Senators Ben Nelson of Nebraska and Larry Craig of Idaho recently introduced the Biogas Production Incentives Act of 2007, a Senate bill posed to advance the renewable energy production from animal and agricultural waste. The bill would extend tax incentives to the biogas industry that have been open to other renewable energy industries for years and provide loans to small businesses.

anaerobic digesters

Processed biogas is produced at biological treatment facilities that contain large anaerobic digesters, like the large twin tanks pictured here. Credit:, Alex Marshall

The production of biogas involves the anaerobic digestion (AD) of animal waste and other organic wastes. The gas is composed of at least 60 percent methane and can be used as is directly on the farm from where it was produced or processed to substitute natural gas, propane, and other fossil fuels. Large-scale production of biogas could replace billions of gallons of fossil fuels through existent technology and governmental support.

“The technology to break down animal wastes to create biogas already exists, but it needs encouragement from the federal government to become a commercially viable alternative to natural gas. This new energy source would benefit rural communities and the environment while lessening our dependence on fossil fuels,” said Senator Nelson. “We shouldn’t waste the waste; we should promote biogas development.”

The Biogas Production Incentives Act of 2007 would provide biogas producers with a tax credit of $4.27 for every million British thermal units (mmBtu) of biogas produced. The bill would offer loans, loan guarantees, and grants for the collection and transportation of approved energy feedstock to a processing facility. Loans would also be available to small businesses for the purchase or construction of equipment or facilities for collection and transportation. A safety net for biogas producers has been written into the bill that would provide payment from Commodity Credit Corporation funds to producers when the annual average daily prices of natural gas falls below a certain level.

National biogas production potential from AD systems on dairy, swine, and beef farms could exceed 340 million mmBtu of gas per year as estimated by the Environmental Power Corporation. Approximately 2.5 billion gallons of heating oil per year would be produced.

“We’ve made great strides in developing an ethanol industry in Nebraska, and we should do more to diversify and expand our production of biofuels and renewable energy,” said Senator Nelson. “My legislation will put into place tax incentives and financial support for large-scale and small-scale producers to get involved in biogas production.”

“One of the major obstacles for biogas development in agriculture is the significant costs associated with it,” Nebraska Farm Bureau President Keith Olsen said. “Incentives for biogas production and other incentives to encourage the development of the infrastructure to support it would certainly help livestock producers who are interested in the opportunities associated with the production of biogas.”

“The Nebraska Pork Producers Association embraces Senator Nelson’s Biogas Production Incentives Act for its recognition, incentives, and use of animal and agricultural byproducts to produce biogas. The Act’s efforts will utilize our naturally occurring byproducts to help reduce the nation’s dependence on fossil fuels while providing financial incentives to Nebraska livestock producers to produce this biofuel. We encourage its passage and implementation,” said Larry Sitzman of the Nebraska Pork Producers.

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