California dairies are turning manure to money (Methane & Energy)

Bakersfield Californian ^ | 7/20/04 | Juliana Barbassa - AP

[Paul Atreides]

Bubba has been doing the same thing for years. It's called giving a speech.

[maestro]

$$$$$$$$$ it's back to the horse and buggy?

[LizardQueen]

There's a dairy up here that generates enough electricity this way that they can sell some of it back to the electric company.


LQ

[Texas Eagle]

This is great news. Now that these dairy farmers have a way to supplement their income, maybe we can wean them off their stupid subsidies.

Yeah...right.

[dila813]

So.....

Spent 1.5 Million to save 75% on electricity?

That is a savings of 26,250 a year.

So if the cost of money was free and he had a zero interest rate loan it would take 58 years for this investment to pay off.

Sounds like we would have been better off trucking it off. More enviromental religion, it doesn't matter how much it costs as long as it helps the planet (sarcasm).

[fourdeuce82d]

That is a savings of 26,250 a year.

I thought the article suggested his total bill had been $60k, and he was saving $45k/year...still a 20+ year undertaking.

I guess if the residue can be used as fertilizer without further processing, you might have another revenue stream.

[nathanbedford]

My neighbor here in Bavaria has been doing the same thing for some years but it only makes economic sense if subsidized, a concept not foreign to European farming.

[dila813]

It says he saved 75% and it states his bill was reduced to about $15,000 a year.

It is then easy to do the math of a 58 year payback if you assume zero cost of cash with a zero interest rate.

Also, manure revenue stream doesn't require a 1.5million dollar investment even though it would generate more money than this venture detailed in this article even if it was free.

[X-FID]

To produce energy, the farmer has to scrape up the manure, mix it with water, and pour it into a lagoon typically covered by an enormous plastic bag. When the mixture is heated, it produces methane, which is trapped by the bag, piped into a generator, and burned to create electricity.

These people are just pulling our chain, right? How are they heating this lagoon? The enormous plastic bag is probably oil based, the methane is piped by existing electrical power no doubt, and what is left? A lagoon full of cow$hit.

They should just shove a hose where the sun don't shine in all their cow's and decrease the overhead, it makes more sense.

[dila813]

hey, a new invention, the butt plug hose adapter!

You will be a millionaire, the state will have to pay you a commission on the money you saved.

[X-FID]

Thank's, but I'll keep my day job!

[tubebender]

I guess if the residue can be used as fertilizer without further processing,

You can't spread manure on a field if the run off could enter a stream or the Water Quality Control Board will be on you with big fines. Did it say each of those systems received nearly a half million dollars of our tax money...

[BureaucratusMaximus]

Who woulda thought cow $hit be worth sumthin?

Only in America.

[lucysmom]

These people are just pulling our chain, right? How are they heating this lagoon? The enormous plastic bag is probably oil based, the methane is piped by existing electrical power no doubt, and what is left? A lagoon full of cow$hit.

The system produces its own heat. In cold climates, it is also used to heat the barns in winter. The system produces its own electricity. What is left is both solid and liquid waste. The solid waste is dried and used for animal bedding and the liquid is a high quality low odor fertilizer sprayed on fields.

Basically what this does is keep pollutants, like bacteria, out of the water system, turn a liability into an asset, and make farmers more independent. How could that be bad?

[dila813]

"....and make farmers more independent." If you think 50% matching grants of taxpaper money makes them more independent, then a 100% matching grant must be complete freedom from dependence on the taxpayer.

[q_an_a]

he saves 30,000 a year on a piece of equipment that cost 1 million + a federal grant that is not spelled out. That means it only takes 25 years for the investment to pay off.

[lucysmom]

he saves 30,000 a year on a piece of equipment that cost 1 million + a federal grant that is not spelled out. That means it only takes 25 years for the investment to pay off.

You are assuming that what was true almost 20 years ago is true today.

Ron Koetsier, who has 1,200 dairy cows on 160 acres near Visalia in Tulare County, invested about $1 million to get a digester built in 1985.

Technology has improved since 1985 and costs have come down.

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/05/14/BAGJG6LG3R15.DTL

The Straus Farms' covered-lagoon methane generator, powered by methane billowing off a covered pool of decomposing bovine waste, is expected to save the operation between $5,000 and $6,000 per month in energy costs. With those savings, Straus estimates he will pay back his capital investment in two to three years.

[dila813]

It says 50% matching grant above which would be 500k.

the quote"Straus estimates he will pay back his capital investment in two to three years." is not found in the article above.

Another problem, it says he "since 2002 has been saving about $30,000 a year on energy costs" then almost in the same breath says, "eventually expects to save about 75 percent of his total energy costs, reducing the bill to about $15,000 a year"

This is a 34 year payback, not a 2-3 year pay back. If he started in 1985 he would have at least 15 years to go.

A dollar today isn't worth a dollar yesterday. 1mill from 1985 would be worth over 60 million dollars today. You have to look at the cost of money and interest or the performance in relationship to a managed or indexed investment. Then he added 500 thousand in 2001 that would be 780k in todays dollars, so the system cost today would be 61 million dollars.

That is the true cost of the system. So what is the true payback on the system?

Only 1373 years!