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With dairy as its No. 1 agricultural sector, California produces lots of nitrates from the manure of its 1.8 million dairy cows -- 35 million tons every day. To reduce the levels of water- and air-polluting nitrates, a new 10,000-square-foot "digester" will help turn cows’ waste into compost as well as electricity.

The renewable energy project at the Antonio Brasil Dairy, a 640-acre ranch in Dos Palos, 141 miles south of Sacramento, is expected to generate 18,000 gallons of liquid compost a day as well as 250 kilowatts of electricity. One kilowatt is enough to power a home for one hour.

The project, built by Energy Elite Systems of Nevada, is being touted as an example for other dairy ranches across the U.S. to curb nitrate levels as well as to harness methane gas as a source of energy.

The digester system moves the manure and urine through six 20,000-gallon steel tanks, which breaks up solid pieces and heats it to 135 degrees. The tanks pasteurize the waste to eliminate infectious organisms and sterilize the manure. Methane gas then bubbles to the top and is filtered into a co-generating system.

The generator is connected to the local grid, and the heat and exhaust from the power unit is used to heat the manure. The heat could also be used to sterilize the milk on farms.

"(The system) might be a breakthrough, a breakthrough in a challenge that has faced the dairy industry throughout this country and in California," U.S. Rep. Jim Costa, D-Calif., told the local Merced Sun-Star.

California is responsible for 21 percent of the U.S. milk supply, more than any other state, and followed by Wisconsin, New York, Pennsylvania and Idaho.

"What we're really talking about here is protecting water resources, protecting the air quality and climate and creating a renewable energy stream," said Costa, who grew up on a dairy farm himself.

High levels of nitrates are dangerous if the gas seeps into underground drinking water. Gasses emitted from the decomposing waste also can cause severe lung inflammation. Manure runoff can severely harm river and stream ecosystems because waste contains ammonia, which is highly toxic to fish at low levels, according to the EPA.