City approves landfill gas deal with New Carbon as company pledges $20 million investment

The Hastings City Council approved a gas purchase and ground lease agreement with New Carbon to build a landfill renewable natural gas (RNG) system at the municipal landfill, after a lengthy public discussion and a failed motion to table the item.

Why it matters: New Carbon told the council it will invest about $20,000,000 to install a gas collection and upgrading system that will capture landfill methane and inject pipeline-quality gas into the Tallgrass interstate pipeline. The company said the city will receive a sliding-scale royalty that could total roughly $2,100,000 over the life of the project.

New Carbon head of feedstocks Brian Lammers said the company plans to start construction in late 2027 and achieve commercial operation around February of the following year. "We plan to interconnect with the Tallgrass interstate gas transmission system," Lammers said. He described a footprint for collection wells and an upgrade facility and told the council the firm has done preliminary engineering and has an indicative long-term offtake term sheet.

City staff and technical advisers told council members that the project would accelerate work the city would otherwise be required to do later: the landfill will reach regulatory thresholds in the coming years that would obligate the city to install a gas collection system. Marty Stange, speaking for city staff, said the project would let an outside partner build that system now.

Several council members and residents asked procedural and legal questions. Council members pressed New Carbon on market risk and contract protections: "What happens if natural gas prices fall and make this project not feasible?" one councilor asked. Lammers said New Carbon expects to sign a long-term purchase agreement prior to construction to lock in economics. Councilors also requested assurance that equipment and operations would meet future regulatory requirements; Lammers said the project anticipates incremental well installation and upgrades as needed to comply with evolving rules.

Some council members urged a second legal review before final approval. Council discussion included concerns that the contract language be reviewed by additional counsel and that state permitting and the Nebraska Department of Environmental Quality would provide further technical review. City landfill staff noted that the NDEQ permit renewal process this year would provide an additional regulatory review.

A motion to table the item for further review failed; the council then voted to approve the gas purchase and ground lease agreement. The motion passed with a recorded tally reported as six yes, zero no, and two abstentions.

Next steps: The developer said it will continue permitting work with state agencies and finalize a long-term offtake agreement. The council also approved related easement and right-of-way agreements required for the lateral pipeline to reach Tallgrass; those agreements passed on a separate vote.

The agreement transfers most upfront capital and operating risk to New Carbon while providing the city a royalty stream and an installed gas-collection infrastructure the city would otherwise need to build later. The council discussion emphasized both the revenue opportunity and the need for careful legal and technical review before construction begins.