Companies are trying to green the network with waste gas

Smithfield Foods Inc., the country’s largest pork producer, expects to sell gas from all of its farming operations in Missouri by the summer. Most of his farms already supply methane to the gas grid. Once the covers are stretched across the 4-acre lagoons and then connected to equipment that removes carbon dioxide and impurities from the fumes, Smithfield in Missouri expects to supply enough gas to fuel about 10,000 homes.

“We’ve been making energy from manure for a few decades now,” says Kraig Westerbeek, who heads Smithfield’s renewable energy business. “We’ve had some failures, but these projects show that you can really get it done.”

The rush of companies to join in on the reduction of greenhouse gases makes a big undertaking of harnessing the methane that seeps from the mounds of organic waste. So-called renewable natural gas can be produced in commercial quantities on pig and dairy farms, landfills, wastewater treatment plants and from spoiled food and slaughterhouse sludge.

By burning it to generate electricity or heat, no less carbon dioxide is produced than shale gas. But methane is a more powerful greenhouse gas than carbon dioxide. Diverting methane from the atmosphere to the energy network is treated as a reduction in emissions and rewarded with valuable credits for low carbon and renewable fuels, which can be traded with or separately from the gas.

Gas from landfills, farms, sewage treatment plants, food waste and other anaerobic digestion systems makes up less than 1% of the natural gas supply in the US. The market is flooded with so much shale gas that many oil drilling machines simply burn their once-valuable by-product – what they call ‘waste gas’ – in the well instead of spending money getting it to market. On Monday, natural gas futures traded at $ 2.27 per million British thermal units, a meager winter price that is below breakeven for many producers.

Gas from real waste usually costs many times more. It cannot compete with shale gas without subsidies such as fuel credits and its beneficial effect on the math of corporate emissions.

Analysts and utilities believe that renewable natural gas could reach 10% to 30% of the total natural gas supply by 2040. for the funds that send trillions of dollars with an eye for environmental and social responsibility.

Pipeline and utility companies 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 daily business of energy companies. Unlike grid operators, pipeline owners have no wind and solar power to tout ESG investors or avert skepticism about the value of pipelines in a green energy economy.

“Renewable natural gas is a green thing to talk about,” said TJ Schultz, RBC Capital Markets analyst. “The advantage for them is that it fits within their existing infrastructure. They don’t need to make any changes. “

RBC estimates that commercial quantities of gas can be produced at more than 2,500 US landfills, the most productive resources, and about 8,000 farms, providing the most valuable credits because they are the most powerful polluters.

The American Biogas Council struggled to reach utility companies three years ago, said Patrick Serfass, executive director of the advocacy group. That was before so many companies promised carbon neutrality and ESG funds had such the power.

“Now the gas companies are coming to us asking how they can obtain renewable natural gas and help build more systems to green their gas source and make their pipelines greener,” said Mr. Serfass.

Dominion Energy Inc.,

a major utility company aiming for 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 aiming for an additional $ 500 million with Smithfield separate from the pork producer’s Missouri business.

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

Dominion and Smithfield, the latter of which aims to eliminate more emissions than are produced in U.S. properties by 2030, have other projects planned or underway in Arizona, California, Virginia and North Carolina, where millions of pigs are fattened every year. “Southeast North Carolina has the potential to become one of the leading renewable natural gas production regions,” said Ryan Childress, director of gas business development at Dominion.

Sempra Energy‘s

SoCalGas, the country’s largest gas company, is partnering with dairy farmers and says 20% of its gas will come from waste by 2030. California regulators recently said the Los Angeles utility can charge extra from customers who want biogas.

Duke Energy Corp.

says it has a five-year plan to lead the field in renewable natural gas. Chevron Corp.

has pledged more than $ 200 million. Williams Cos. Chief Executive Alan Armstrong told investors the company, which carries nearly a third of all U.S. gas in its pipelines, is able to exchange fossil fuels to reduce emissions.

King of Prussia, Pa.’s UGI Corp.

sold its stake in a coal-fired power plant statewide. It bought a company that trades in the renewable gas credit markets in California and invested in a dairy gas project in Idaho. UGI director David Lindenmuth told an online biogas conference this month that the gas distribution company is following the lead of its European businesses.

“Utilities out there have figured out how to stay relevant,” he said. “Preserve that invested infrastructure, but also talk about how they can partner in reducing greenhouse gases and not be taken apart by environmentalists.”

Write to Ryan Dezember at [email protected]