MCCOMMAS BLUFF LANDFILL RNG PROJECT

The McCommas Bluff Landfill in the City of Dallas, Texas covers 966 acres and is among the largest operating landfills in the United States.

In 2007 Cambrian, with a partner, acquired from a trustee in bankruptcy the operating assets of a failed RNG, or renewable natural gas (pipeline quality biomethane produced from landfill gas), project that collected and processed landfill gas produced at the McCommas Bluff Landfill and upgraded it to meet the pipeline injection standards of Atmos Pipeline-Texas.

Cambrian Energy and its partner were the fourth owners of the RNG project. All three prior owners failed due to inadequate Financial Engineering of the project. RNG had been sold as a natural gas equivalent by the prior owners on a merchant basis with no increased value realized from the environmental attributes associated with the RNG produced. The project made money when natural gas prices were high, and when natural gas prices were low, as often occurred in the volatile natural gas market, the project went bankrupt.

Under Cambrian Energy’s project development leadership, the McCommas Bluff Landfill RNG Project has become the largest producing RNG project and, perhaps, the most successful RNG project in the United States.

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During Cambrian Energy’s ownership in the project, the following industry firsts were accomplished:

Much improved Financial Engineering for the project through the negotiation and signing of a first-of-its-kind long-term RNG Sale Agreement in which RNG from the project was sold to Shell Energy North America for a fixed double digit price per MMBtus (million btus) at a time when natural gas was selling for less than $2.00 per MMBtu

Sale of $40.2 million in tax-exempt bonds supported only by the RNG Sale Agreement entered into with Shell Energy North America, and without credit enhancement, to finance the installation of electric compressors, the upgrade of the existing RNG processing facility, and the addition to the RNG processing facility capacity

The first and only bond issue at a landfill gas-derived RNG project to receive an investment grade rating from a credit rating agency, in this case Fitch

Signing with Constellation Energy a first-of-its-kind long term electric power purchase agreement at a fixed price to establish a predictable profit margin against the fixed-price RNG Sale Agreement

The production of the highest volume of RNG of any RNG project in the United States with more than 7,000 MMBtus per day being delivered into the Atmos Pipeline-Texas natural gas pipeline

The largest number of solar-powered automatically tuning landfill gas wells installed at any RNG project in the United States

Participation in a transaction through which RNG was sold into the transportation fuel market to further improve the economics of the project