Central California is home to nearly 1.6 million dairy cows and their manure -- up to 192 million pounds per day. It’s a mountain of waste and a potential environmental hazard.

But for dairyman John Fiscalini, the dung on his farm is renewable gold: He’s converting it into electricity.

At his farm outside Modesto, a torrent of water washes across the barn’s concrete floor several times a day, flushing tons of manure away from his herd of fuzzy-faced Holsteins and into nearby tanks. There, bacteria consume the waste and release methane, which is then burned in a generator capable of producing enough power to run Fiscalini’s 530-acre farm, his cheese factory and 200 additional homes.

Fiscalini’s resourcefulness should be drawing accolades, considering that state mandates are requiring California industries to boost renewable energy use and slash greenhouse gas emissions sharply over the next 10 years.

But efforts to convert cow pies into power have sparked controversy. State air quality control regulators say these “dairy digester” systems can generate pollution themselves and, unless the devices are overhauled, are refusing to issue permits for them.

The standoff underscores how conflicting regulatory mandates are making it hard for California to meet its green-energy goals.

“We didn’t expect this,” said Michael Gallo, chief executive of Joseph Gallo Farms in Atwater, Calif., whose family has spent “a lot of money” to get its dairy digester system compliant.

The idea of turning biological waste -- whether manure, trash or grass clippings -- into fuel has been around for centuries. Technologies vary, but the idea is to extract methane from decomposing organic material, remove impurities and burn it for heat, light or transport. Interest boomed after the Kyoto Protocol, the 1997 international treaty on climate change. Methane, considered by many scientists and environmentalists to be as damaging a greenhouse gas as carbon dioxide, was among the key six pollutants targeted.

Today, the European Union is leading the global charge to turn waste into watts; more than 8,000 biogas operations are up and running in Europe, and thousands more are slated to open in the next decade. The United States, which has not ratified the Kyoto accord, has only about 150 digester projects operating at livestock farms nationwide, said Chris Voell, a manager of the U.S. Environmental Protection Agency’s AgStar program, which works with farmers to get such systems up and running.

Funding is an issue. Government subsidies aren’t as readily available in the U.S. as they are in Europe. Just 16 digesters were operating at California dairies last year, fewer than in Wisconsin (which had 19) and Pennsylvania (18).

“California has about four times as much potential for emission reductions and energy generation as the next-largest dairy state,” Voell said. “I know the regulations are much more strict in California. But there’s so much potential there.”

Air regulators say they understand why farmers are frustrated but point out that methane is not the only worrisome gas that pollutes. Like an internal combustion engine in a car, the generators used to convert the methane into electricity produce nitrogen oxides, or NOx.

NOx exacerbates the state’s smog problem, particularly in the San Joaquin Valley, which has some of the country’s dirtiest air. NOx levels for the valley are federally set. In the San Joaquin Valley, officials at the area’s air pollution control district say it is their job to enforce these rules and curtail ozone pollution.

That stance has come as a shock to dairy farmers such as Fiscalini, whose $4-million digester system was set up out of frustration with regulators wanting him to fight pollution. Time and again, he said, he’d been told by regulators and read in local newspapers that dairy farmers must curtail methane emissions. Fiscalini believed that such digester systems, especially ones that converted the waste into electricity, would eventually be mandatory.

“I figured I might as well try to do this now and do some good,” Fiscalini said.

He received $1.5 million in grants from the U.S. Department of Agriculture and the California Energy Commission, which was promoting the use of biogas digesters.

The $800,000 grant from the commission required that Fiscalini’s system include a generator that would convert methane into energy, he said. Fiscalini started construction in 2007.

But in 2008, when work was halfway complete, he found himself stuck. Officials from the San Joaquin Valley Air Pollution Control District were blocking the farm from firing up the engine.

The concern: NOx.

Fiscalini then spent several hundreds of thousands of dollars on a catalytic converter and other filtering equipment to meet the air district’s limit of 11 parts per million of NOx for new digester systems. That works out to equal the emissions of 26 cars for every 1,000 cows, said Frank Mitloehner, an associate professor at UC Davis’ department of animal science.

But his worries are far from over. The digester has been running for only nine months, and he’s already had to replace some of the filtering equipment and repair the generator twice.

“I wonder, sometimes, why I ever thought this was a good idea,” Fiscalini said.

Air district officials said they’re just doing their jobs. Combating smog, not climate change, is the agency’s mission.

“The board has been clear that when we’re faced with these sorts of trade-offs between reducing greenhouse gases and reducing NOx, we’re going to choose NOx,” said Dave Warner, director of permit services for the San Joaquin Valley air quality district.

The farmers “should have checked in with us first, before buying their equipment,” he added.

Last year, six dairy digesters were shut down because of regulatory or financial problems. One of them is at Ron Koetsier’s dairy in Visalia.

Koetsier had been using his digester and generator system since 2003 as a way to power his barns and eliminate his dairy’s electrical bill. Southern California Edison, his electricity provider, had just opened the door in 2008 to buying his excess electricity when the San Joaquin Valley air district told him that his two generators violated local NOx emission standards for digesters.

He contacted the manufacturer of the generators. He said he was told that it would cost $100,000 in new parts to get them in compliance, and up to $50,000 a year in maintenance fees.

Koetsier shut the system down. Now the equipment is collecting dust.

“They have a point. I want clean air,” Koetsier said. “But it doesn’t make financial sense for me keep doing this. I don’t see how they can turn methane gas into electricity in California, given these rules.”

p.j.huffstutter@latimes.com