PG&E has agreed to buy three billion cubic feet of cow-produced methane (otherwise known as "renewable natural gas") from Central Valley-based BioEnergy Solutions, enough hot air to provide electricity to 50,000 California homes, according to a press release.

"BioEnergy Solutions was founded by dairymen, and we understand the challenges agriculture faces in the coming years to reduce emissions," said Albers, a third-generation dairyman. "PG&E has a similar challenge, which is to increase its production of renewable energy. This agreement turns what would otherwise be a growing problem for farmers into a new revenue source and helps PG&E reach the environmental goals set by the company and the state."

Here's how it works, reports Green Wombat:

BioEnergy Solutions will install methane digesters at dairies, where manure will be pumped into covered lagoons. As methane is released from the decomposing manure, the digester will remove the carbon dioxide and impurities before piping the gas to a PG&E plant to be burned to produce greenhouse gas-free electricity.

Albers says BioEnergy will install and operate the digesters at no cost to dairy owners while giving them a share of the gas sales (he wouldn't say how much) and any renewable energy credits that result. "Even though there’s been a lot of digester technology out there, there's never been a situation where the dairyman can share in the profits," Albers says.

The solution is a win for PG&E because by 2010 they have to be delivering 20 percent of their electricity by renewable energy sources. It's a win for the environment because methane is a powerful greenhouse gas. And it's a win for Albers and California dairies because they're getting paid for the stuff.

And it's no skin off the cows' noses.