Microbe-managing Mother Nature: From energy to E. coli, microbe management is big business.

The next energy source: Barnyard animals

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Microgy deploys thermophilic digesters, a different type of technology in which sealed vats are heated to around 130 degrees Fahrenheit for about three weeks. The company argues that the strain of bacteria it uses is more efficient and works 24 hours a day because the weather doesn't affect production.

Thermophilic digesters can also break down waste grease, fats and other byproducts into fuel along with manure. The technology comes from an overseas company called Danish Biogas Technologies, which awarded a license to Microgy in the late 1990s.

"The technology might be new here, but there are thousands of facilities in Europe. Because of higher energy prices over there, the industry developed faster," Environmental Power's Tejwani said. Most European facilities are small, but he estimates that 1,000 manure sites exist in the United States that could export fuel.

Even though the benefits seem fairly clear on paper, farmers have been reluctant to invest in the technology because of initial equipment costs. So some digester manufacturers pay for the technology themselves and turn a profit from selling gas, rather than the equipment. This cuts manure expenses for farmers by not requiring any investments.

Farmers that do operate their own digesters can benefit by using the energy they produce. California cheesemaker Joseph Gallo Farms has a seven-acre mesophilic digester that powers a generator providing about 700 kilowatts of electricity, about half of one farm's electricity needs. Steam from the generator is then trapped and used to run boilers, saving about $2,000 a day in electricity and $1,000 in propane.

"With energy prices the way they are going, this looks like it could be popular," said Carl Morris, chief operating officer for Gallo, which is also building a thermophilic digester at another facility. "The environmental benefits are tremendous. They are not high-tech, strictly speaking, but the engineering is quite complex."

Morris, however, does cite some obstacles to widespread adoption. Unlike Gallo, a relatively large enterprise that is a spinoff from the wine empire bearing the family name, many farms will produce more energy than they can consume.

If farmers don't have the means to easily sell their excess energy as natural gas or electricity on the open market, making the digesters pay for themselves will be tough. To date, the federal government has had to subsidize the construction costs.

Microgy is a long way from profitable, in part because of steep equipment costs. In the fourth quarter of last year, Microgy lost $2 million and reported revenues of $527,000. Revenues were higher before it switched from selling digesters to building and owning them.

Nevertheless, the reasons for adopting the technology are piling up. As Jensen says, "It doesn't eliminate manure, but it makes it easier to manage."