theReactor

August 7th, 2012

Converting Landfills into Energy Profitably

By Kent Harrington | Comments (7)
When you're the biggest trash hauler in the US, the world's growing stash of trash is your oyster. And Waste Management Inc, which rakes in $12.3 billion every year carting rubbish away to landfills, has unearthed its pearl, worth an optimistic $40 billion a year. That’s the estimated value if all 112 million tons of trash it hauls were diverted from landfills and converted into fuels and chemicals, Carl Rush, VP of Waste Management’s Organic Growth unit, told Businessweek. Since about 82 percent of that horde is still left untouched today, that's a huge profit waiting to be unearthed. Waste Management has already been producing energy from trash, incinerating garbage at 131 landfill facilities to make electricity, while also capturing methane at others – most going to help fuel their huge fleet of trucks (view company video). The company throws out impressive stats on its website: its landfills produce over 550 megawatts of electricity, enough to power more than 440,000 homes. The combined operations produce more renewable energy than the entire solar industry in the United States. Wow. Those numbers open your eyes to Waste Management's role in the energy future.

Becoming an energy venture capitalist

But Waste Management wants to boost its energy production even further, and, to find promising new technologies, it has become an eager venture capitalist, buying stakes in eight companies that turn trash it into heat, power, fuel and chemicals. One of its most promising investments is Agilyx, a small Oregon-based company that cooks dirty, unsorted plastics using pyrolysis into useful hydrocarbons. Already a long way from the workbench, the company has produced over 250,000 gallons of fuel at a prototype facility over the last three years. Agilyx has proven that it  can convert a ton of plastic into about 5 barrels of oil, according to chief executive officer Chris Ulum, turning a ton of waste into about $520 of oil. Those numbers impressed Waste Management, which is currently building a plant in Oregon to use Agilyx’s fuel technology, and its investment includes rights to the plastic-conversion technology for a decade. Agilyx plays to Waste Management's major strength: Americans toss out about 33 million tons of plastic each year, and very little is recycled because plastics can be contaminated by the mixing of types.

Converting unsorted plastic into crude

Fortunately Agilyx can convert unsorted plastic of all types into synthetic crude oil. The base system can convert 10 tons of plastic into 60 barrels of oil each day for about $60 a barrel; so with oil currently selling at around $90 a barrel, it’s definitely cost-effective. A short video gives an overview: http://www.youtube.com/watch?v=A2OOdaXqelM&feature=player_embedded Kevin DeWhitt, CTO for Agilyx, explained that the byproducts of the process include light gasses that Agilyx burns to heat its own process; ground-up solids – carbon, small amounts of metal and silicon – that can be sold; and small amounts of chlorine from PVC (polyvinyl chloride plastic) that are scrubbed out in water and become nontoxic salt. The technology produces only a tiny fraction of emissions. The graphic below follows the transformation from plastic to oil. Because Agilyx employs what CEO Chris Ulum calls a “distributed-manufacturing approach,” the company will deploy modular units at active municipal and industrial waste sites, eliminating costly shipping expenses. “One of the things that we think is a real virtue of technology is that it’s scalable – we don’t sell a small, medium or large system,” Ulum told Biorefining Magazine. “We sell a basic building block that then can be scaled to match the requirements of our clients. We can have a solution that is good for not only large cities, but also small towns.” Competing against the price of oil won’t be easy. But the sheer quantities of landfill plastic mean that Agilyx should be able to provide fuel to customers under fairly long-term contracts with stable pricing. For more on Agilyx's technology, check out this Agilyx PowerPoint presentation.

Will more corporations embrace these energy solutions?

Images: Agilyx technology, Agilyx; Landfill, Ashley Felton
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7 Responses to “Converting Landfills into Energy Profitably”

  1. Robert S says:

    How does that compare to the volume of oil required to make the plastic…I mean what is the overall recovery rate?

    Also, how long until we figure out a way to unearth all those metals and other useful materials we have been throwing away for so long? Landfills could be the smelly, but productive, mines of the future.

  2. Kent Harrington says:

    I do not know the answer to your question, but found a interesting fact on their website:

    "A barrel of Agilyx crude yields 91% by volume gasoline and diesel, compared to 76% from a typical barrel of crude. That means that refineries get more high-value products from each barrel of Agilyx crude."
    http://www.agilyx.com/media-room/wp-content/uploa...
    http://www.agilyx.com/media-room/wp-content/uploa...

    I'm sure Waste Management will be ramping up their landfill recycle soon. That's the only reason they made this investment.

    Sorry, but hope this stimulates thought.

    Kent

  3. Robert S says:

    Interesting, yet another niche in the energy sector.

  4. I think the trash industry is going to grow substantially in the next few years with all the junk we're collecting!

  5. Kent,

    I like your posting (s). I have been working in the biogas market for about 7 months as a consultant. I think biogas is underestimated as renewable energy source. The reason is: it can be used as a base load energy source – unlike solar or wind.

    The biggest barrier, in my experience, for biogas has been the utilities. The smaller biogas operations work since you can generate electricity with engines, turbines, or fuel cells on site, but the interconnection fees are still astronomical. When you start trying to inject conditioned landfill methane into the pipeline the utilizes are reluctant at best to accept that gas since it is perceived as a liability.

    I do see the situation from the utilities prospective, but in my opinion the best driver for the biogas energy market is passing mandates such as Renewable Energy Portfolio Targets. I am optimistic we will hit more aggressive renewable energy goals when biogas is included as a base load renewable energy source.

    David

  6. Kent Harrington says:

    Why a liability?

    That's very interesting. Can you send me a link to more information.

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