A new report issued by Sierra Club and Breach Collective concluded that NW Natural used Oregon Senate Bill 98, or SB 98, to fund out-of-state biogas projects with more than $60 million in customer funds, without achieving a meaningful reduction in gas demand or greenhouse gas emissions.
SB 98 allows gas companies to invest in so-called “renewable natural gas,” or biomethane, even when its cost is much higher than that of conventional methane gas. The report says the law, which NW Natural wrote and supported, enabled subscriber funds to be directed to facilities associated with slaughterhouses and heavily polluting industrial livestock operations in other states.
Growing Environmental and Financial Costs
The report focuses on anaerobic digestion facilities at large-scale concentrated animal-feeding operations, as well as meat-processing plants owned by multinational companies such as Tyson Foods in Nebraska. According to Sierra Club and Breach Collective, communities near these facilities face increased air and water pollution, while biomethane markets may encourage the expansion of more polluting livestock facilities and the consolidation of the animal agriculture sector.
The report also provides two examples of financial risks. NW Natural’s project in Lexington, Nebraska, was shut down after only a few years of operation, while the company quietly abandoned in 2025 an investment estimated at $43 million in a facility in East Wenatchee, Washington, with the impact of the decision on customers remaining unclear.
Legal Targets That Appear Out of Reach
According to the report, the projects produced far less gas than expected and provided limited emissions benefits, while the company seeks to pass the remaining costs on to customers. Even in the most optimistic scenarios, NW Natural came nowhere near achieving the SB 98 goal of reaching a 5% biomethane share by the end of 2024. The report considers the targets of 10% by 2029 and 30% by 2050 to appear unattainable under current trends.
The report’s authors also indicate that the emissions intensity of the biomethane supply increased as the company attempted to expand it, resulting in a decline in the net climate benefit of these investments.
What Does This Mean for Energy Policy?
The practical point is that classifying a fuel as “renewable” does not automatically guarantee an actual reduction in emissions or protect customers from rising costs. The report argues that directing spending toward building electrification, heat pumps, and energy efficiency could provide a faster path to reducing emissions in the buildings sector, but this is the conclusion of the report and the organizations that prepared it, not an independent assessment accompanying the article.
Sierra Club and Breach Collective recommend repealing SB 98, halting subscriber-funded biomethane investments, and redirecting resources toward electrification, heat pumps, and energy efficiency. Open questions remain regarding how regulators will deal with troubled projects, who will bear their final costs, and whether the law’s targets will be revised or eliminated.