Biogas: what options for Slurry power in the US?

Issue 5 and Volume 11.

Intensive animal farming produces large amounts of waste – about 75 kg per cow, per day – that is both a source of methane pollution and a potential groundwater pollutant. Using anaerobic digestion to treat animal slurry can provide a solution to this problem, as well as renewable energy. Germany has 2500 farms producing power from on-farm plants, so what would it take for the US to follow suit? Brent A. Gloy looks at the technology, the issues, and the way forward.

The production of renewable energy from livestock dung, or slurry, is particularly appealing for a number of factors. Rising energy prices, rising fertilizer prices, and incentives for renewable energy production have increased the value of outputs from livestock waste-to-energy systems. Additionally, intensive farming operations (known in the US as confined animal feeding operations or CAFOs) have come under increasing regulatory scrutiny in regard to waste treatment. Biogas production generally results in improved treatment of agricultural wastes, reducing the environmental impacts associated with CAFOs. The US Environmental Protection Agency estimates that 7000 US cattle or pig farms could generate electricity on site, and reduce this sector’s methane emissions by up to 66% from current levels.

Anaerobic digestion of livestock slurry

Anaerobic digestion (AD) is a natural biological process whereby bacteria convert organic materials to biogas, which consists primarily of methane (CH4) and carbon dioxide (CO2). The methane content of biogas from livestock wastes varies but is typically 55%-65%. The gas also contains a variety of other compounds, most importantly hydrogen sulphide (H2S). Hydrogen sulphide, which is corrosive, and other impurities can complicate the use of biogas, by significantly increasing maintenance costs when used in combustion engines. Although a variety of low-cost applications can remove some of the hydrogen sulphide, more thorough cleaning is necessary in other applications. Additionally, the low BTU content of the gas necessitates cleaning and compression in order to substitute directly for natural gas. These processes are all capital intensive and reduce the net energy yield from anaerobic digestion.

Anaerobic digestion takes place in airtight containers, ranging from covered waste lagoons to upright steel tanks. The nature of these containers varies depending upon the specific application, and the size of the waste containers depends upon the desired amount of conversion of organic substrates to biogas and the time that the waste remains in the container. The amount of time that the waste spends in the container greatly increases the size requirements for the system. The greater the storage requirements, the greater the capital required to build the system. Because storage area is dependent upon the volume of the container and its cost is generally proportional to the surface area, there are often considerable economies of scale present in the construction of larger containers.

Anaerobic digestion can take place at a variety of temperatures. In general, higher temperatures result in faster conversion to biogas, usually requiring less storage space than lower temperature systems. However, higher-temperature systems generally require more intensive management. Other approaches to reducing the storage space and improving yield include mixing the waste in the containers, adding additional bacteria, or including media to increase the surface area for the bacteria.

The biogas produced has a variety of potential uses, most commonly on-farm use in boilers and other heat systems and the generation of electricity, usually using internal combustion engines. The electricity not needed on-farm can be sold onto the electrical grid through net-metering agreements, depending on location (Germany’s feed-in arrangement pays farmers per kilowatt hour fed into the grid). On-site applications generally require minimal amounts of cleaning and no additional compression of the gas. Yet biogas can also be cleaned to higher standards required for deployment in natural gas networks or, less commonly, cleaned and compressed to form compressed bio-methane for use as a transportation fuel.

Estimating the potential amount of livestock waste available for AD is a difficult process. However, the waste generally has a relatively high moisture content, making AD attractive as no pre-drying is needed, this alone is not sufficient to ensure that AD is appropriate for treating livestock waste. A variety of features often associated with livestock waste can also make AD difficult. The presence of large amounts of inorganic bedding materials such as sand is an example. It is difficult to remove sand completely from the waste stream and it will often settle out in the digestion process, requiring the AD system to be cleaned and halting gas production for an unacceptable period of time. Likewise, the use of certain feed additives and vaccines can inhibit the production of the methanogenic bacteria.

Setting these specific concerns aside, confined livestock operations are attractive candidates for AD because they generally consist of large concentrations of livestock. CAFOs that raise livestock in covered buildings or on concrete are the most attractive candidates for AD as this waste contains smaller amounts of impurities such as dirt and soil. Also the waste is consistently collected before the organic compounds begin to break down. Dairy and swine operations are most frequently considered appropriate for AD systems, and some poultry operations may be good candidates. Beef finishing operations typically operate in outdoor dirt lots which, in the case of AD, raise concerns for collection and quality of the manure streams. However, some beef operations are conducted on concrete and could likely support an AD system.

The US Environmental Protection Agency (EPA) estimates that there are approximately 2623 dairies and 4281 swine operations that are candidates for electricity conversion from animal manure in the United States, and that anaerobic digestion systems on these operations would reduce methane emissions for these two industries by up to 66% from current levels.

At present, AD is not commonly practised in either of these industries in the US. In 2002, the US EPA AgStar programme estimated that there were 40 digesters operating on livestock operation (AgStar Digest, Winter 2002). By 2006 the number of operating digesters in the US had increased to 97 with an additional 80 systems in the planning stages (AgStar Digest, Winter 2006).

Yet while AD is still in its infancy in the US, the industry is well developed in parts of Europe where it has received considerable incentives. For instance, Austria has over 350 on-farm digesters and Germany has over 2500 such biogas plants installed.

Attractiveness of anaerobic digestion

Anaerobic digestion systems have a number of attractive features for CAFOs — including the reduction of odours associated with livestock waste, the improved handling of nutrients associated with livestock waste, and the production of renewable energy.

Both the dairy and swine industries have shown strong tendencies toward larger operations, and some industry estimates suggest that the scale of production will continue to increase. For instance, the US Department of Agriculture (USDA) reports that farms with fewer than 200 cows accounted for 66.3% of milk production in 1993 whereas by 2006 these small farms accounted for only 33% of milk production. Likewise, the number of farms with more than 2000 cows grew from 220 in 1998 to 573 in 2006.

Although CAFOs seem likely to expand, waste treatment is one factor that may limit their growth. Large CAFOs produce large amounts of wastes. A typical lactating dairy cow will produce up to 150 pounds (approximately 70 kg) of manure and urine per day. It is expensive to handle and dispose of this waste, which contains large amounts of nutrients that can cause pollution if it enters ground or surface water. Environmental regulations require that the nutrients contained in the waste be distributed over large areas of cropland. Because the nutrient concentrations are relatively dilute and the manure is of high moisture content, transportation of manure off-site can become cost-prohibitive for large livestock operations. These wastes produce strong odours and potential air pollution, which often evokes strong opposition to CAFO location in many communities. Table 1, right, shows the amounts of waste and nutrients produced by 5000 lactating dairy cows, though does not quantify the associated odours. (There is anecdotal evidence that many communities now making dairy construction permits contingent upon a digester being included in the construction.)

The next key benefit of the digester system is its ability to produce renewable energy. The production of energy from manure results in the destruction of methane, a potent greenhouse gas. Likewise, the energy created by the process offsets energy that would otherwise be produced using fossil fuels.

Figure 2, on page 150, shows that energy prices have undergone a significant increase in recent years, which has greatly increased the value of biogas that can be produced by an AD system. Energy prices have a strong influence on commercial fertilizer prices. Figure 3, page 151, shows the price of anhydrous ammonia, phosphate, and potassium (NPK) fertilizers. Like energy prices, these values have increased substantially in recent years.

ecause livestock waste contains large amounts of nutrients, they can offset some of the need for commercial fertilizers — yet many CAFOs find it difficult to distribute nutrients to cropland economically, so are typically treated as a net cost. In other words, the costs of disposal are typically thought to exceed the value of the nutrients. As prices of the nutrients rise, the value of recycling these nutrients is expected to increase.

To improve the economics of recycling the nutrients one must either use the manure close to where it is produced, remove some of its water content, and/or concentrate the nutrients into a more stable form. These types of activities (aside from spreading close to the source) generally require technology. As a result, they will also exhibit economies of scale. While an AD system is not needed to recycle the nutrients, it fits nicely with many systems that can more effectively recycle nutrients. Additionally, some of the energy produced by the system may be utilized by these processing activities.

The production of energy from AD systems is also attractive because it is a stable and reliable source of fuel. Its consistent supply and ease of collection at the site of production overcomes collection and transportation issues often associated with biomass-based energy solutions. Table 2, page 150, shows the value of the energy content for dairy manure. Under these assumptions, the value is quite low, making transportation of raw manure (11% volatile solid content) to a digester cost prohibitive, if one only considers the energy value of the manure.

The relatively low energy value of manure indicates that it must undergo a separation process on site, be transported very short distances, or receive a tipping fee. However, it is also important to point out that many other agricultural and waste materials have much higher energy contents. In some cases, these materials are difficult to digest on their own and the manure may serve as an effective buffering agent. The relatively low energy content of manure is just one of the challenges facing the development of a large biogas industry.

A Biogas Case Study

The key factors that are likely to give rise to economically viable systems include:

  1. The system must be large enough to support intensive management and the technology required for high levels of gas production

  2. Favourable energy off-take agreements

  3. The ability to co-digest non-manure waste streams.

Anaerobic digestion is a natural biological process, and if a system is managed correctly, it will produce more biogas than poorly managed systems. Performance can be maximized by various means, such as maintaining an environment in the digester that optimizes the output of methanogenic bacteria. Individuals with the proper chemical and engineering training or digester experience are more likely to be able to effectively manage this process. Additionally, the use of process control technology can facilitate effective management of the system. Many systems simply cannot produce enough energy to justify these expenditures.

The ability to capture favourable pricing for energy production is also central to the economics of the system. In the US, or other regions without a feed-in system, the best market for most energy production is simply to offset any retail purchases of energy. However, most large-scale biogas production systems will be capable of producing more energy than can be consumed on the livestock operation, so it is necessary to identify and capture additional markets for energy. In some cases, a nearby industrial user may be able to utilize biogas. In other cases, electrical generation presents a viable option. Some utilities are more willing to negotiate with producers than others. The pricing of the environmental attributes of biogas is also complicated. In short, professional marketers are much more likely to have success in identifying favourable markets for energy and the environmental attributes of biogas production.

Although large livestock operations can produce considerable amounts of waste, its low energy content means the economics of an application are greatly enhanced if the facility can process other waste streams, such as food processing wastes, slaughterhouse wastes, or by-products from ethanol or biodiesel production. In some cases, the energy value of these wastes will be sufficient to compensate for transportation expenses. In others, the biogas facility may receive a fee for processing wastes that are typically disposed of in municipal waste treatment facilities.

The following example illustrates the economics associated with a potential biogas production system in West Central Iowa (Table 3). The associated livestock production system consists of 11,000 dairy cows. Approximately 9600 of these cows are lactating and the rest are dry. The estimated manure production at the site is 284,985 US tons. Based upon the assumptions in Table 2, the manure alone should generate approximately US$1.69 million. There are a variety of ways to evaluate the potential economic feasibility of such a system. If one considers a 10-year time horizon and a 15% discount rate, the present value of this revenue stream is approximately $8.5 million. If the operating costs are $400,000 the present value of the expense stream is approximately $2 million. This leaves approximately $6.5 for capital investment or $589 per cow. Current costs for building a digester of this scale are likely to exceed $589 per cow. As a result it is necessary to realize improved pricing for the energy and environmental attributes, achieve lower operating costs, obtain additional waste materials capable of producing higher gas yields, and/or producing tipping fees.

The challenges of biogas

To develop a vibrant biogas industry a number of challenges must be overcome. These include the site-specific nature of biogas production, the development of flexible and appropriate technology, the development of markets for energy and related products, and the establishment of sound policy related to biogas production.

Site-specific nature of production

The most serious challenge to biogas production arises from the site-specific nature of its production. Combined with the considerable economies of scale and management associated with biogas production, it is evident that large livestock production sites are best suited for biogas production. Such sites often have their own unique production characteristics including the housing style, manure collection system, and production practices. Sites that collect manure frequently, do not use inorganic bedding materials such as sand, and avoid the use of vaccines and feed additives that can inhibit methane production are better candidates for AD systems.

While good candidates for AD systems can be found across a variety of geographic locations, many of these locations do not possess favourable energy sale alternatives. Currently, the electric power market is the primary market for energy produced by AD systems, with the terms of sale dependent upon the utility serving the operation. At present, it appears that there is a wide variation in the willingness and terms offered by utilities for electricity generated by biogas systems.


It is unlikely that one technology emerges to serve all purposes. The waste processed in any one system is dependent upon the housing and manure collection system utilized by the farm in question, and issues such as use of sand. Until reliable technology is developed to separate these unwanted materials from the digestion stream, it will be difficult to utilize AD at these sites. Because revenues from AD are relatively small in comparison to revenues generated by the associated livestock production system, it is unlikely that operators will change practices to accommodate energy production.

More research is needed to understand the impact of co-digestion of a wide variety of waste streams with livestock manure. The inclusion of higher energy value waste streams shows great potential for enhancing the economics of AD systems, but there have been relatively small amounts of research in the US on the impact of co-digestion.

Process control technologies are also needed to ensure stable and predictable gas production. These allow for more precise management of the biological production process. They can provide early warning signs of imbalance in the digester system and allow for the achievement of higher average rates of biogas production. By most standards, the biogas production systems in operation today are not large enough to support intensive management at a single location. As a result, creativity is required to develop systems that can produce relatively high levels of biogas, without dedicated management on-site.

Until the technologies are well developed and more cost-effective, the economical production of biogas will be limited to relatively large AD systems as smaller livestock operations cannot support the management and technology costs associated with larger biogas production systems. Different types of technologies are required for different size livestock operations but the production of electrical power from biogas is not subject to substantial economies of scale. This means that a series of smaller digesters could be economically viable.

Market development

Table 4 shows some of the potential markets for biogas production and provides comments on the current status of the markets as well as their potential. The markets for the energy produced by the system are also dependent upon the site.

Biogas applications are unlikely to be economically competitive with large coal-fired power plants unless the environmental attributes of generating power with biogas are translated into a cash value or unless coal prices increase. Although electricity can be transmitted to a variety of end consumers through the electrical grid, each utility has its own policies related to placing energy in the grid. Additional work is needed to streamline the process for selling electricity generated by biogas production systems.

The other potentially large market that could be accessed with limited technological and infrastructure development is the natural gas transmission network. Placing biogas in this system would require that the gas be cleaned and upgraded to pipeline quality standards. Because the network is extensive, in many cases biogas could be transmitted to the pipeline at reasonable cost. Unlike generating electricity, the costs of clean-up and compression can be substantial and do generate economies of scale. This means that large systems would have an advantage, unless gas from small AD systems could be pooled before clean-up and insertion. The standards and costs to participate in this system can differ dramatically from utility to utility. The impact of placing cleaned biogas in the system infrastructure is not well known and work is needed to understand issues to do with impurities, the costs of their removal, and the costs of connecting.

Taking to the roads

Per BTU of energy, transportation fuels typically sell for a much higher price than electricity. One opportunity is for biogas to be cleaned and sold in compressed form for utilization in the transportation sector. A variety of transportation vehicles can utilize compressed and cleaned biogas fuel. Fleets such as buses, taxis, and commercial fleets are the most likely candidates for this type of fuel, which has been utilized in some European and Scandinavian countries. However, work is needed to understand the costs of cleaning, compressing, and transporting this fuel. If such a system were to develop it could dramatically improve the market potential for biogas.

The number of vehicles that can utilize natural gas fuel is small in proportion to the total vehicle fleet, but large in relationship to the supply of biogas. However, several technical and marketing barriers exist. The gas must be cleaned and compressed. To the extent that the gas differs from natural gas, the impacts of using this type of fuel in a vehicle are not well known, and the quality standards are not well understood. As with generating electricity from coal, biogas would be much more competitive with natural gas if the environmental benefits were monetized.


Public policy can play an important role in the development of a biogas industry in the United States. Currently, most policy related to biogas production has been implemented by individual states and utilities. In contrast, national policies have focused on incentives for construction of biogas production facilities, such as grants for feasibility studies, waste management related construction grants, and loan guarantees.

There has been little by way of US national policy directed toward developing markets for energy produced by biogas production systems. Such efforts would be likely to play a much larger role in industry development than do the current subsidies for the construction of farm level digester operations. National level policies might include the development of national quality standards for biogas inserted into gas pipelines. Such standards would make clear the requirements that must be met before biogas can be included in the existing and well-developed gas transmission network. Similarly, national rules on the pricing of electricity generated from biogas applications would ease the negotiation process required to sell electricity into the grid.

Although some utilities provide financial incentives for the production of electricity produced from biogas, the site-specific nature of biogas production will limit the scale of the industry. National, rather than regional-, state-, or utility-level incentives for this type of energy are more likely to be effective in stimulating the industry. A per unit credit for electrical production from biogas would also speed the development of systems, as would incentives for fleets to adopt the use of natural gas and biogas transportation fuels.

The process of monetizing the environmental benefits associated with biogas production is complex. National policy aimed at clarifying the magnitude of environmental benefits associated with the production of biogas would be a tremendous benefit to the industry. Additionally, national policy to assist in developing the markets for these benefits is likely to be necessary as no one producer has a strong enough incentive to organize the market.

Unlike other forms of renewable energy, biogas production does not currently have a dedicated governmental lobby. The development of an association to organize and advocate for the development of the industry would also be likely to speed industry development and make policymakers more aware of the potential benefits of biogas production.

Where there’s muck, there’s brass

The production of biogas has several appealing features. It creates renewable energy and tempers a variety of environmental concerns associated with confined animal feeding operations. However, the potential for biogas production from anaerobic digestion (AD) is also highly site specific. In particular, the low energy density of manure makes transporting waste to centralized digesters difficult. As a result, large livestock operations are more likely to be good potential candidates for AD. Unfortunately, these operations may not be located in an area that offers attractive energy sale options.

In addition to the problems associated with a highly site-specific industry, there is little coherent policy associated with biogas production. National policy is needed to clarify the standards that biogas must meet for inclusion in the natural gas distribution system and to encourage producers to sell electricity to other users. Policy could also clarify and encourage the development of markets for the environmental benefits associated with biogas production. Additionally, research is needed to understand the potential biogas production that can be generated from other sources of wastes and energy crops.

Brent A. Gloy is with the Department of Applied Economics and Management at Cornell University. e-mail: [email protected]

The paper was first presented at Power-Gen Renewable Energy and Fuels Conference in Las Vegas, Nevada, USA, on 21 February 21, 2008.

A full list of references is available from the author on request.