Fair Oaks Farms uses a state-of-the-art milking system for its 22,000 cows that produce 2.5 million pounds of milk a day. Photo by Kelly Lafferty Gerber | CNHI News Indiana
Fair Oaks Farms uses a state-of-the-art milking system for its 22,000 cows that produce 2.5 million pounds of milk a day. Photo by Kelly Lafferty Gerber | CNHI News Indiana
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FAIR OAKS — A giant, covered tank filled with around four million gallons of manure sits on the sprawling property at Fair Oaks Farms, one of the nation’s largest dairy operations that milks around 22,000 cows.

Inside the pit, the manure is producing huge amounts of methane, a potent greenhouse gas that has more than 80 times the warming power of carbon dioxide.

But rather than spewing it into the atmosphere, a cutting-edge system called an anaerobic digester is turning the methane into renewable natural gas that heats homes, generates clean electricity and powers semi-trucks.

Mike McCloskey, who heads Fair Oaks Farms and has become a national advocate for reducing agriculture’s carbon footprint, was one of the first in the state to experiment with anaerobic digesters. He installed one 2004, but it ended up a disaster.

“Back then, the technology was poor at best,” he said. “There were a lot of snake-oil salespeople. But jump to today, and the technology is phenomenal.”

Fair Oaks, which has also developed into one of the largest agritourism attractions in the U.S., now uses some of the methane-turned-gas to fuel over 40 milk-hauling semis and a fleet of tour buses producing far less emissions than diesel.

The back of the buses proudly proclaim they are “powered by poo.”

CLIMATE CHANGE AND COW MANURE

Fair Oaks now has five digesters owned and operated by an outside company called DVO that turns every ounce of ozone-eating methane created by the cows’ manure into clean natural gas. The farm earns a cut of the profits from all the gas sold.

More Indiana livestock farmers than ever are following suit. Since 2004, renewable natural gas companies like DVO have built hundreds of digesters in Indiana, according to McCloskey, the chairman of the environmental committee at U.S. Diary. The nonprofit group has a target to make the nation’s diary industry netzero carbon by 2050.

The Environmental Protection Agency only has 11 digester projects listed in Indiana, but the bureau notes the data comes from voluntary sources and doesn’t guarantee the accuracy of that number.

Digester technology is needed now more than ever as the impacts of climate change are becoming more severe. Scientists estimate that methane from livestock manure produces between 11% and 19% of greenhouse gas emissions that contribute to global warming.

And Indiana has a lot of manure. Livestock farms in the state generate approximately 9.5 million tons of it every year, according to estimates from Purdue University. The upside: all that manure could be turned into the equivalent of 10 billion cubic feet of natural gas per year.

That’s enough energy to power more than 51 million average U.S. homes for a day.

PROFITS FROM POOP

A slew of federal regulations and incentives encourage farms and companies to install anaerobic digesters that cut down on methane emissions. The EPA in 2007 launched its Renewable Fuel Standard Program, which requires a certain volume of renewable fuel be used in transportation, home heating oil or jet fuel.

That program led California in 2011 to implement its Low Carbon Fuel Standard initiative, which created a credit market in which anaerobic digester operators from around the country can sell their natural gas to the state to use as a cleaner transportation fuel. Today, California’s credit market is the country’s most lucrative and has been a major reason the digester industry has grown, argued Dana Adams, the legislative policy manager for the Coalition for Renewable Natural Gas, a national nonprofit advocacy group.

“It wasn’t until we had markets that made it more lucrative that developers and investors saw this as a potential industry,” she said.

All the natural gas produced at Fair Oak Farms is sold on California’s credit market, McCloskey noted.

“It really is a great system when you think about it, because it allows us to be able to create this renewable fuel and not to have to store it,” he said.

Today, three states have a low-carbon credit market. Eight more are considering legislation to create one, including Illinois and Michigan.

But in Indiana, there’s little appetite to create a similar kind of credit program or incentivize farmers to install digesters, explained Adams.

The state does operate the Voluntary Clean Energy Portfolio Standard Program, which launched in 2011. It allows regulated electric utilities to qualify for financial incentives if they add certain amounts of clean energy into their generation and supply portfolios. That includes natural gas from digesters.

It’s unclear, however, whether any Indiana utilities have incorporated natural gas from livestock manure into their energy supply.

Adams said states that don’t offer tax incentives or grants are more likely to lose out on any proposed renewable natural gas projects such as large-scale anaerobic digesters.

“Policy and things such as tax exemptions absolutely play a part in companies picking what states are the most desirable for the next project,” she said.

With Michigan and Illinois considering low-carbon credit markets, though, regional pressure could force Indiana lawmakers to take a more serious look how to attract these projects to the state, Adams speculated.

“I wouldn’t be surprised if there is interest,” she said. “I think that legislators in Indiana will also be looking at what other states around them are doing in order to stay competitive.”

THE FUTURE OF DIGESTERS

At Fair Oaks Farm, the anaerobic digester there is doing more than just producing profitable and climate-saving natural gas. The leftover solid waste is being used as nutrientrich fertilizer for crops. A filter captures small fibers that are used for animal bedding.

McCloskey is also partnering with another company to install a new system that will get even more miles out of the farm’s manure. Sedron Technologies’ Varcor system is housed in a massive building on the property and will be operational by the end of the year, he said.

It turns the leftover manure from the digester into clean water for the cows, liquid ammonia-nitrate fertilizer and another kind of fertilizer in pellet form that can be knifed into no-till fields.

“Nothing goes to waste here,” McCloskey said.

Today, only larger farms with around 1,000 cows or more can attract a company to install a digester, he noted. They’re expensive to build and maintain, and the company needs to generate enough natural gas on a long-term contract to make a profit.

Even so, McCloskey’s vision is to see the technology and economics develop far enough that even small dairy farms can install a digester. He said considering the U.S. in just two decades has become an international leader in the industry, it’s possible.

“There’s tremendous value for us to work on reducing these emissions, but you have to make it economical for dairy farmers to participate,” McCloskey said.

Indiana’s policies aren’t currently at the point of helping make digesters lucrative for farmers, he argued, but the state is on the right path that could lead to substantial developments in the future.

In the end, McCloskey argued, digesters are just a part of the overall solution to reduce greenhouse gas emissions in the diary and agriculture industries. It will take states, federal agencies and U.S. farmers all implementing an array of new practices and policies to help curb the impacts of climate change, he explained.

“No matter how much we believe we’re capitalists, we need to understand that this is a serious problem,” McCloskey said. “Everyone’s going have to cooperate and everyone’s going have to pay to solve it.”
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