Peat is a renewable fuel, which can be used in a Peat-Fired engine or as a normal fuel, like in a furnace. It can be farmed automatically using a Peat Bog and a Turbary.
The Peat Bog places the Bog Earth and some water in the world in hollow 15×15 square with a 9×9 area in the middle, in a pattern so the Bog Earth matures (it needs to be in a 1 block radius of water for this to happen). It needs BuildCraft energy and Bog Earth to work, but you don't need to supply it with water to place, it creates it from the energy supplied. After the Turbary harvests the peat, the Peat Bog will replace the dirt blocks left after “harvesting” and collect it as a waste, although this dirt can be reused to create more bog earth.
This machine will “harvest” any matured Bog Earth to get peat and it will leave dirt behind. It will automatically eject the peat to an inventory or BuildCraft pipe next to it.