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Biogas in California

One of the biggest alternative fuel sources is what is called biogas, usually methane, that can be burned relatively cleanly to drive turbines and create electircity.  And there are two big sources for biogas, and both are waste.  One is landfills, which can capture the gases given off as garbage decomposes, and the other is animal waste, with methane captured in a similar process.  Most of that methane tends to just be released into the atmosphere, a problem as most environmentalists see it because methane itself is not a very friendly chemical to have in the air, and the big waste lagoons of industrial farms tend to produce a ton of it.

Turns out Pacific Gas & Electric has devised a perfect solution, helping those farms set up sequestration and cleaning processes so that the released methane is stored in a relatively pure and usable form for transportation to nearby natural gas pipelines.  PG&E splits revenue from the sale of the energy and carbon credits gained in using renewable energy with the farms.

In all, an elegant solution to the problem PG&E and many other California utilities face: offering at least 20% of their electricity from renewable sources by 2010--suddenly just two years away.  And biogas is at a competitive price point right now, just about a third of what it costs per kilowatt hour for photovoltaic solar (though you can expect that gap to narrow as solar ramps up in the next five years).  PG&E estimates they can light 1000 homes with the energy produced by a 2,500 cow dairy farm.  With a little less than 2 million dairy cows in California (not to mention other potential sources for methane from other agribusinesses), the potential for utilities out west to meet their goals is pretty significant at this point.

What's most exciting about this program is not so much the specifics, since those are actually not very pretty, but the creativity with which companies and entrepenneurs are approaching the question of alternative energy.  Ten years ago, the idea of reducing our dependence on fossil fuels was met with one uniform suggestion: cut our usage of electricity.  There was no other answer for it.  And while a smart energy efficiency program is still part of any plan intending to reduce emissions and get us out of a fossil fuel economy, better ways of producing power keep coming up, and keep getting better the more we start to look into it.

The other lesson here is that, while too much government intervention can distort the free market and create economically unsustainable environments, just the right amount can help stimulate innovation and promote adoption of new technologies.  Government's best role still tends to be as a large-scale consumer and early adopter of better technology--a role some corners of government like defense and space have long cherished--but these kinds of binding goals for renewable electricity seem to be having a positive effect as well.

In reality, it appears as though the biggest reason that utility companies did not adopt cleaner sources of energy, or work on innovation of such, is that they did not need to, and there was no external motivation.  Now that the motivation is there, look for the innovation to accelerate.