In this video clip from "The High Energy Show" on Motley Fool Live, recorded on Feb. 1, Fool contributors Travis Hoium, Jason Hall, and John Bromels take a look at how methane from agricultural and landfill waste gets converted into renewable natural gas ready for all kinds of uses.
Travis Hoium: What is renewable natural gas? This is kind of the first, depending on where you're looking at it, negative carbon product. California, I think, is treating it as a negative carbon product. There's a lot of interesting financial dynamics, but what is it and where is it going to be used, Jason?
Jason Hall: Yes. We'll start there first, so RNG, renewable natural gas, scientists are going to call it biomethane. You think about human-derived waste from landfills, burps. [laughs] Nice job Johnny Power.
John Bromels: Thank you.
Hall: You think about our agricultural waste, landfill waste, all of those things eventually rot, and when they rot, what do they release? They release a lot of methane. Methane is a very powerful greenhouse gas. One of the reasons you see oil producers in these shale areas are flaring their natural gas where there's not infrastructure, it's not enough gas to economic, to take that gas out and sell it. They flare it. Because by flaring and burning it off, it's far less dangerous as a greenhouse gas.
Bromels: Methane, if I can pop in with the science on this for a second, methane, CH4, carbon, and hydrogen. But yes, believe it is the second most potent greenhouse gas behind water vapor, that you can release, at least of the gases that are generally released into the atmosphere.
When you burn it, it merges with the oxygen in the air to release carbon dioxide, also a greenhouse gas, but not as potent a greenhouse gas, and then the hydrogen actually merges with some of the oxygen as well to produce water. Essentially when you burn methane, you are getting rid of that CH4, the methane, and you're converting it to CO2, carbon dioxide, and water, which again you're essentially releasing a less potent greenhouse gas instead of a more potent greenhouse gas.
Hall: It's less worse, is really the key thing about it. The agricultural industry, particularly the dairy industry, is very carbon-intensive because of the animal waste.
Bromels: Cow farts.
Hall: Yeah. Cow farts, the manure, it's a serious issue.
Hoium: We don't drive much, but we drink a lot of milk in my family so that's bad for the environment.
Hall: There you go. You're supposed to eat the cows, Travis.
Bromels: Cows.
Hall: There you go. The answer for this is the dairy industry wants to deal with this. The industry broadly wants to deal with this. Landfills have been dealing with this for a number of years. Waste management has been a leader in this space of capturing that methane and getting it into the methane value chain. Getting it into pipelines, using it for different sources, like waste management uses it to power small power plants, to generate electricity.
If you're going to flare it, at least take that energy and use it for something good. The idea here is to work with these large dairies and large agricultural producers, take that waste, use a methane digester, convert it to methane, and then put that methane into the pipeline system, the natural gas pipeline system.