May 12, 2023 at 12:43 p.m.
From brown to green
The nearly two-hour informational meeting was filled with excitement and apprehension as farmers listened intently to the details of the proposed Nature Energy biogas plant for potential advantages and drawbacks.
Jesper A. K. Nielsen, Nature Energy vice president of business development, said tanker trucks would collect manure directly from participating farmers and return with nutrient-rich fertilizer after an anaerobic digestion process pulled methane from the waste. The presenters said the project would have a positive financial impact on local producers and the Sauk Centre community.
Self-described as a leader in the green transition and biogas pioneer, Nature Energy has ambitious goals to operate 15 plants in North America by 2027, beginning with agricultural communities in Wisconsin and Minnesota. Each plant is intended to produce renewable natural gas from local organic waste for more than 40 years.
Sauk Centre Economic Development Authority board members Jean Marthaler and Heidi Leach flew to Denmark in late March as part of the third group of Americans to tour the Nature Energy biogas facilities. After returning, Marthaler said road damage from trucks presented the primary apparent downside of the proposed plant in their community.
The Denmark-based biogas company opened its U.S. headquarters in St. Paul in February 2022. Shell Global acquired Nature Energy in March; the subsidiary continues to operate under the same brand name.
The proposed Sauk Centre plant would be the standardized design used in Nature Energy’s 14 large-scale renewable natural gas plants in Europe. City boards approved similar facilities in Benson and Wilson for the permitting process.
According to Nielsen, Nature Energy was exploring several sites in the Sauk Centre area to potentially house the biogas plant that requires at least 25 acres near an interconnect to a natural gas distribution system.
During the presentation, Nielsen said the project aims to utilize manure from roughly 17,000 cows in nearby farms of all sizes within a 20-30 mile radius of the facility. Nature Energy trucks would collect the manure from the storage site while it was still fresh – within seven days. The biogas company intends to compensate participating producers with an improved bottom line and higher-quality fertilizer.
According to Nature Energy data, the company transforms 4.4 million tons of waste into renewable natural gas annually, leading to about 5 million tons of soil health products and green fertilizer production each year. The company’s profitability, however, relies heavily on selling carbon credits rather than biogas.
“It is all about carbon credits at the end of the day,” Nielsen said. “The gas is sold off the same as natural gas. The green molecules go with the black molecules and travel (through) pipes around the U.S. The carbon credits are sold off to companies that need to lower their footprint.”
More than an hour into the meeting, one woman raised her hand with a question: “How does this model pay us?”
Bob Lefebvre, Nature Energy USA vice president of business development, said the annual rate per cow was dependent on several factors. The company’s payment model starts with a one-time upfront payment meant to cover initial investment costs for the farmer. That initial amount, and an annual payment, reflect the amount of manure collected greater than 5% solids.
“Then there is profit sharing,” Lefebvre said. “The better we do, the better you’re going to do.”
Lefebvre said participating farmers, in many cases, could use savings and profits from the partnership to pay off the initial investment for the covered reception area within one to two years. However, this depends largely on the size of the storage site.
“The investment that Nature Energy makes with the farmer (impacts) the length of the contract,” Lefebvre said. “We would like to have 10-year contracts, and then we could work from there.”
Nielsen said one farmer increased their bottom line by 11% solely by participating; then, there were advantages of more efficient fertilizer and decreasing the carbon footprint.
“The (fertilizer) will come out (of the plant) with no gas in it, of course, but also with a lot less smell,” Nielsen said. “It does smell, but it does not hang in the air like natural manure, so there are a lot of neighbors that will be happy.”
While fertilizer returned to the producers from the biogas plant would have less volume than the manure collected, Nature Energy staff said the nutrient level would be equal to or greater than the initial input.
“That product that we’re bringing back (has) more nitrogen in part because of the turkey litter and in part because of the processing of the regular anaerobic digesting of it,” Lefebvre said.
In addition to property taxes that would accrue on the state-of-the-art biogas facility worth tens of millions of dollars, the proposed plant would dramatically impact the Sauk Centre community in several ways.
Referencing data from Nature Energy’s European portfolio, Nielsen said one biogas plant would generate about $15 million in local revenue each year. Nielsen said through an email that the company was eager to partner with local government and had not yet discussed tax abatement plans.
The plant would bring an estimated 12 to 16 full-time jobs to the Sauk Centre community, with 65 to 75 additional full-time indirect positions. The company projects 650,000 man hours for facility construction.
The Shell subsidiary ensured it would be a corporate neighbor in Sauk Centre, supporting the community with initiatives like local scholarship funds. Nielsen said Nature Energy was open to working with local schools to provide educational opportunities for students.
The plant would operate from 6 a.m. until 8 p.m. on weekdays and 8 a.m. until 2 p.m. on Saturday. Traffic for the Benson plant was estimated to account for about 90 trucks daily during the week and roughly half that figure on Saturday.
The presenters said the informational meeting was in-part to gauge interest from local producers as their partnership is crucial to the business model.
After the informational meeting, Sauk Centre Mayor Warren Stone said the project’s future ultimately comes down to interest levels from local producers.
“My thought right now is Sauk Centre is agriculturally based,” Stone said. “We are giving the option to all our agricultural producers to look at other ways of doing things. Citywise, I think it’s great, but for our ag base, if they like it, they like it. If they don’t, they don’t. If we don’t get enough people on board to go with this, it might not happen.”
Discussion of the proposed project is expected to return to Sauk Centre City Hall throughout the coming months for officials and producers to consider the plant.
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