Dairy farm to produce pipeline-quality biogas
Settled in the Yakima Basin of Washington, George DeRuyter & Sons dairy has been using an anaerobic digester (AD) producing biogas for electric generation. Over the years the production has been at a meager and declining rate, driving Dan DeRuyter and his partners to explore other options. The exploration resulted in a partnership with Promus Energy LLC, a renewable energy development company, to convert GDR’s current AD system into Promus’s integrated digester-based system. The system is designed to profitably convert dairy manure of 3,150 cow equivalents and other organic wastes into revenue-generating products. These products include pipeline-quality renewable natural gas (RNG) for transportation fuel, 3.8 tons per day of biofertilizers, 3.3 tons per day of a high-value crystalized ammonium sulfate fertilizer produced from an ammonia scrubber, a fibrous peat moss replacement at 86 cubic yards per day, and environmental credits.
Dan Evans, president of Promus Energy, sees the system model as the first of a series of projects. “We expect the model if in the right locations to be very attractive to hundreds of dairies across the nation,” Evans said. Dan DeRuyter, partner at George DeRuyter Sons dairy, echoes the thought. “If we can make this work, I can guarantee more dairy farms will be doing it,” DeRuyter said. “This is an exciting way to improve on how we deal with our waste management.”
Promus Energy began to focus on renewable natural gas when Evans and his partner at the company saw natural gas transportation fuels playing a big part in the new energy economy. According to Promus, 200 million gallons of diesel was displaced by natural gas vehicles (NGVs) in 2012, with NGVs poised for rapid growth, estimates range from 3 to 10 billion diesel gallon equivalents (DGE) by 2017. “We can produce renewable natural gas at half the price of diesel even without credits, and with the value of federal and state credits we are able to compete with frack gas in a high value market of transportation fuels,” Evans said. “We knew that we could make a lot more money converting that biogas into renewable natural gas for vehicle fuel instead of electricity.”
The biogas produced by the existing digester will be converted to pipeline grade RNG and transported through a new 3.7 mile pipeline to the Williams Northwest Pipeline. The project will produce 4,300 DGE per day of RNG, the lowest carbon fuel available that qualifies as an advanced biofuel for renewable fuel standard (RFS) credits worth an average of $1.15 DGE over the last three years. It also can be sold anywhere on the pipeline network making it eligible for existing California low carbon fuel standard (LCFS) credits and additional value can be generated by shifting from wholesale pricing of RNG to retail by offering direct fleet fueling as operators convert to natural gas fuels, according to Evans.
“We found Dan and George DeRuyter’s existing digester operation as a perfect fit for us surrounded by other large dairies, which gives us an economy of scale, Evans said. “Putting a pipeline in that area allows us to be connected to the major gas transmission line to give us the opportunity to do multiple dairies in one location with that common piece of expensive infrastructure.”
The project was made a reality by a “timely convergence of multiple factors,” Evans describes in his outline of the project. Presently the market is tipping to natural gas for transportation fuels, as well as the current dairy manure management regulations, commercially mature technology, integrated, multi-product digester system and economic and environmental benefits help the project move forward. One of the economic benefits was from Yakima County, which recently approved a $1.4 million grant for the pipeline, “setting the stage for other large dairies in the area to become follow-on phases,” Evans said.
It is a $12 million project, $2.8 million being the pipeline and interconnect costs, half of which is funded by the Yakima County grant. Evans says the project’s financial close target is the third quarter of this year, with the goal of becoming operational by the second quarter of 2015.
Phase one is set to begin this summer with the second phase estimated to take place at DeRuyter D&A dairy, doubling the outputs and sharing a single gas cleaning unit and pipeline system with the GDR project, but having its own digester, nutrient and fiber recovery system. Other dairies in the area include Dolsen’s Cow Palace, Bosma’s Liberty, H&S Dairies and Spring Canyon Dairy. The pipeline from DeRuyter’s digester will be equipped with access points so the other five dairies in the area can easily connect in the future if they install digesters. The county will own the pipeline and lease it to the dairy.
Evans says the model is driven by three things: the need for low carbon renewable fuel with, the need for dairies to better manage their nutrients to comply with clean water requirements, and the opportunity to make money from waste, which was once something costly to get rid of, into raw materials and an array of other renewable products. “We expect this model is going to have national interest,” Evans said. “We already have dairies and other projects around the country that are waiting to see how this one goes, if it goes as we expect and we get it launched this fall we should be at a place where we have many others wanting to do the same thing.”