'The poop is worth a lot': State's largest dairy farmers are cashing in by converting methane from cow manure into natural gas
Rick BarrettThere’s a new cash cow on dairy farms these days, and it's threatening to put milk in the back seat, so to speak.
Some of the nation’s largest dairies have installed anaerobic methane digesters that convert manure gas into fuel used to run vehicles like buses and trucks. The digesters have become a profitable sideline for farms seeking additional ways to use millions of gallons of livestock waste.
“The cow’s milk is worth more than its poop, but the poop is worth a lot,” said Aaron Smith, an agricultural economics professor at the University of California-Davis.
At some point, Smith said, farmers essentially could be farming the methane from a cow's manure rather than its milk.
“This fact should make us pause,” he said. Large subsidies have been paid to capture methane gas from manure that would have contributed to global warming. “But what if the farmer adds cows because of the subsidy? Then we are no longer paying to reduce emissions.”
Wisconsin has 318 methane digesters, including around 50 on dairy farms, according to the state Public Service Commission. Most are at wastewater treatment plants, landfills, food manufacturers and industrial sites.
Wisconsin has more methane digesters than nearly any other state, according to U.S. Environmental Protection Agency data.
More:In some Wisconsin counties, contaminants from manure, fertilizer exceed recommended limits by 50%
Huge digester under construction
One of the biggest units in the nation is under construction in Greenleaf, about 18 miles southwest of Green Bay.
When finished this fall, it could process more than 360 million gallons of manure a year from 11 farms with a total of around 25,000 cows.
The $60 million digester, from a firm called Dynamic Group, was awarded a $15 million Public Service Commission grant to help fund the project. State officials said the money will be paid only if Dynamic Group, through its subsidiary BC Organics, meets certain performance standards.
The Greenleaf digester will process manure that could otherwise be spread untreated on fields in areas with fractured bedrock, where it could seep through soil and pollute drinking water. In many ways, the digester functions as a municipal wastewater treatment facility.
"We've got some advanced filtration after the digestion process," said Dan Nemke, chief technology officer for BC Organics.
Cleansed water from the digester could then be used on the dairy farms, or with a state permit, could be discharged into the East River.
An interstate natural gas pipeline
The methane from the Greenleaf digester will be injected into an interstate natural gas pipeline where it could flow nearly anywhere in the country. In fact, much of the value of manure-based gas produced in Wisconsin is based on California's Low Carbon Fuel Standard that incentivizes reduced greenhouse gas emissions.
Under a complex but lucrative system, petroleum companies source renewable fuels and emissions reductions — from anywhere in the country — in order to balance out their use of fossil fuels. It allows them to meet the strict vehicle emissions limits in California, a state too big to ignore because it has around 12% of the nation's population, 400,000 miles of roads, and significant air quality problems.
"We have to show a pathway for the gas to go all the way into California," Nemke said, even if it actually flows somewhere else.
That "carbon credits" system has spawned a methane-digester gold rush on large dairy farms in the Midwest, according to Mike McCully, an industry consultant from Chicago.
For a 3,500-cow dairy, it could mean $350,000 a year in revenue from capturing the methane from manure. If the farm owns the digester and assumes more of the financial risk, the revenue could be even higher, according to McCully.
"At that point, milk has become the byproduct of manure production," he said.
Generally, digesters are only practical on dairy farms with at least several thousand cows. In Wisconsin, those are some of the largest dairies known as Concentrated Animal Feeding Operations.
It would be difficult for small farms to afford a digester because they don't produce enough manure to pay for it, according to McCully, although there are examples of smaller-scale systems that also use food waste and other feedstocks.
"The trend is for fewer, larger dairy farms," he said, and government energy policies that incentivize methane digesters could have the unintended consequence of driving the growth of the largest farms.
Dairy cattle are methane machines
Dairy cows are veritable waste machines; on average they excrete nearly 17 gallons of manure and urine a day. Most farmers store a mix of manure, urine and water in tanks and lagoons until they can spread it across crop fields in spring and fall.
A single farm with 500 cows produces as much daily waste as South Milwaukee, based on Cornell University research.
A 1,000-cow herd? Think of the 42,000 residents of Fond du Lac.
Livestock farming represents about 30% of the methane emissions produced from human activities in the U.S., with beef and dairy cattle as the major contributors, according to the University of Wisconsin-Madison Extension.
Methane is considered a greenhouse gas because it traps infrared radiation in the atmosphere and raises air temperatures. Scientists say in some ways it poses greater global warming risks than carbon dioxide.
Digesters have environmental benefits
Anaerobic digesters work by sealing manure into a giant pit or tanks to keep oxygen out while microbes feed on the contents and produce methane that's captured and refined into renewable natural gas or is burned to generate electricity.
The liquid and solid materials that come out of the process can be applied to fields as fertilizer in a more precise, focused way than raw manure, reducing but not eliminating the risk of pollution from phosphorous and nitrates that trigger algae blooms in waterways and contaminate drinking water in private wells.
The solids can be run through a drier that produces a clean material for animal bedding, garden composting or even landscaping. And what's spread on fields contains fewer pathogens and has less odor than raw manure, according to BC Organics.
It smells similar to soil or wet leaves, the company says.
The Greenleaf digester will improve water quality in the East and Lower Fox rivers because less phosphorous and sediment will enter the water from snow melts and heavy rain after manure is spread on fields, according to BC Organics.
Digesters can be part of the solution to climate and water quality problems, said Scott Laeser, water program director for Clean Wisconsin, an environmental group in Madison.
"Methane is an extremely potent greenhouse gas. If we can capture some of it, and prevent it from contributing to our climate challenges, that is a benefit," Laeser said.
However, Clean Wisconsin believes that smaller farms, which have been disappearing from the rural landscape for years, should also have access to incentives and subsidies aimed at fighting climate change.
"We don't want digester technology to proliferate at the expense of smaller farms," said Laeser, who has an organic produce farm in Lafayette County.
'A Band-Aid on a bullet wound'
Critics of methane digesters say the biogas produced isn't really clean energy like solar or wind power. It still emits significant pollutants including carbon monoxide, sulfur dioxide and ozone-forming pollutants.
While turning manure into renewable fuel sounds promising, it's more like putting a "Band-Aid on a bullet wound," said Amy van Saun, an attorney for the environmental group Center for Food Safety, in Portland, Oregon.
"The better thing would be to treat the actual underlying problem, which is having that much animal waste concentrated in one area," van Saun said. It should be managed in a way it can actually feed the soil, sequester carbon and not pollute the water and air.
Methane digesters incentivize increased dairy herd sizes and, therefore, increased emissions, according to van Saun.
"It's our opinion that digesters that create factory-farm gas are a false solution to the climate crisis," she said.
Some communities have had problems
Originally, the Greenleaf digester was planned for the nearby Town of Holland. But in 2019, town supervisors voted 2-1 to reject a conditional permit for the project. Among the concerns raised were problems reported at other digesters, including a 2014 incident in Waunakee, in Dane County, that caused a fire and methane explosion.
Some communities have had problems with odors.
In Weld County, Colorado, residents living near a methane digester that processed cattle manure and food waste reported smells of scorched manure. Some said they experienced dizziness and headaches.
And these were rural residents familiar with run-of-the-mill agricultural smells, The Coloradoan newspaper reported in 2017.
"I think the population in that area could have handled it if every so often, when the wind was blowing a certain way, there was a bit of an odor. But this was clearly a highly offensive odor that also caused physical problems for some of the residents," Sybil Sharvelle, a Colorado State University associate professor of environmental engineering, said in an interview with The Coloradoan.
The company that ran the digester spent at least $1 million on odor mitigation technology and committed to spending more. But citing hundreds of complaints, local officials suspended the facility's operating permits after only about two years of operation.
Why is manure so controversial?
Much of the reason cow manure has become controversial is the changing nature of dairy farming.
Manure has been a dependable and potent fertilizer for as long as cows have grazed the land. In moderation, it's part of a balanced ecosystem and doesn't create hazardous amounts of pollutants.
Managed cattle grazing, where the cows poop on the pastures while chewing on the grass, actually helps create habitat for native wildlife, according to Grass Works Inc., a Wisconsin nonprofit that promotes the practice of cows getting most of their nutrition from grazing.
When cows graze intensely in one area, and then are moved to another pasture until the next grazing cycle, it reduces the spread of invasive shrubs and restores diverse native plants. It also provides nutrition for invertebrates, which are then eaten by birds and other animals.
But you hardly ever see dairy cows on pastures anymore, said Mark Kastel, founder of Organic Eye, a nonprofit that monitors the organic foods industry. Many farms have such a large number of cows, the amount of pasture they'd need for grazing might mean the cows would have to walk several miles back to the barn for milking.
Incentives and subsidies for large farms, where the cows never set foot on grass, have created an unequal playing field in dairy, according to Kastel.
Wisconsin still has dairy farms where the cows are in pastures much of the year. But they're usually small operations that produce organic milk, where grazing is a requirement to be organically certified.
Otherwise, "Farming in a sound environmental manner puts you at a competitive disadvantage," Kastel said.
Wisconsin well-positioned for future
For years, methane digesters have been used to generate electricity that's sold to utilities. But often the amount that farmers were paid fell to the point where it was no longer profitable for them. Also, some of the digesters installed years ago were unreliable or not managed properly.
Fortunately, the technology has greatly improved, said Josh Meissner, a Clark County dairy farmer and board member of Edge Dairy Farmer Cooperative.
Meissner said he's planning to transition his farm's digester from producing electricity for Dairyland Power Cooperative to producing natural gas which would go into an interstate pipeline and be eligible for carbon credits.
"The saving grace for the industry is there's always going to be a renewable product that's marketable. There's no doubt in my mind that our future is pretty secure," Meissner said.
But some of the incentives and subsidies could disappear. The EPA is revising its renewable fuel requirements and California's program only guarantees that a digester will receive carbon credits for 10 years.
There are "boom and bust" cycles in biofuels, said Hardy Sawall, director of business development for U.S. Gain, a renewable fuels company in Appleton that's partnered with more than a dozen Wisconsin farms on methane digesters.
"We're in a growth cycle right now," Sawall said.
Tax credits and grants proposed in President Joe Biden's "Build Back Better" agenda would bolster the market for digesters. Also, in addition to California, other states have eyed incentives to drive the demand for renewable natural gas and reduced emissions.
A growing number of large companies, like Walmart and Amazon, have pursued carbon credits to offset their own greenhouse gas emissions. They can buy credits from places like landfills and dairy farms that are working to reduce emissions.
Wisconsin is well-positioned to benefit from the changes, said Joe Pater, director of the Office of Energy Innovation at the Public Service Commission.
Wisconsin has awarded grants and incentives for around 40 digesters over the last 10 years. State officials say there's room for approximately 1,300 more facilities serving a variety of markets and purposes.
The Greenleaf project, said Nemke, with BC Organics, could be a model for methane digesters across the country.
"Part of the driver," he said, "is showing people what we can do."