Today, one of the largest infrastructure companies in North America Kinder Morgan has reached an agreement to acquire Kinetrex Energy, the largest supplier of liquified natural gas (LNG) in the midwestern region and a growing producer and supplier in the renewable natural gas (RNG) market. Kinder Morgan now joins a plethora of companies making their way into the RNG and LFG market, aiming to convert waste into energy.
Landfill gas also known as LFG is a combination of many gases formed as a product of anaerobic decomposition reactions that occur from organic waste breaking down in landfills. Its composition approximately consists of 50% methane and 50% carbon dioxide. Landfill gas can be harmful towards the environment and contributes to climate change. Due to increasing environmental regulations and the incentives for low-carbon energy, companies in the waste management industry, with the help of innovation and new technologies, are creating projects in partnership with landfills across the United States to turn LFG into a renewable source of energy.
While there are many different types of landfills such as industrial waste landfills and construction and demolition waste landfills, LFG is most abundant in municipal solid waste (MSW) which are the third largest source of methane in North America. In 2019, this production of methane was equivalent to the emissions of 22 million cars annually or the emissions from the energy usage from 12 million homes annually. Landfill gas, which contains methane, is most commonly found in MSW landfills, and therefore many of these sites are being used for LFG projects.
The three main project types from LFG include the generation of electricity, fuel gas, and renewable natural gas (RNG). Approximately 7 out of every 10 LFG projects are operational for electricity generation. For example, Portland-based cooperative PNGC Power operates one of the LFG-to-electricity projects at the Coffin Butte Landfill site in Corvallis, Oregon. At this site, landfill gas is trapped and collected, and then used to provide power to three 16-cylinder and two 20-cylinder generator engines, which then provide electricity to approximately 4,000 homes.
LFG can also be converted to renewable natural gas (RNG). Landfills typically drill into the land and install pipes as injection systems to capture the gas before it can be released into the surrounding environment. Prior to treatment, biogas in its raw form has content about 40-60% methane, and after treatment, the RNG that is injected into a pipeline has methane content greater than 95%. This treatment method includes the removal of contaminant gases such as carbon dioxide, siloxanes, and hydrogen sulfide.
Within the last five years, over fifteen projects have become operational spread across several states in the U.S. Since 2005, the number of landfill RNG projects in the United States has increased from 11 to 71 operational projects over a 15-year period, marking ~13% growth rate each year. As shown in Exhibit 1, the number of new RNG projects in the U.S. has grown significantly.
Many supermajors in the oil and gas industry have already begun to heavily invest in the low-carbon, renewable gas market, and companies like Amazon, UPS, and Anheuser-Busch have already become consumers of RNG for transportation, as a replacement for diesel fuel. This interest in RNG will lead to additional projects and scale into the industry as reflected by Kinder Morgan’s acquisition of Kintrex Energy today. ADI Analytics has conducted extensive research and consulting work in waste conversion to energy, natural gas treatment, renewable natural gas, and landfill gas for a wide range of waste management, oil and gas producers, and technology providers. Contact us to learn more.
– Arul Walther
