By: Lydia Crawley
The Parsons Advocate
Jeffrey Craig from Renewable Natural Gas Company, LLC presented a proposal to the Tucker County Solid Waste Authority at the board’s meeting. Under the proposal, the company would collect, refine and market renewable natural gas produced by the Landfill with the Solid Waste Authority receiving a 13% royalty from the sales.
Craig said he presented the background of the project at the September meeting of the Authority, so he would just get to the basics of the proposal. “So, last month I came down and gave you the background and we will just cut to the chase,” Craig said. “What we’re prepared to offer today is a proposal where we would pay for the design, permitting, installation, construction and operation of the landfill gas collection system here on the site.”
According to Craig, his company would work with Centec on the design of the system. “We would get together with Centec and put together a design and then obviously obtain a permit and submit to the state,” Craig said.
Craig said that the Authority would have sign off power on the project. “Once that gets approved, obviously you all would have to sign off on it as well and be comfortable with the design and all that sort of thing, that goes without saying,” Craig said.
The installation of the system would be paid for by Renewable Natural Gas Company, LLC at no cost to the Solid Waste Authority under the proposal. “We would pay for the installation,” Craig said.
The company would foot all costs of the project, according to Craig. “I think, the last time, the sense was that you all wanted us to own and operate it,” Craig said. “We are happy to do that. So, at no cost to the Authority, we would permit, design, construct, install, own and operate the Landfill Gas Collection System here on the site. That is Phase 1.”
Craig said Phase 2 would involve connecting to the Columbia Pipeline. “The second thing that we would do is install the equipment to process the gas that comes out of the Landfill and interconnect it with the Columbia Pipeline that borders the property,” Craig said.
Craig said his company has already been in talks with Columbia about the Tucker County project. “We’ve had two conferences, telephone conferences with Columbia Gas Transmission,” Craig said. “We’ve been working with the folks out of their Houston office.”
Columbia is supporting the project, according to Craig. “They’ve been extremely supportive,” Craig said. “They’ve done these kind of projects before. In fact, I’ve worked with them before, as well and of all the pipelines, they’re in the top two or three. They think this is a great project.”
Craig said that the Pipeline should have no issues with accepting the gas produced by the facility. “This line has more than ample capacity, which for all of us is important,” Craig said. “They have enough gas moving through that line that they don’t believe there will ever be a problem with us injecting directly to that line.”
Craig said the facility’s proximity to the storage field is advantageous to the project. “Most of this gas runs to the storage field,” Craig said. “They move gas in and out of the storage field. I’m not exactly sure where it is, but I don’t think it’s too far away and that is a prime position to be in because there’s always large volumes of gas.”
Craig said the facility’s location next to the interstate pipeline is what made the site attractive. “What can happen with a number of projects, which is what made this site so attractive, is if you don’t have a large interstate pipeline near your facility, you often times have difficult problems getting the gas into the system.”
According to Craig, smaller pipelines and companies do not like renewable gas because of potential problems that may arise. “Because if there’s an industrial plant 50 feet down the road or houses, something like that and the gas gets off spec a little bit, it could cause damages to people’s furnaces, it can create havoc,” Craig said. “So, local gas companies aren’t real excited about these things, these projects, but the interstates are.”
Craig said his company was willing to offer a royalty payment of 13%. “What we would be proposing would be to pay a royalty of 13% of the gross revenues and that’s simply the volume of gas we produce times the price we get paid,” Craig said.
Craig said there will be transparency with the project and the relationship his company will have with the Authority. “It’s very visible,” Craig said. “Very transparent. There are no hidden charges. No sub charges. None of that. It’s just A times B and that’s what you get. “
Initial talks involved a royalty of 12%, according to Craig, but the number was revised after the positive conversations with Columbia. “We had talked about 12%,” Craig said. “Now that we have talked to Columbia and we realize that we can do the type of project we thought we could do, we wanted to raise it to 13%.”
Under the forecasted royalty schedule provided by Craig, the Authority would receive an estimated $542,113 in royalties in 2025 with the amount rising each year to a payment of $636,436 in 2032. Craig did tell the the Authority that the royalties were tied to market price, so as the price of the gas increases, so would the payments to the Authority.
Vice-Chair Dennis Filler asked what the expected life of the Landfill would be for gas production. Craig replied that as long as new fill was added, the gas production would continue to rise, but even if the Landfill no longer took fill, there would still be a steady gas production for at least 10 years.
Craig said he would be supplying the Authority with a draft of the contract for review. No action was taken on the proposal by the board.
The next meeting of the Tucker County Solid Waste Authority will be held December 11th at 3 p.m. at the Tucker County Solid Waste Authority Office located at 284 Landfill Road in Davis.