Skagit company powered by manure

Skagit Valley HeraldDecember 2, 2013 

MOUNT VERNON — A changing economic environment has taken a little power out of the national renewable energy movement in recent years, but a local effort built on a dream to reduce greenhouse gas emissions with locally created energy is pressing forward.

Mount Vernon-raised brothers Kevin and Daryl Maas rallied local investors in 2007 and took advantage of federal stimulus grants to get five manure biogas projects off the ground between 2009 and 2013.

Skagit-based company Farm Power Northwest LLC uses cow manure to create renewable biogas energy while preventing methane from entering the atmosphere.

The founders had high hopes for growth, but Kevin Maas said the disappearance of specialized federal support and a drop in natural gas prices has slowed that progress.

With the infrastructure in place, however, they are holding strong with revenue from electricity, renewable energy tags and carbon credits. The manure-fueled plants also provide benefits to the farms that participate.

Though substantial dividends may take a while, company investors and founders have still played a part in creating a sustainable, renewable source of energy locally.

Farm Power Rexville in Mount Vernon was the first of the Maas’ plants to become a reality. It was built strategically between two dairy farms, Harmony Dairy LLC and Beaver Marsh Farms, in August 2008.

The facility processes millions of gallons of manure each year and produces enough energy to power 500 homes.

With or without the digester next door, the farms would reuse their manure as fertilizer for the next cycle of crops. But using the digester improves the quality of the fertilizer and provides free bedding.

“It’s just a win-win for us,” said Eric Vander Kooy. He co-owns Harmony Dairy with his father Dick and brother Jason.

Vander Kooy estimates the fiber bedding produced at Farm Power Rexville saves Harmony Dairy up to $10,000 each month that they formerly spent on wood shavings.

The liquid fertilizer also is higher quality than raw manure.

“The manure is more broken down, so it’s got more of a kick than regular fertilizer. The nutrients are more readily available to the plants,” Vander Kooy said.

EXPANSION

When the Maas brothers opened their first plant, natural gas was selling at its highest price in decades ($8.11 per 1,000 cubic feet when purchased by utility companies) and Congress was considering the idea of a national cap-and-trade system that would set up a market for greenhouse gas emissions credits.

Each of the five Farm Power facilities cost between $3 million and $5 million and were paid for with a mix of funding from U.S. Department of Agriculture grants, state grants, loans and private investments. They are located between Lynden and Tillamook, Ore., and support five full-time employees.

The Maas brothers also relied on U.S. Department of Treasury grants to build new facilities, which allowed 30 percent of renewable energy project construction costs to be recouped after construction was complete.

The program stopped accepting new applications in 2012.

Meanwhile, the national cap-and-trade law didn’t pass, and the price of natural gas fell to $4.48 per unit in Washington in 2012.

The drop was precipitated by a glut of natural gas produced domestically with new drilling techniques, said Phil Thompson, a professor of economics at Western Washington University focusing on energy studies.

“Generally, it makes these projects look not as good because you’re basically selling natural gas, and natural gas is cheaper than it was to go out and buy five years ago,” Thompson said.

Maas said the contracts his company holds with Puget Sound Energy are 10-year deals locked in to prices established when the plants opened, but the low price of natural gas is a major deterrent to opening up more plants.

“If electrons are cheap to be made other ways, we’re not going to keep building digesters,” Maas said.

ENERGY

Farm Power’s primary product is electricity and the company capitalizes on recognition as renewable energy.

“The electrons are the majority of our revenue. The ability to say ‘this is renewable energy’ is a small premium on top of that,” Maas said.

Puget Sound Energy’s nonprofit, the voluntary Green Power Program, purchases from Farm Power. That accounts for roughly 5 percent of the company’s revenue, Maas said.

A third source of income comes from carbon credits, based on the amount of greenhouse gas offset by Farm Power. The credits account for about 10 percent of Farm Power revenue, Maas said.

METHANE REDUCTIONS

To lessen manure seeping into the watershed, dairy farms are required to keep excess in lagoons, where manure releases methane into the atmosphere as temperatures rise, Maas said.

Livestock manure contributes 9 percent of human-produced methane in the U.S. It’s a greenhouse gas that has, pound-for-pound, 21 times the climate change effect of carbon dioxide over a 100-year period, according to the U.S. Environmental Protection Agency in its April 2013 Inventory of U.S. Greenhouse Gas Emissions and Sinks.

The combustion process in Farm Power’s engine destroys methane that otherwise would be released into the atmosphere, Maas said.

The result is a net greenhouse-gas benefit, which Farm Power sells to the Portland, Ore.-based nonprofit, The Climate Trust.

The trust retires carbon credits to preserve the climate, much the way a land trust purchases acreage to preserve land, programs director Sheldon Zakreski said.

As of November, the trust had retired credits from Farm Power Rexville and Farm Power Lynden worth 40,554 metric tons of carbon dioxide. That’s the equivalent of one year’s worth of emissions from 8,449 passenger vehicles, according to the EPA’s greenhouse gas equivalencies calculator.

FUTURE OUTLOOK

While expansion has stopped and real dividends look to be about seven years off, Eric Shen, an original investor in Farm Power, is still excited about what he calls an “elegant solution” to a number of problems: methane pollution, reliance on nonrenewable fossil fuels, and farmers’ fertilizer and bedding material needs.

Shen said grass-roots community investment is one of few ways to start alternative energy progress.

“There are a lot of forces that back the status quo,” Shen said. “Getting these projects off the ground ... corporations don’t seem interested in it, they’re interested in proliferating models that make money.”

Maas said he built the digester to provide clean, renewable power to communities locally, rather than merely accept power coming from a coal-burning plant that has negative impacts the end user doesn’t see.

“There are efforts to save the world that have a negative impact on investors. There are efforts to save the world where you go broke doing it. It’s really hard to find an opportunity that you won’t go broke and you can still afford to live in a community and give people your phone number,” Maas said.

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