Companies are looking to green their waste gas network

Smithfield Foods Inc., the country’s largest pork producer, expects to sell gas from all of its Missouri farm operations by the summer. Most of its farms already supply methane to the gas network. Once the covers are spread over the remaining 4-acre lagoons and then connected to equipment that removes carbon dioxide and impurities from the steam, Smithfield expects to supply enough gas to Missouri to power about 10,000 homes.

“We’ve been looking at how manure has been made from manure for decades,” said Kraig Westerbeek, who runs Smithfield’s renewable energy business. “We’ve had some failures, but these projects show that you can do things.”

The rush of companies to join the reduction of greenhouse gases makes a big deal out of the exploitation of methane that drains from piles of organic waste. The so-called renewable natural gas can be produced in commercial quantities at pig and dairy farms, landfills, wastewater treatment plants and from spoiled food and slaughterhouse sludge.

Its combustion to generate electricity or heat produces no less carbon dioxide than shale gas. But methane is a stronger greenhouse gas than carbon dioxide. The diversion of methane from the atmosphere and into the energy grid is treated as an emission reduction and rewarded with valuable low-carbon and renewable fuel credits, which can be traded with or separately from the gas.

Gas from landfills, farms, sewers, food waste and other anaerobic digestion systems accounts for less than 1% of the US natural gas supply. The market is flooded with so much shale gas that many oil drillers simply burn their valuable by-product once – what they call “garbage gas” – at the head of the well, rather than spend money to drive it. market. On Monday, gas futures traded up to $ 2.27 per million British thermal units, a poor winter price that falls below the equilibrium threshold for many producers.

Real garbage gas usually costs many times more. It cannot compete with shale gas without subsidies such as fuel credits and its beneficial effect on corporate emissions.

Analysts and utilities believe that renewable natural gas could reach 10% to 30% of total natural gas supply by 2040. The lower end of that range will continue to need help from policy makers, the industry’s deep pockets. energy companies and companies eager to polish their environmental credentials for funds that drive billions of dollars in terms of social and environmental responsibility.

Pipeline companies and utilities are the key to a biogas boom. Connecting manure ponds to pipelines is too expensive for most farmers, but connecting remote gas sources to the market is the day-to-day business of energy companies. Unlike grid operators, pipeline owners do not have wind and solar energy to cope with ESG investors or to divert skepticism about the value of pipelines in a green energy economy.

“Renewable natural gas is something I can talk about,” said RBC Capital Markets analyst TJ Schultz. “The advantage for them is that they fit into their existing infrastructure. He doesn’t have to make changes. “

RBC estimates that commercial quantities of gas could be produced at more than 2,500 US landfills, the most prolific sources, and about 8,000 farms, which produce the most valuable credit because they are the most powerful polluters.

The U.S. Biogas Council struggled to reach utilities three years ago, said Patrick Serfass, executive director of the advocacy group. This is before so many companies have promised carbon neutrality and ESG funds have such an influence.

“Now, gas utilities are coming to us wondering how they can get their hands on renewable natural gas and help get more systems to green their gas source and green their pipelines,” Mr Serfass said.

Energy Dominion Inc.,

a large utility that seeks carbon neutrality by 2050, plans to invest $ 2 billion in biogas projects. It has a $ 200 million pact to install them on dairy farms and is pursuing another $ 500 million, with Smithfield separated from the operations of the Missouri pork producer.

The partnership’s first project is collecting gas from the Escalante Desert in Utah from 26 pig farms. The gas flows to a pipeline between the gas fields of Wyoming and Bakersfield, California. Pigs are expected to heat about 3,000 homes.

Dominion and Smithfield, which aim to eliminate more emissions by 2030 than are produced on its US properties, have planned or are in the process of other projects in Arizona, California, Virginia and North Carolina, where millions of pigs are get fat every year. “Southeast North Carolina has the potential to be one of the most important regions for renewable gas production,” said Ryan Childress, director of gas business development in Dominion.

Energy AlwaysS

SoCalGas, the largest gas company in the country, works with dairy farmers and says 20% of its gas will come from waste by 2030. California regulators recently said the Los Angeles utility may charge additional fees. from customers who want biogas.

Duke Energy Body.

says it has a five-year plan to be a leader in renewable gas. Chevron Body.

has committed over $ 200 million. Williams Cos CEO Alan Armstrong told investors that the company, which carries nearly a third of all US gas in its pipelines, is positioned to change fossil fuels to reduce emissions.

The King of Prussia, UGI of Pa Body.

he sold his stake in a coal-fired power plant across the state. He bought a business that trades in California’s renewable gas credit markets and invested in an Idaho dairy project. UGI executive David Lindenmuth said this month at an online biogas conference that the gas distribution company is looking to run its European business.

“Utilities there have learned how to stay relevant,” he said. “Keep that infrastructure invested, but also talk about how they can be a partner in reducing greenhouse gases and not be distinguished by environmentalists.”

Write to Ryan Dezember at [email protected]