Normative Narratives

Green News: Competition in the Waste-to-Fuel / Energy Industry

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(Everyone is sick of hearing about this government shutdown anyways right??)

The potential of the waste-to-energy industry is a recurring topic here at NN. To quote a NYT article on the subject, “THERE is an indisputable elegance to the idea of transforming garbage into fuel, of turning icky, smelly detritus into something valuable.” It seems that energy producers and waste management companies agree, as there has been a strong push in the past decades to turn energy based waste / fuel into commercially viable alternative power source. Most articles I have reviewed so far have referred to the gasification of garbage in specially designed power plants. A new concept proposes to capture the methane released from garbage already in landfills and turning it into energy/fuel:

Clean Energy Fuels will announce on Thursday that it has started selling a fuel made of methane from landfills and other waste sources at its more than 40 filling stations in California. The company, which is backed by T. Boone Pickens, is developing a nationwide network of natural gas pumps and plans to introduce the fuel elsewhere as well.

The company expects to sell 15 million gallons of the fuel in California this year, more than double the amount of similar fuels the Environmental Protection Agency projected would be produced nationwide.

To many in the industry, the pace of the fuel’s development has been something of a surprise.

“Though California and others have been investing in the development of this fuel, I don’t think people were expecting there to be a significant public supply or access this soon — maybe not even this decade,” said Tim Carmichael, who leads the California Natural Gas Vehicle Coalition, a trade group.

A big factor in methane’s rise is the surge in natural gas production from shale drilling, which had already nudged the transportation industry to begin shifting to vehicles that can run on the cleaner-burning fuel, making it easier to meet emissions standards.

Another reason is powerful government incentives, especially in California, that have imposed strict regulations intended to help reduce carbon emissions to 1990 levels by 2020. Under the program, suppliers that reduce emissions during the production, transportation and use of the fuel are awarded tradable credits.

These and similar federal incentives are allowing Clean Energy to sell the fuel, which is called Redeem, at the same price as its conventional natural gas fuel even though it is more expensive to produce.

But because of its source, the fuel counts as renewable and takes less energy to extract and process, making it more attractive to companies seeking to burnish their green credentials

The fuel’s environmental benefits also include capturing the methane before it is released into the atmosphere. When the methane-derived fuel is burned, it is far less harmful to the atmosphere than petroleum fuels. But the methane that escapes directly from decomposing waste is more potent as a heat-trapping gas than carbon.

For this reason, many large-scale farms, wastewater treatment companies and garbage companies have developed systems to capture escaping methane — known as biogas — for both transportation and electricity, and several start-up companies are working on systems of their own. There are projects in Europe as well, where biogas for transport is more common.

Beyond the bottom line, customers are increasingly interested in how clean the fuel is, said Andrew J. Littlefair, the chief executive of Clean Energy, adding that Redeem can burn 90 percent cleaner than diesel. “We’re seeing from these heavy-duty trucking fleets, and these shippers that hire these trucking fleets, they’re really interested in sustainability,” he said. “It’s gotten to be a very important part of the sale.”

John Simourian, chief executive of Lily Transportation, which uses a nationwide network of trucks to move a range of products, including construction materials and groceries, said that only a small portion of his fleet ran on natural gas but that the company was shifting over.

Not only is the fuel less expensive, but it gives the company a competitive advantage with customers on price and environmental concerns. “It’s just a win all around,” he said.

It is interesting to note all the different avenues being explored when it comes to turning waste into something valuable and environmentally friendly–and why not? According to Sharon E. Burke, the assistant secretary of defense for operational efficiency plans and programs “Waste is a problem, so if we could dispose of waste and create energy at the same time, that would be a silver bullet.” But you don’t need to be en expert to know that trash is a problem, especially in densely populated areas (such as major cities) which produce a lot of trash; it stinks, it takes up room, and it costs money to get rid of. It is safe to say that, with the current trash disposal system, we have a “surplus of trash”.

Now imagine a world where not only is trash not a liability, but there are actually companies biding for trash (both intra-industry and inter-industry; some want it for landfill methane extraction, others to gasify the garbage directly into energy)–a trash shortage! A stream of revenue could open up for large municipalities, instead of a large bill for waste management. It is true that eventually waste-to-trash will have to get off subsidies to become truly commercially viable. However, if as a society we are unwilling to reward waste-to-energy for it’s positive externalities (such as less emissions and less garbage around), we can still hold “dirty” energy producers accountable for their negative externalities via carbon tax / cap and trade. As waste-to-energy matures and becomes more efficient, and emissions prices stabilize due to a more complete global market, the industry should eventually be able to compete without subsidies. It would appear this world is not so unimaginable or far-off as one may think.

 

 

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