January 12, 2007

An international renewable energy company is planning to build what it says will be the world's largest biogas facility near Maricopa within two years and is eyeing other sites in the Valley.

Microgy Inc., a subsidiary of New Hampshire-based Environmental Power, struck a deal with Pinal Feeding Co. to use manure from the 160,000-head cattle operation to power a conversion facility about 35 miles south of Phoenix. Microgy has built similar facilities in California, Texas and Wisconsin and more than 20 throughout Europe.

Once operational, the plant will produce the natural gas energy equivalent of 1,000 barrels of oil daily, said Sean Breen, Environmental Power vice president of development. That translates into more than 2 billion cubic feet of gas annually, or 25 to 30 megawatts of electricity, enough to power 6,250 to 7,500 homes a day.

By comparison, Salt River Project's entire renewable capacity is 81,000 kilowatts, enough to power about 32 homes per day, according to SRP spokeswoman Patty Likens.

"This facility, at least at this juncture, looks like it will be the largest facility of its kind in the world," Breen said. "It's a substantial capital project involving several tens of millions of dollars."

Breen would not divulge exact building costs. He said the plant would take one year to build following a year of permit discussions with the city, which he said will take place in the near future.

Maricopa officials said they are aware of the project, but have not been contacted by Microgy.

"Right now, this looks like a private venture," said Danielle Casey, Maricopa management assistant. "The city has not been brought into this yet."

For Maricopa-based Pinal Feeding Co., the plant means cost savings and potential energy credit income. Microgy's facility could produce more than 500,000 metric tons of greenhouse gas emissions credits that can be sold to other companies. Credits are given to companies that pollute below government standards, which can be sold to those that pollute over those standards. Essentially, heavily polluting companies are fined and under-polluting companies are rewarded through the energy credit system.

Pinal Feeding -- one of the largest feed lots in the country, which produces more than 1,200 tons of manure daily -- expects to save up to $700,000 in yearly natural gas and manure exporting expenditures.

"There's definitely a large cost savings involved," said Earl Petznick, Pinal Feeding Co. president.

Microgy will use a special process to turn Pinal Feeding's manure waste materials into natural gas, which has proven to produce nearly four times the amount of natural gas as conventional methods. Microgy holds exclusive license rights to the technology in North America.

Bacteria is added to manure to break down organic material into biogas rich in methane, or natural gas. The process is expedited because the waste storage tank reaches at least 113 degrees Fahrenheit, which is optimal for microbic decomposition.

Following decomposition, the emitted pipeline-grade gas can be used for thermal energy, direct biogas sales or to power electric plants. Other byproducts include fertilizer, bedding and mulch.

Breen said the plant is designed to inject natural gas directly into a gas pipeline. However, Microgy has yet to enter discussions with Southwest Gas, the state's largest natural gas provider, or El Paso Corp., which owns the largest gas pipeline system in the U.S. Officials from both companies say they have not been contacted by Environmental Power regarding gas transportation or purchasing.

"We've heard vaguely of the project, but nobody has contacted us yet," said Garth Andrews, Southwest Gas spokesman. "If this company were able to supply pipeline quality gas within our Btu standard and at a competitive price, we would be interested."

Success of Microgy's plant depends on the company's ability to reach a deal with another entity to distribute its product. To date, no such agreements have been reached, Breen said, but discussions are taking place.

Once built, the conversion plant will operate 24 hours a day, year-round. Approximately one dozen employees will run the facility.

SRP has two methane gas plants at landfill sites in the Valley. They produce 4,000 kilowatts of energy yearly, which is inserted directly into the electricity grid.

Microgy's Maricopa plant also will mean a dramatic change for residents tired of the manure smell that often fills the air.

"One of the environmental benefits of digestion is the dramatic reduction in the offensive odor of manure," Breen said. "It goes in as regular manure, and when it comes out ... the odor is greatly reduced."

Environmental Power also is looking at other potential sites in the Phoenix area for future biogas facilities. With a large farming community and a natural gas pipeline infrastructure in place, Breen said more facilities could be on the way.

"This is sort of our foundation for what we hope to be many facilities we can build in Arizona," he said.

Environmental Power has developed and operated other green facilities such as hydroelectric plants and municipal waste projects since 1982.

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Environmental Power: environmentalpower.com

Pinal Feeding Co.: pinalfeeding.com