Unlocking the full potential of manure as a resource and defining that resource so it is environmentally friendly: that’s the overall vision. Industrialized anaerobic digestion holds this kind of promise and extends the renewable energy-producing capabilities of rural America – beyond the limitations of corn and soybeans. But how do we get there? California has already moved in this direction as environmental pressures on large dairies have created opportunities for producing biogas, converting it to biomethane and delivering pipeline-quality renewable natural gas.

As for the not-as-large dairies and livestock farms of the East and Midwest, anaerobic digesters are often viewed as individual enterprises. But there are real opportunities for farms to work together through community-scale digesters using co-digestion: a process of digesting multiple feedstocks, along with the manure, to produce a more uniform, economically viable and steady output of biogas.

Community-scale digesters require three essentials.

1. The nutrient management program must be acceptable.

2. The fixed energy agreement must be profitable.

3. The agreement between farms (LLC or cooperative) must be able to ensure a long-term supply of manure for the site.

Farmers want to understand the mechanics, not just the benefits. For example: 1) what to do with the energy; 2) how to get the biogas to the consumer; 3) what size herd is needed; 4) nutrient management implications; 5) plant siting and management; 6) financing concepts, long-term agreements and commensurate risk; 7) how to obtain environmental credits and energy incentives.

“Most of the producers we talked to at World Dairy Expo [last] fall, wanted to learn something and take information home to get prepared. Some had projects in the planning stages and were interested in more in-depth discussions,” notes Steve Dominick, Midwest regional director for Waste Energy Solutions (WES), based in Pittsburgh, Pennsylvania.

“We talked with producers from the Midwest, Northeast and Southeast,” adds John Kunkle, WES eastern regional director. “One producer, for example, had 1,000 cows and suburban neighbors; he was looking for a way to control odor and environmental issues and was interested in learning about the energy.”

“The serious producers were talking about biogas power, land requirements and actual siting of plants,” notes Tom Cassidy, WES regional director of feedstocks management. “But what they really wanted to know was how to make it happen.”

“Farms, large and small, are thinking about manure management as an individual farm issue,” Dominick explains. “Everyone is thinking farm-scale; few farms are thinking community-scale. For the most part, the U.S. digester companies are promoting farm-scale digesters. Community-scale is what we are marketing because you need to have the size (2,500 cow-equivalent minimum) for the economics and steady biogas output to make it work. This means multiple farms. It also means multiple feedstocks, co-digestion of the combined waste streams and pushing the natural gas alternative instead of electric power. In the U.S., utilities just are not paying enough for electric power from digesters.”

Denmark figured it out

“Anaerobic digestion is a more complicated story than ethanol, largely because we’re dealing with a dilute resource stream,” explains retired USDA microbiologist Eivind Lillehoj, Ph.D. The son of a Danish immigrant, Lillehoj spent his National Institute of Health (NIH) postdoctoral studies in yeast fermentation research at the Carlsberg Laboratories in Copenhagen, Denmark, before returning to the states to serve 30 years with USDA – primarily in the area of food safety with emphasis on fungal contaminants (mycotoxins).

The microbiology and fermentation expert has always had an interest in ethanol and biogas production. “I followed what Denmark was doing,” he relates. “Liquid manure has only about 5 percent solids, dairy may have a little more than that. But generally speaking, we’re not dealing with a commodity like processed corn. Denmark figured it out: how to make economically viable methane from a 5 percent solids waste stream. We need to understand what they’re doing and try to simulate that here.”

“Denmark is ahead of where we are because the economic situation in Europe is such that centralized digester plant owners make a fair profit from their investment. They can afford to put quite a bit more into the centralized digesters: stainless steel pipe and higher-end control technology versus black-iron pipe and ball valves for manual control,” observes Cornell University agricultural engineer Curt Gooch, P.E.

He toured several Danish biogas plants during a January 2006 visit to Europe. Gooch heads up the dairy facilities and waste management program under Cornell’s PRO-DAIRY program. He is responsible for conducting applied research in dairy housing and waste management systems and for the development and delivery of education programs. A website dedicated to dairy waste management and treatment is one method of outreach (http://www.manuremanagement.cornell.edu/).

“In Denmark, they have learned from their initial installations and subsequent installations, at each point using the best technology available,” Gooch explains. “Their later installations are very refined and very durable. Our industry has not had the chance to go through the design, install and improve cycles to this degree. Here in the U.S., there is a lot of focus on anaerobic digestion by a smaller group of people than in Europe. There are people here putting their heart and soul into making improvements, but the numbers are smaller and so their impact is smaller. In general, we tend to have larger herd sizes for dairy, swine and poultry, and these economies of scale are to our advantage. We are well positioned to take advantage of that. However, the cost to aggregate manure to a central spot is the back-breaker.”

Understanding the microbiology

“The fermentation process is different in anaerobic digestion (AD) compared with yeast-based ethanol production,” Lillehoj explains. “AD is a multifaceted and sensitive fermentation that requires a lot of care of the feedstock stream going into the fermenter (digester) to get uniform biogas coming out. Anaerobes are more difficult to work with than yeast. You look at the AD microbes cross-eyed; they’re gone. Yeast, on the other hand, you can hit in the head with a hammer and they keep on fermenting.”

The approach is microbiology rather than chemical engineering. “Anyone can make biogas,” Lillehoj notes. “Industrial production of biogas: that’s the magic. One of the things that can happen in farm-scale digesters is huge fluctuations of output: one day we can have X units of biogas and the next day, Y units. I’m supportive of on-farm technology; however, what the Danes have taught us is you have to have a fairly big plant with professional managers who understand the process and have control over the ingredients for uniform biogas production, 24 hours a day, 7 days a week.”

Revenue is the driver

Revenue from Danish biogas production is one-third electricity cogeneration, one-third sales of heat from biogas plants and one-third tipping fees for receiving industrial and institutional waste biomatter.

“Denmark has centralized heating systems so that a little town can benefit from a digester in the countryside. The water is heated, circulated to the households, recirculated back to the plant, reheated, and the process goes on,” Gooch explains, noting a U.S. example – a dairy farm with an anaerobic digester in eastern New York, which sold hot water to a nearby nursing home for many years. “They’re getting peanuts for the electricity but were making a fair profit on the hot water.”

Conventional farm-scale digesters here in the U.S. have traditionally relied upon electricity sales as the sole source of revenue. “We have electricity sales, and then we’re done,” says Gooch. “We’re getting 2, 3 and 4 cents per KWh and Danish plants are getting the equivalent of 20 U.S. cents per KWh, plus they have two other line items for revenue.”

In the U.S. context, community-scale co-digestion plants provide revenue opportunities from tipping fees for receiving industrial and institutional biomatter. By achieving large-scale, steady biogas output and implementing the technologies for “scrubbing” and upgrading the biogas, other markets for the energy (besides electricity) improve the biogas revenue stream.

Dealing with a fickle energy market

“The vicissitudes of the market have a big impact on biogas. The natural gas companies are ready to go all the way down with their price to protect their position,” Lillehoj suggests, noting that ethanol had the same struggle for economic viability until a big player – ADM – fought to get USDA to subsidize the process, providing tax breaks and other incentives without which the ethanol industry would never have gotten off the ground.

Case-in-point: analysts look at ethanol production demand for corn as a major price driver in the grain markets now and in the future. Experts note that the 51-cents-per-gallon subsidy for ethanol production allows an ethanol plant to pay for itself in less than two years. Within a few years, analysts expect corn usage for ethanol to rise from 3 billion bushels per year to 6 billion bushels per year.

In the absence of such government incentives for biogas, Lillehoj notes that biogas producers are forced to find niches and form alliances to add leverage to their positions in the energy marketplace.

“As companies start seeing their electric rates for the future, there will be more interest in sole-source power supplied on a parallel power station,” notes Kunkle. “For example, a food processing plant that wants to sole-source its power and has some organic waste feedstocks to contribute, may be interested in hooking up with a community digester, which member farms contribute manure to.”

Feeding U.S. fuel consumption

Dairy and livestock farms are positioned to help their states reach renewable energy portfolio objectives. “In New York state, for example, 13 percent of our energy comes from renewable sources now, and we want to get to 25 percent by 2012 or 2015,” Gooch observes. “With all of our hydropower in place, there is little chance this objective can happen by hydro sources, alone… so what else can we do? We can harness wind, burn wood chips in boilers and build digesters.”

“If you do the math on corn, it is self-limiting,” Lillehoj observes. “A 10 billion bushel crop, even if all of this corn is converted, that’s 25 billion gallons of ethanol. Yes, it’s a major fraction of what is used, but not anywhere near what we need to replace our gasoline consumption in this country.”

The Danes and other scientists worldwide are working on cellulosis: industrializing the conversion of starch to sugar, targeted at about a nickel per pound.

“This will revolutionize agriculture in a major way by providing an alternative to the limitations of corn,” says Lillehoj. “Biogas production, on the other hand, has the potential for producing energy at levels that can be a complete replacement for gasoline. Research initiatives seek to integrate biogas with biomass conversion in a thermal construct that takes advantage of the biogas. The industry calls this ‘biorefineries.’ Everybody’s working on it, and the Danes have a leg-up. There are enzymes marketed today by the Danes and others that convert cellulosic material to sugar, but the process has not yet been industrialized at the requisite economic scale. The day that happens, we will see a major transformation of U.S. agriculture.”

Putting a value on the environmental benefits

Dominick sees one of the biggest hurdles for digester technology is the present lack of government incentives. “We don’t have the tax incentives that the wind turbines, corn ethanol and soybean biodiesel enterprises have,” he observes. “If the incentives are missing for the energy produced from digester systems, then this technology will have a difficult time gaining a foothold – and the opportunities for farm and community solutions may be lost.”

Gooch acknowledges co-digestion is not something that’s happening a lot here in the states. “In New York, the concern is that there will be extra nutrients to put back onto the farms that could affect compliance with CAFO guidelines,” he explains. “Phosphorus removal through flocculation and separation is doable, but the equipment and chemical costs to enhance P-removal add significant costs to the projects.” The technologies that address biosecurity by controlling waste pathogens can also add costs to a project.

“Here we have very little gas scrubbing technology in place compared with Europe,” Gooch adds. “All the digesters we saw in Europe used gas scrubbing. (Gas scrubbing purifies the methane gas by removing hydrogen sulfide and other corrosive elements). There was no question about it. It was just done. It’s not hard to do, but it is another element that adds cost to the plant. The benefit is that it extends the life of the equipment and offers additional options for how the gas is used (i.e., alternative natural gas or carbon-neutral vehicle fuel).” In Austria and Sweden, much of this upgraded biogas is used for fueling vehicles, mainly buses.

The bottom line, says Dominick, is “you must have a place to put the digestate that should be at least a break-even or somewhat profitable enterprise. Co-digestion solves farm and community challenges, including helping with watershed management, but it can’t be sustained if it is not profitable. The biogas from the plant must also be used in the most profitable fashion – whether it is electricity generation, boiler operation, natural gas replacement or liquefied methane vehicle fuel – and a plant needs to be sited so that it is accessible to the waste coming in to keep the operating costs low.”

Attitudes, policies and financial support

“There is a whole different culture in Denmark,” Gooch observes. “The Danish people ride their bikes. There are separate bike lanes and bike traffic lights. I was there in the winter, and at 6:30 or 7:00 a.m., it’s still dark, and you see 50 people stopped and waiting for the bike light to change. I would challenge anyone to find this level of commitment here, to a means of getting to work without using fossil fuels. That was one of the things that struck me on my visit. The attitude is different. Combine this with the nine laws in Denmark that really encouraged digester development. Some of these laws had to do with farmers, some had to do with other generators of organic waste. These laws basically created an opportunity where they could promote a good thing for everybody.”

For example in Denmark, land filling of organic waste is prohibited, and there is a tax for incinerating organic waste, but no tax on organic waste processed through a digester. Denmark also mandates farms have eight to 10 months of manure storage.

“I think change may need to come more at the policy-making level. We don’t want to see a burden of regulation, but some incentives are needed for anaerobic digestion to be widely adopted,” Gooch notes. “Co-digestion is good for the environment, good for farmers, good for food waste processors, good for consumers.” He also notes that carbon credits or other environmental credits may be a way to provide payback to farms for achieving the desired environmental benefits.

Community digesters bring major community, environmental and climate change benefits – for example, waste reduction and utilization, nutrient recycling and management, watershed quality improvement, capture of greenhouse gas emissions, carbon-neutral renewable energy, odor control, pathogen control and rural revitalization.

The necessary systems and equipment for achieving these benefits add cost to a centralized community co-digestion project. Financial incentives that place a value on these benefits to society are needed on the process side in addition to the energy output side. The marketplace for the energy alone, does not offer sufficient economic advantage to get the train up and running on the track.

Looking at the total picture, it is apparent the U.S. needs economic incentives to increase the use of a biogas technology that betters the environment, provides a strong flow of carbon-neutral renewable energy and benefits the largest segment of our economy – the American farmer. PD