An inquiry from a prospective client regarding renewable natural gas opened a new market for U.S. Venture and led to the creation of a whole new division.
While that inquiry 10 years ago didn’t result in a contract, U.S. Venture leaders saw the growth potential in using RNG in the transportation and energy markets. The Kimberly-based company created a division, U.S. Gain, to develop and serve the growing market.
“At U.S. Oil, we had clients that had a lot of diesel trucks, and running them can get expensive,” says U.S. Gain President Mike Koel. “With RNG, it’s cheaper, cleaner and it’s American-made.”
Using RNG is growing in popularity. The Coalition for Renewable Natural Gas reported in April that during the past five years, RNG usage increased 291 percent, displacing close to 7.5 million tons of carbon dioxide equivalent. Nationwide, it’s estimated 175,000 vehicles run on natural gas. Vehicles may have an engine that runs only on natural gas or an engine that can run on regular gasoline or natural gas.
RNG is produced from methane captured during the decomposition of organic materials at farms, landfills and wastewater treatment plants. It is then cleaned and conditioned to meet pipeline standards and injected into existing natural gas distribution pipelines. RNG is used as an alternative fuel and as a renewable thermal energy solution.
Koel says RNG is growing in popularity for several reasons, including consumers demanding cleaner air, governments establishing air quality targets and emission policies, and businesses seeking to meet their sustainability goals.
During the past 10 years, Koel says U.S. Gain has diversified its RNG supply chain, from investing in and managing natural gas development projects at dairies, wastewater treatment plans or landfills to building and operating natural gas fuel stations, both private and a public GAIN Clean Fuel network.
While a few fleets in the region use RNG, including Paper Transport Inc. in Green Bay and Veriha Trucking in Marinette, Koel says it’s popular on both the East and West coasts, where RNG costs much less than diesel fuel and reduces a company’s overall emission load, which is critical in states such as California that have a Low-Carbon Fuel Standard.
Businesses can also earn credits through the federal Renewable Fuel Standard Program, which requires a certain volume of renewable fuel to replace or reduce the quantity of petroleum-based transportation fuel, heating oil or jet fuel.
Earlier this year, U.S. Gain became the largest RNG supplier in Oregon by signing supply agreements with Salem Area Mass Transit District, Gresham Sanitary, Heiberg Garbage and Pride Disposal. The company also signed a supply agreement with the Port of Seattle for use at Seattle-Tacoma International Airport.
In addition to helping businesses reduce their emissions and fuel costs, U.S. Gain assists farmers by purchasing the methane from their dairy digesters and converting it into RNG, Koel says. This past spring, U.S. Gain completed a gas processing facility at Clover Hill Dairy in Campbellsport. U.S. Gain worked with Nacelle Solutions, an industry leader in developing gas cleanup equipment specifically designed for the RNG industry, on the project.
U.S. Gain now purchases RNG from Clover Hill Dairy, says Bryan Nudelbacher, U.S. Gain’s director of RNG Business Development.
“Many of the large farms already have digesters, and we work with them to offtake and distribute the RNG produced,” he says. “But the Clover Hill project goes one step beyond that. Now, we’re also actively leading development of gas processing facilities and coordinating transportation of pipeline-grade gas to injection sites, drawing on skill sets from industry experts, as appropriate.”
Clover Hill Dairy has had a methane digester since 2007, says owner Joe Bonlender. “Replacing our generators with the RNG system, our farm will see many added environmental benefits such as less noise pollution (from generators), cleaner air and less odor. Our business will also see an added income stream,” he says.
Once the RNG is prepared, it enters a pipeline. RNG is conditioned to meet pipeline standards and can be injected into existing natural gas distribution pipelines. From the pipeline, the fuel is transported to one of U.S. Gain’s 60 RNG stations across the country or private stations at businesses. “It’s a vertically integrated (system) and is very efficient,” Koel says.
By collecting the methane from farms and other sources, such as landfills, Koel says RNG production keeps the gas from entering the atmosphere. When it comes to greenhouse gases, methane is 30 times more powerful than carbon dioxide.
That was a big selling point for the Northwest Alliance for Clean Transportation in Oregon to make the switch to using RNG.
“RNG offers significant greenhouse gas and criterion air pollutant emission reductions, benefiting not only our planet, but also the health and livability for residents in our local communities,” says Alex Schay of the Northwest Alliance for Clean Transportation in Oregon. “Additionally, fleets may achieve meaningful cost savings through use of RNG, which may be very helpful during the current economic slowdown, showcasing another way that RNG can make a real difference.”
How RNG works
Renewable natural gas, or RNG, is an alternative fuel source that more individuals and businesses are turning to since it costs less than fuel derived from fossil fuels and does not have a negative environmental impact. RNG is generated from farms, wastewater treatment plants and landfills by capturing the methane gas created by the decomposition of organic materials. To create RNG, anaerobic digesters break down the organic matter, and as the bacteria used in the process “work,” biogas is created. Then, the non-methane components of the biogas are removed so the methane can be used as a fuel or energy source. The RNG is then added to a pipeline.