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A California company has arrived in Florida for a kind of reverse gold rush, but it’s not seeking precious metal — it wants manure.
Brightmark Energy out of San Francisco is one of multiple firms soliciting Florida dairy farmers to turn their cow poop lagoons into money-making biogas machines as carbon emission standards tighten to mitigate climate change.
Federal renewable energy policy as well as California law allows fuel companies to reduce their pollution debt by purchasing credits from entities overachieving in carbon reduction efforts.
Improved technology that can spin cow excrement into renewable natural gas in addition to the burgeoning carbon credit market is attracting pioneers — called developers — that build the projects, pay for the manure, then reap the benefits of selling Earth-friendly fuel and credits.
“I know there are several dairy farms being approached and some of them are in different stages of negotiation,” said Okeechobee dairy farmer Woody Larson, whose storied family signed a biogas contract with Brightmark in January. “It’s a growing thing in the dairy industry.”
Larson, whose father Louis “Red” Larson started the dairy in 1947, said more than one company sought the farm’s manure to set up anaerobic digesters that work like a stomach to break down waste to produce renewable natural gas. The family initially narrowed it to three firms.
“We started listening to all of them and kind of thought we couldn’t sort through all of this, but we got it down to one company we wanted to deal with,” Larson said.
Florida has about 80 dairy farms, 124,000 dairy cows and ranks 19th in milk production out of the 50 states.
Brightmark, which was founded in 2016, hopes to partner with more farms in the Sunshine State.
“We love Florida. You have a lot of cows,” said Brightmark Energy President Bob Powell. “This area in the last one to two years has really become an interesting marketplace and we have the State of California to thank.”
California boosted the U.S.’s carbon credit market in 2006 with its Global Warming Solutions Act. The act required the state to reduce its greenhouse gas emissions to 1990 levels by 2020. The Golden State did better than that, meeting its goal in 2016, according to the California Air Resources Board.
Then it raised the stakes. Emissions must be reduced an additional 40 percent by 2030 — a much heavier lift.
To help meet the new goals, California enacted the Low Carbon Fuel Standard (LCFS) that limits the amount of greenhouse gases a fuel company such as Pacific Gas and Electric can put into the atmosphere. If a fuel producer can’t meet its target by using renewable fuels itself, it can buy LCFS credits that are generated by companies exceeding their emission targets. Oregon has a similar credit that launched in 2016.
The National Renewable Fuel Standard Program also aims to reduce carbon emissions from transportation and allows credits, which it calls Renewable Identification Numbers, or RINs, to be sold or traded.
As emission caps tighten, the market for credits increases.
A Financial Times article in November said carbon credit prices had hit record highs as companies that had stockpiled their credits found themselves having to buy additional ones as more restrictive rules came into play.
Transactions in California carbon credits totaled more than $2 billion in 2018, and were up to $2.8 billion last year, according to Graham Noyes, executive director of the Low Carbon Fuels Coalition.
Brightmark will participate in the national and California programs.
“Someone has identified Florida as a place that has a lot of farms and valuable project potential,” said Janet Peace, senior vice president for policy and business strategy at the Center for Climate and Energy Solutions. “To make a bio digester work you have to have a large farm or multiple farms that send manure to you.”
As of December, about 285 anaerobic digesters were being used on livestock farms in the U.S., according to a United States Environmental Protection Agency database.
At least one is operational in Florida. Alliance Dairy in Trenton, west of Gainesville, uses a digester it installed in 2012 to produce electricity for the farm. A 2016 article in the publication BioCycle said Alliance got a $2.1 million federal grant to offset the $8.5 million cost for set up.
Depending on the farm size and number of cows, a renewable natural gas project ranges between $5 million to $25 million, said Sam Wade, director of state regulatory affairs at the Coalition for Renewable Natural Gas.
While the contract with the Larson family in Okeechobee is confidential, it will convert about 230,000 tons of manure per year from 9,900 cows into renewable natural gas.
Brightmark will pay for the construction of anaerobic digesters at four Larson family farms, including two owned by Larson Dairy, Inc. and two owned by JM Larson, Inc. Brightmark gets two products to sell, the gas itself, and the environmental credits. The project is expected to yield the equivalent of 1.3 million gallons of gas per year.
“The project developers are really good at making these things work,” Peace said.
Currently, manure from the Larson farms is treated through a series of lagoons that break it down into a wastewater that is sprayed onto fields that grow grasses to feed the cows.
“We recycle all of it, but now this is another way to capture some of the gas that comes off and produce energy,” Woody Larson said.
Project expected to reduce greenhouse gasses from dairy manure
Brightmark will use two methods to process the manure. One places a tarp over the manure lagoon to trap methane, the other includes using above-ground tanks. The project, which could take two years to complete, is expected to reduce greenhouse gas emissions from the dairy manure at a rate of 57,400 metric tons annually.
Brightmark already has renewable natural gas projects at dairy farms in Yakima County, Wash., Madison, Wisc., and Sumter, S.C.
Powell, Brightmark’s CEO, said Florida is a good state for this kind of industry because its regulations are”protective of the environment, but also pragmatic.”
Brian Nowicki, California Climate Policy Director for the Center for Biological Diversity, said that could be code for fewer legal requirements that improve Brightmark’s profit margin.
“It definitely means cheaper,” Nowicki said. “Where there may be requirements in California for extra environmental reviews, they may not be as strict in other states.”
It’s most certainly faster to do a project in Florida over California, said Mark Stoerman, chief operating officer for Newtrient, an Illinois-based company that consults with dairy farmers.
Where it could take three years for permitting to occur in California, it may only take 18 months to two years in Florida from project announcement to start-up, he said.
“That’s huge to a developer,” said Stoerman, who worked with the Larsons on the deal with Brightmark. “One of the big questions the dairy farms have is ‘Why are these guys wanting to do this?’ ”
While Brightmark invests the money to get the project built with profit on the back end, farmers also benefit in reducing their environmental footprint and selling the manure.
In Florida, farmers may be facing increased scrutiny and monitoring of agriculture runoff as environmental rules are updated, said Gary Ritter, assistant director of government and community affairs for the Florida Farm Bureau.
The South Florida Water Management District is reviewing standards for the watershed that drains into Lake Okeechobee, which includes a huge swath of land north to Orlando.
“The dairy farms have made tremendous strides in how the industry does business,” Ritter said. “But they may be thinking they can’t do anymore on their own the traditional way and the biogas is another avenue.”
This story was produced in partnership with the Florida Climate Reporting Network, a multi-newsroom initiative founded by the Miami Herald, the South Florida Sun Sentinel, The Palm Beach Post, the Orlando Sentinel, WLRN Public Media and the Tampa Bay Times.