Indiana gears up to turn manure into renewable energy
There’s not much to see in this remote corner of southern Decatur County. Dairy cows outnumber people. Farmland sweeps wide in every direction.
But this area, on the outskirts of Greensburg, could be the next center of Indiana’s growing biogas industry, turning manure into renewable natural gas.
The project would connect Hulsbosch Dairy Farms LLC, a 17-year operation with about 6,200 milk cows, with a Pennsylvania supplier of renewable natural gas called REV LNG.
The two companies want to partner up to extract the methane in thousands of pounds of cow manure to convert it into lucrative natural gas for purposes such as trucking and heating.
Biogas—a mixture of methane, carbon dioxide and other gases produced from manure, agricultural waste and other sources—is still a tiny sliver of the energy world, accounting for less than 1% of Indiana’s energy generation.
But activity is starting to pick up around the state, and some utility experts are keeping their eye on it as a sleeper source of energy.
Several other projects are either underway or recently completed and could begin to make a dent in the state’s huge energy consumption.
“It’s still not huge, but it’s a notable amount,” said Doug Gotham, who directs the State Utility Forecasting Group based at Purdue University. “We’ll see how much bigger it gets.”
But the latest project still has a few wrinkles. REV LNG—which collects and stores the manure, then extracts the methane that results from a natural breakdown called anaerobic digesting—still needs to find a way to tap into a nearby pipeline to deliver the purified natural gas it produces from the methane.
The company has asked nearby Shelby County for approval to rezone 6.7 acres of farmland near a natural gas pipeline owned by Canada-based TC Energy.
REV LNG wants to use that piece of farmland, in the southwestern part of the county, to build a natural gas injection facility, where trucks ferrying natural gas from the dairy farm could unload and inject the gas into the pipeline.
The proposed development includes below-grade pipelines and above-grade decanters, compressors, meters, a filter separator, an emergency generator and a control building.
CEO David Kailbourne said his company has developed more than 30 projects at dairy farms in 10 states. The farms use a highly automated process in which bacteria break down manure in a reactor that helps capture methane, a greenhouse gas, allowing it to be used as renewable fuel.
“You have a farm, that’s our feedstock, the manure we collect from the barn floor,” Kailbourne told the Shelby County Plan Commission during a hearing last month.
The seven-member commission unanimously voted to send the matter to the Shelby County Board of Commissioners with no recommendation after about a dozen neighbors complained about how the project would increase truck traffic on narrow roads and contribute to drainage problems in an area that regularly floods during rainstorms.
“I don’t have a problem with what they’re doing. I have a problem with where they’re putting it,” said David Settles, who owns a farm to the east.
The commissioners could vote on the zoning change later this month—a decision that could tee up the project for construction or send it back to the drawing board.
Meanwhile, other projects are also hitting the headlines. In White County last month, developers of a digester facility the size of three football fields cut a ceremonial ribbon to mark the opening of what they called one of the largest such facilities in the world.
BioTown Biogas, in the town of Reynolds, uses dairy manure, beef manure, food waste and other agricultural waste to make renewable energy. It is expected to produce more than 3 million gallons of fuel and 42 million kilowatt-hours of renewable power a year.
Merrillville-based Northern Indiana Public Service Co. will buy the electric power generated by the facility, while Denver-based United Energy Trading will buy the gas.
“This day represents a tipping point for our region, for the energy industry and for a sustainable future,” Lt. Gov. Suzanne Crouch said at the ribbon cutting. “With the commissioning of this renewable energy facility, BioTown Biogas and the state of Indiana are claiming our position on the leading edge of a new era in clean energy production.”
The tiny town has one stoplight, one gas station, 526 residents and 150,000 pigs. It was once touted as BioTown USA, after former Gov. Mitch Daniels set a goal nearly 20 years ago of making Reynolds energy-self-sufficient, converting manure, corn, soybeans and other agricultural waste into renewable energy sources.
It was part of a 20-year strategy, developed by Indiana’s then-new Department of Agriculture, to harness agricultural resources for economic development.
That self-sufficiency never happened, and the town is as reliant on the grid today as it was two decades ago. But biomass producers are still pushing the concept.
The new operation, BioTown Biogas, is actually an expansion of the earlier operation. It is a joint venture between Indiana-based BioTown Ag and New York-based Green Rock Energy Partners, a private equity firm.
“It’s small in scale compared to the grand scheme of the U.S., but it’s doing its part to kind of help add renewable energy in areas that oftentimes find a challenge to decarbonize,” said Cody Myers, managing partner and co-founder of Green Rock Energy Partners.
He pointed out that interest is growing in Indiana’s renewable natural gas projects.
More Indiana biogas projects
Two years ago, for example, Chicago-based Amp Americas II LLC acquired a dairy renewable natural gas operation from Fair Oaks Farms in northwestern Indiana.
The Fair Oaks operation includes five digesters and two gas processing plants that capture methane from 1.5 million gallons of dairy waste generated by 36,000 cows across nine dairies per day.
Also two years ago, Kinetrex Energy, an Indianapolis-based supplier of liquefied natural gas, was acquired for $310 million by Kinder Morgan Inc., a pipeline and bulk terminal company based in Houston.
The deal included two small-scale, domestic liquefied natural gas production and fueling facilities, as well as a 50% interest in a landfill renewable natural gas facility.
Kinetrex said it was looking for a larger partner to help it increase its presence in renewable natural gas produced from methane emitted from landfills, wastewater treatment plants and agricultural sources as a substitute for diesel fuel. The company owns half of a renewable natural gas operation at the South Side Landfill in Indianapolis and has signed commercial agreements at three additional landfills.
“So you have three different data points, all outside people coming into the state of Indiana to go in fast in renewable natural gas projects,” Myers said.
What all the projects have in common is the use of biomass, organic material from plants and animals. It’s the umbrella term for substances such as cow manure, crop and food waste, landfill waste, wastewater, and firewood.
For most of human history, biomass was the largest source of annual energy consumption around the world. That changed in the mid-1800s, when the Second Industrial Revolution began to replace biomass with fossil fuels such as coal and crude oil.
Now, Indiana is taking steps to make biomass matter again.
The project at Hulsbosch Dairy Farms offers clues into the challenges of turning biomass into energy. The renewable natural gas developer, REV LNG, is struggling to find a way to connect the gas produced at the farm into a pipeline because the farm is so remote.
“In an ideal situation, there would be a natural gas pipeline directly at the farm, or a mile or two away,” Kailbourne, the company’s CEO, told the Shelby County Plan Commission. “But most dairy farms are in rural areas. We don’t have natural gas service in a lot of rural areas.”
So the company has little choice but to take the gas, compress it into trucks and drive to an injection facility dozens of miles away. In this case, the company said it would drive a 53-foot trailer every day to Marietta, about 30 miles away, if the land is rezoned and the company is permitted to build an injection facility.
Kailbourne said his company has signed up only one farm, Hulsbosch, but has a maximum capacity of three farms in a region, each with an anerobic digester. He did not provide a dollar figure for the Indiana operation, only to say it is a “multimillion-dollar project that the company is investing in for 20 years.”
The company has partnered with SJI Utilities Inc., a publicly traded utility based in Folsom, New Jersey, to help finance the projects.