ShareThisBy KEVIN DIAZ
Friday, April 27, 2007
On Steve Whitesides' dairy farm in southern Idaho, cow manure used to be just an unavoidable byproduct of doing business.
Now it's a growing part of the business _ and one that's getting the attention of Congress.
Lawmakers are considering tax credits and other subsidies to encourage the use of methane gas, which can be produced from manure.
"We're taking a product and enhancing the value of it," said Whitesides, whose farm near Rupert has the first biogas production facility in Idaho. "It's going to be an addition to what we already do."
Biogas, the latest buzzword in the nation's growing inventory of alternative fuels, has much in common with ethanol, biodiesel and other renewable energy resources. But unlike its "green" counterparts, it doesn't receive a federal subsidy.
A bill that Sens. Larry Craig, R-Idaho, and Ben Nelson, D-Neb., introduced last week would change that. In an effort to spur the development of the fledgling industry, they're proposing a system of farm loans and federal loan guarantees, as well as price supports that work much like those that support large-scale commodity crops such as corn and soybeans.
The capstone of the legislative effort would be a $4.27 tax credit for every million BTUs (British thermal units) of biogas. That would be a boost to Whitesides Dairy and to Intrepid Technology and Resources Inc., the Idaho Falls start-up company that owns the "digester" tanks that decompose Whitesides' manure and capture its methane gas for fuel.
The process is called "anaerobic digestion." It works something like a mechanical stomach, breaking down the manure into gas that can generate energy and byproducts that can be used as fertilizers.
CEO Dennis Keiser, who came out of retirement six years ago in search of new business opportunities, said help from Congress would be a good way to jump-start an industry that has plenty of promise.
"Tax credits are a tremendous benefit if you're making money, which we plan to do," he said.
Intrepid, a publicly traded company that counts the Whitesides family as stockholders, recently negotiated a 15-year deal to sell its "green gas" to Idaho's Intermountain Gas Co.
The gas and the money are just starting to flow on Whitesides' farm, a large commercial dairy that Steve runs with his brother, Brent, and Brent's son Brandon. They recently emerged from the small prototype phase to a commercial operation that can process the waste from 4,500 of the farm's 6,000 cows _ about 250 tons of manure a day.
"That's a lot of manure, isn't it?" said Keiser, computing the possibilities on a calculator.
He translates it into 210 cubic feet of methane gas a day, enough gas in a year to heat 2,000 average-size homes in Idaho.
And that's just one plant. Intrepid has another in the works in Wendell, Idaho.
The New Hampshire-based Environmental Power Corp., a national leader in biogas development, estimates that the nation's dairy, swine and beef farms could produce more than 340 million BTUs of gas a year. That's enough to replace about 2.5 billion gallons of heating oil, or about 20 percent of U.S. heating oil consumption.
Until now, much of the waste that Whitesides' cows produced has been used as fertilizer.
That not only takes up grazing space, but also builds up a lot of nitrogen and phosphorus in the soil, which isn't good.
Plus, Whitesides said, "There was no energy benefit."
"We think there's a need for it," said Albert Morales, executive vice president of Environmental Power, which has biogas plants in Wisconsin, Texas and California. "If it's developed, it could provide a significant amount of energy for our country."
Morales sees big commercial possibilities for biogas, and the proposed federal subsidies, he said, would enable it to compete with other renewable fuels for investment dollars on a "level playing field."
Idaho Sen. Craig, who's visited Whitesides Dairy, endorses that view. "You create a new market, help control waste, keep our environment clean and create a new revenue stream for farmers," he said.
Craig's and Nelson's bill comes amid a torrent of new energy proposals in Congress as lawmakers grapple with increasingly expensive and uncertain supplies of imported fossil fuels.
"We're at a stage right now where we're trying to figure out what the next best, great energy technologies are going to be," said Frank Maisano, a Washington-based energy industry spokesman. "There's an aggressive effort to find any technology that will allow us to reduce emissions and improve efficiency."
With more than 152 million farm animals in the U.S. producing some 2 billion tons of manure a year, biogas holds the promise of a national waste solution as well as an energy source.
"It's there," said Lloyd Knight of the Idaho Cattle Association. "Why not tap it?"
(Contact Kevin Diaz at kdiaz(at)mcclatchydc.com.)
