Danny Kluthe’s not too worried about the high price of diesel fuel.

After all, he gets 71 miles per gallon.

But his pickup’s not running on diesel. It’s running on biomethane generated from his 8,000-head hog operation.

“This is big,” he said with a smile as he surveyed his operation. “All livestock producers can be energy efficient.”

Kluthe’s operation sits in the northeast corner of Colfax County, tucked in the hills across from Sacred Heart parish at Olean.

He always saw animal waste as a natural resource that was simply being wasted.

So in 2005, he installed an anaerobic digester that creates methane to power an 80-kilowatt generator. The electricity produced is distributed onto Cuming County Public Power District’s power lines and sold to Nebraska Public Power District.

Kluthe’s OLean Energy powers 53 homes each year.

An odorless effluent is diverted into a lagoon and used as fertilizer for farmland.

The first year was tough. There was the initial financial investment plus a learning curve.

“The first year, I didn’t understand a digester, and a digester really didn’t understand me,” Kluthe said.

But once they got to know each other, he said, he could generate 100 kilowatts from his 80-kw unit.

Kluthe, who is still the only producer in Nebraska to have a digester system, said there were some immediate benefits.

“All the manure that goes through this digester comes out odorless,” he said. “We can take livestock and make them neighbor-friendly. And that is huge economic development.”

He said the hogs replace the energy source each day and it’s better for the environment.

Still, he knew the methane could be utilized in more ways, especially as he burned off any leftover methane.

“When the universities would come out, the tech schools would come out, I’d challenge them — figure out a way to compress this and store it and we’ll do well,” he said.

Then he got a call that would propel his ideas to reality.

Kevin Kenney, a self-proclaimed “fledgling inventor,” saw what Kluthe was doing and liked it, but felt he needed more demand for his product.

“I looked at the value chain of energy, and we’re losing it through Mother Nature,” he said.

Kenney, with his background in the petroleum industry, thought the two could work together, using the compressed natural gas (CNG) technology that is being developed in California.

"I found out that you can’t compete with methane on a local level,” he said.

Kenney said diesel engines have changed little since they were developed and today’s tractors are only 20 percent more efficient than those from decades ago.

“Why should we be stuck on technology that’s 80 years old?” he said.

Using new technology, the pair worked to compress the additional methane produced by the existing digester.

“We’re taking a technology that’s already here and integrating it to a rural setting,” Kenney said.

They altered Kluthe’s truck with a natural gas tank — they have a patent pending — and successfully got it to operate on 80 percent biomethane and 20 percent diesel.

“That was awesome,” Kluthe said of the moment he realized their venture was successful.

And, he said, it’s a no-brainer that producers around the state and country should use this technology.

“I said back when I built this that all dairies and hog operations when they build a unit will automatically build this right into it,” he said. “It’s here. They will want to do this.”

Back in 2005, installing a digester to create electricity wasn’t a huge incentive, he said.

But this development means livestock producers can now get more for their money.

“All we need is a hole in the ground, a boiler to heat it and a compressor, and we’ve got our own energy,” he said. “The payback is phenomenal.”

The pair wants to help other producers install similar systems.

“We’ll help anybody get to this point if they want to,” Kluthe said. “We can give them a turn-key operation the whole way.”

In addition to averaging 70 miles to the gallon with the biomethane, there are other advantages to outfitting vehicles to run on the biomethane, as well.

Kenney said there are no emissions with biomethane. It simply burns off as water and carbon dioxide.

As opposed to ethanol, there is no “food vs. fuel” debate and its cost does not rise and fall with corn prices.

“I support the ethanol industry, but we’ve got to use what we’ve got on the farm,” Kenney said. “And everybody’s got this.”

Kluthe and Kenney also have outfitted a tractor to run on biomethane.

If Kluthe’s away from home in his biomethane-fueled pickup, he can fill up at any CNG fueling station.

Kenney said it’s essentially the same product. Natural gas is 95 percent methane while they are producing 99 percent methane.

The only difference is that natural gas is taken out of a well.

“Why can’t we take it out of farms?” Kenney said. “We’re just letting it go to waste.”