Cost limits appeal of methane digesters
Updated: Saturday, July 03, 2010 10:28 AM
Environmental benefits overtake economic reasons, farmer says
By TIM HEARDEN
As dairy farmers seek to reduce their operations' greenhouse gas emissions -- not to mention their odor -- anaerobic digesters can be a solution.
But there's a catch: They're expensive.
It takes energy and insulation to warm the manure tanks for creating worthwhile biogas, and specialized equipment and more energy to clean up the gas so it will burn more easily to generate electricity.
"None of those are very cheap," said Mike Gamroth, an extension dairy specialist for Oregon State University's department of animal science. "You've got to have some larger amount of manure to make that economical."
Producers can quickly spend many thousands of dollars not only to install the right equipment but also to connect it to the electrical grid to generate income from the power. The equipment must be installed to code and meet the satisfaction of utilities, Gamroth said.
Fortunately, there are both government and private economic incentives available for installing digesters, which are widely credited with reducing greenhouse gas emissions, bacteria, pathogens and odors on dairy farms.
On May 3, the U.S. Environmental Protection Agency and Department of Agriculture announced they would provide up to $3.9 million over the next five years to help farms overcome obstacles preventing them from recovering and using biogas.
The funds will be used for technical assistance and outreach to livestock producers, who could receive help with feasibility studies, according to a government news release.
States provide incentives, too. In Oregon, for instance, a 50 percent tax credit is available for the capital costs of biofuels, according to a primer on digesters on the Oregon Department of Agriculture's website. In addition, a $5-per-wet-ton biomass tax credit is available for manure converted to biomass, so a 400-cow dairy could supply 6,000 tons of manure to a digester and generate an annual biomass tax credit of $30,000, the site estimated.
Also, an Oregon Department of Energy loan program offers five- to 20-year loans for up to $20 million.
A producer could create a low-cost version of a digester by making some sort of vessel and using whatever heat is available to make methane, then using the biogas to heat water or work space on the ranch itself, Gamroth said.
"That cuts the cost down quite a bit," he said. "With a farm that's using a lot of electricity, it can save them all that cost. They just need to weigh that savings against the cost of installing the entire system."
The federal government estimates that about 150 on-farm manure digesters are operating at livestock facilities around the country, and that 8,000 farms around the country are good candidates for capturing and using biogas.
If all 8,000 farms implemented biogas systems, methane emissions would be reduced by more than 34 metric tons of carbon dioxide equivalent a year -- about equal to the emissions from 6.5 million cars, the EPA asserts.
However, most producers don't pay enough for conventional electricity to make conversion to biogas fiscally worthwhile, said Jim Krahn, executive director of the Oregon Dairy Farmers Association.
"That's really what it boils down to," Krahn said. "If as consumers of electricity we were paying three times more than we are now, then digesters could make sense. With 99 percent of them that are built, once the funding goes away -- the assistance, the tax credits -- it becomes very difficult."
One well-known success story is Cal-Gon Farms in Salem, which operates a system in partnership with Portland General Electric, an electric utility. Bernie Faber, whose operation has about 300 cows, began operating Oregon's first methane digester in 2001. The digester produces between 30 and 40 kilowatts.
Faber advises producers that may be thinking of having a digester installed to get involved with a company that "has a track record" of experience in building them. He said producers should go see other projects the company has developed.
"I've always said some of the cheapest things to do to make sure you don't make mistakes is go get on an airplane," he said. "Go visit some of these things, talk to the people that own or operate them and see what benefits there are and what problems they have gone through."
Faber said he's used to answering questions about cost from other producers, but in the past few years he's gotten more questions about how a digester can help reduce odors and emissions.
"People look at this more as an environmentally friendly thing," he said. "It's hard to beat up on somebody that's trying to do something for the environment. It helps the image of the industry, I believe, and we're very fortunate here. We've got really great neighbors and literally have zero complaints."
Oregon Department of Agriculture digesters page: www.oregon.gov/ODA/energy_methane.shtml