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Natural Gas June 22, 2021 01:51:32 AM

Renewable Natural Gas Set For Disruptive Growth

Anil
Mathews
OilMonster Author
The solutions that Vanguard offers don’t amount to a miracle cure for all the world’s climate ills, which is of course true of any energy source.
Renewable Natural Gas Set For Disruptive Growth

SEATTLE (Oil Monster): Imagine if you will a renewable source of energy without constraints of time of day or weather. A renewable source of energy whose surface of potential is just now being scratched. Perhaps most importantly in today’s political environment, a source of renewable energy that does not rely on supply chains dominated by adversarial nations as the source of its feedstock, but America’s family farms instead.

That is the line of business in which Vanguard Renewables and its new CEO, Joel Gay, are engaged. It is a business focused on converting manure and food waste into renewable natural gas (RNG). What remains following the production of RNG is then turned into organic fertilizer, returning the nutrients from the manure and food waste produced back to the soil to be recycled again and diverting tons of waste that would have otherwise gone into landfills or incinerators.

RNG is the first carbon-negative energy source since it is produced from organic matter that would otherwise be released as a powerful greenhouse gas. As a result, Vanguard is helping companies like Starbucks and Unilever meet their “net-zero by 2050” pledges that have become a fad among major energy and consumer goods companies.

The positive news for everyone is that this industry is scalable in a major way. Vanguard, which was founded in 2014 by a pair of entrepreneurs, already has farms in development in 17 of the 50 U.S. states and is embarking on a plan for major expansion. To manage that expansion the company just announced the hiring of a new Chief Executive Officer, Joel Gay.

“Vanguard has been a bona fide disruptor within the clean-tech and renewable energy markets through its creation of the most scalable RNG platform in the world – a differentiated commercial model incorporating vertical integration that contemplates the most valuable components of the renewable energy and waste management value chains,” Gay said in a company release. “This groundbreaking model has forged a truly circular economy that prevents waste and pollution, captures clean energy for beneficial use, and creates value for all stakeholders. In sum, this equates to an incredibly unique and timely opportunity that I am keen to further scale and monetize. Vanguard’s founders, John Hanselman and Kevin Chase, have well-positioned the Company for its next phase of growth and value creation.”

In a conversation this week I told Gay that his company’s move was the first I had actually learned in some detail about this part of the energy world, and that I felt a little guilty about that. “You’re not the only one who was relatively unaware of this sector,” he said with a laugh. “Up until about 4 months ago I was, too. I had heard about landfill gas, but wasn’t familiar with RNG or bio-gas as a function of anaerobic digestion. So I have spent the last 4 months just auto-didactically getting up to speed, and clearly feel as though this sector is set to experience massively explosive and disruptive growth.”

Vanguard, already one of the biggest players in the production of RNG by anaerobic digestion nationally, stands to play the leading role in that growth. “In terms of the growth potential, it is relatively unlimited,” Gay said.

“The business is bifurcated between organic and Ag. On the organic side, we are combining both manure and organic recyclable material – this is off-spec food, spoiled food, organic liquids or organic solids. We combine all of those into a homogenous slurry, which is then fed to our anaerobic digesters. So, on the organic side, we end up with roughly 2 parts manure combined with 8 parts organic materials.”

Gay said that currently the business model is to target big urban centers with a variety of sources for this organic material – restaurants, grocery stores, etc. – that can be aggregated into large enough volumes to create economies of scale.

Equally interesting is the Ag side, where the company works hand in glove with big farming operations to set anaerobic digesters directly on their site. “On the Ag side, it is simply the creation of bio-gas through cow manure exclusively,” Gay said. “It’s two very different processes, but ultimately, they are producing the same end product.

“On the Ag side, we have an incredible long-term partnership with Dominion Energy, where we have consummated a ‘build and operate’ contract. There are various possible models. Within energy, it can be ‘build only,’ ‘build and operate,’ or it can simply be ‘operate.’ So on that side of the business our model is a ‘build and operate’ where Dominion owns the assets – which is excellent because it allows a relatively small company like ours is today to experience exponential growth without taking on the entirety of the capital risk.”

On the organic side of the business, Gay said the company’s current plan is to “build, own and operate,” thus taking on the capital, execution and technology risk. “It is entirely conceivable that, over the next 5 years, we could have anywhere from 250 to 500 anaerobic digesters across the lower 48 states,” he said.

Where ESG concerns come into play, Gay acknowledged that RNG is an “ESG business” but also pointed out the fact that this business “lies at the nexus between energy, sustainability and the environment.” The company has not produced a formal ESG report to this point, but Gay said he plans to make addressing those concerns one of first top priorities.

Gay, who has an MBA from the University of Chicago’s Boothe School of Business, has had a meteoric rise across his career. An excellent athlete, he first shot for a career as a pro soccer player, but abandoned that at the age of 22 and set his sights on his business career, including – as he puts it – the “arrogant” goal of becoming a CEO by the age of 40. He beat that goal by several years, and in 2016 was named to Fortune’s ‘40 Under 40’ list, an award he called “an honor of a lifetime.”

As Muhammed Ali famously said early in his career, “It ain’t bragging if you can back it up.” Given his background and accomplishments, it is no surprise that Gay became the choice for the new CEO of this cutting-edge company looking to dramatically expand its reach.

The solutions that Vanguard offers don’t amount to a miracle cure for all the world’s climate ills, which is of course true of any energy source. But this method of producing RNG does come with a practically limitless source of feedstock and lacks the natural constraints and international supply chain issues that threaten to severely limit other forms of renewable energy in the years to come. All of these factors and more make this a company and the business sector it is a part of well worth watching in the coming months and years.

Courtesy: www.hellenicshippingnews.com                                                                      

               

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