Duke University report characterizes U.S. biogas potential
A new report published by the Nicholas Institute for Environmental Policy Solutions at Duke University seeks to uncover under what conditions a substantial, decentralized domestic biogas market could develop in the United States by 2040. The report, titled “Biogas in the United States: An Assessment of Market Potential in a Carbon-Constrained Future,” determined that biogas could supply as much as 5 percent of the total natural gas market in 2040, when U.S. consumption of natural gas is expected to reach nearly 30 trillion cubic feet.
According to the report, the analysis estimates the potential supply of biogas nationwide, assuming that sources of biogas enter the market at their corresponding breakeven prices. Landfill waste, animal manure, wastewater sludge and biomass residue are some of the feedstocks investigated. The researchers take into consideration detailed cost, feedstock and technology data. Cost estimates include gas collection or production, clean up, compression and piping.
Within the report, the authors not that their findings indicate enough biogas could be generated in 2040 to supply between 3 percent and 5 percent of the total natural gas market at prices of $5-6 per MMBtu, with the largest source of biogas estimated to be thermal gasification of agriculture, forest residues and biomass. In the long run, the report predicts that the market share of biogas could rise much higher than the 5 percent, reaching as high as 30 percent, but only at a very high price mark-up relative to natural gas prices.
While the report determined that producing pipeline-quality biogas would be a lower cost option that using biogas onsite to generate electricity, when other factors were considered, the use of biogas to produce electricity could actually be more profitable than supplying it to the pipeline. The analysis also concludes that policy incentives, such as renewable fuel mandates, subsidies, or low carbon incentives, are likely necessary to spur growth in the biogas market.
The study was authored by Brian Murray, research professor and director for economic analysis at the Nicholas Institute; Christopher Galik, senior policy associate at the Nicholas Institute; and Tibor Vegh, an associate in research in the Environmental Economics Program at the Nicholas Institute. A full copy of the report can be downloaded on the Nicholas Institute website.
© Copyright 2014 - BBI International - All rights reserved.