Companies are looking to green the network with garbage gases

Smithfield Foods Inc., the country’s largest pork producer, expects to sell gas from all of its Missouri farms in the summer. Most of their farms already feed methane into the gas grid. Once the roofs extend through the 4-acre lagoons to the rest and then connect to equipment that removes carbon dioxide and smoke impurities, Smithfield hopes to supply enough gas to Missouri to power about 10,000 homes. .

“We’ve been looking at how to get energy from manure for a couple of decades,” said Kraig Westerbeek, who leads Smithfield’s renewable energy business. “We’ve had some failures, but these projects show that it can really be achieved.”

The rush of companies to join the reduction of greenhouse gases is doing big business from harnessing the methane that drains from piles of organic waste. The so-called renewable natural gas can be produced in commercial quantities on pig and dairy farms, landfills, wastewater treatment facilities and from food sludge and slaughterhouses.

Burning it to generate electricity or heat produces no less carbon dioxide than shale gas. But methane is a more potent greenhouse gas than carbon dioxide. Diverting methane from the atmosphere into the energy grid is treated as a reduction in emissions and is rewarded with valuable low-carbon credits and renewable fuels, which can be traded with gas or separately.

Landfill gas, farms, sewage treatment plants, food waste, and other anaerobic digestion systems make up less than 1% of the U.S. natural gas supply. The market is flooded with so much shale gas that many oil drillers simply burn their by-product, which was once valuable, what they call “garbage gas,” into the wellhead instead of spending money channeling it to the well. market. On Monday, natural gas futures traded at $ 2.27 per million British thermal units, a minimum winter price that falls below the balance of many producers.

Real garbage gas often costs many times more. It cannot compete with shale gas without subsidies such as fuel credits and their beneficial effect on companies ’mathematical emissions.

Analysts and utilities believe that renewable natural gas could reach 10% to 30% of total natural gas supply by 2040. The bottom of this range will still require help from policymakers, from the deep pockets of the world. energy industry and companies wishing to burn their environmental credentials. by the funds that run into trillions of dollars taking into account environmental and social responsibility.

Pipeline businesses and utilities are key to the biogas boom. Connecting manure ponds to pipelines is too costly for most farmers, but linking long-range gas sources to the market is the day-to-day of energy companies. Unlike grid operators, pipe owners do not have wind and solar energy to promote ESG investors or divert skepticism about the value of pipes in a green energy economy.

“Renewable natural gas is a green thing for them,” said RBC Capital Markets analyst TJ Schultz. “The benefit for them is that it adapts to their existing infrastructure. They don’t have to make changes.”

RBC estimates that commercial quantities of gas could be produced at more than 2,500 U.S. landfills, the most prolific sources, and at about 8,000 farms, which give the most valuable credits because they are the most powerful pollutants.

The U.S. biogas council struggled to get utilities three years ago, said Patrick Serfass, executive director of the defense group. This was before so many companies promised carbon neutrality and ESG funds maintained that influence.

“Now gas utilities have been asking us how they can get renewable natural gas and help build more systems to green their gas source and green their pipelines,” Serfass said.

Dominion Energy Inc.,

a large company seeking carbon neutrality in 2050 plans to invest $ 2 billion in biogas projects. It has a $ 200 million pact to install them on dairy farms and is chasing another $ 500 million, with Smithfield separated from the pig producer’s Missouri operations.

The association’s first project gathers gas in the Escalante Desert in Utah from 26 pig farms. The gas flows into an oil pipeline between the gas fields of Wyoming and Bakersfield, California, and the pigs are expected to heat about 3,000 homes.

Dominion and Smithfield, the latter of which aims to eliminate more emissions in 2030 from those produced on its U.S. properties, have planned or ongoing other projects in Arizona, California, Virginia and North Carolina, where each year s ‘fatten millions of pigs. “Southeast North Carolina has the potential to be one of the leading regions for renewable natural gas production,” said Ryan Childress, director of gas business development at Dominion.

Always Energy‘s

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

Duke Energy Corp.

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

has pledged more than $ 200 million. Williams Corps chief executive Alan Armstrong told investors that the company, which transports nearly a third of all U.S. gas to its pipelines, is in a position to switch fossil fuels to reduce emissions.

King of Prussia, UGI of Bread Corp.

sold its stake in a coal-fired power plant statewide. He bought a business that operated in the California renewable gas credit markets and invested in an Idaho dairy gas project. UGI executive David Lindenmuth said this month at an online biogas conference that the gas distribution company continues to lead its European companies.

“The utilities there have figured out how to stay relevant,” he said. “Keep this infrastructure upside down, but also talk about how they can be partners to reduce greenhouse gases and not be separated by environmentalists.”

Write to Ryan Dezember to [email protected]