Roeslein Alternative Energy's WTE project begins RNG production

By Katie Fletcher | August 29, 2016

On Aug. 24, Roeslein Alternative Energy and Smithfield Hog Production celebrated the production of renewable natural gas (RNG) at the Ruckman farm site for delivery to the national pipeline from its large manure-to-energy project.

“The significance for us is it’s really proof of concept technically that this is achievable with the hog operation combined with the assets we’ve installed to collect the biogas to clean it and inject it,” said Chris Roach, director of Roeslein Alternative Energy.

Roach added that RAE selected the right equipment and everything is working well together thus far, calling it a technical proof of concept milestone. The biogas cleanup system is a pressure swing absorption (PSA) technology provided by Guild Associates. “We still are at the beginning of operations of proving out optimal efficiency, the economics are all in front of us, but technically we’ve achieved success.”

A special event was held, marking the completion of this significant portion of the $120 million initiative involving RAE and Smithfield Hog Production operations in northern Missouri. The project's focus is to reduce greenhouse gas emissions, produce RNG, eliminate rainfall effects of treatment systems and generate additional jobs for the surrounding community.

Around 125 people attended the event from a host of organizations and companies involved with the project, including contractors; equipment suppliers; customers; and non-profit organizations like the Nature Conservancy, National Wild Turkey Federation, Fish and Wildlife Service, Missouri Department of Natural Resources and others. According to Roach, around half of the attendees traveled to the project site to see all of the equipment and look at some of the equipment at the lagoons.

The project began back in 2013 when RAE secured an agreement with the Missouri operations of Smithfield Foods Hog Production Division to develop, install, own and operate processing facilities to capture, purify and sell the biogas produced from the anaerobic conversion of manure generated from this large hog feeding operation. The project is broken into two horizons, with the first horizon consisting of two phases.

Phase one involved the installation of impermeable covers and flare systems on 88 manure lagoons located on nine hog finishing farms. So far, impermeable synthetic covers are installed on 41 of the 88 existing manure lagoons. The covers turn the lagoons into anaerobic digesters (AD) where, as an interim step, the resulting biogas has been flared.

Phase two of the project involves installation of equipment to remove impurities from the biogas to create pipeline-quality RNG. As of July 1, RNG from the AD of hog manure has been injected into the national pipeline using an interconnect that has been installed at Ruckman Farm.

Roach said, in about six weeks, plans are to commence RNG production at Locust Ridge Farm as well, from four of eight lagoons, delivering gas to Ruckman Farm for pipeline injection. Over the next few years, phase two will continue with plans to complete construction of biogas cleaning and RNG production at the remaining seven farms within Smithfield’s operations.

Duke Energy in North Carolina has agreed to purchase one-third of the nine farms’ RNG to help meet clean energy requirements for power generation with a 10-year contract. Roach said Duke will essentially have all of the volume produced at Ruckman by 2018. The RNG that’s produced is being interjected into the American Natural Resources natural gas pipeline, which is done so through a lateral that comes off the larger TransCanada pipeline system that runs from southwest Kansas up into the Great Lakes area. 

In 2016-’17, with agreement from Duke, RAE is also selling gas to the vehicle fuel market with its customer Element Markets. “For the balance of gas we have to sell, vehicle is the target because of the current RIN (renewable identification number) market—D3 RINs are pretty attractive—but there are other markets we will look at,” Roach said. “Right now, the electricity market for RNG is still running at about half the value of the RIN market, so it’s secondary for us, but those are the two main markets.”

Eventually, Roach said the company hopes they can have local compressed natural gas production. “We’d like to be able to use all the gas right here, locally, as vehicle fuel,” he said.

Once phase two is complete, the project will launch into horizon two, which is supplementing the hog manure feedstock with biomass harvested from restored prairie grasslands to produce additional RNG. According to Roach, RAE is in the process of evaluating and selecting a new above-ground digester system for the grass. He said the hope is for the first system to be up and running at Ruckman, since the PSA equipment and interconnection is already there, and it could become operational as early as late next year.

Roach said that the economics of the overall project still work having two separate AD systems to segregate the gases, because the gas from grass will not be of interest to Duke, but that gas will be injected with gas produced from the lagoons, so it’s important for RAE to produce them separately and track the two. “The gas from grass will be cellulosic and we’ll apply for that same D3 pathway that we’re close to reaching EPA approval on for the manure, and the grass will be the next effort,” Roach said.

When completed, the hog manure from the project will produce approximately 2.2 billion cubic feet of pipeline-quality RNG, or the equivalent of 17 million gallons of diesel fuel (DGE) annually. Horizon two RNG production will double.

Roach said that the long-term viability of projects like this are really anchored with customers like Duke. “The short-term opportunity of the RIN market, we’re able to take advantage of because, at this point, we’ve built everything to date on equity,” he said. “We don’t have long-term cash flow requirements that are typical of say a bank loan, but it is important that we realize some price certainty around the RIN market if we’re going to build our project and eventually finance the next phases of the project on that cash flow.”

Roach added that they’re actively looking for downstream partners in the RIN space that could help provide price certainty and long-term volume commitments by getting the gas into the vehicle side. “That’s a challenge, but we think we’ll be able to achieve it,” Roach said. “We’re gaining credibility in the space so we think we’re going to be able to get the longer term certainty on RNG sales that we need.”