Waste Diversion in Ontario; a Broken Business Model

This week in the Toronto Star there was further reporting of abuses of waste that was supposed to be diverted and sent for composting, being sent to landfill instead.

The problem of less waste being diverted than expected, to my mind lies in how the waste industry's current business model works.

The simple version of this story is that waste is seen as a liability and the rewards go to people who take the waste off the municipalities hands.

The rewards are best if you have a landfill; you take waste, get paid an attractive fee and bury it in a hole in the ground. Without a landfill you have to pay part of the fee to someone who has one. Thus the landfill operators are the big winners in this game. Until waste is recognized as an energy resource and should be used to create liquid fuels or electricity, this is unlikely to change.

Recyclers make their money by extracting resalable materials from the waste stream and selling these commodities on the open market.In good times they make money, but in low commodity cycles recycling is a tough business. Many of them would like to have alternatives to landfill and so would their customers.

There seems to be no particular incentive for landfill operators to find alternatives to landfill, unless the capacity of their landfill is almost used up. Most see the solution as finding other landfill sites and until we find viable alternatives they are probably right. I've spoken to a number of landfill operators and they believe that landfill is here to stay. They also feel that most alternatives are too capital intensive to justify serious attention at this time.

The article focussed on Dongara Pelletizing Plant sending waste to landfill instead of processing it into energy pellets. This story highlights an excellent example of what is wrong with the system, not what is wrong at Dongara.

York Region doesn't pay them for energy pellets delivered to customers. The way their deal works, they get paid the tipping fees for each tonne of garbage delivered to their plant regardless of what happens to it. It's off the municipality's hands, so they no longer need to worry. When and if Dongara dumps it in landfill, irrespective of the reason, by my rough calculations they appear to make about $20.00 per tonne. Its not much, but if the Star is right and they have no market for their product, that might become an important source of revenue. Is it any wonder that they take advantage of it?

In a contract of that nature, there ought to be a penalty for dumping instead of processing, rather than a reward as is currently the case. The $84 per tonne paid by York Region is a significant premium as is pointed out in the article, but it should be tied to diversion only.

Until there are incentives that drive the right diversion behavior, many promising solutions are unlikely to survive. Most are capital intensive and require investors to take significant risks. Why do that, when there are cheaper and safer investments in the area of waste handling and diversion?

There is no future for oil! The Future for oil is fine!

There is no future for oil! The Future for oil is fine!

Everyday the argument continues and the so called evidence mounts each day for both sides of the argument.

I personally believe that oil is finite and that we've probably reached peak production, but there are a lot of voices from people more qualified than me that might disagree. The announcement last week of BP's deep discovery in the Gulf of Mexico is being used by some to support the theory that there's lots more oil and that modern technology will help us find it and extract it.
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That may be true, but as the cost of finding and extracting oil climbs the search for alternatives grows. The problem is that many of the alternatives are not really viable today. Either they cost considerably more than oil, or they are not really scalable and so while contributing to the pool, do little to change the situation.

North America consumes about 8.16 billion barrels of oil per year. Biomass is often touted as the solution. There are about 1.3 billion tons of biomass available in the US to be turned into fuels. Canada probably has more, but i could not find the numbers i needed to confirm this. The problem with Canada is that most of the biomass is in remote areas and the costs of transport and harvesting make it unattractive at the present time.

The truth about biomass everywhere, is that it is expensive to grow, harvest and transport to fuels production facilities. I'm not saying biomass cant work, merely that there are large problems to which we have not found answers. If all of this biomass was converted to liquid fuels, I've estimated we'd create no more than 34% of the fuel needed for North America.

On the other hand waste presents a very interesting set of numbers.
*Municipal solid waste contains about 8000 BTU per pound.
*Each barrel of oil contains about 5.8 million BTUs.
*Each ton of waste converts to 2.7 barrels of liquid fuels
*We dump about a billion tons of waste into landfill each year

This means, using existing technology that we know works, we could produce 2.7 billion barrels of fuel from the MSW we produce and currently spend about $80 billion a year to dump in holes in the ground.

The beauty of converting waste to liquid fuels is that we kill two birds with one stone; we reduce our dependence on landfill and solve a number of the problems that go along with it like the escape of methane into the atmosphere, the leachate that seeps into our ground water and the odors that affect all who are close by.

However more importantly if we were to convert all of this waste we could produce about 37% of North America's fuel needs from a widely distributed energy resource. We go a long way to reducing our dependence on foreign oil and we produce a fuel that is one of the greenest on the planet.

It is unlikely that in the short term there will be the capital available to convert all of our hydrocarbon waste to fuels, but if the governments of the world want to create green jobs, this technology would be a good place to put money.

Fischer Tropsch fuels contain no sulfur, no particulates, no nitrous compounds and no aromatics. Their life cycle greenhouse gases are among the lowest of all fuels and their is a huge carbon offset from the waste diverted from landfill.

What's also important is that these fuels can be produced today, with virtually no technology risk. This technology has been around for over 80 years but only operating at very large scale. With second generation advances it is now possible to build economically viable small scale plants that would provide waste handling solutions to the more than 336 cities around the world with more than 1,000,000 people.

I recently returned from Cleantech Boston where there was much talk of waste to energy, but most were talking about using waste to generate electricity. There's no doubt that this approach works, but it is low value add when compared with fuels. More about this in a later blog.

Is Peak Oil real or Imagined?

There is a lot of discussion over peak oil; if it is real; if it is here or still to come.

The article below presents the most compelling data on peak oil that I've seen in a long time.

http://truecostblog.com/2009/07/14/is-peak-oil-real-a-list-of-countries-past-peak/"

Whether you are a believer or a doubter, Praveen Ghanta's data is worth looking at.

I have long believed that peak oil is a reality. I just didn't know for sure if we'd reached it or not. Now the answer is clear and tells me that apart from any environmental reasons or social reasons, the new alternative fuels from waste business I'm building is the right thing at the right time.

What's more, the data reinforces that we need every type of alternative fuel if we are to avoid an energy catastrophe once the down turn is over. The IEA's report from last year shows we'll need an additional 45 million barrels per day to meet demand by 2030.

Based on my own research, this new supply wont come from new oil discoveries. Our only chance is alternatives, but we have to move now because these things take time to prove and to scale up. We have to look at everything from bio-fuels to electric vehicles and every energy source from biomass to waste.

Fischer Tropsch is proven and ready to go, most of the other alternatives have problems with scaling up, social implications or are too early stage. Now is the time to act.

Advantages of Green Diesel Over Bio-diesel.

What is "green" diesel and how is it different from bio-diesel?

Almost everyone has heard of bio-diesel and most of us know that it is fuel made from plant or animal material, usually plant material is grown specially for the purpose of making fuel.

Wiki describes it as follows:

Biodiesel refers to a vegetable oil or animal fat based diesel fuel consisting of long-chain alkyl (methyl, propyl or ethyl) esters. Biodiesel is typically made by chemically-reacting lipids (e.g., vegetable oil, animal fat (tallow)) and alcohol.

Biodiesel is meant to be used in standard diesel engines and is thus distinct from the vegetable and waste oils used to fuel converted diesel engines.

On Wiki, I could find no definition for green diesel however I think there is an important distinction to be made here.

Green diesel is chemically different than bio diesel, and it can be made from waste streams destined for landfill. It's green because it is preventing waste from going to landfill, and it's green because its "well to wheels" GHG footprint is the lowest of all fuels.

What is often overlooked in bio diesel is just how much fossil fuel is used to create it and just how much GHG are released from the time land is cleared and planted to the time the bio diesel is used in an engine. Following its life cycle, soy oil creates more than twice the green house gas emissions of green diesel made from biomass, according to a study by MIT researcher HM Wong.

The process to produce green diesel is very different from how bio diesel is made.

To make green diesel, waste and or biomass is first sorted to remove recyclables and other undesirable elements. It is then gasified at very high temperatures (10,000-12,000 degrees C.) where the molecular bonds are broken and then the syngas that is produced is passed over a catalyst at elevated temperatures. (More details of this process can be found at www.alternativefuelscorp.com )

The process was developed by two German scientists over 80 years ago, is well documented and is seen by many scientists and energy analysts as one of the most likely to succeed alternative fuel. In South Africa, 30% of the fuel is produced using this process.

Typically Fischer Tropsch, as the process is known, is used to convert coal and natural gas to liquid fuels, so the 1st generation process itself is not considered green because it is not sustainable, emits large amounts of CO2 and the raw materials are fossil based.

However using biomass or waste, 2nd generation Fischer Tropsch creates an ultra clean fuel from a sustainable source and can be set up to produce no emissions.

So what are the benefits of green diesel over bio diesel?

1. There is no competition between crops and fuels over land use. In fact when using waste, land that would be used for landfill could be freed up to produce food crops or for other uses. It is estimated that if every acre of arable land in the USA was put to producing fuels, it would supply no more than 10% of what is needed every year.
2. The other issue in the area of land use is one of soil cycles. How many times can you keep planting the same land with the same crops before the land becomes exhausted? Yes you can add fertilizer, but that again is mostly fossil derived and the run-off pollutes our rivers and lakes.
   
3. The fuels produced by Fischer Tropsch also include a gasoline fraction and these fuels contain no sulphur, no particulates, no aromatics and no nitrous compounds, making them very clean burning and reducing the production of acid rain. Green diesel does not create the black smoke we all have experienced when driving behind trucks because it contains no particulates.
   
4. Green diesel can be used in any diesel engine without modification. Other fractions can be used to run aircraft engines. This means that we can run cars, trucks, trains, boats, planes and generators on FT fuels without exacerbating GHG levels.
5. Landfill waste is a problem for which there is no immediate solution. It costs north America about $80 billion dollars to bury a billion barrels of oil each year. As standards of living around the world improve, so does the volume of waste and at present waste seems inexhaustible. So this is truly a renewable fuel with far greater environmental benefits than bio-diesel. See my June 17th 2009 blog posting for details about recycling at the molecular level.
   
6. Green diesel produced from BTL (biomass to liquids) or WTL (waste to liquids) doesn't smell like fossil diesel. In fact it has a pleasant kind of soap smell. So its not unpleasant either on the road or at the fuel pump. Bio diesel reputedly smells like french fries when used in engines, I'm not sure I want to be riding behind that first thing in the morning, but perhaps that's just me.
   
7. In cold climates green diesel has a great advantage over bio-diesel. It doesn't cloud or gel until much lower temperatures (-40C) making it ideal for cool climates like Canada and the mid-west of the US. Imagine having to warm your fuel before starting out on a cold morning!
   
8. Because it has exactly the same chemical properties as fossil based diesel, it can be blended with regular diesel, stored and distributed using the same infrastructure.
   
9. Although chemically identical to fossil diesel, it has a higher cetane rating and on a gallon for gallon basis contains 22% more energy.
   

All in all with all these advantages I believe this makes green diesel a pretty good alternative.

• It's cleaner
• It's greener
• It's sustainable

Let me know what you think.

A Billion Barrels

Peak oil, the energy crisis, $4.00 gasoline, energy security are terms we've all become familiar with, yet right in our own back yard lie the equivalent of a billion barrels of oil. Its there for the taking.

Each day we send 1000s of tons of waste to landfill, and mostly think nothing of it.

Let me give you some figures that will shock you:

• We throw out 10% of the food we buy.
• Every day the average person throws out 4.5lbs of garbage.
• Every little baby generates about a ton of trash per year.

Despite our recycling efforts about 56% of what gets thrown out ends up in landfill. About 70% of this material contains carbon which can be reclaimed and turned into fuels, chemicals and electricity. This means the amount going to landfill could be reduced to about 16% with very positive effects on the environment.

Landfills are huge producers of greenhouse gases, predominantly methane which is about 30 times more damaging than carbon dioxide. In addition even in places where it is collected from landfill, about 46% escapes into the atmosphere.

Not only do these gases escape but dangerous chemicals and metals leach out and contaminate the ground water.

I'm not suggesting we burn the waste to create electricity, although in some instances that might be preferable. However I am suggesting that we look at non-burning solutions to convert the energy into useful forms. Where there is no burning, there are minimal emissions. In some cases this energy will be as electricity, in others it will be fuels or chemicals. In others it will be all three depending on what is needed in a particular market.

This waste contains valuable energy that can be used to power trucks, planes, cars and of course to generate electricity. All commodities which are vital to our survival, lifestyle and well being. Every year North Americans send over 1,000,000,000 tons of waste to landfill. If this could be converted to fuels, it would create a billion barrels of high quality fuels each year.

With the right choice of process, these fuels can be the cleanest around. They can be made so they contain no sulfur, no particulates, no aromatics and no nitrous compounds. These are all the things in fossil fuels that harm the environment. What's more research by MIT shows that fuels made from this kind of material produce extremely low greenhouse gases in their life cycle. Lower levels even than bio fuels.


This is what this blog is about. Waste is a fact of life, but it doesn't have to go to a hole in the ground. It can be turned into value added products that are in great demand.