Roeslein’s Perfect Fit

A biogas project in northwestern Missouri is leveraging the fortuitous colocation of hog production assets and a natural gas pipeline to speed the project toward commercial completion.
By Tim Portz | November 21, 2015

The Ruckman complex of Smithfield Foods Hog Division in Missouri is just one of nine different hog production sites that together make up the largest and most ambitious swine waste-utilizing biogas project ever undertaken. The site, just northwest of Albany, Missouri, features nearly 70 individual barns, and at any given time, holds nearly 60,000 hogs. Their waste flows into nine different lagoons, each 20 to 35 feet deep in the center and capable of holding nearly 15 million gallons of manure. Seven of the lagoons have already been covered in black, 80-millimeter, high-density polyethylene (HDPE), and the final two lagoons were scheduled to be covered by press time. While impressive in size and scope, it is the infrastructure that runs just underneath the complex that project developer, builder, owner and operator Roeslein Alternative Energy is confident will make the difference in the project’s long-term viability.  While it didn’t initially figure in to Roeslein’s development plans, the ANR natural gas pipeline running underneath the Ruckman complex has emerged as one of the projects most important assets.

“This was not our original concept,” Chris Roach, director at RAE, tells Biomass Magazine. Instead, RAE planned on cleaning the biogas, compressing it, moving it by truck and decompressing it. “After a lot of analysis, we decided that we didn’t want to do that,” Roach says. Not only was the original concept too energy intensive for RAE’s liking, introducing high amounts of truck traffic to the area’s rural roads wasn’t appealing.

Instead, RAE went to work on connecting the farms by pipeline. “Our initial investigation had us installing over 100 miles of pipe to connect all of the farms,” says Roach. “But once we got with some real installers and down to the real cost of the pipe system—what is needed to do it not only safely but cost-effectively—we essentially cut the cost of it in half.  That was a big advancement in the development of the project concept.”

This discovery, and the decision to utilize a pipeline to move produced biogas to market, came after some of the other sites had already gone through the lagoon-covering step that Ruckman is now finishing up. “Frankly, if we had to do it all over again, we’d have just done Ruckman and gotten it operational,” says Roach.

The ANR pipeline, a portion of the larger TransCanada pipeline system, includes over 9,000 miles of pipe and connects natural gas supply basins throughout the Midwest, giving RAE the market access that its earlier compression and trucking solution simply couldn’t. 

Without this market access, RAE’s first offtake partner wouldn’t have been possible. Just over 1,000 miles east-southeast of Albany, a combined-cycle natural gas plant owned by Duke Energy sits alongside the Dan River. It is there that Duke Energy will burn a portion of RAE’s produced biogas in its turbines to comply with a North Carolina mandate to derive 0.2 percent of its retail power sales from swine waste. While the mandate was meant to incentivize renewable energy systems like the Ruckman facility in North Carolina, so far, biogas produced from hog waste is not available within the state.

Landing Duke Energy as its first customer gave RAE something many other biogas developers struggle to find, a long-term offtake agreement. These stable, guaranteed revenues provide lenders with the certainty they need to loan developers the capital required to fully construct projects with costs sometimes approaching $100 million. Duke Energy’s needs will consume one-third of the project’s biogas, and RAE is working to identify other markets and customers. Roach indicates that RAE is looking at the market opportunity created by allowing renewable natural gas transportation fuels to qualify as a renewable fuel, earning D3 renewable identification numbers (RINs). In addition, Roach says RAE is looking into California for opportunities created by that state’s Low Carbon Fuel Standard. “It’s important for us to  make the most of  the current market opportunities and also lock in some long-term contracts so we can keep our debt partners assured that we’ll be able to meet our debt service requirements moving forward,” he says.

For now, RAE is more than happy to take a stepwise, incremental approach on the project, and the company plans to be ready to inject clean, pipeline-quality renewable biogas into the waiting ANR pipeline, just below Smithfield’s pigs’ feet, in the summer of 2016.

Authors: Tim Portz
Executive Editor, Biomass Magazine
[email protected]