Turning manure into money

The Washington Post, By Jim Morrison, June 16, 2020. Link to story

When Randy Jordan, a fifth-generation dairy farmer in central Massachusetts, looked into turning manure from his 300 cows into natural gas more than a decade ago, he just wanted to find a way to lower his increasingly painful electric bill.

He knew that biodigesters, a sort of modern alchemy that transforms poop into profits, had been around for decades. But many of the tanks, where microorganisms digest manure and turn it into methane gas that can be burned as fuel or converted to electricity, had been abandoned. They proved too complicated to manage. “It was challenging,” he remembered, “and the money didn’t work.”

Then he met Bill Jorgenson, a longtime energy consultant with a vision.

Jorgenson told Jordan that while 87 percent of the digesters in the country had failed, he had a new recipe for success: add food waste to the manure. It would increase the energy output and boost the income for farmers through tipping fees from manufacturers, retailers and others looking to unload food waste. Best of all, it would use methane from the manure, instead of venting it into the atmosphere to contribute to climate change.

It was an unlikely alliance between the farmer and the consultant. “This guy genuinely did not know which end the manure came out of the cow,” Jordan joked.

Along with four other farmers, they formed AGreen Energy LLC and began operating on five farms. By 2014, after three of the farmers dropped out and sold their shares to Jordan, the project smelled just right to Vanguard Renewables, a start-up that saw the technology’s promise with the addition of food waste. The companies merged. Vanguard soon raised $72 million in venture capital and began financing biodigesting partnerships with other New England dairy farms.

That caught the fancy of Dominion Energy, which is now investing more than $200 million to join with Vanguard to capture manure methane from dairy farms in Colorado, Utah, New Mexico, Georgia and Nevada and convert it into natural gas. Dominion will own the projects and sell the gas. Vanguard will design, develop and operate the biodigesters. Farmers get paid for hosting the digester and benefit from the byproducts of the process, including heat for their property, livestock bedding and fertilizer.

Randy Jordan’s local battle to reduce his rising electricity costs has become part of the global battle against a warming planet.

Over the past two decades, there’s been a slow, steady rise in the transformation of farm and food waste to energy, but the process remains a rarity.

According to the Environmental Protection Agency, biodigesters on livestock farms total 255, up from 24 in 2000, driven by the market for renewable gas, a desire by farmers to diversify and federal tax credits as well as government subsidies in states such as California, which has awarded nearly $320 million in grants and matching funds since 2015.

Why the investment? Poop is a pervasive problem, and a source of methane, a greenhouse gas more potent than carbon dioxide. Trapping methane, processing it and burning it for energy or selling it to the electric grid is a way to remove it from the atmosphere. It turns manure — a 1,400-pound dairy cow produces nearly 54,000 pounds of it annually — into money.

Still, manure is a comparatively modest source of methane from cows. While agriculture — livestock and crop production — accounts for 10 percent of greenhouse gas emissions in the United States, just 12 percent of that fraction comes from manure, according to the EPA. Cows burp up 95 percent of the methane they create, little puffs of pollution during digestion in its four stomachs, far more than comes out the other end.

Dominion, with 7.5 million customers in 18 states, partnered earlier with Smithfield Foods on a $500 million deal to build biodigesters on hog farms in five states, including North Carolina and Virginia. One of the hog farms is operating. None of the dairy farm projects, expected to be completed over five years, is in operation.

“These partnerships with Smithfield Foods and with Vanguard Renewables are great examples of how we can create new sustainable business models around greenhouse gas reduction,” said Ryan Childress, Dominion’s director of gas business development. “They’re economical, they’re market-driven, and they’re scalable.”

Unlike energy from wind and solar, gas from manure is available 24 hours a day, Childress said. Dominion estimates the dairy farm projects will produce 1 billion cubic feet of natural gas annually, a comparative eyedropper in the U.S. market, which used more than 31 trillion cubic feet last year. It’s more expensive than other methods. The typical cost to construct a biodigester and the accompanying facility to clean the natural gas for a farm with 5,000 cows is about $15 million, according to Kevin Chase, co-founder and chief investment officer of Vanguard.

But processing methane from farms into natural gas helps reduce the carbon footprint for companies such as Dominion, which has pledged to reach net zero emissions from methane and carbon dioxide by 2050.

The partnerships with Vanguard and Smithfield, Childress said, are equivalent to taking 650,000 cars off the road or planting 50 million trees. “That’s huge carbon reduction bang for your dollar,” he added.

But how loud is that bang? It depends upon whom you ask.

The World Wildlife Fund’s director of dairy, Sandra Vijn, said methane is “an important transition fuel” and is more sustainable than drilling for natural gas.

“There are many industrial processes that require very high temperatures that currently can only be achieved by burning gas,” she said. “And biogas can be a viable alternative until carbon-free options are technologically and economically feasible.”

But Mark Kresowik, the eastern district deputy director at the Sierra Club, the national environmental organization, said zero-emissions electricity from renewable sources such as wind or solar is the best choice.

“When you move methane through pipes and into homes, you still have the same climate and health impacts of transporting, leaking and burning gas,” he said. “It doesn’t eliminate any pollution. It’s simply changing the source of that pollution from drilling to capturing it in this other fashion.”

Even small leaks and other releases of methane during repairs, as little as 2 or 3 percent, negate the improved greenhouse gas effects over coal, for instance. Dominion has cut methane emissions from leaks by 25 percent in the last decade and has pledged to reduce them by another 65 percent by 2030, Childress said.

Rebecca Larson, an associate professor of biological systems engineering at the University of Wisconsin, has studied the climate effects of agriculture and the biological processes that take place when microorganisms break apart manure.

“The benefits of digesting manure are significant,” she said. It not only reduces greenhouse gases, but the high temperatures dampen the odors associated with manure and decrease potential pathogens that can enter the watershed. One study Larson co-wrote concluded that greenhouse gas emissions from a dairy farm can be reduced by 35 percent overall when biogas-based electricity replaces grid-based electricity. The problem for farmers, she said, has been the cost.

Cost is one of several issues Vanguard helps solve.

The company builds the biodigester and provides the expertise to operate it. “People think anaerobic digestion is super straightforward where you’re basically throwing organics into a tank and cooking it and magically, you produce natural gas,” Chase said. “But it’s really a very difficult and time-consuming business. It’s four different things, a development company, an operating company, an energy company and an organic management company.”

By raising capital, he said Vanguard has been able to hire 38 employees, including biologists, chemists, environmental engineers, construction staff and a development head. Since 2014, Vanguard has benefited from a Massachusetts ban on disposing large amounts of organic waste in landfills. Retailers, institutions, breweries and manufacturers — including Whole Foods, Gorton’s Seafood, Cape Cod Potato Chips, Cabot Creamery and Wachusett Brewing Co. — pay Vanguard to take their food waste or pay a hauling company, which gives Vanguard a tipping fee.

The company is completing a sixth in Vermont that will pipe gas to Middlebury College’s power plant as part of the school’s transition to renewable energy.

For Peter Melnik, who runs the 100-year-old Bar-Way Farm in Deerfield, Mass., partnering with Vanguard was another way to diversify, something struggling dairy farms need. He figures the heat, fertilizer and energy savings are $75,000 to $100,000 annually. The odor reduction, he adds, makes Bar-Way a better neighbor.

“The dairy economy is never great,” Melnik said recently during a phone interview while plowing hay on his tractor. “I knew that to survive we needed to create different income streams. I was always taught to use the assets that you have available to you. The manure just seems to be one that was going unused. It just makes sense.”

While the Vanguard farms in New England combine manure and food waste, the projects with Dominion will use only manure. For the Dominion projects, clusters of four to eight dairy farms will each have a digester that pipes methane to a second facility where it is processed before entering commercial pipelines. Vanguard earns money by selling either electricity or renewable natural gas.

Down on the farm, the process begins by collecting manure. Methods differ, but often it’s washed from the paddock, the milking parlor or the feed lane into a trough and fed into a rubber-bladder-topped digester. There, microbes eat the organic matter, producing methane, carbon dioxide and small amounts of ammonia. The gases are piped out

On Jordan’s farm, the gases go to a generator that produces electricity. Jordan, who has an interest in Vanguard thanks to the merger, says electricity not used by the farm is sold directly to two area businesses, Polar Beverages and the Wachusett Brewing Co. Jordan said heat and hot water from the biodigester save him about $35,000 annually. He also gets 14 million gallons of liquid fertilizer annually that he applies to his fields, a savings of about $100,000. And he uses the solid byproduct for animal bedding, an estimated $20,000 savings.

Jordan sees biodigesting as a partnership marrying one product line — milk — with another product line — manure. He keeps the cows healthy. A healthy cow produces milk for the market, but also manure for the digester. Vanguard makes sure the other living organism on his farm, the digester, stays healthy. “Do I have to help repair a pump one day when it’s broken? You bet,” he said. “But I’m not nursing that thing and changing its diaper and making it go every day.”

One feeds the other. One needs the other. “Life has changed. Life is difficult. Life is better,” he said. “And I’m still here, probably because of the digester.”