Who will become the Saudi Arabia of poop power?
The world is currently flushing $9.5 billion a year down the toilet, according to a recent study from the United Nations University’s Institute for Water, Environment and Health. That’s the value that they estimate could be captured if the entire world’s human waste was processed into eco-friendly biogas using anaerobic digesters and other such technologies. Even a much more modest target — processing only the waste of the billion or so people who currently have no access whatsoever to sanitation — would annually yield the equivalent of $376 million worth of natural gas, the report found.
At present, remarkably little human waste is currently channeled into waste-to-energy systems — in fact, more than 90 percent of all human waste is currently dumped untreated into rivers and oceans. That could change, however: some analysts see parallels between the burgeoning “excrement economy” and the transformation of used fryer oil in recent years from a worthless waste product into a valuable biofuel feedstock that now sells for around $1.50 a gallon. “Challenges are many, but clearly there is a compelling, multi-dimensional financial case to be made for deriving energy from waste,” says Chris Metcalfe, a co-author of the UNU report.
Experts are especially bullish when it comes to China, which is well-positioned to become the Saudi Arabia of poop power, thanks to its rapidly urbanizing population and a lack of taboos surrounding the reuse of human waste. The country has already installed some 8 million small-scale, low-tech bio-digesters to handle its agricultural waste, and its human-waste treatment centers are expected to see up to a 400 percent increase in volume over the next five years, according to a Credit Suisse report published this fall. “There’s an unprecedented opportunity,” says Beijing-based waste-to-energy evangelist Heinz-Peter Mang.
Still, turning toilets into sources of clean energy isn’t an easy task. One of America’s first sewage-to-energy facilities, built in Rialto, California, by EnerTech Environmental, went belly-up in 2012, despite having received $160 million in tax-free public financing. Similar problems have afflicted farm-based manure-to-energy projects: an NREL study found that the failure rate for agricultural digester projects in the U.S. was around 50 percent, and some versions of the technology have failure rates as high as 70 percent. "Really, you're looking at a new industry," says Alan Rozich, chairman of PMC BioTech. ”This is the Wild West right now."
Many tech companies and utilities believe the rewards could outweigh the risks, however.
One indication of the potential value currently locked up in poop: in 2013, the dairy industry estimated that installing manure-to-biogas equipment at the country’s 2,600 largest dairies would create annual revenues of up to $4.6 billion. Doing so would cost around $6.4 billion in capital investments, but would deliver substantial profits over time, the report found.
That’s alluring enough to have convinced a number of public utilities and private companies to experiment with sewage-to-energy systems. Ameresco (NYSE:AMRC) has been at the forefront of the U.S. human-waste biogas sector, using technologies modeled on landfill methane-capture systems. It installed the country’s first human-waste biogas refinery in San Antonio in 2010, through a partnership expected to generate $200,000 a year in royalties for San Antonio Water System ratepayers. A similar Ameresco project in Dallas is similarly expected to generate $1.5 million annually for ratepayers, as well as to offset 60 percent of the municipal water system’s energy needs.
In recent years, a number of other human-waste projects have cropped up around the U.S. The Budd Inlet water-treatment plant in Olympia, Wash., is now saving $228,000 a year in utility costs through a system that uses captured methane to offset the plant’s energy requirements. A similar project in Brooklyn, being managed by National Grid (NYSE:NGG), is refining a mixture of human waste and commercial food scraps into biogas, which is then fed into the local natural-gas grid; when the facility is brought fully online next year, it is expected to create enough gas to serve 5,200 homes.
Such methane-capture facilities are typically large-scale installations, which can make installation problematic in the densely populated areas where human waste is most freely available. One possible solution: a compact “pressure cooker” system, recently installed by D.C. Water, that essentially cooks waste to boost gas production, allowing energy to be harvested even in cramped urban settings. The D.C. plant is already saving the utility about $10 million a year in energy costs, plus an additional $13 million in treatment and trucking expenses, making the $470 million system a sound investment, says D.C. Mayor Muriel E. Bowser. “We can’t afford to have waste be just waste,” she says.
Many challenges remain for the U.S. biogas industry, perhaps most notably competition from the natural gas sector, where the fracking boom has ensured a ready supply of cheap gas. Still, some analysts predict that a natural-gas glut could spur the creation of filling stations for gas-powered vehicles, establishing infrastructure into which biogas could then be fed. “If the fracking boom can pay for that, biogas can inherit that and green it,” says Heather Youngs of the Berkeley Energy and Climate Institute.
We’re a long way from being able to fill our trucks with fuels derived from human waste, of course. Still, so-called “black water” is both cheap and abundant, and the supply won’t be running out anytime soon. Energy investors would be well advised to hold their noses, and keep a close eye on the human-waste bio-energy sector.
Companies to watch
* Caterpillar (NYSE:CAT) and General Electric (NYSE:GE) are both prominent manufacturers of biogas generators, with Caterpillar alone having installed more than 1.5 gigawatts of biogas generation capacity worldwide.
* Britain’s United Utilities Group (LON:UU), the country’s largest publicly traded utility, powers 25,000 homes in the north of England using the collected and processed waste of its 1.2 million customers.
* Irish firm AquaCritox and its parent company, SCFI Group are marketing a technology that uses supercritical water to convert organic materials, including liquid human waste, into steam and carbon dioxide without requiring costly pretreatment and drying processes.
Ben Whitford is the U.S. correspondent for The Ecologist. He has written for the Guardian, Newsweek, Mother Jones, Slate, and many other publications.