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Updated: April 3, 2013 6:05AM

A Chicago company has quietly become a key investor in a $12 million technology project on an Indiana farm that turns cow manure into compressed natural gas. Now, the money backers are building a network of fueling stations to try to knock off diesel as the clean-burning gasoline alternative of choice.

“We have to transition off of fossil fuels at some point, and with renewable compressed natural gas, the economics work to do the right thing,” said Nathan Laurell, a 36-year-old Bucktown resident who heads the investor group’s company, called AMP Americas.

The economics make sense because compressed natural gas prices stand at about $2.20 a gallon for truck fleets that buy at volume discounts, compared with $4 a gallon for diesel.

The natural gas fuel has 20 percent less carbon dioxide than does diesel, and virtually no soot and smoke, Laurell said.

And let’s not forget the 12,000 milking cows who ensure that the process qualifies as renewable. Thankfully, it’s a mechanical process. Vacuum tankers suck up the cows’ poop and transport it to digesters to be converted to fuel.

On Monday, U.S. Department of Energy officials will attend a ribbon-cutting ceremony at Fair Oaks Farms, 30 miles south of Merrillville, Ind., to recognize the renewable gas project and startup of the first two fueling stations.

The Obama administration’s stimulus program provided $750,000 in public funds toward the cost of the fueling stations, which cost $2 million apiece. The fueling stations are at Fair Oaks, Ind., off of exit 220 on Interstate 65, and in Sellersburg, Ind., off of exit 7 on Interstate 65 just north of Louisville, Ky.

A third fueling station that opened in the past year on Chicago’s North Side supplies Peoples Gas trucks.

The farm, which employs 150, partners with AMP Americas to run 42 trucks — one of the nation’s largest compressed natural gas fleets — that carry 50,000-pound loads of milk for 20,000 miles a day throughout the Midwest. The farm leases the trucks from Paccar, the parent company of Kenworth. The farm built an anaerobic digester to convert 500,000 gallons a day of liquid manure into clean fuel using natural bacteria. Farm operators decided to convert the biogas produced into compressed natural gas after deciding that producing electricity would be a money loser, said Mark Stoermann, the farm’s project manager.

The farm’s milk-delivery fleet is unique because of its size and breadth, since most such fleets run no more than 100 miles back and forth, Stoermann said.

AMP Americas has partnered with Trillium, a subsidiary of Integrys Energy Group, the parent company of Peoples Gas and North Shore Gas, to build a nationwide network of compressed natural gas fueling stations.

The goal is to build 10 fueling stations by the end of the year that will provide the compressed natural gas along two corridors: From the Midwest to the South via Interstates 65, 75, 85 and 95, and from West Texas to the East Coast via Interstates 10, 20 and 40.

Once the fueling stations are built, will the trucks come?

Experts say yes, as long as large-truck fleet owners are willing to convert to natural gas, recognizing they will save enough money to recoup their equipment investments in one to two years, and reduce emissions at the same time.

Natural gas, both compressed and liquefied, is expected to capture 5 percent to 8 percent of big-truck sales in 2013 and 2014, respectively, compared with less than 5 percent today, according to Matthew Blair, an analyst at Macquarie Capital, Inc.

Blair said competition is also heating up as more companies build natural gas fueling stations to try to profit from what they hope is a clean-energy boom.

The competition with diesel will be intense as automakers increasingly tout diesel-powered vehicles.

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