Dairy Farms Turning Methane from Cow Manure into Clean Renewable Natural Gas
Until recently, using anaerobic digesters (AD) was an uncommon manure/waste management practice in the dairy industry mainly due to economic challenges. In addition to the significant capital cost of the digester, hiring additional staff to operate and maintain the AD system and meeting regulatory or permitting requirements has proved to be too costly.
Dairy farmers typically have narrow profit margins, which means they have less capital to invest in practices beyond what is needed for the farm to function. A farmer may be aware of the benefits of AD, but if the cost is perceived to outweigh those benefits, there is limited incentive to pursue an AD. AD benefits such as environmental stewardship, odor reduction, and emission reductions have been difficult to monetize, and revenue from renewable electricity generation for a farm with an AD system is often not high enough to make up the deficit. Furthermore, low electricity rates have made it increasingly difficult for power generation projects to remain profitable.
One of the most effective ways for Dairy Farmers and project developers to address these economic challenges is by developing dependable renewable natural gas (RNG) markets. Projects using methane that is converted to RNG can increase revenue by taking advantage of market incentives for biogas. Tax credits, renewable energy credits, carbon offset credits, or other incentives offered through federal, or state renewable or low carbon fuel standards are a potential source of revenue or cost savings. Several states have created programs focused on reducing fossil fuel-based fuel, such as Low Carbon Fuel Standard (LCFS) incentive programs in California and Oregon. At the federal level, the Renewable Fuel Standard provides market-based monetary value for renewable fuels, including biogas to renewable natural gas (RNG).
These state and federal programs dramatically increase the market value of RNG for farmers and developers. Market trends for renewable/low-carbon fuels have made RNG more valuable than electricity. If a project can demonstrate that RNG is used as a transportation fuel and meets appropriate requirements, RNG can also generate Renewable Identification Numbers and/or LCFS credits. Because of this, many dairy projects currently in development have plans to produce RNG.
Companies like Morrow Energy work with farmers and developers to design and manufacture biogas upgrading facilities that convert the methane gas from the AD to pipeline-quality clean renewable natural gas. Morrow Energy, based in Midland, Texas is one of the only US-based companies that designs and manufactures biogas upgrading equipment. The first cow manure-to-pipeline gas plant of its kind in the United States was designed and built by the Morrows, including the amine plant, compression, pipeline, and interconnecting piping. Morrow has designed and manufactured over 15 digester facilities throughout the United States and Canada.