
Biogas is produced by the anaerobic (no oxygen) breakdown of biodegradable materials (manure, sewage, plants, etc). It’s mostly methane (CH4) and carbon dioxide (CO2). These gases can be combusted (like a car engine does) to create an energy release, and used as fuel. There are a few breweries already doing this to reheat their boilers, including Spoetzel (Shiner) Anheuser-Busch, and MillerCoors.
Gundersen Lutheran is sourcing biogas from local breweries and cheese makers, along with a local landfill in order to power the hospital. They aim to be completely energy independent by 2014. [Grist]
Side note: contrary to popular belief, the “fart” is comprised more of nitrogen and CO2 than methane. Now you know.