Cooperative Approaches to Facilitate the Use of Anaerobic Digesters on Dairy Farms

Cooperative Approaches to Facilitate the Use of Anaerobic Digesters on Dairy Farms Carolyn Liebrand USDA Rural Development Biofuels: Prospects and Challenges in Development and Policy Southern Association of Agricultural Scientists and Southern Rural Sociology Association Annual meeting, February 2, 2009 This presentation is based on the forthcoming RBS Research Report 217, Cooperative Approaches for Implementation of Dairy Manure Digesters to be published circa Jan/Feb 2009 by USDA/Rural Business-Cooperative Service.

What is Anaerobic Digestion? Manure + Oxygen-limiting environment = Biologically stabilized effluent and Methane, Carbon Dioxide, Hydrogen sulfide

Biologically stabilized effluent • Reduced Odor • Avoided lawsuits • Regulatory compliance • Improved nutrient quality • Avoided fertilizer purchases • Sales • Reduced pathogens; weed see viability • Avoided herbicide purchases • Easier to handle • Lower energy use (revenues/avoided costs)

Biologically stabilized effluent • Separated solids • Cow bedding (sales/avoided purchases) • Gardening products (sales) • Liquid fertilizer (sales/avoided purchases) (revenues/avoided costs)

Biogas • Flare • Fuel for farm equipment • Power a generator for electricity • Cogeneration: heat/hot water • Mobile engines: remove H2S, pressurize • Pipeline: clean and condition • Sell carbon credits (revenues/avoided costs)

Biogas • “Global Warming Potential” (1 CH4~ 21 CO2) • Qualified to receive carbon credit if: • Net reduction of carbon emissions from base period • Measureable and verifiable • Clear ownership of claim • CCX • 1 contract = 100 MT of CO2-e ; <100 contracts need aggregator • One cow represents 5 metric tons/year CO2-e(methane from AD) • ~ 20 cows/contract; < 2,000 cows need aggregator

But! • Only 95 AD projects on dairy farms in 19 states (according to NRCS, 2007) • Less than 0.2 % of licensed dairy farms

Obstacles to adoption of anaerobic digesters for dairy manure • Anaerobic digester • Capital cost • Limited number of providers • Lack of information • Adapting digester to exiting manure system • Additional demands on operator time and skill

Obstacles to adoption of anaerobic digesters for dairy manure • Capturing value • low rates paid by utilities • interconnection issues • inability to utilize effluent on farm • Bedding, fertilizer • inability to market products from effluent • Bedding, fertilizer, soil amendment, carbon credits, gas

Possible Cooperative Roles • Negotiation • Prices and terms with utilities • Digester providers • Firms with organic waste

Possible Cooperative Roles • Services • Technical assistance • Digester management • Back-up equipment • Manure hauling • Financial

Possible Cooperative Roles • Carbon Credit trading • Inform members of the opportunity • Engage brokers or act as broker • Engage aggregators or act as an aggregator (pooling) • Joint venture with other co-ops for aggregator services • Engage or have verifiers on staff

Possible Cooperative Roles • Marketing • Green electricity • Digested solids; liquid effluent • Centralized digester • Centralized gas plant

Summary • Limited function  - ? - multiple functions • Cooperation—more efficient/effective than each adopter “going it alone” ? • Benefits of acting cooperatively > costs?

Questions/Comments? Carolyn.Liebrand@wdc.usda.gov 202/690-1414

Cooperative Approaches to Facilitate the Use of Anaerobic Digesters on Dairy Farms