Clean Energy Fuels, the undisputed leader of renewable natural gas production and development in the US, announced this week it secured a new contract with one of the largest dairy farms in the US. The contract with provide additional 5 million gallons of low carbon RNG to the company’s growing network.
Firstly, under the agreement, Clean Energy Fuels will build a methane digester at the Millenkamp Dairy, located in Jerome, Idaho. The device would produce RNG which then will go to the California market.
Moreover, according to the statement, the project will provide 5 million gallons of low-carbon RNG annually. Also, the company and oil major bp will develop the project at the Millenkamp site, through a joint venture.
Such a deal is not new for the RNG company. In fact, it has worked closely with bp since 2017. It has also solid relations with Chevron and TotalEnergies for similar projects, involving dairy farm methane turned into RNG.
Particularly, under the agreement with bp, the company will include more RNG output from dairy farms in South Dakota and Iowa. Bp will transport the fuel to California markets and then it would get federal credits as well as California’s Low Carbon Fuel Standard credits.
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On the other hand, Clean Energy Fuels will then distribute the RNG through its extensive network of over 550 stations, the largest RNG fuel distribution network in the US. In addition, the company has offtake agreements to supply fleets with RNG; some of the clients are Amazon, UPS, the Los Angeles Metro, and New York City Transit.
CEO Andrew Littlefair spoke about the matter during a virtual presentation on January 26. “Amazon wants 100% RNG as does UPS for the vehicles we fuel. And there isn’t a better carbon-negative intensity fuel than RNG.”
Furthermore, during the presentation, the company announced some key objectives for the future. In fact, the company expects total 2022 RNG sales to average 194 million GGEs, or gasoline gallon equivalents; with all volumes coming from third-party supply contracts. By 2026, the company expects RNG sales to average 474 million GGEs, with about 104 million GGEs of that coming from its own dairy-produced RNG.
Finally, California is the destination of much of the RNG produced in the US; as it has substantial demand from the state’s LCFS credits. Existing RNG demand in California currently is over 125 million gallons; with about 90% supplied by landfill gas and dairy farms.
