Dow Jones Market Watch, March 13, 2007
ENERGY PRODUCERS TAKE ANOTHER LOOK AT TRASH
Federal grants help refuse-to-energy plants get going.
[Rachel's introduction: The federal government never misses an opportunity to subsidize the garbage industry -- because they can count on the industry to kick back mountains of cash at election time. Now the feds are subsidizing what they hope will be a new generation of trash incinerators, which destroy resources and create massive pollution, just like older incinerators did.]
By Elizabeth Davidz
WASHINGTON (MarketWatch) -- There's a lot of trash talk in D.C., but it's not what you might expect. In the hunt for the new energy sources, politicians and energy experts are taking another look at America's refuse.
And it's not all talk. Millions of federal and private dollars are already backing new energy enterprises across the country from a California plant turning trash into ethanol, to a Minnesota plant turning poultry feces into power.
Waste-to-energy technology has been around since the 1930s, but even as it evolves it's been elbowed out of the marketplace by cheaper fossil fuel-based power.
As the president and Congress dole out more renewable energy incentives, "trash" tech may finally be able to compete and shed its image of being costly and inefficient.
Under President Bush's initiative to reduce the U.S. gasoline usage by 20% in the next 10 years, the Energy Department announced last month a $385 million grant to help factories producing cellulosic ethanol, a type of ethanol that can be made from non-food crops and trash. "We're not using a food commodity, we're using a wasted commodity," said Arnold Klann, CEO of BlueFire Ethanol Fuels Inc. one of the six companies awarded money.
BlueFire Ethanol was awarded up to $40 million to develop a solid waste bio-refinery at a Southern California landfill. The plant, which will start construction this year, will use the landfill's organic trash to produce 19 million gallons of fuel-grade ethanol per year, according to the company.
The plant, which should be built by 2009, will run on methane -- a gas emitted by rotting organic trash that can be used like natural gas. Fed by corn, America's ethanol production leads the world. But as corn prices rise, there's a hunt for new ethanol sources. With Americans producing about 250 million tons of trash per year, there's plenty of raw material for BlueFire's ethanol. Klann said the company has plans for 20 more plants across the country.
'BlueFire's technology has been around since 1992, according to Klann. Although there are plants in Japan, there hasn't been financing for a U.S. plant until now.
"We're going to be an overnight success in a tad under 15 years." Klann said.
BlueFire isn't alone. The U.S. leads the world in developing so-called green energy technologies, but lags behind in forming companies around these technologies. Investors have seen Europe and Asia as being more regulatory-friendly to renewable energies. That may be changing. Turning trash into ethanol is relatively new, but burning trash to create energy date backs to the 1930s.
In the nation, there are 89 plants generating 2,800 megawatts of energy from burning trash, enough to supply more than 2 million households, according to the Energy Department. Although these plants rid the U.S. of 14% of its trash, they produce less than 1% of the total national power.
It still costs more to generate electricity at a waste-to-energy plant than it does at a coal, nuclear, or hydropower plant, the Environmental Protection Agency says. Plus, it takes 2,000 pounds of garbage to equal the heat energy in 500 pounds of coal. Scientists working with the newer technologies are finding more efficient ways to turn the trash into energy.
The ash created by traditional trash-burning plants can also contain high concentrations of various metals that were present in the original waste. In Minnesota, Fibrominn LLC's plant will also burn waste when it opens for business, but its ash is actually a commodity. The difference is in the waste. Fibrominn's plant, due to open in June, will burn poultry feces.
By burning the litter, the plant will produce enough electricity for about 90,000 homes. The resulting nutrient-rich ash can then be sold as a fertilizer. The company's European partner, Fibrowatt LLC, has three similar plants already running in the United Kingdom.
"As long as people eat chicken, this energy source will be around," said Fibrowatt's CEO Rupert Fraser.
The fuel from the plant will come from poultry farms in the area. Usually farmers have to pay to get rid of litter, but instead they will receive market-value for the 700,000 tons of fuel the plant needs. Fraser said the company is looking at building more plants across the country.
The waste-to-energy technologies of BlueFire, Fibrominn and other companies don't add to greenhouse gas emissions, because they run on carbon already in the environment.
Under EPA guidelines, waste-to-energy plants must control unpleasant odors by containing and scrubbing the trash's emissions prior to and during use. Waste-to-energy byproducts are often less pungent, but also regulated.
Both BlueFire's and Fibrominn's plants are being built in states that already have "green" energy incentives. As the Congress looks to extend and create "renewable" energy incentives -- like those in the 2005 Energy Policy Act -- it is possible these companies and other new tech waste-to-energy companies will be able to get a foothold in more places across the country.