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Exclusive: Startup launches its first coal seam bioreactor

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May 23, 2024
Illustration of a light bulb wearing a cowboy hat

Illustration: Sarah Grillo/Axios

Cowboy Clean Fuels, a startup injecting sugar beet waste into coal seams in Wyoming, is raising $10 million and kicking off its first commercial project this week, the company tells Axios.

Why it matters: The startup's process both removes carbon and generates renewable natural gas, tapping into two hot sectors of the energy transition.

Zoom in: Cowboy Clean Fuels co-founder and CEO Ryan Waddington said the company is planning to do its first commercial injections this week of the biomass into a coal seam in Wyoming's Powder River Basin.

  • The Series B round, which is halfway closed, includes funds from existing investor Machan Investments, the family office of natural gas vet Dan Dinges.
  • A portion of the Series B round is being used as a match for a $7.8 million grant the company secured from the Wyoming Energy Authority.
  • The tech was developed by co-founder and CTO Michael Urynowicz, a professor at the University of Wyoming's Center for Biogenic Natural Gas Research.

How it works: The company takes molasses residuals from sugar beet processing and injects them over a thousand feet below the ground into coal seams.

  • In certain regions of the world, like the Powder River Basin, coal seams contain microbes that convert organic matter into methane.
  • Cowboy Clean Fuels is feeding those microbes a sugary snack and then collecting the renewable natural gas. As the microbes break down the biomass, the carbon dioxide is sequestered into the coal seam.
  • The company is unique in that it plans to sell both carbon removal credits and renewable natural gas. It's essentially making coal seam bioreactors and tapping coal assets for the clean side of the energy transition.

The big picture: Carbon removal companies, like Charm Industrial and Graphyte, are getting creative injecting various biomass sources underground.

  • Large corporates like Microsoft are spending heavily on buying the carbon removal credits generated by these types of projects to help offset their growing carbon footprints.
  • At the same time, companies with net zero ambitions can run vehicle fleets and distributed energy assets on renewable natural gas, making it a hot commodity.

What's next: It'll take 3 to 5 months for the microbes in Cowboy Clean Fuels' coal seams to start producing renewable natural gas.

  • The company is injecting 1,000 tons of the biomass per month at the first site but plans to ramp up to 200,000 tons per year.
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