The search for an alternative to fracking has led a Philadelphia-based renewable energy supplier to create a system that encourages the use of methane from landfills instead on shale gas.
The Energy Co-op, which supplies a range of renewable energy products to customers in southeastern Pennsylvania, is now offering cash payments the company calls “Renewable Natural Gas Credits” to any operator who captures gas that is naturally generated by landfills, and sells it to commercial customers.
The first project to adopt the cash payment system is Lanchester Landfill on the border of Chester and Lancaster Counties where methane from the decomposition of organic material has been captured over the last decade for sale to some local businesses.
Since January, the co-op has been making payments to Granger Energy Services, a Michigan-based company that extracts the gas from the landfill, treats it and pipes it to seven local businesses for heating or industrial uses.
The Energy Co-op says the credits are the first in the country, and could become a model to encourage the use of non-fracked sources more widely.
The credits, or payments, are issued when Granger sends “Renewable Natural Gas” (RNG) to local businesses. The Energy Co-op uses revenue from some of its residential customers who agree to a surcharge of about 20 percent added to their regular gas bills. Those customers agree to pay extra in order to promote the use of the landfill gas. The Co-op essentially pays Granger to provide companies with methane generated at the landfill. Since the program was launched in January, 116 customers have elected to pay extra, the Co-op says.
The participating customers are motivated to pay the extra on their bills in the knowledge that the revenue will pay for the production of gas from a renewable source rather than from a non-renewable source such as a fracked well, said Clay Bedwell, the Co-op’s Director of Energy Services.
The co-op does not make a profit from buying the credits but operates the program because it advances the goal of promoting the use of renewable energy sources.
“What we’re getting out of it is the opportunity to offer end users a unique product, and Renewable Natural Gas Credits are just the mechanism we use to offer the product,” Bedwell said.
Eric Kravitz, director of business development at the Co-op, said the credits are designed to encourage the production of an alternative to fracked gas.
“The new product has the potential to change how natural gas is produced in the region,” Kravitz said. “As landfills are constantly replenished with organic waste, RNG is a renewable and environmentally beneficial alternative to pipeline natural gas.”
He argued that the credits can become a national model for reducing reliance on fracked gas. The credits are an equivalent to Renewable Energy Certificates (RECs) which are used as an incentive for utilities to generate electricity from renewable sources such as wind and solar.
The credits are also designed to incentivize the use of landfill gas for commercial or residential purposes; to develop a market for the biogas, and to avoid the flaring that might otherwise result. They cannot be used for generating electricity or for vehicle fuel.
Kravitz declined to predict how effective the credits could be as a means of encouraging the use of renewable landfill gas but argued that the fuel can be one source of sustainable energy.
“By the numbers, this is a difficult question to answer, but conceptually, it’s important to draw a link to renewable energy sources,” he said in an email. “Wind and solar will likely never supply all of our electricity, and RNG isn’t going to completely offset pipeline natural gas, but what they all have in common is that they are one component of what will need to be a multi-faceted solution.”
Bob Watts, executive director of the Chester County Solid Waste Authority which operates the Lanchester landfill, said the gas is captured via about 200 wells that are sunk into the landfill. They have been installed there over the course of about 12 years, and have been collecting gas that would otherwise be burned off to meet a state requirement to destroy 98 percent of the methane generated there.
A third of the gas is used to make electricity at an on-site generator that feeds into the grid while the remainder is pumped via a 13-mile pipe to the seven customers including Dart Containers, a maker of Styrofoam cups; Chase New Holland, a maker of farm equipment, and Tyson Foods, Watts said.
The gas-gathering equipment was installed at a cost of some $10 million, about half of which came from the landfill, Watts said. He said the landfill has already recouped its investment by selling gas and electricity generated from it. The landfill earns about $1,000 a month from Granger’s biogas operation.
Watts said the landfill generates about 3,000 cubic feet of methane a minute, or enough to power 9,000 homes if the gas was all used for residential purposes.
“Using it as renewable energy is a benefit to the local community,” he said.