Pursuing Profits From Prodigious Piles Of Poop

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Methane is much in the news these days, as groups like Natural Allies are hiring Democratic luminaries to pitch the wonders of so-called “natural gas” — a climate-killing fossil fuel that harms the environment when it is released into the atmosphere and when it is burned. To offset the negative aspects of methane, fossil fuel companies are working overtime to capture the methane created by cow poop — the prodigious byproduct of the world’s nearly 1 billion bovines. They have a catchy new name for it — renewable natural gas or RNG — and suggest it is more climate friendly than the stuff that comes out of the ground.

Poop power is real. In rural China, people raise chickens beneath their homes. Methane from chicken excrement rises and is captured by a metal shield under the floor. From there it is piped to the kitchen where it is used as fuel for the cook stove. Much the same principle is now being applied to the piles of poop that accumulate on farms where cows are raised, but on a much larger scale.

The Methane Game

According to The Guardian, methane from animal waste can be purified into a product virtually indistinguishable from fossil fuel 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 signed a 20-year contract to capture methane from cow manure with Pinnacle Farm in California’s Central Valley and turn it into RNG. Aemetis installed a digester at the dairy that 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.

Over the past few years, Shell, BP, and Chevron have all announced similar deals within the dairy industry. In California, the country’s top dairy producing state, officials estimate 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.

Environmental justice and animal welfare groups are campaigning against subsidies for the industry and raising questions about the challenges posed by digester technology. Digesters can and do leak and methane leaks are a huge problem for fossil fuel companies — and the environment. Methane is a much more powerful greenhouse gas than carbon dioxide.

Digesters 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.

Is RNG Really Carbon Negative?

Of course, the real question is, does using methane captured from cow droppings really help protect the Earth from overheating? Methane is methane, isn’t it? That depends on who you ask. For those who stand to profit, RNG is a miracle fuel. Others aren’t so sure.

Under California’s clean fuels policies, energy producers must reduce the carbon footprint of transportation fuel every year. If they miss the targets, they have to buy credits to offset their excess emissions. On the other hand, if they produce fuels deemed to have a low carbon footprint, they can sell credits to those who exceed the targets.

Like all such regulatory schemes, the devil is in how the rules of the game are set. There is always the danger that the rules will encourage people to chase the profits those credits make possible rather than pursuing the ultimate goal, which is saving the planet from a climate disaster.

The Guardian says the biggest winner in the system California has created is RNG from dairy farms. It consistently receives not only the lowest carbon footprint scores across all fuel types, but also some of the only negative scores. Carbon negative fuels are considered to remove greenhouse gases from the atmosphere. As the rules are now, 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, but is an inevitable byproduct of the dairy industry. Therefore, when energy companies intervene to capture methane and convert it into fuel, the process results in a net reduction in emissions.

Some agricultural economists see things differently. They point out that existing climate policies have turned manure into a revenue source 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.” Taken to an extreme, some climate advocates worry that dairy farms could end up turning into feces farms that happen to also produce dairy.

At the request of the Union of Concerned Scientists, Kevin Fingerman, an associate professor on energy and climate at the California State Polytechnic University, Humboldt, published a study entitled Manure Biomethane Analysis last year that took a closer look at 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 the Golden State. 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.

If California climate regulators recognized 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.

Playing The Game Of Regulatory Roulette

CleanTechnica readers may be hearing a faint echo at this point. As part of a deal the auto industry foisted off on the government after the economic crisis of 2008, the EPA adopted something called the “footprint rule,” which allowed the manufacturers to skate on some of the corporate average emissions requirements if they produced larger, heavier vehicles.

Here’s how the game is played. The government gets to take credit for enforcing stricter fuel economy standards. The industry gets to complain — loudly — about how burdensome and onerous those requirements are. Meantime, they simply start building larger, heavier vehicles that allow them to skirt around the rules. The result is, the average size of light duty vehicles goes up to the point where the manufacturers stop producing small, efficient family cars at all, meaning no one is making the cars that are meant to lower overall fuel economy and therefore greenhouse gas emissions.

Look around you today. Mostly what you see are large SUVs and pickup trucks on the road. The average fuel economy of new cars sold in America has ticked up, but not nearly as much as the regulators thought it would when they let the industry talk them into this silly game. If people complain the average price of a new car today is too high, that is largely because the less expensive cars have disappeared from the marketplace, thanks in large part to the “footprint rule.”

For industry, regulations are a game they play, one that always has the optimization of profits as the principal goal. Does it make any sense for RNG producers to be allowed to ignore the entire chain of events that takes place to create those mountains of manure in the first place? Of course not. But that’s how the rules of the game were written. Can you blame the fossil fuel companies for taking advantage of the rules? Not really. It’s like Willie Sutton, the infamous bank robber in the 1930s who told the FBI that he robbed banks “because that’s where the money is.”

Poop Policies Have Consequences

As a result of the UCS report, regulators in California are rethinking the rules, but that has brought a furious backlash from the fossil fuel companies. Most observers doubt any significant changes will occur. Richard Plevin tells The Guardian, “There are so many vested interests. There are billions of dollars on the line if the numbers are changed.”

But there’s more to this story. Just as California’s efforts to control exhaust emissions have been the model for similar actions by other states and other nations, the RNG regulations will have consequences at the federal level, where billions more dollars are in play for those who produce cleaner fuels. They also are being incorporated into similar regulatory schemes in other countries, Canada being one of them.

The Takeaway

The basis for the “footprint rule” was that farmers and businesses need bigger trucks to keep the wheels of commerce turning. But the upshot is that all vehicles got bigger as a result. Currently the federal EV rules provide for a $40,000 tax credit for vehicles that weigh more than 14,000 pounds. You know and I know that someone, somewhere in the auto industry is already thinking about producing such monstrosities for personal transportation. It’s inevitable.

Here the underlying assumption is that manure happens, so why not take advantage of it? The obvious answer is the system created by the California regulators ignores the embedded emissions in the new “brown gold” known politely as manure. As a result, the fossil fuel companies, instead of jumping into renewables with both feet, will once again sell more climate killing methane while telling the public how it is a bridge fuel, a “get me over” solution for humanity that allows them to keep raking it obscene profits. Isn’t capitalism grand?