North America’s largest garbage hauler is looking for Canadian partners to help create new technology that will convert waste to energy.
Waste Management Inc. , the Houston-based giant that owns thousands of garbage trucks and hundreds of landfill sites across the continent, is ramping up its search for small entrepreneurial firms in both Canada and the United States that can help broaden its business and cut down on the need for landfill sites.
The company’s Organic Growth group, its venture investing arm, wants to expand its portfolio of investments in companies that are working on leading-edge technologies for creating renewable energy, expanding recycling, or managing waste.
It already has about 30 investments, a small number of which are in Canada. In 2010 it bought an 11-per-cent equity stake in Montreal garbage-to-gas technology firm Enerkem Inc., and last year invested $7.5-million directly in a commercial-scale plant Enerkem is building in Edmonton.
Waste Management has also invested in Harvest Power, a company with a plant in London, Ont. that converts organic waste to fertilizer and gas, which in turn generates electricity.
“We are trying to find technology providers,” said Joseph Vaillancourt, managing director of the Organic Growth group.
The idea is to link up with smaller companies that conduct research and development on new waste technologies, rather than performing the R&D in-house. If the technologies are successful, they can be eventually integrated into Waste Management’s day-to-day operations.
Waste Management is already a key player in turning waste into energy, using garbage dumps as the source. At about half of its 266 landfill sites in the United States and Canada, naturally forming methane gas is collected, and in many cases it is used to fire generators that produce electricity. Collectively, enough power is produced from the landfills to light up more than a million homes.
Mr. Vaillancourt said Waste Management’s venture arm was established about five years ago, but the group quickly realized it didn’t make sense to just buy up a new technology and immediately bring it inside the organization. It was far more effective to let the entrepreneurial companies continue their work, with support from Waste Management’s practical expertise and, of course, its money.
It also became clear that there is no silver bullet for turning waste into energy, he said: Different technologies are suitable for different kinds of waste.
That means Waste Management will need a whole portfolio of technologies. “It isn’t like we are trying to bet on the horse that will win. Our belief is that to win you need to have a chariot of seven horses,” Mr. Vaillancourt said. The company has four significant investments just in the “gasification” field – the high-temperature conversion of waste to gas.
Waste Management will not disclose exactly how much it has invested in new technologies so far, but Mr. Vaillancourt said it is “many hundreds of millions.” It generated more than $13-billion (U.S.) of revenue and about $1-billion of profit last year, with $258-million in cash at year-end, so it has deep pockets.
The new technologies will allow it to extract more value from the garbage it handles, while at the same time providing a much broader range of waste-treatment options to its customers.
Potentially, Waste Management could eventually control a suite of technologies that collectively turn all municipal and industrial waste into energy and other useful end products, thus eliminating any need for disposal at landfill sites, Mr. Vaillancourt said.
In addition to money and expertise, Waste Management can also supply something else that is critical to companies designing systems to convert garbage to energy – a custom-made stream of waste.
“With any of these companies, their conversion technology optimally works with a certain homogeneous source of waste,” Mr. Vaillancourt said. “We have the ability to pre-sort it and process it for them. We can basically engineer a fuel for them.”
Enerkem vice-president Marie-Hélène Labrie said the Waste Management partnership has helped accelerate her company’s success “by facilitating access to waste feedstock and by providing expertise in the collection and management of a wide range of waste streams.”
But Waste Management doesn’t invest only in energy conversion technology. One of its initiatives is a social media venture called Recyclebank, an affinity program that hands out redeemable points to people who engage in specific recycling activity. Waste Management is also investing in solar-powered trash compaction technology, and innovative ways to dispose of medical waste.
And it is experimenting with semi-automated systems to separate the components of construction and demolition waste – a stream that makes up a large portion of all the garbage generated in North America.
Some of Waste Management’s venture partners:
Enerkem Inc., Montreal
Technology that converts solid waste into biogas. The company has a demonstration plant in Quebec and is building a full-scale commercial operation in Edmonton.
Agilyx Corp., Oregon
Technology that converts low-value waste plastic into synthetic crude oil.
Harvest Power, Massachusetts
Takes organic waste and converts it to fertilizer and gas, which can be used to generate electricity. Has facilities in Ontario, B.C. and several cities in the United States.
BigBelly Solar Inc., Massachusetts
Sells solar-powered garbage compacters to reduce energy and transportation costs.
Recycle Rewards Inc., New York
Runs Recyclebank, a rewards program that issues points for eco-friendly activities such as recycling electronics or buying certain “green” products. The points can be redeemed for discounts and deals.