On December 15, 2009, the U.S. Agriculture Secretary Tom Vilsack announced a landmark memorandum of understanding (MOU) with the Innovation Center for U.S. Dairy, a part of Dairy Management Inc. developed to foster industry-wide collaboration and innovation, to support innovative methods to turn dairy waste into electricity and reduce greenhouse gas emissions (GHGs) by 25% by 2020.  Secretary Vilsack announced the agreement at the U.N. climate conference in Copenhagen and set forth proposed new measures to cut emissions of methane by utilizing manure to generate electricity.
 
Secretary Vilsack stated, “[u]se of manure-to-electricity technology is a win for everyone because it provides an untapped source of income for farmers, provides a source of renewable electricity, reduces our dependence on foreign fossil fuels, and provides a wealth of environmental benefits.”

The MOU provides that the USDA will take several steps to help dairy farmers meet the ambitious goal of reducing GHG emissions by 25% including undertaking new research initiatives, encouraging dairies themselves to increase research, allowing implementation flexibility and enhancing the marketing efforts of anaerobic digesters to dairy producers.
 
The anaerobic digester technology is one proven method of successfully converting waste products, such as manure, into electricity by utilizing generators fueled by methane captured from the animal manure.  However, according to the USDA, only about two percent of U.S. dairies that are potential candidates for a digester are using the technology, but those that are routinely generate enough electricity to power 200 homes.

Although some argue low fossil fuel prices have kept the anaerobic digestion technologies from reaching their full potential as energy producers, this new initiative of the USDA combined with better electricity buy-back rates, and strict new laws regulating farm nutrients have made anaerobic digesters a viable alternative for electricity production and waste management compliance.  As a rough rule of thumb, approximately one kilowatt (kW) of electricity is generated for every 5 Holstein milking cows contributing to the digester.  An increase in the adoption of methane gas digesters for dairy farms would make it easier to connect digesters to electricity grids and help digester operators to capture potential carbon offset payments.
 
This MOU is part of a trend to increase the focus on the agricultural sector as the Obama administration focuses on new climate change measures.  This trend includes the current proposed carbon cap-and-trade program pending in the U.S. Senate, but will more than likely not stop there as new measures are implemented to reduce GHG emissions and increase the use of renewable sources of electricity.  Companies should keep abreast of developments like these in order to ensure that they are taking full advantage of all the available benefits.