Those Bloom Energy fuel cells that eBay said it will use to power its new data center in Utah? They’ll run on natural gas. Likewise most Bloom Boxes going in these days.

But they can run on biogas – and eBay, like many of the companies turning to fuel cells these days, is paying a premium for its natural gas in order to enable biogas production.

This is part of the story of the rise in demand for biogas, a trend highlighted by Pike Research in a new report.

The market analysts said biogas, while still “a relatively minor player within the overall bioenergy sector,” reached $17.3 billion in revenue in 2011 and is on course to nearly double that figure by 2022.

“Increasing demand among farmers, municipalities, and industrial processors for waste treatment technologies, on the one hand,” senior analyst Mackinnon Lawrence said, “and widening opportunities for renewable natural gas in transportation and cogeneration applications on the other, signal steady growth for the biogas industry over the next decade.”

Biogas is made when microorganisms break down organic matter in an oxygen-free environment – thus the term anaerobic digestion. The product typically has lower methane content than natural gas, but can be used in some energy systems as is, or can be processed — removing hydrogen sulfide, chlorine and sulfur, for instance — to make it interchangeable with natural gas.

With natural gas cheap these days, biogas can be a challenging option. Systems are expensive to implement, and unless they can be tied to the natural gas grid, it can be difficult to take advantage of the fuel generated.

Still, we’ve seen biogas taking shape in a wide range of applications.

In New York state, biogas production recently began at the Synergy Dairy, a 2,000-head dairy farm in Covington, Wyoming County. It’s the largest on-farm co-digestion biogas project in the state, one of 17 New York biogas plants together turning waste from 20,000 cows into a generating capacity of 3 MW.

In April, we saw the first commercial application of a UC Davis-developed system for converting food waste (along with plant residues, yard waste and paper products) into biogas. Unveiled by Clean World Partners, a Sacramento-based startup that licensed the technology, the biodigester was installed at American River Packaging, where it immediately set about converting tons of food waste and unrecyclable corrugated material into bio-derived natural gas, creating 1,300 kilowatt-hours of renewable energy each day.

The system, invented by UC Davis scientist Ruihong Zhang, can plow through 25 tons of waste a day right now, but with help from $6 million in new funding from the California Energy Commission – funding backed by ratepayers — that capacity will jump to 100 tons, producing “enough renewable natural gas to replace 566,000 gallons of diesel fuel and generate 3.17 million kWh of electricity every year,” according to the commission.

The biofuel is used to power American River Packaging, and the nation’s first digestion-based renewable natural gas fueling station is also being developed to use Clean World’s digestion system to fuel the trash collection company’s clean-fuel fleet, as well as vehicles from area jurisdictions and agencies.

That’s the biogas-as-transportation-fuel angle Pike was talking about.

Landfills are at the center of the biogas mini-boom, with biogas a natural product of the decomposition of waste. At the Hickory Meadows Landfill, in eastern Wisconsin, a new landfill gas-to-energy project has the capacity to generate 42,000 megawatt hours (MWh) of renewable electricity per year – enough to power 2,800 Wisconsin homes.

The gas consists of about 50 percent methane and 50 percent carbon dioxide — much lower methane content than natural gas — but still useful. At the site, the gas had previously been captured and flared off, but now the gas is distributed via the landfill’s existing gas collection system to a renewable power plant, where liquid and particulate matter is removed. The landfill gas is then injected into internal combustion engines to produce environmentally clean electric power, while also reducing greenhouse gas emissions.

An example of putting this kind of gas to work can be found in South Carolina, where BMW says it’s saving $5 million a year in energy costs by using gas captured from landfills.

* Pete Danko, EarthTechling