The Continuing Reign of Finance?

I graduated from Bainbridge Graduate Institute (BGI) with an MBA in sustainable business three and a half years ago. Farm Power was only a few months old, and one of our biggest hurdles was raising capital. While I had discussed this extensively with other interested classmates, our education hadn't focused much on finance--with the notable exception of one spectacular Entrepreneurship class, we had spent little time on the mechanics of debt, securities, and such.

Today, Farm Power has perfected its formula for funding capital-intensive projects, borrowing millions of dollars from sustainable banks while raising equally large amounts from investors and grants. I haven't kept up with the curriculum at BGI, but I have noticed that guest speakers these days are definitely trending towards finance. Unfortunately, it appears that most of the topics end up being on the service side of the industry--analysis, wealth management, and such. And all I can think of is: "None of this really matters!"

It probably sounds strange to hear this, so let me explain: what I see is an economy with vast amounts of money sloshing back and forth, try to cheat basic laws of physics and biology. New sources of energy or sustenance can't be conjured out of thin air, so finance turns to speculating in derivatives of the tangible. The simple existence of hedge funds and their manager compensation norms is evidence enough that there is no shortage of capital willing to pay obscene fees for a chance to cut corners on actual wealth creation. Meanwhile, creating sustainable new sources of food, electricity, or transport is hard, risky, and requires a long-term view.

What this world needs is not another level of money managers or more analysis of mutual funds or even another investment bank; what it needs is more people working to create long-term value that is actually worthy of financing. Our system of worshiping at the temple of finance may or may not be beyond help, but there are ways for truly good ideas to access capital and investors who want to provide it.

What about our own waste?

After dozens of posts, readers may be growing impatient with my focus on dairy cow manure. So, for a change of pace, I turn to pondering the organic waste that comes out of own homes--the majority of it food waste but also excrement. This potential energy leaves by two main routes--the sewer system (from both toilets and sink disposals) and the garbage system. In rough terms, each American dumps and flushes a pound of "fuel" every day, to be dispersed in sewage-treatment plants and landfills. I say dispersed because although both wastewater-treatment plants and landfills can be designed to capture some of the energy in garbage and sewage, their main goal is to make waste go away. And the material that arrives at these plants is already heavily diluted by water or inert solids, so energy production remains inefficient.

But what if we diverted all this organic waste--perhaps sending it in special pipes to small, energy-producing local digesters? One pound per person per day, converted into biogas, can be burned to produce about one kilowatt-hour of electricity--with enough extra heat (left over after warming the digester) to bring five gallons of water to a comfortable temperature for showering. Unfortunately, the typical American needs about twelve kilowatt-hours for household use, along with similarly excessive amounts of heat.

So there, in short, is why I focus on dairy manure: it produces far more energy than the farms could ever use and involves a lower "yuck factor" than what we dump and flush!

Lynden Approaching Completion

Four months after we broke ground, our Lynden digester project is almost ready to come online. The Bellingham Herald ran a story on our progress (and a great photo of guys from Andgar working on the flare). There are also a lot more pictures in the Whatcom Farm Friends photo galleries on the project.

Spreading the word

In a few weeks, I'll be leaving the Pacific Northwest (for the first time in almost a year!) to go speak about the Farm Power experience. On October 18th, I will be joining hundreds of bioenergy professionals in Des Moines for the BioCycle "Renewable Energy from Organics Recycling" conference. BioCycle magazine provides regular coverage of the digester industry along with composting and other types of waste recycling, so they draw a wide audience and we hope that BioCycle will bring this conference to our region in the future--by then we hope to have many more projects to talk about.

Meanwhile, our friends at NW Farms & Food recently wrote an story on our progress; like all the articles on the website, this one combines depth with clarity, but it also managed to capture the genesis of Farm Power better than I'd ever heard it expressed--with one of my quotes, no less!

"I was thinking about manure digesters [in 2004], but I figured that by the time I could do anything, half the farmers in the county would already be working on their own project. Lo and behold a year later — nothing. Nothing at all!”

“So that’s when we headed down this path,” he said. “If nobody was doing it, yet it was clear that it could be done, that it should be done, then we just had to figure out a better way to do it!”

And we continue to work every day to get digesters built throughout the Pacific Northwest, coming up with little innovations that--unexceptional by themselves--add up to real renewable energy projects that otherwise wouldn't happen. Construction on Farm Power Lynden is nearly complete, and regular readers know we're pushing forward on other biogas installations. I'll try to post a little more often this fall to keep spreading the word online as well as on the road.

Summer in the manure business

While many people slow down a bit during the summer, we at Farm Power have been steadily accelerating. Our builder Andgar has added a photo page for our Lynden project, showing the rapid construction progress there. It appears likely that our second digester will be completed in half the time it took to build the first one--it helps to build during the summer rather than starting in November!

We've also been getting out in the community a bit, finally attracting the attention of business/tech website Xconomy after giving an update at the Northwest Energy Angels summer social. And two different websites dedicated to spreading good ideas have Farm Power material: NWCleanTech--a new site focused on "connecting regional innovation"--added Farm Power to its list of featured Pacific Northwest companies and also put us on their cool interactive map, while a member of Planet Forward--a project from George Washington University--put together a multi-media post called "Visiting an Anaerobic Methane Digester" after touring the Rexville facility.

Speaking of tours, we've scheduled one more tour for Saturday, August 21st. We'll be meeting at 11am by the picnic shelter next to the Rexville Grocery, giving a little overview, and then proceeding to the digester. Afterwards, I look forward to relaxing back at the Rexville's mini-restaurant and continuing to discuss renewable energy; we're still raising money for a little while longer, so come get your questions answered.

Further growth at Farm Power

Last year around this time, we still had yet to fill our first digester's tank with manure; how things have changed. Now--besides all the operating experience from running Farm Power Rexville near Mount Vernon--our second digester is under construction, our third project has been financed and is in permitting, and we just received a $1 million grant from the Oregon Department of Energy for a Tillamook installation! The Tillamook region features dozens of medium-sized farms that pasture extensively in a temperature environment. It's an ideal location for one of our multi-farm community digesters. We've been talking to area farmers for over a year and are happy to be able to move forward; some locals have been happy to hear about us as well and we quickly received good coverage in the Tillamook Headlight-Herald.

To help us fund this rapid expansion, we are going back out to our supporters to raise more equity--by selling ownership units in Farm Power. For angel investors, we've been posting information on AngelSoft and we can take money from accredited investors anywhere in the United States. However, we are most excited about our ability to accept investment from a broad swathe of Washington State residents through a small public offering; an info sheet on the offering can be found at our company homepage. Anyone interested in further information can request our offering circular by contacting us or writing to invest@farmpower.com. One of the best ways to understand what we do is to attend one of our upcoming tours, currently scheduled for 10am on Saturday July 24th and 2pm on Tuesday July 27th--we update the schedule regularly at http://www.farmpower.com. We have gotten great support from our current members, and we look forward to expanding the Farm Power membership.

A digester in action

As Farm Power grows, we keep meeting more and more people who have heard of what we do but have never seen a manure digester; we'd like to start changing that.

First, we recently posted a YouTube video hoping that our maintenance work could get on the legendary Discover Channel show "Dirty Jobs". Mike Rowe has already done a show involving a manure digester, but we're sure working at ours would be more fun!

Back in March, a local television station did a five-minute segment giving a the best video overview to date of the Rexville project; they also took some footage at the Lynden site, but only a greenhouse was visible at that point so we'll have to wait for another segment to cover our second project.

Finally, for those who want to see manure-to-energy in person, we've scheduled a tour for Wednesday July 14th. We'll be meeting at 2pm by the picnic shelter next to the Rexville Grocery, giving a little overview, and then proceeding to the digester. Since the actual experience can be a bit smelly, don't hit the tour on the way to an important social event, but we do encourage anyone interested to come. Give us a call or send us an E-mail if you have any questions.