JUNCTION CITY, Ore. (AP) — The 750 cows at Lochmead Farms, north of Junction City, are producing more than just milk. Their manure is now being used to create electricity.

New technology, known as a "biodigester," is capturing methane gas from the manure and using it to power a turbine to create electricity. The Emerald People's Utility District has a 15-year contract to buy all of the energy the digester generates, said Alan Tank, a managing partner of Revolution Energy Solutions, the Washington, D.C., company that owns and operates the methane digester at Lochmead Farms.

The $2.2 million computer-controlled system, which includes an engine, turbine and three large storage tanks, will create an estimated 1.5 million kilowatt-hours of electricity — enough to power about 300 houses — each year, he said.

Besides being a source of renewable energy, the project has other benefits, say members of the Gibson family, who own Lochmead Farms, and Tank.

If left out in the open, manure breaks down, releasing methane, a potent greenhouse gas. The digester will reduce emissions by at least 3,500 metric tons of carbon dioxide equivalent each year, according to a report by The Climate Trust and the Energy Trust of Oregon, two Portland nonprofit organizations. That's equal to removing about 700 cars from the road for a year.

The digestion process also creates odorless byproducts that are used on the farm for livestock bedding, fertilizer and soil enhancements, Tank said.

Jock Gibson, president and owner of Lochmead Dairy, said the dairy had been interested in biogas for the past decade, but it took a while to find the right partner.

"We've been looking for some time to find folks who knew what they were doing," he said. "These folks (Revolution Energy Solutions) know what they're doing, and the proof is in the pudding," he said, gesturing toward the three storage tanks.

The farmers and digester company executives first met about two years ago. Design, planning, and securing permits from county and state agencies took about a year and a half; actual construction was completed in about four months, Tank said.

Lining up financing for the $2.2 million project, also took multiple partners, he said. A private equity firm put up about half the cost, and the project will receive various federal and state tax credits, including the state Business Energy Tax Credit, Tank said. Dairies typically don't pay anything — "The only thing they have to put into it is the manure," said Amanda Green, renewable energy project coordinator for the Oregon Dairy Farmers Association. But Buzz Gibson, vice president of Lochmead Farms, said his family decided to move a piece of equipment and reinforce a driveway, which cost about $80,000.

The project at Lochmead Farms was certified for $2,247,000 in eligible costs, said Jeff Keto, manager of the state's Business Energy Tax Credit program. The maximum tax credit would be half of that, or $1,123,500. Those are preliminary figures, however, and the end value of the tax credit could be much lower, he said.

The project makes money by selling the electricity and through carbon offset credits, which also can be sold. About 90 percent of its revenue will come from selling the power and about 10 percent will be from the carbon offset credits, estimated Ben Vitale, president of The Climate Trust.

Northwest Natural partners with the Climate Trust to find, purchase and verify those carbon offset credits, which are bought by businesses or agencies to offset greenhouse gases they produce.

The University of Oregon's Office of Sustainability bought 615 metric tons of Verified Emissions Reductions from The Climate Trust to offset greenhouse gas emissions from the Erb Memorial Union.

Student leaders wanted to make the student union "carbon neutral," said Steve Mital, director of the UO Sustainability Office. The UO did this essentially paying for a reduction in greenhouse gases at the farm that was equal to the amount of greenhouse gases produced by the student union.

"I think people are really thrilled that they can see very concretely and in physical form the impact of their contributions," Mital said.

Oregon trails other states, such as Wisconsin, in tapping biogas at dairies, Green said. But more projects are in the works for Oregon.

"The Gibsons are at the front end of this," said Thad Roth, business program manager, for the Energy Trust of Oregon.

His group had no role in the Lochmead Farm project, but it will be working with Revolution Energy Solutions on the next four dairy biogas projects it has planned in Oregon. The next biogas plant will be at Oak Lea dairy in Aumsville, south of Salem, which is scheduled for completion by early July, Tank said.

"It takes willing investors and it takes someone motivated like the Gibson family," Roth said.


Information from: The Register-Guard, http://www.registerguard.com

Copyright 2011 The Associated Press.