MEAD, Neb. – Ranchers have long been fond of saying cattle manure smells like money.

Now folks in the business of making ethanol are smelling dollars too – in the methane gas emitted by manure at large cattle feedlots and dairies.

Across the country, ethanol plants powered by methane instead of costly natural gas or coal are possible, which could be a win-win situation for the environment and the industry.

“We’ll produce ethanol much more efficiently and do it in an environmentally friendly way,” said Dennis Langley, CEO of E3 BioFuels.

Burning the methane will cut the amount of the greenhouse gas released into the environment.

In addition to providing a cheap energy alternative, using methane addresses a longtime criticism that making ethanol uses too much natural gas or coal.

Supporters of corn-based ethanol and other biofuels contend they burn cleaner than fossil fuels, reduce U.S. dependence on foreign oil and give farmers a market to sell their produce.

The first plant using the methanol closed-loop system is set to begin operations in February.

Under the closed-loop system at the Mead plant, manure will fall through metal slats in the cattle pens and be collected. Methane from the manure will be trapped instead of being allowed to drift into the atmosphere, and then used to generate power for the plant. Corn and grain will be used to produce ethanol and cattle will eat the wet distiller’s grain that is a by-product of ethanol production.

If the plant is successful, it could increase expectations about the environmental impact of alternative-fuel production.