BioCycle September 2011, Vol. 52, No. 9, p. 39
Fair Oaks Farms assembles team to roll out fleet of CNG engine-equipped trucks to deliver milk using natural gas that will eventually come from the dairy digester.
Nora Goldstein

FAIR Oaks Farms, based in Fair Oaks, Indiana, has embarked on a new venture – a compressed natural-gas (CNG)-powered milk fleet that will reduce the use of diesel fuel by more than 1.5 million gallons/ year. A portion of the natural gas to be used is renewable, tapping biogas from an anaerobic digester with capacity to process manure from 10,500 cows at the Fair Oaks Dairy. Two fueling stations are being installed – a northern station in Fair Oaks, and a southern station in Sellersburg, Indiana near the Kentucky border.
“Conditioned biogas from the digester will be transported via pipeline to the Fair Oaks fueling station where it will be pressurized and either used directly for fuel if trucks are there, or go into the natural gas pipeline,” says Mark Stoermann, the project manager. “The southern fueling station in Sellersburg will use exclusively natural gas, but what is taken out will be offset by what we put into the pipeline at the northern station.”
A new fleet of 42 milk-hauling trucks, equipped with Cummins Westport 8.9L natural gas engines, started being delivered to Fair Oaks last month. The CNG fleet will transport 53, 6,000 gallon loads of milk daily, equal to 7.5 million gallons per month or 90 million gallons of milk a year. The emissions and carbon footprint of CNG from the pipeline is over 40 percent less than that of diesel fuel – and that doesn’t account for the reduced carbon footprint of using renewable natural gas.
The trucks are equipped with two extra tanks that enable the vehicles to travel up to 600 miles on one fueling – in order to cover the distance to a milk plant in Murfeesboro, Tennessee that Fair Oaks supplies. The other milk plants are in Indianapolis and Winchester, Indiana. “The extra tanks were paid for by a $2 million grant from the Indiana Office of Energy Development,” says Stoermann. The project also received a $750,000 grant from the Greater Indiana Clean Cities Coalition.
Fair Oaks Dairy installed a GHD two-stage, mixed plug-flow digester three years ago. While several other digesters operated by Fair Oaks Farms on dairies in the same area are generating electricity with the biogas, the power produced by this digester far exceeded the economic payback from selling power to the grid. “We would be producing electricity from the biogas generated, and be getting paid less per kWh than it would cost us to produce it,” explains Stoermann. “That isn’t bad if you are producing a little bit more power than you are consuming, as is the case with our other digesters. Selling to the utility helps cover the labor and maintenance on those engines. But at the volume of electricity we would be generating at this digester, the resulting loss did not make sense.”

That economic reality led Fair Oaks Farms and its founder, Mike McCloskey, to seriously evaluate other uses for the biogas, including fuel for its milk delivery fleet. “We started working on this project over two years ago, and were able to pull together a team to make it happen,” says Stoermann. “All of the technology we are using is proven and all the companies we have partnered with are proven companies with great track records.”
Companies that have come together for this project include UTS Residuals Processing, LLC, which is supplying the gas conditioning system, Ruan Transport Corporation, which is providing the drivers and maintaining the fleet, Clean Energy Fuels Corp., which built and will operate the CNG fueling stations, and New Frontier Holdings, the lead investor in the project. “The companies involved are all committed to renewable energy, sustainable processes and doing the right thing,” says McCloskey. “We also have had the support of Indiana Governor Mitch Daniels, the state of Indiana and the U.S. Department of Energy.”

PROJECT COMPONENTS
UTS is installing a Flo-Tech Green Lane gas cleaning system at the Fair Oaks Dairy. “We are connecting with the flange on the downstream side of digester, which leads into the gas upgrading skid,” says Bernard Sheff, president of UTS Residuals Processing in Eaton Rapids, Michigan. “Conditioned gas will be put into a pipeline that is a little over 5 miles long, and transported to the fueling station. Two 500 psi compressors have been installed so the gas can be injected directly into the pipeline or directed to Clean Energy’s storage tanks.” UTS will do the sampling and monitoring of the gas and maintain the conditioning system.
Construction of the northern fueling station was completed in August with construction on the southern station underway at press time. The northern station will start out utilizing natural gas until the pipeline with the conditioned biogas and the compressors are fully operational. Several Ruan trucks in the Fair Oaks fleet were able to fuel up on CNG in early September. Clean Energy Fuels has equipped the station with the two standard sizes typically used to dispense the gas for heavy duty trucks and light duty trucks and passenger cars. In addition to servicing the dairy fleet, the station will be open to the public. CNG is typically priced significantly lower than gasoline.
“This is the first dairy biogas project that we have been involved in,” says Greg Roche, Clean Energy Fuel’s director of business development. “The landfill gas industry has had a head start on producing renewable natural gas because it has been required to capture the landfill gas for a number of years. But the dairy sector has just as much potential to take advantage of the biogas from digesters. The value of the Fair Oaks Farms’ project is that it will bring this potential to the forefront.”
Fair Oaks Dairy is receiving some corn-based substrates from the ethanol industry to boost biogas production. It is installing a 1 MW GE Jenbacher engine to offset the power used by the gas conditioning unit and other equipment. Heat from the engine will be used to help heat the digester. Fair Oaks also is installing a heat exchanger to utilize heat in the effluent to preheat the influent going into the digester.
The Fair Oaks Farm CNG fleet is leasing the trucks from Paccar (PacLease), the parent company of Kenworth that supplied the vehicles, and in turn is contracting with Ruan who is operating the fleet. Ruan Transport Corporation, based in Des Moines, Iowa, is a nationwide company of “dedicated contract carriage” operations. “Essentially, we manage fleets dedicated to specific customers in regions around the country,” explains Ben McLean, senior vice president & CIO of Ruan Transportation Management Systems. “The scope of each operation is more regional. So with Fair Oaks Farms, the assets, drivers, data management and maintenance are dedicated to them. And because the system is regional – essentially a closed loop, captive fleet – we only need two fueling stations to make this project a reality.”
The milk truck payloads are in the range of 80,000 lbs total weight, adds McLean. The 8.9L Cummins Westport ISL G engine installed in the Fair Oaks fleet is more typically used for medium-duty range engines and applications, including buses, refuse trucks and local delivery vehicles. “The ISL G is unrestricted for use with payloads up to 65,000 lbs, and selectively approved by Cummins Westport for applications to 80,000 lbs,” says William Boyce, Eastern Regional Manager for Cummins Westport, Inc. “With weights of 80,000 lbs, typically a 12L or 15L engine is used.” Cummins Westport is currently field-testing an 11.9 liter CNG/LNG engine that is projected to be in the marketplace in 2013.
Boyce acknowledges that there are some concerns about the performance of the ISL G engine in this heavy-duty application. “We’ve been pleased with ISL G performance to date, and have introduced specific guidelines to make sure that everything is being done to promote their longevity, including regular maintenance and service,” he notes.
Although the capital costs for the project are significant, if the price of diesel holds in its current range and the assumptions used for cost of service and fuel efficiency (miles/gallon) of the trucks is on target, Stoermann anticipates a payback of three years. “We realize there are unknowns with the project, and whenever there are unknowns, there are risks. But we have an opportunity to prove this technology and show the value that can be recovered for American dairy producers.”