A new industrial revolution based on clean, renewable sources of energy beckons. It's time for MSW managers to look closely at what's already underway.

By Kay Martin

Bioenergy and Bio-Based Products
Biomass and the Waste Connection
The Devil We Know
Regulatory Gatekeepers
Environmental Myopia
Follow the Money
Greener Pastures

In 1875, the head of the United States Patent Office recommended that his agency be closed because, in his words, "There is nothing left to invent." A century and a quarter later, we might well titter at such lack of foresight. But this kind of complacency - this illusion of mastery - reflects the hallmark of conservatism in every generation of technology.

In hindsight, it's easy to see the catalytic effect that key inventions, such as the harnessing of electrical energy, petroleum extraction, the internal combustion engine, or the cracking of code, have had on the production of goods and services. The economic, social, and environmental changes spurred by these technological innovations have been so enormous, so far-reaching, that it is difficult to envision the modern world operating in any other way.

But history teaches us at least two important lessons. One is that stasis is illusory. Another is that there are those rare but significant points in time and space when technology intersects with economic and social forces in a way that initiates quantum changes. In Western European civilization, these turning points, or "industrial revolutions," have been linked to the harnessing of new forms of energy - first coal, then oil.

There is a growing community of thought that we're standing at another critical crossroads. A new industrial revolution, based on the gradual displacement of petroleum by clean, renewable sources of energy, has already begun.

Living plant matter, or biomass, holds solar energy captive within its cellular structure in the form of sugars and extractable gases. These can be liberated with benign conversion technologies to produce a virtually inexhaustible supply of environmentally beneficial fuels and chemicals. This shift from a petroleum-based to a carbohydrate- and hydrogen-based industrial economy will fundamentally transform energy generation, the production of goods and services, environmental balance, and overall quality of life. It will also dramatically change the way we manage spent resources at the end of the pipeline.

As solid waste policy objectives expand from public health and safety to sustainability, there is an increasing need to understand forces and trends at work beyond our own discipline. What's driving this emphasis on renewables? Who are the principal change merchants and gatekeepers? Is MSW a viable feedstock for new bio-based industries? If so, what impact will these technologies have on the existing solid waste infrastructure? On broader environmental goals? Serious dialogue on these more global issues is long overdue.

Bioenergy and Bio-Based Products

Three factors seem to be driving the movement away from petroleum and toward biochemically based industries. At the forefront is the "energy crisis," driven principally by diminishing access to large quantities of cheap oil. The US currently imports 56% of its oil, up from 36% during the 1970s oil crisis. This upward trend will probably continue, with experts predicting a 75% importation rate as early as 2010. This increasing dependency will occur at a time of elevated world market demand from industrializing Asian nations. Oil prices are also a major factor in the US trade deficit, which rose to an all-time high of almost $32 billion by mid-2000.

The balance of trade and national security implications of America's dependence on foreign oil, coupled with increasing pressures on world oil reserves, has pushed the development of renewable energy sources and technologies to the top of the federal policy agenda. The White House and the US Department of Energy (DOE), along with the US Department of Agriculture (USDA) and the US Environmental Protection Agency (EPA), have recently launched a National Bioenergy Initiative "to develop an integrated industry that will produce power, fuels, and chemicals from crops, trees, and wastes." The goal of this program is to triple the use of bioenergy and bio-based products by 2010. Congress already set aside hundreds of millions of dollars in grant funding to advance this objective.

A second major driver is, for want of a better phrase, the pollution prevention and sustainability movement. The high social value placed on clean air, clean water, resource conservation, and preservation of the natural environment now forces the hand of both regulators and industry to move toward renewable inputs and nontoxic outputs. Bioenergy and bioproducts weigh heavily in this equation since they not only replace polluting petrochemical equivalents, but in most cases yield a significant net environmental benefit.

For example, studies by the Argonne National Laboratory and the DOE concluded that replacing reformulated gasoline (RFG) with an alternative 85% fuel blend of ethanol produced from biomass can reduce greenhouse gas emissions by up to 90%. By way of contrast, the highly publicized methyl tertiary-butyl ether (MTBE) groundwater pollution issue has also served to highlight the environmental benefits of biomass-derived oxygenates. Recent congressional proposals for the creation of a national renewable fuel standard, in which ethanol from biomass would play a central role, have won the support of new national coalitions made up of environmental, conservation, and public health organizations. Similar environmental constituencies coalesce around other emerging bioproducts markets, such as degradable solvents and herbicides and organic plastics.

The pollution prevention and sustainability movement has also led to a significant recasting of regulatory policy among federal agencies along the lines of cross-media environmental management. Last year's presidential Executive Order on Development and Promotion of Bio-based Products and Bioenergy compelled key agencies, such as the DOE, USDA, Forest Service, and EPA, to coordinate their research and regulatory efforts on this issue. The creation of multidisciplinary regulatory frameworks now trickles down to the state and local levels and highlights the life cycle benefits of biofuels, fuel cells, and other petrochemical product alternatives.

The third driver of the new industrial revolution is what we might call "technology readiness." Several industrial processes for converting biomass to fuels and chemicals are now commercially available, and more are on the way. These technologies are diverse and specifically tailored to the unique requirements of both feedstocks and end products. They include such time-tested processes as fermentation, distillation, hydrolysis, gasification, pyrolysis, and anaerobic digestion. Targeted markets for new bioindustries include distributed electricity, fuels, and fuel cells; a vast array of biochemically derived products such as fragrances, adhesives, pharmaceuticals, cosmetics, food additives, and flavorings; and biodegradable plastics, solvents, cleaners, fertilizers, and herbicides.

Biomass and the Waste Connection

If biomass indeed has the potential to become the universal 21^st-century feedstock, then an inventory of the major sources of these raw materials should give the solid waste industry pause. Bioenergy alternatives, such as ethanol, are already being produced commercially from agricultural food crops. Cellulosic crop residues, such as corn stover, sugar cane bagasse, and rice straw, as well as forest residues and fast-growing trees and grasses, can also be utilized. In fact, any organic material, including cellulosic fractions of the MSW stream, can be processed for the recovery of sugars or the extraction of synthesis gas. Since organics make up about 65% of the residual wastes currently being landfilled, their potential diversion to biomass processing facilities deserves serious attention.

There are several good reasons why MSW could emerge as a premier feedstock in the next generation of industries, as compared to other sources of biomass. These relate to supply, cost, and environmental benefit. Notably, feedstock supplies from the agricultural sector are subject to seasonality, carbohydrate loss from extended storage, and competition with food and feed markets. Their production consumes land and water resources and contributes to fertilizer and pesticide use. The absence of an existing infrastructure for the collection and delivery of agricultural and forest biomass to industrial sites is an additional factor in their comparatively high cost to processors.

In contrast, MSW constitutes a steady supply of biomass that could be collected, segregated, and delivered via an existing and separately funded infrastructure. By entering into symbiotic partnerships with materials recovery facilities (MRFs), biomass processing facilities - or biorefineries - can secure a reliable supply of postrecycled cellulose at zero to negative cost. Since the biorefinery's major profit center is in its end product, the facility can set a tip fee for the feedstock below that of competing landfill markets. Collocation of biorefineries with MRFs thus enhances the economics of both operations. These partnerships also yield positive life cycle benefits through the diversion of waste from landfills, the reduction of traffic and emissions, and the commercialization of environmentally friendly products.

But if all this talk about a new industrial revolution and new product markets is really true, why isn't there a literal stampede of growers, entrepreneurs, bankers, environmentalists, and multinational waste corporations beating down the doors of government to get these "green" industries on the ground?

The short answer is that there are indeed billions of dollars already invested, strong bipartisan bioenergy and bioproducts lobbies in Congress, enlightened national environmental constituencies, and real projects in the mill. But, unlike their military counterparts, industrial revolutions don't happen overnight. They advance, retreat, and advance again. A characteristic common to both, however, is that - even on the eve of change - most folks don't see them coming.

Lest those of us responsible for long-range planning get caught with our proverbial guard down, it serves to examine why these developments have received so little attention in the solid waste industry and how both regulators and environmentalists have bolstered such conservatism, both within and outside our ranks.

The Devil We Know

In recent years a heightened environmental ethic has dramatically refocused waste management practices on upstream reduction and reuse and on downstream pollution prevention and energy recovery. The coupling of MRFs with a variety of biomass conversion technologies opens up a whole new spectrum of expansive and potentially lucrative markets for MSW. It also creates a potent one-two punch for landfill diversion, which could feasibly approach 75% or more.

But this potential - this vision - proved slow to materialize among solid waste professionals. In fact, it's hardly a blip on the radar screen. When it comes to framing the future, most of the industry's long-range planners remain strikingly conservative in outlook. The management scenarios they paint differ little from today's menu. Despite laudable gains made by recycling, landfills are still projected to capture the lion's share of total discards. This view of what's in the offing derives from the perceived fickleness of recycling markets and the maturity and reliability of disposal technology.

Given the sweeping policy and infrastructure changes we've witnessed in the past decade, one might wonder why such dismal theories would be given much credence. After all, if the combination of recycling mandates and new landfill regulations virtually turned waste management on its heels 10 years ago, why shouldn't the new millennium be equally dynamic? A common response to this question says that the conditions that gave rise to recycling, namely a perceived and impending shortfall of landfill space, were extraordinary. Without another "waste crisis," we're told, duplication of this magnitude and pace of change won't be likely.

Herein lies the problem. When solid waste managers ponder significant new diversion markets for the MSW stream, they typically look to recycling and movements afoot in their own industry for cues. This limited perspective provides few insights. The markers of the recycling decade and those of emerging bioindustries are horses of a different color.

Recycling surfaced as an antidote to the alleged landfill crisis. It was immediately woven into the public health and safety domain of solid waste management and received priority billing in the new hierarchy of management practices. Significantly, recycling legislative initiatives preceded, and in some cases led, development of the very recovery technologies on which they came to rely. Municipal recycling evolved into the current collection and processing system largely under the gun and by trial and error. It was an infrastructure financed largely off the public user-fee dole, and one that often pitted public operators against private ones and pitted both against the old guard scrap industry. From the start, people grounded recycling in supply-side economics, the basic premise of which was, at best, feeble - namely that expanding the supply of secondary materials would stimulate market interest.

The forces favoring commercialization of new bioindustries have a much different look and are sufficiently camouflaged to have escaped the interest or scrutiny of most solid waste planners. As noted earlier, these developments now occur outside the solid waste industry and involve major corporate and entrepreneurial investments in advanced technologies that are focused on lucrative product markets, such as alternative fuels or plastics. These new industries place reliance on a demand-side equation: that market displacement of petroleum and petrochemical products will occur as a result of both social and economic forces. This strategy resulted in biotechnologies leading the way for policy initiatives that will ultimately catalyze their increasing market share.

With several new industries poised at the starting line, demand for cellulosic biomass could proceed very quickly. For example, passage of a single initiative by Congress, such as a renewable fuels standard, could meet or exceed the existing national goal for tripling bioenergy and bioproducts use by 2010. What this means is that any sector with a large and cheap supply of biomass should keep its ear to the ground.

Regulatory Gatekeepers

The lack of attention given by solid waste forecasters to bioindustries definitely slowed the forging of potential partnerships, which could enhance landfill diversion and further environmental goals. Such conservatism would seem to be out of place in the regulatory community, where multidisciplinary action and the optimization of environmental benefit are the buzzwords of national policy.

But there is considerable history to overcome. Despite some promising multimedia overtures, agency balkanization dies hard and remains an obstacle to the development of innovative regulatory solutions. While air, water, resource, and waste agencies may give lip service to a life cycle scorecard that balances environmental costs and benefits, regulators on the ground often remain loathe to yield territory when it comes to vested policy or prescriptive standards. This tunnel vision can be disastrous, as the recent MTBE debacle illustrated. In the latter case, officials imposed a regulatory measure designed to improve air quality without regard to its potential long-term impact on groundwater. Resolution of this issue (for example, through the use of ethanol-based RFG oxygenates) continues to be hampered by emissions debates waged in parochial regulatory parlance.

Perhaps the greatest obstacle to innovation posed by regulatory agencies remains their penchant for dictating precise solutions to environmental problems rather than setting rational performance standards that challenge the ingenuity of the marketplace. Just as the electric car failed to materialize as the chosen panacea for air-quality problems, so the mandated conversion of diesel truck engines to natural gas in some nonattainment air basins effectively short-cut debate on the cross-media benefits of alternatives, such as biodiesel. Should a fossil fuel that is nonrenewable, consumes large amounts of electrical energy in its production, and carries a very high engine conversion cost be favored over a fully renewable diesel fuel that knocks the slop out of particulate and air toxins, is NOx neutral, and smells like French fries?

In an example closer to home, EPA in 1989 proposed a hierarchy of integrated waste management practices that rapidly became the holy grail of state recycling laws. This hierarchy ranked technologies on an existing hazardous waste model that prioritized waste prevention over reuse, and reuse over disposal or incineration. Translated into the solid waste genre, however, reuse took on the rather narrow definition of recycling and composting. Other technologies capable of meeting the policy objectives associated with landfill diversion were either arbitrarily subordinated or simply left out of the equation.

California's recycling law is a case in point. It not only couples mandatory diversion goals with hefty noncompliance penalties, it also dictates which technologies qualify for diversion credit and which do not. In the statute, source reduction, recycling, and composting are in; conversion technologies are out. While the state claims a 37% diversion rate, about 35.5 million tons were still disposed last year, 65% of which were biomass. By categorically disqualifying technologies capable of converting these materials into environmentally beneficial products, incentives for commercialization of new industries end up effectively removed. The salient question for the state's waste agency is not how to maximize recycling, but how to optimize diversion. The existing regulatory structure militates against the advancement of these broader sustainability goals.

Environmental Myopia

The diverse communities of interest operating under the environmental banner have yet to develop a uniform message on the issues surrounding conversion technologies, bioenergy, and bio-based products. The reason for this lies not only in the often parochial nature of state and local concerns, but in the historic fractionation of the environmental movement itself. Just as regulatory agencies grew and diverged in response to major statutory domains, so environmental interests coalesced around specific conservation and pollution abatement issues. Like their regulatory counterparts, environmental groups responded to the increasingly complex nature of air, water, waste, and resource issues by becoming experts in the underlying technical and legal foundations of separate disciplines.

This division of labor greatly enhanced the sophistication and effectiveness of watchdog activities on a wide variety of public health and preservation issues. But as we've seen, specialization is a double-edged sword. As sustainability initiatives move us toward more comprehensive life cycle assessments of costs and benefits, dealing with issues in isolation becomes increasingly ineffectual. There is a bit of irony in the indictment that some environmentalists cannot see the forest for the trees.

In the solid waste arena, the environmental community has been strongly supportive of regulatory efforts for both recycling and disposal site containment. But this same advocacy, in many instances, resulted in a marked vesting in the status quo and a reticence to move away from specific engineered solutions or technologies to more flexible, and in some cases more beneficial, cross-media approaches to environmental management.

For example, recent environmental arguments raised to EPA opposing regulatory changes that would allow controlled experiments with new aerobic and anaerobic digestion technologies for in-situ composting at lined landfills. Such bioreactor cells represent a major divergence from the current dry-tomb method. This has led some environmentalists to voice renewed concerns about leachate migration. Allegations also resurfaced that aggressive biodegradation of the waste column is unacceptable because "all landfills leak." Lost in this debate of form over substance are the potential benefits of these advanced biotechnologies, such as decreased fugitive emissions, increased energy recovery, accelerated waste stabilization, reusable site capacity, and lower long-term management costs.

Legislative proposals that pave the way for more aggressive diversion of wastes from landfills also met with resistance in some environmental quarters. In California, for example, an environmental group successfully opposed an amendment to state law to extend diversion credit to a variety of noncombustion technologies capable of converting waste biomass into fuels, fuel cells, and a variety of other bioproducts. The group based its opposition on allegations that such processes could compete with recycling and composting and, worse, that new bioenergy technologies would increase pollution because their end products include alternative fuels. The more global environmental benefits of expanding petroleum displacement markets never surfaced as a relevant factor in this debate.

It's likely that such myopic perspectives will fade in tandem with the introduction of enlightened regulatory programs. Whereas regulators are ultimately bound by science, however, activists are not. Indeed, environmental lobbies gain their voice through the forging of strategic political constituencies and the crafting of messages designed to stir public controversy and influence desired outcomes. It is on this slippery slope, where the ends justify the means and where theory becomes dogma, that science crosses over to religion. And, in true McCarthy-esque fashion, politicians stray from this anointed path with great trepidation.

At its extreme fringe, the environmental movement calls for a radical reduction in consumption and the stifling of economic growth and development. This cure for planetary ills, such as resource depletion, pollution, and global warming, ignores the fact that a significant portion of the Earth's population will thrust itself into the modern industrial age within the next two decades. It is not so much a question of if this major surge in production will occur, but by what means and at what environmental cost.

For example, experts predict that when China and India reach the same level of per-capita energy consumption that South Korea enjoys today, these two countries alone will account for a doubling of world oil consumption. Such nations might thus be doomed to repeat the mistakes of their petroleum-dependent forebears and without a comparable level of environmental safeguards. Clearly, if western nations fail to commercialize and actively promulgate alternative technologies for industrial development based on clean, renewable resources, the global environmental consequences could be staggering.

With so much hanging in the balance, it would seem that the powers that be would come around to the right way of thinking and just get on with it. But, as with most things in life, there's a more pragmatic side to the equation: Economic interests will dictate both the nature and the pace of bioresource development. The question is: Who stands to win and lose the most from these changes?

Follow the Money

When it comes to changes as dramatic as the birthing of a new industrial economy, vested interests loom large on both Wall Street and Main Street. These interests crosscut several economic sectors, including petroleum producers, petrochemically based industries, large agricultural cooperatives, ethanol refiners, forest managers, multinational waste corporations, and public solid waste agencies. All share a financial stake in the outcomes of future biomass utilization for the production of basic goods and services.

Major oil companies obviously have the most to lose by this transition, a fact that has not gone unnoticed in corporate boardrooms. Indeed, this market-share issue came on the scene sooner than most anticipated. While alternative-fuels development always sat on the front burner of the national bioenergy initiative, it appeared in the early going to pose little threat to existing gasoline markets. Commercial production of ethanol from corn had enjoyed some modest success in the Midwest, but expansion of these markets to a national scale seemed to be some years away.

MTBE changed all that. This high-profile issue shined a fortuitous spotlight on ethanol's potential as a replacement oxygenate. Congressional proposals, spearheaded by a strong bipartisan coalition, soon followed. These efforts escalated the debate to include the development of a national renewable content standard for gasoline, broader distribution systems for 85% ethanol fuel blends, and the promotion of flexible-fuel vehicles by major US automakers. Suddenly the prospect of a rapid expansion in market share for ethanol appears within reach.

Petroleum producers may be expected to continue their fight against such proposals. But strong, bipartisan agricultural coalitions based in the Midwest Corn Belt, along with large, multinational ethanol producers, now prove to be a formidable opponent. The political appeal of their message lies not only in its environmental premise, but also in the new life that expanded ethanol markets would breathe into depressed rural economies hard-hit by falling commodity prices.

Corn ethanol refiners recently documented their ability to meet national capacity needs for a phased renewable fuels standard. In anticipation of favorable federal and state initiatives, some refiners moved into an aggressive acquisition and consolidation mode, expanding their span of control over agricultural lands and crops capable of feeding ethanol production. These agricultural interests represent the vanguard of the biofuels industry, which will rely at its onset on the established corn-to-ethanol base.

A second phase of development, already underway, involves the expansion of feedstocks and technologies to include cellulosic biomass. Such materials as agricultural residues, forestry wastes, MSW, and other organics represent a virtually limitless supply of raw materials for bioproducts industries. They also bring with them new economic and political constituencies.

To date, agricultural and forestry wastes have received greatest attention as the cellulosic feedstocks of choice. This emphasis plays to the hand of existing growers and corn ethanol producers, who stand to benefit from the potential conversion of waste byproducts into cash commodities. But the focus on these sources of biomass also derives in part from the heavy involvement of related federal agencies in biotechnologies research and development funding. The USDA continues its long-standing policy interest in expanding agricultural markets and in fostering rural economic development. Similarly, the US Forest Service, in an effort to abate the high costs of its wildfire management program, took a direct partnering role in proposed California biorefinery projects to encourage the removal and utilization of natural timber wastes from the forest floor.

Of all the potential purveyors of cellulosic biomass, the solid waste industry, with its separately funded infrastructure, is probably in the most favorable market position to provide a reliable supply at the lowest price. But it is also an industry that is largely asleep at the switch when it comes to exploiting its pivotal role and actively promoting its feedstocks. Large-scale diversion of biomass wastes to bioproduct manufacturers will change the face of solid waste enterprises. It will also have an uneven impact on current investments, bringing strong new opportunities to some sectors and fierce competition to others. Predicting the likely winners and losers under these changing market conditions might be as simple as following the biomass.

The operators of large MRFs and transfer stations occupy strategic market positions as the regional hubs of materials flow. They are therefore the logical future brokers of MSW cellulosic biomass and the sector most likely to benefit from the commercialization of new bioindustries. This is particularly true for independent MRF operators who do not own landfills and who can significantly reduce disposal costs for postrecycled wastes by supplying the biomass fraction to a nearby processor. While there are several such projects under discussion, these potential partnerships are only beginning to be explored.

On the flip side, the most likely losers in this scheme are long-term investors at the bottom of the current waste management hierarchy. Clearly, landfills and incinerators have the most to forfeit from the commercialization of bioindustries since they are vying, at much lower odds, for the same feedstock. With biomass making up about 65% of what goes to landfill, such big-dollar facilities could, on a regional basis, lose over half of their throughput to upstream competitors within the next decade.

The continuing flow of major capital into sanitary landfills as a long-term business and management strategy is of concern for two reasons. First, it is likely that disposal capacity is purchased far in excess of that required to ensure a safe future reserve. Regional capacity needs are typically calculated on the basis of projected population and economic growth over three or more decades, less expected diversion. Seldom, however, do the latter estimates exceed statutory recycling goals, nor do they anticipate new diversion technologies.

Confounding this problem is the assumption that total calculated tonnage capacity needs will be managed by the current dry-tomb method for the life of the project. This ignores the prospect that new disposal technologies, such as advanced bioreactor cells, could realistically mature within the next decade and quadruple landfill capacity over current methods. If a 100-year megalandfill becomes a 400-year facility, how many centuries of capacity are necessary to ensure the public health and safety? What is the associated cost of funds, and where else could those dollars be invested to advance parallel environmental goals?

A second reason for concern is that vested interests in large-capacity landfills militate against the development of aggressive and innovative waste diversion strategies. Even when vertically integrated with MRFs, landfill operators have no real incentive to optimize upstream diversion options. What serves their interest is promulgating the current system, wherein only materials with market value in excess of processing costs are recovered. In this scenario, the major profit center continues to be the landfill gate. The lion's share of this throughput - postrecycled biomass - has greatest value as a landfill feedstock. As long as capacity remains available, investors at the end of the pipeline will continue to be the voice of conservatism on new environmentally beneficial alternatives.

The recent divestiture of incinerator and megalandfill investments by multinational waste companies in selected markets, however, indicates that such monies are already being freed by the private sector to explore other opportunities. Among these are novel approaches to the vertical integration of services, including the development of strategic partnerships with emerging urban bioindustries.

Greener Pastures

Francis Bacon once wrote, "He that will not apply new remedies must expect new evils." This is the admonition with which we enter the 21st century. It is also the challenge - one that must be met with a new set of tools capable of wedding prosperity with sustainability. Advanced biotechnologies and the return to renewable resources provide an unparalleled opportunity to grow and flourish, to replenish and restore. It is a natural remedy, practical in its application and comprehensive in its reach. It is a vision that compels us to move from resource depletion to resource abundance, from toxicity to degradability, from waste to efficiency. It is a mandate to pursue a more intelligent approach to environmental stewardship - a brighter shade of green.

Kay Martin is the director of solid waste management for Ventura County, CA.

MSW
March/April 2001