By Ron Goble
VISALIA, Calif. – About a little more than five years ago, dairyman Ron Koetsier bought a used generator from a waste water treatment plant in some obscure Wisconsin town after officials there determined that it wasn’t cost effective for them to operate it on methane gas anymore.
That same generator is sitting idle again today in California – the victim for a second time from high-cost energy systems and emission levels.
Koetsier had invested $998,000 to convert his dairy operation to a digester system that was projected to produce a significant amount of his own electricity to run the dairy.
He purchased a $130,000 truck outfitted with a vacuum system to suck up tons of manure from his freestall barns and transport it into his covered lagoon. Milking 1,150 Holsteins 2x, the manure production is also significant.
“The vacuum truck was a good system when diesel fuel was 50-cents a gallon,” said the dairyman. “However, when diesel climbed to $4 per gallon it was costing us about $100 a day for fuel.”
On Jan. 1 2009, new regulations became effective from the San Joaquin Valley Air Pollution Control District that would require Koetsier to retrofit his engine and add a special catalytic converter and other required contraptions to cut emissions. NOX emissions had to be cut to 150 ppm. Right now Koetsier’s permit states that his “engine is dormant.”
If Koetsier let that permit lapse, the latest regulations calls for new engine installation emissions to be under 8 ppm.
“I haven’t seen a motor yet that is doing that well,” he declared. “Diesel is still $2.50 a gallon, so I’ve parked the truck and am considering other options.
“A scraper system to get manure out of the building will eliminate the labor and fuel costs. However, the dairy business has to get a whole lot better before I think of making that kind of investment, especially with Congress considering the expensive ‘Cap and Trade’ measure that is full of fees and taxes for businesses,” Koetsier said.
After the original investment in the digester technology, the dairyman applied for a performance grant through Western United Resource Development provided for by Senate legislation. That measure called for the dairyman to get paid 5 1/2-cents per kilowatt for energy that produced electricity on his dairy. He could have collected about $150,000 from WURD if he had kept the system going.
Economics didn’t pencil out
Some dairy operators are operating on a waiver to establish a baseline for system performance. Then regulators will determine what emission standard they would set based on what the system produces.
Pick a number!
“The Air Resource Board picked a number for emission standards, as a compromise between the enviromentalists and the dairy industry,” said Koetsier. “The Air Board has to decide whose most credible. The National Dairy Board spent $6 million on air emission study to get real numbers on what emissions are, but the Air Board made the call 5 years ago without the science.
“It’s the same thing they are doing with automobile motors. They decree a miles-per-gallon number and then expect industry to be able to make it happen. About the only way that’s possible is to have everyone driving those tiny Smart Cars,” he said.
Those in the position of regulating don’t care if you go out of business or not,” the dairyman said. “You can go out of business or move out of the state. The hay day for the dairy industry in California is over. More people are leaving California than are coming.”
Koetsier’s system ran about two years before he spent another $300,000 to retrofit to meet the newest standards. He started the digester in 2003 and ran it into 2008.
His dairy’s energy bill was usually about $60,000 to $70,000 a month. When generating their own power, Koetsier estimates they saved in reality only about $40,000 to $50,000 a year in electrical costs.
The utility billed $2,000 a month standby charges, just to be hooked into the electrical grid. Southern Cal Edison would only offer net metering – they wouldn’t pay you while collecting demand and hookup charges. Probably half of the dairy’s energy savings were burned up by high fuel costs, he said.
Koetsier said that until regulators focus on real sicentific research in setting their emission parameters, dairy producers will continue to struggle with trying to meet a moving target to be in compliance with environmental regulations. Whether it is CO2 or NOX emissions being regulated, there are too many political decisions being made that impact producers’ ability to run a profitable dairy operation.
■ To contact Ron Koetsier, e-mail him at email@example.com.