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A rising industry

America has long remained one of the most wasteful countries in the world, generating 239 million metric tons of garbage every year, about 1,600 to 1,700 pounds per person. While some view it as a threat to our environment and society, the solid waste management industry sees an opportunity.

“It’s a profitable industry,” according to Debra Reinhart, a member of the Board of Scientific Counselors for the EPA. “It’s a difficult industry but it is profitable if it’s done right.”

Two private companies, Waste Management and Republic Services, lead the solid waste management sector. Together they own about 480 landfills out of the 2,627 landfills across the United States. The two companies have seen staggering performance in the market, with the stock prices of both doubling in the past five years. Both Waste Management and Republic Services declined CNBC’s request for an interview.

“They’ve learned how to be best-in-class businesses,” said Michael E. Hoffman, a managing director at Stifel Financial. “Their publicly traded stocks outperformed the market handily between 2015 and 2019 and underpinning it is a meaningful improvement in their free cash flow conversion.” The stocks have continued to outperform.

Tipping fees

Since its inception, landfills have made a majority of their revenue via tipping fees. These fees are charged to trucks that are dropping off their garbage based on their weight per ton.

In 2020, municipal solid waste landfills had an average tipping fee of $53.72 per ton. That translates to roughly $1.4 million a year in approximate average gross revenue for small landfills and $43.5 million a year for large landfills just from gate fees.

Tipping fees have seen steady growth over the past four decades. In 1982, the national average tipping fee sat at $8.07 per ton or about $23.00 when adjusted for inflation. That’s nearly a 133% increase in 35 years.

While tipping fees make landfills sound like a risk-free business, they are still quite an expensive investment. It can cost about $1.1 million to $1.7 million just to construct, operate and close a landfill. For this reason, private companies have replaced municipal governments to own and operate the majority of the landfills across the U.S.

“I think it’s because the trend has been to go larger and larger so the small neighborhood dump can’t exist because of the regulations and the sophistication of the design,” Reinhart said. “So we are tending to see large landfills, which do require a lot of investment upfront.”

Privatization of landfills

Private companies have also played an important role in discovering new ways beyond tipping fees to turn a profit out of garbage. Landfill mining and reclamation, a process of extracting and reprocessing materials from older landfills, is one of them.

In 2011, a private scrap metal company contracted with a nonprofit landfill in southern Maine to mine precious metals. In four years, they recovered more than 37,000 tons of metal worth $7.42 million.

But it isn’t always a success story. In 2017, the city of Denton, Texas, ended its landfill mining program before it could even start after realizing that the benefits weren’t worth its $4.56 million price tag. According to experts, economics is usually the biggest challenge to make landfill mining work.

“There’s virtually no way I can see how that makes money,” said Hoffman. “The commodity values would have to be at such higher levels than they are today for whatever it is you’re trying to get your hands on.”

Meanwhile, some experts argue that landfill mining can be profitable if done correctly by recovering more space for tipping fees.

“Many people are mining but they’re not reusing the space,” according to Sahadat Hossain, professor of civil engineering at the University of Texas at Arlington. “If you do the operation right, you’re never going to be involved and it will always make you money.”

Landfill gas to energy

Modern chemistry has also allowed landfills to be mined for energy, using methane gas that is produced from decaying trash. According to the U.S. Energy Information Administration, landfill gas generates about 10.5 billion kilowatt-hours of electricity every year. That’s enough to power roughly 810,000 homes and heat nearly 547,000 homes each year.

“The landfill gas operations that are known as low or medium DTU which are the predominant form of capturing the gas and turning it into electricity or steam and then selling it? Those are very good returns on capital projects,” Hoffman said.

While revenue from generating energy and fuel isn’t quite impressive, landfills that participate do benefit greatly from generous subsidies. The tipping fee, combined with various mining techniques and government subsidies have altogether transformed the landfill industry into a booming business.

The solid waste management industry will only continue to expand as long as there are those who view garbage as a resource rather than waste. Because when it comes to landfills, one man’s trash is quite literally another man’s treasure.

“Waste is not a waste, but it’s a resource,” emphasized Hossain. “World has limited resources. If we don’t reuse and recycle these, we cannot talk about a circular economy. That will always be a talk in the tabletop discussion.”

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U.S. ambassador insists America remains the top foreign policy actor in the Middle East

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U.S. ambassador insists America remains the top foreign policy actor in the Middle East

America is the most important foreign policy actor in the region, U.S. Ambassador to the UAE says

The U.S. Ambassador to the United Arab Emirates Martina Strong believes the U.S. is unequivocally the most important foreign policy actor in the Middle East.

Her comments come roughly one year after President Joe Biden threatened “consequences” for Saudi Arabia after the OPEC kingpin slashed oil production along with its allies against Washington’s wishes.

Biden’s administration has been notably quiet about recent OPEC+ output cuts, however, even as oil prices have rallied close to $100 a barrel.

The U.S. is seeking to orchestrate a delicate balancing act in the region, particularly as it pushes for the normalization of ties between Israel and Saudi Arabia and responds to China’s growing influence.

Saudi Arabia has recently shown signs of steering toward China and Russia after rekindling relations with Iran through Beijing-mediated talks and receiving an invitation to join the emerging economies’ BRICS alliance.

Asked by CNBC’s Dan Murphy whether the U.S. remained the most important foreign policy actor in the region, Strong replied, “Absolutely. I have no doubt about it. Our leadership is really unquestioned and apparent in every, I would say, region of the world — and this is no different.”

Strong said the U.S. is “working very closely together with the UAE and with our other partners here in the region on our core national security priorities as well as our national economic priorities.”

Saudi Arabia’s Crown Prince and Prime Minister Mohammed bin Salman (L), India’s Prime Minister Narendra Modi (C) and U.S. President Joe Biden attend a session as part of the G20 Leaders’ Summit at the Bharat Mandapam in New Delhi on September 9, 2023.

Evelyn Hockstein | Afp | Getty Images

“When it comes to security, President Biden has put forward a very positive, strong vision for our cooperation with the region. It’s based on diplomacy, it’s based on deterrence, de-escalation and, at the end of all this, of course, is prosperity,” she added.

“We’ve been doing that successfully here in the UAE for over 50 years, and we look forward to doing so for many years to come. I would say what is perhaps unique about our partnership with the UAE is how future-oriented and forward-looking that partnership is.”

Strong said the U.S. and UAE would continue to work together in response to the climate crisis. The UAE will host the COP28 climate conference from Nov. 30 through to Dec. 12.

— CNBC’s Ruxandra Iordache contributed to this report.

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Indian energy minister warns of ‘organized chaos’ if oil tops $100 per barrel

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Indian energy minister warns of ‘organized chaos’ if oil tops 0 per barrel

Oil prices surged to their highest level in more than a year on Thursday. The U.S. West Texas Intermediate futures reached $95.03 per barrel, marking the highest cost since August 2022.

Manan Vatsyayana | Afp | Getty Images

India’s minister of petroleum and natural gas warned that there’ll be “organized chaos” if oil prices break above $100 per barrel, but said the South Asian nation is well positioned to weather higher costs. 

“If the price goes above $100, it’s not going to be in the interest of either the producing country or anyone’s interest. You will have large, organized chaos,” Hardeep Singh Puri told CNBC’s Dan Murphy during a panel at the ADIPEC oil and gas conference in Abu Dhabi, United Arab Emirates on Tuesday.

But “you should not be worrying about the impact on India. India’s a large economy that has a lot of domestic production. We’ll cut back, we’ll do something or the other,” Puri said.

Last week, oil prices surged to their highest levels in more than a year with U.S. West Texas Intermediate futures hitting $95.03 per barrel. Prices have since pulled back, standing at $89.44 a barrel in Wednesday morning trade in Asia.

While Puri was confident that India could navigate higher prices, he warned that other nations may not be able to do so.

“I would worry about what happens to other parts of the developing world … that is really a worrying point,” Puri said, highlighting that rising prices in the last 18 months have placed “100 million people into abject poverty.” 

“They had to go from reasonably priced gas and cooking fuels [to] wet wood, coal or whatever they could get. That is the problem.” 

Hardeep Singh Puri, India’s minister of Petroleum and Natural Gas, at the ADIPEC conference in Abu Dhabi, United Arab Emirates, on Tuesday, Oct. 3, 2023.

Bloomberg | Bloomberg | Getty Images

The minister said on X, the social media platform previously known as Twitter, that oil producers need to be mindful of the struggles consuming countries face. 

“During the pandemic, when crude oil prices crashed, the world came together to stabilize the prices to make it sustainable for the producers. Now, as the world is at cusp of economic recession & slowdown, oil producers need to show [the] same sensitivity towards the consuming countries,” he said in a post.

India’s energy transition 

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Quick Charge Podcast: October 3, 2023

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Quick Charge Podcast: October 3, 2023

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