2. 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.

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

4. 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)

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

6. Biogas (revenues/avoided costs) Flare Fuel for farm equipment Power a generator for electricity Cogeneration: heat/hot water Mobile engines: remove H 2 S, pressurize Pipeline: clean and condition Sell carbon credits

7. Biogas “Global Warming Potential” (1 CH 4 ~ 21 CO 2 ) 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 CO 2 -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

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

9. 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

10. 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

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

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

13. 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

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

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

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