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Dairy farms that
capture methane from their cows' manure can earn valuable
pollution-cutting credits through
California
's Low Carbon Fuel Standard.
Rich Pedroncelli/AP
California
is
trying to cut greenhouse emissions from the state's cars and trucks, and
in a controversial twist, its efforts are putting cash in the pockets of
dairy farms across the country. It
is the result of an odd but lucrative trade: pollution cuts on farms, in
order to satisfy limits on emissions from
California
's roadways.
Among those that could reap a windfall is High Plains Ponderosa Dairy,
in southwest
Kansas
. The dairy's thousands of
cows spend their days and nights inside long barns.
"They've got fans and cooling in the summertime, and they're
warmer in the wintertime, but because of that, when your cow's poop,
it goes on the concrete, and we can collect it all," says Greg
Bethard, the dairy's general manager.
Right now, that manure goes into big storage ponds called lagoons where
bacteria feed on it and release a gas called methane.
Methane is the main ingredient in natural gas, burned in home
furnaces and stoves. It is
also a powerful greenhouse gas. It
does not persist in the atmosphere as long as carbon dioxide, but while
it does, it traps eighty times more heat, helping to drive climate
change.
Later this year, though, the dairy's manure will instead flow into big
tanks, called anaerobic digesters, which will capture most of the
methane.
The captured methane will go into a natural gas pipeline that's located
just a few miles from the farm. That pipeline is connected to gas
pipelines in
California
, which is essential for it to participate in
California
's emission-trading system.
California
's Low Carbon Fuel Standard sets increasingly strict
limits on greenhouse gas emissions from transportation fuels used by
California
's cars and trucks. Oil and gas companies, which sell gasoline and
diesel fuel, must satisfy these caps on emissions. They
can satisfy the law by selling less gasoline, but there is also another
option; they can pay for cuts in greenhouse emissions somewhere else.
This is where the methane-capturing equipment at Ponderosa High Plains
Dairy comes in. The dairy is
building it through a partnership with the oil company Shell. When they
capture methane from manure, they will be awarded pollution-reduction
credits - partly for reducing their methane emissions, and partly for
delivering a less-polluting fuel for use in
California
's transportation fleet.
California
's oil and gas companies can buy those credits to cancel out their own
emissions. The dairy also
will earn clean fuel credits through a separate federal program called
the renewable fuel standard.
For High Plains Dairy and Shell, these emissions credits could be worth
tens of millions of dollars a year, although the value of those credits
does go up and down, depending on demand.
"If you take today's value [of the credits] and extrapolate
it out, yes, there's profits to be made," Bethard says.
"But I still think, long term, our primary business is still
going to be milk."
Because its manure ponds release lots of methane, Bethard's dairy is set
up perfectly to take advantage of this opportunity.
There is more pollution to eliminate, which means more profits to
be gained by doing so. Dairies
or beef cattle operations that keep cows outside, allowing their manure
to dry, or those that allow cows to graze on pasture, don't generate as
much methane from manure.
Aaron Smith, an economist at
the
University
of
California
,
Davis
, decided to examine the impact of emission credits on such dairy farms.
"I had heard people saying this was kind of a big deal, and I sort
of put off looking into it for a while, because I was thinking, 'How big
of a deal could it really be?'" he says.
When he calculated the potential revenue from emissions credits, "I
was stunned," he says.
The value of these pollution-cutting credits could amount to a 50% boost
in revenue over just selling the cows' milk. Smith published the result
as a blog
post titled "What's more valuable: A cow's milk or its
poop?" It quickly became the second-most read article on his
website, only trailing a taste-test of fast-food chicken sandwiches that
Smith and his daughter carried out.
Smith says that the generous subsidies for dairy-derived methane might
lead to a paradoxical and unwelcome result. It could persuade dairies to
expand, adding more cows, and producing more manure.
This is particularly worrisome because cows also release methane
by burping it out as they digest grass, and those emissions cannot be
captured.
This is not what
California
's emission-trading system intended.
"If you have a program that creates incentives to generate more pollution,
then you're not going to get the benefits that you want," Smith
says.
Smith says he's not sure that these credits are, in fact, persuading
dairies to expand. But considering the potential revenue, he says, it
certainly could happen.
A coalition
of environmental justice groups is now mobilizing to stop it. Brent
Newell, an attorney with one of those groups — Public Justice —
wrote a petition to the California Air Resources Board (CARB) demanding
that it stop issuing credits to dairy or beef or hog farms for capturing
methane. "The solution
is not to commodify it, so that cows and hogs are pooping money!"
he says.
Newell says these credits benefit the biggest farms, which are the
biggest polluters, "and it harms the health and welfare of
communities that experience all the air and water pollution that's
associated with the factory farm system."
According to Michael McCully, a consultant to the dairy industry,
farms need at least 3000 cows to produce enough manure to justify
building an anaerobic digester. In a 2021 article published in Hoard's Dairyman, McCulley
wrote that the emissions-trading programs could make it harder for small
dairy farms to survive, since they have difficulty taking advantage of
this new revenue stream..
Last week,
California
's environmental regulators denied Newell's petition. Richard Corey, CARB's
executive director, wrote that the current emissions trading system is
working as designed, encouraging farmers to capture methane emissions.
In fact, data from another climate-related program in
California
show that money invested in manure digesters had the greatest impact on
greenhouse emissions, at the least cost. However, Corey also said that
CARB will take a fresh look at these criticisms and decide whether the
program needs tweaking.
Oregon
and
Washington
, meanwhile, are moving toward launching their own emissions-trading
systems, which could further boost demand for manure-derived methane.
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