Turning Manure into Money

June 17, 2020

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by Jim Morrison (Washington Post) 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.

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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.

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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.

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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.”

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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. READ MORE

Exclusive: How the Sierra Club Took Millions From the Natural Gas Industry—and Why They Stopped [UPDATE] (Time Magazine)

U of I-Led Center for Agriculture, Food and the Environment (CAFE) Secures $10M USDA Grant to Build Sustainability and Prosperity for Dairy Industry (Unversity of Idaho/Daily Fly)

California draws ire as out-of-state factory farms turn pig poop into cash (Washington Post)

Excerpt from Washington Post: Neighbors of industrial hog farms in Missouri, who have long battled agriculture companies over reeking manure lagoons, have encountered an unexpected obstacle in their fight: California.

Seven years ago, California embarked on an aggressive plan to reduce methane emissions from in-state dairy farms by bolstering a system of carbon credits. The credits encouraged the state’s dairy farmers to capture methane, a greenhouse gas that is produced by animal waste, and inject it into pipelines for use as an alternative fuel.

But the state’s effort to combat global warming has morphed into something bigger: a sprawling program that financially benefits factory farms far beyond its own borders.

Small farmers, environmental advocates and scholars in Missouri and elsewhere say California’s system is helping perpetuate noxious, environmentally hazardous and agriculturally unsound practices in other states, where the credits are boosting companies that raise tens of thousands of hogs in a handful of barns and pump the poop into waste ponds.

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The generous rating gives the farms a large number of credits that they can sell to major oil companies, which use them to offset greenhouse gas pollution from gas and oil.

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California climate regulators, agriculture industry groups and Smithfield defend the system of carbon credits as an important tool to combat global warming.

Smithfield, which is majority-owned by China-based WH Group with a U.S. herd of more than 14 million pigs, said in a statement that it supports the role the California subsidies play in company efforts to cut its carbon footprint by “converting waste into clean, low-carbon renewable energy.” Smithfield promotes its projects as eliminating the greenhouse gas equivalent of more than 100,000 cars annually.

They involve outfitting company feed lots across the country with technology that captures methane from manure lagoons. “Biogas initiatives have been identified by the EPA, USDA, White House and many others as an effective climate solution,” said the Smithfield statement. “While nobody is investing in hog production as a means to get [California] credits, we are reducing emissions.”

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Smithfield, which in January (2025) was spun-off by its Chinese owner into a publicly traded company in the United States, does not disclose how much it receives under California’s carbon-trading system. California publishes summary figures but does not release financial and other data relating to the subsidies for individual operators, designating it an industry trade secret. The state does release a total figure for all farms it subsidizes: $400 million in 2023.

The expected return on investment in systems that turn animal poop into natural gas is in the double digits over the decades-long life of the projects, according to public statements by Dominion Energy, a major Smithfield partner, oil giant Chevron and Midwest power company DTE Energy. Smithfield and its partners say they have invested at least $650 million in such technology so far, meaning a potential profit of tens of millions of dollars.

To receive carbon credits under California’s “Low Carbon Fuel Standard” program, companies convert methane from animal waste into natural gas and pipe it into California’s fuel supply. It is usable only in the tiny fraction of vehicles powered by natural gas. But big oil companies buy the carbon credits generated to cancel out — on paper — the emissions from the fossil fuels used by most cars and trucks.

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The oil companies are passing the extra costs of purchasing those carbon credits on to California consumers, according to the state’s own Energy Commission data. A University of Pennsylvania study, based on the state’s data forecasts that the added expense — last year 10-cents-per-gallon on average — could soar to as much as 85 cents within the next five years.

State climate regulators argue there is no evidence that the program, which awards credits for fuel from manure and various other sources the state ranks as climate friendly, inflates gas prices. But the former manager of the state program, Jim Duffy, calls that assertion “absurd,” pointing to the state’s own data disclosures. He said the state has turned the program into a “gravy train” for polluting agricultural companies.

The methane subsidies were initially modest at the program’s 2009 launch. But in 2018, with the state’s dairy industry reeling, California substantially changed the formula for calculating the climate benefit. It also eliminated a requirement that the fuel needed to be physically delivered into California, allowing firms to drop it into pipelines tangentially connected to the state.

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The California Air Resources Board holds up its program as a gold standard for the growing carbon-trading sector. Oregon, Washington and New Mexico have approved programs built on the California model, and eight more states are considering it.

California regulators, who declined interview requests, wrote in a statement that the carbon credit subsidies for Smithfield are crucial to getting livestock companies around the country to curb their emissions, motivating pork and dairy operations to invest in “digester” machinery that cuts methane emissions. Before California began funding the projects, the climate agency argues, “there were relatively few operating methane reduction projects in California and the nation.” READ MORE