UK-supermajor BP is set to market renewable natural gas in California on behalf of renewable hydrocarbon company Gevo, as it officially begins injecting RNG into a natural gas pipeline.
The RNG is produced from dairy cow manure supplied by three dairy farms located in Iowa, where 355,000 million British thermal units are expected to be produced annually. Gevo said it anticipates the project will generate $16 to $22 million of EBITDA per year beginning in 2023.
“As this renewable energy supply becomes reliable, the entire circular economy model can grow and prosper," said Chris Ryan, president and chief operating officer of Gevo, adding that it is an example of the circular economy in action.
"Supplying value added animal feed to dairies and to other animal feed operations, capturing the manure, then converting the manure to make RNG for use in the production of transportation fuels, more animal feed, and later, jet fuel when our Net-Zero 1 plant operates," he said.
“In addition to being good for us, California and the world, our dairy partners are also expected to reap benefits from the RNG Project over the long term,” Ryan said.
“The manure digesters are expected to improve the farms’ sustainability and lay the groundwork for more efficient recycling of nutrients and better soil health. It’s important that they share in the value.”
Rapidly expanding market
Companies are continuing to invest in RNG from dairy cow manure, with farms expanding out of California and into the US Midwest.
Financial group Orix USA announced on Tuesday that it has invested in three anaerobic digestion projects that are expected to convert 194 million gallons of dairy manure into RNG.
The projects are in Iowa and South Dakota and are developed by Dynamic Renewables, a US biofuels operator.
The projects are expected to remove 691,000 million Btu of methane from the atmosphere each year.
“As a firm with an ongoing commitment to sustainability, biofuel projects are a great fit for us due to their important role removing methane from the atmosphere,” said Neil Winward, head of Strategic Solutions within Orix USA’s Special Opportunities group.