Houston company launches ambitious partnership to recover natural gas from landfills

As the old saying goes, “One man’s trash is another man’s treasure”. But in this case, to be more specific, it’s another person’s renewable energy.

Houston-based Archaea Energy is partnering with Republic Services, one of the nation’s largest waste management companies, to recover methane produced from landfills and refine it to power power plants, homes and vehicles. In addition to matching the quality of natural gas produced from wells, landfill methane, known as renewable natural gas, or RNG, has the advantage of emitting lower levels of greenhouse gases. and meet federal and state standards as a low-carbon fuel.

The companies plan to develop 39 RNG projects in 19 states, representing the nation’s largest renewable natural gas development. Five projects are planned for Texas: one in the Houston area, one in Beaumont, two in the Dallas-Fort Worth area and one in Amarillo.

“We’re really excited about this,” Republic vice president of environmental services Tim Oudman said in an interview. “Nobody else has done anything like this.”

Under the joint venture, Archaea Energy will develop, design, construct and operate the RNG processing plants located at landfills owned by Republic Services. Construction is expected to begin later this year, with the plants scheduled to be completed and commissioned until 2027.

When fully operational, the 39 projects are expected to generate more than 12.5 million cubic feet of RNG per year, about enough to heat 175 homes for a year.

Nick Stork, CEO of Archaea Energy, said the joint venture represents a good fit for both companies. Phoenix-based Republic was looking for a partner who could develop more than three dozen RNG processing plants and maintain consistency across projects in terms of efficiency and sustainability.

Archaea, on the other hand, specializes in a standardized approach to designing and building RNG facilities, which should reduce costs.

The two companies have signed a five-year agreement to create a joint venture valued at $1.1 billion. Under the terms of the agreement, Archaea Energy will invest approximately $800 million and own 60% of the joint venture, and Republic will contribute approximately $300 million and own 40%.

RNG primer

RNG, also known as biomethane, is produced from sewage, food waste and livestock waste such as manure. But the main source of RNG comes from landfills, according to an economic analysis by the Coalition for Renewable Natural Gas, a trade group that champions RNG in North America.

When solid waste decomposes in landfills, it emits gases – primarily the powerful greenhouse gas methane – into the atmosphere. But the gas, which would otherwise contribute to global warming, can be captured by various technologies and refined into biomethane by removing carbon dioxide, hydrogen sulphide and other unwanted gases..

The resulting RNG is interchangeable with natural gas from wells and can be injected into the natural gas distribution system.

As of mid-2021, 176 RNG facilities were in operation and 220 were under construction or planned, the Coalition for Renewable Natural Gas found. North American RNG production reached 87.3 billion cubic feet last year, but still represents a tiny fraction of the US natural gas market, which consumes about 100 billion cubic feet of gas per day.

fast growing archaea

Stork, CEO of Archaea, said he got into the RNG business as a landfill owner in Pittsburgh. “I started in this industry as a garbage collector, owner of landfills and garbage trucks,” he said.

Along with its landfill partner, Richard Walton, Stork decided to build an RNG plant. When he and Walton, now president of Archaea, realized they could build the project themselves at less than half the cost estimated by the contractors, they formed Archaea Energy in 2018. (Society is named after single-celled organisms that produce methane as a byproduct of decomposition.)

Last September, Rice Acquisition Corp., a special purpose acquisition company or SPAC led by former executives of EQT, the largest natural gas producer in the United States, based in Pittsburgh, combined Archaea Energy and a long-established renewable energy company, Aria Energy, to form the new Houston-headquartered Archaea Energy.

The Rice team, which had previously invested in Archaea, sought to combine Archaea’s RNG expertise and technology with Aria’s larger operational asset base to create an RNG producer of sufficient scale to to be able to develop in the market for new RNG projects. Following the merger with Aria, Archaea’s revenues have increased more than 10 times to reach $73.7 million in 2021. The company has approximately 100 employees in Greater Houston and 400 employees nationwide.

Archaea operates 19 landfill gas to power projects, which largely use untreated landfill gas to generate onsite electricity, as well as 12 projects that refine landfill gas into pipeline-grade RNG. In addition to its RNG joint venture with Republic, Archaea recently announced the acquisition of 14 other North American landfill gas to power projects through a merger with NextGen Power Holdings of Calgary.

Archaea markets its RNG production under fixed-price, long-term contracts targeting customers looking for a stable and reliable supply of low-carbon natural gas to help meet their climate goals. Customers include the University of California System and FortisBC, British Columbia’s largest utility.

“Our customers who use rRenewable natural gas today likes the benefits of natural gas, but also wants to decarbonize,” Stork said.


Republic Services has traditionally focused its RNG marketing on the transportation sector, where biomethane can be converted into compressed natural gas (CNG) or liquefied natural gas (LNG) to power truck fleets, Oudman said. Republic uses about 20% of its own vehicles on CNG, he said.

The joint venture, due to its ambition, is expected to attract the attention of transport fuel markets, which see RNG as a cheaper way to reduce carbon emission standards than alternatives, such as switching to electric vehicles. . Proponents of RNG, such as the Coalition for Renewable Natural Gas, say it could provide a small piece of the puzzle when it comes to moving the country towards a low-carbon energy future.

RNG provides about two-thirds of the fuel for natural gas-powered vehicles, according to David Cox, founder and chief financial officer of the Coalition for Renewable Natural Gas. Companies pay a premium for RNG because of its environmental benefits, which help them meet regulations and climate goals.

RNG is expected to cost $7 to $20 per million British thermal units, according to a 2019 study by the American Gas Foundation, an industry-funded research group. By comparison, spot prices for conventional natural gas are expected to average $5.72 per million British thermal units by 2040, from an average of $3.94 this year, according to the Energy Department.

But given the growing demand for cleaner energy sources, the industry’s future looks bright despite higher fuel costs, said Stork, CEO of Archaea.

“We actually think there is an imbalance between supply and demand. There is more demand than there is potential supply for renewable natural gas,” he said. “There are only a limited number of landfills and cows in North America, but there is a growing demand.

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