Club and Breach Collective contend that while biomethane may reduce upstream methane emissions from decomposition, it does not eliminate emissions when burned. The projects NW Natural funded produce no net climate benefit sufficient to justify the scale of spending, the report states. The strategy allows the utility to market its portfolio as increasingly renewable while maintaining infrastructure lock-in around fossil gas consumption.
Oregon enacted economy-wide greenhouse gas reduction targets mandating a 50 percent emissions cut by 2050 compared to 1990 levels. Natural gas consumption in buildings accounts for roughly 15 percent of Oregon's total emissions. The report argues that NW Natural's biomethane investment diverts resources from electrification—converting gas heating and cooking systems to electric heat pumps and induction stoves—a pathway that actually eliminates emissions rather than offsetting them.
NW Natural serves approximately 2.6 million customers across Oregon and Washington. The utility's annual spending on biomethane projects raises questions about utility cost recovery. In regulated utilities, companies earn returns on capital invested in infrastructure and programs. Ratepayers ultimately cover these costs through bills. If investments fail to deliver climate performance, ratepayers absorb financial and environmental losses.
The investigation identified biomethane projects in California, Oregon, and other states within NW Natural's portfolio. Many lack direct connection to the utility's service territory, meaning the company purchases renewable gas credits rather than direct supply. This structure resembles carbon offset trading, where entities claim climate credit for emission reductions occurring elsewhere while maintaining high-emission operations at home.
Environmental advocates argue the Biomethane approach perpetuates natural gas dependence. Utilities benefit financially from gas infrastructure expansion and consumption. Investing in biomethane allows them to present as climate-conscious while sustaining the business model dependent on gas sales. True climate action, critics contend, requires reducing gas infrastructure investment and accelerating building electrification.
Oregon's Public Utilities Commission regulates NW Natural's rates and investments. The commission has authority to reject cost recovery for investments deemed imprudent or contrary to state climate policy. Whether regulators will restrict future biomethane spending under SB 98 remains unclear. Environmental groups signal intent to petition the commission for stricter oversight.
The report arrives as utilities nationwide face increasing pressure to align investments with climate law. Several states have begun restricting utility spending on gas infrastructure expansion. Oregon's biomethane law demonstrates how utilities can navigate climate policy through legislative advocacy, creating pathways that appear green but lock in fossil fuel consumption patterns.