On an early August afternoon at Pinnacle Dairy, a farm located near the middle of California’s long Central Valley, 1,300 Jersey cows idle in the shade of open-air barns. Above them whir fans the size of satellites, circulating a breeze as the temperature pushes 100F (38C). Underfoot, a wet layer of feces emits a thick stench that hangs in the air. Just a tad unpleasant, the smell represents a potential goldmine.
The energy industry is transforming mounds of manure into a lucrative “carbon negative fuel” capable of powering everything from municipal buses to cargo trucks. To do so, it’s turning to dairy farms, which offer a reliable, long-term supply of the material. Pinnacle is just one of hundreds across the state that have recently sold the rights to their manure to energy producers.
Communities around the world have long generated electricity from waste, but the past few years have seen a surge in public and private investment into poop-to-energy infrastructure in the US. Though so far concentrated in states with dominant dairy sectors, like California, Wisconsin and New York, Biden’s landmark climate law passed last summer stands to unleash additional billions to support further development nationwide. The sector’s boosters describe it as an elegant way to cut emissions from both livestock and transport; but critics worry that the nascent industry could raise more issues than it resolves by entrenching environmentally harmful practices.
Animal agriculture is the nation’s single biggest source of methane, a greenhouse gas that climate scientists call a “super pollutant” due to its high short-term warming potential. The gas is released from animals when they burp, and through the decomposition of manure when collected in open-air ponds, a common livestock industry practice.
But those emissions are also a potential moneymaker. Methane from animal waste can be purified into a product virtually indistinguishable from fossil fuel-based natural gas. Marketed as renewable natural gas (RNG), it has a unique profit-making edge: in addition to revenue from the sale of the gas itself, energy companies can now also earn handsome environmental subsidies for their role in keeping methane out of the atmosphere.
In early 2020, an energy firm called Aemetis inked a 20-year contract to capture methane from Pinnacle’s manure and turn it into RNG. Aemetis installed a digester on the dairy, which collects the farm’s waste in a concrete-lined pool and captures the gas it releases. The company plans to upgrade it into renewable natural gas at its nearby refining facility, before transporting it to gas stations across the state.
“This is something that’s going to be on every dairy in the future,” said Jessica Cardoso, project coordinator at Aemetis.
Cardoso was raised on a dairy farm in California but, growing up, had no idea about the potential of cow manure. She predicts that natural gas and dairy production will soon go hand in hand.
Over the past few years, energy giants like Shell, BP and Chevron have all announced similar dairy industry partnerships. In California, the country’s top dairy-producing state, officials estimated that over a hundred publicly supported manure digesters were slated to go online by the end of last year. Less than a decade earlier, in comparison, just six such projects were in the works. Nationally, the number of planned and operational RNG production facilities at livestock and agricultural operations jumped by over 36% in 2021 compared to the year prior.
But some watchers of the biogas boom worry that monetizing avoided emissions could backfire. Environmental justice and animal welfare groups are campaigning against subsidies for the industry and raising questions about the challenges posed by digester technology. For one, digesters can and do leak. They also only mitigate about half of the methane problem posed by the dairy industry. While digesters capture emissions from manure, they do nothing to resolve the issue of emissions from cow burps, which, in California, produce roughly the same amount of methane emissions as manure.
But the heart of their concerns is the question about whether or not renewable natural gas generated from dairy farms is truly carbon negative. The answer depends on how you tell the story of its production.
Under California’s clean fuels policies, energy producers must reduce the carbon footprint of transportation fuel every year. Where fuels – such as gasoline and diesel – exceed the targets, producers have to buy credits to offset their excess emissions. Producers whose fuels are deemed to have extremely low carbon footprints can generate and sell valuable credits for every ton of emissions they help avoid.
The biggest winner under this system is RNG from dairy farms, which consistently receives not only the lowest carbon footprint scores across all fuel types, but also some of the only negative ones. Carbon-negative fuels are considered to remove greenhouse gases from the atmosphere.
It’s on this flattering grading system that energy producers like Aemetis can earn avoided methane credits for every unit of energy produced from cow manure. The more they produce, the higher the payoffs.
When assigning a carbon footprint to RNG fuel, regulators don’t factor in any of the emissions associated with producing manure in the first place, such as the transport and raising of animals. This is not the case for many other renewable fuels, whose assigned carbon footprints take into account all greenhouse gases released during their production.
This discrepancy is rooted in the assumption that manure is not produced deliberately; it is an inevitable byproduct of the dairy industry. So, the thinking goes, when energy companies intervene to capture methane and convert it into fuel, that process results in a net reduction in emissions.
But not everyone sees it this way. Some agricultural economists point out that existing climate policies have turned manure into a revenue source in and of itself, similar to cheese or butter. By giving manure its own inherent value, climate regulators have turned it from waste into a commodity.
“Once you pay a cattle producer for their manure, you are effectively subsidizing the production of that manure,” said Richard Plevin, consultant and former researcher at the University of California, Berkeley. “You’ve altered the economics of cattle production.”
Some climate researchers worry that incentives for methane capture have become so generous that they may increase manure production in the long run. Taken to an extreme, some worry dairy farms could end up turning into feces farms that happen to also produce dairy.
Kevin Fingerman, an associate professor on energy and climate at the California State Polytechnic University, Humboldt, published a study in 2022 – commissioned by science advocacy group, Union of Concerned Scientists – that scrutinized the risk of these unintended consequences in California.
He found that revenue from methane capture alone could, in some cases, make up almost 40% of total profits for mid- and large-sized dairy farms in California. When revenue from methane capture begins to eclipse that from dairy production itself, the study warned, it could end up incentivizing farms to increase herd sizes to produce more manure.
The study only looked at California’s clean fuels policies, but most dairy RNG producers can also profit off a parallel federal program – the Renewable Fuel Standard, which requires transportation fuel producers to meet certain renewable fuel targets, either through producing it themselves, or buying credits off those who do. Benefiting from both gives energy producers a valuable financial cushion.
Were California climate regulators to recognize manure as an intentionally produced material, like corn grown for ethanol, then its carbon intensity score would increase significantly to reflect everything from the greenhouse gases involved with producing feed to the emissions released from cow burps.
The California Air Resources Board (Carb), which oversees the state’s clean fuels programs, defended its approach. Dairy digesters are responsible for a significant share of methane emission reductions in the livestock sector, Dave Clegern, public information officer for the agency pointed out. He added: “We do not have any evidence that shows the [policy] is causing a higher amount of manure to be produced in California.” (One reason there may not be any such evidence yet is because the RNG industry is still in the early stages of development.)
At the same time, the agency has indicated an awareness that its subsidies might be overly generous. Last November, it sought feedback on the future of its clean fuel policies, including the possibility of eliminating avoided methane credits for dairy-based RNG by 2040. The suggestion sparked vocal outcry from energy industry representatives, who warned that it would unravel the sector’s progress toward climate targets. In contrast, environmental justice groups welcomed such a phaseout, though some like the Union of Concerned Scientists worried it might be “too little too late”.
The sharply divided response underscored the ongoing tension that arises when climate solutions attempt to balance environmental benefits with industry bottom lines.
Looking ahead to 2023, some policy analysts are skeptical that the agency will significantly overhaul its own clean fuel policies. “There are so many vested interests,” Plevin said. “There are billions of dollars on the line if the numbers are changed.”
It also may not matter. Carb’s policies have already been replicated by other regions and countries, setting off a frenzy for more manure-to-energy projects that now extends beyond California.
Back in the Golden state, energy producers are still moving forward with digester development. Aemetis, for example, is in the midst of building out a biogas labyrinth in its corner of California’s Central Valley. The company plans to construct digesters on dozens more dairy farms over the next few years, all daisy chained together and connected to HQ via a private pipeline.
When I visited Pinnacle Dairy in August, the farm’s digester was still under construction, and its manure ponds were uncovered. Before we left, I leaned over to get a closer look at one of them, watching as tiny gas bubbles rose to the murky brown surface. Some of them clumped together and others floated alone. Eventually they all popped, releasing the methane into the hot afternoon air.
This story was reported with support from the UC Berkeley-11th Hour Food and Farming Journalism Fellowship
