Transcripts

"Green Options"-LFG

SUZANNE PRATT: Thanks Paul. Many businesses consider being environmentally friendly a smart marketing move. But with volatile energy prices, going green can also make good business sense. As Jeff Yastine reports in our ongoing series, "Green Options," that factor is driving an effort to tap into an unusual source of energy.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: For travelers through south Florida's table flat geography, these grass-covered mountains of trash are pretty hard to miss. Every region around the country has at least one solid waste landfill and garbage trucks, sometimes by the hundreds each day, climb the slopes, dropping off tons of trash. These pyramids of refuse generate a lot of methane gas, a byproduct of the bacteria slowly breaking down the organic matter inside the landfill. The methane gas is usually vented or burned off at the landfill to avoid a dangerous buildup of flammable gas. But in recent years, more industrial companies are warming to the idea of using this so-called landfill gas as a method of powering their manufacturing operations.

The Environmental Protection Agency says the number of users of so- called landfill gas or LFG has more than doubled since 1997. One of those new users is Anheuser-Busch. The brewer, owned by Europe's Inbev, uses landfill-produced methane gas to fuel its beer making operations in Houston and Fairfield, California. Methane is captured at the landfill through vent pipes like these, then cleaned and filtered before being pumped through miles of pipeline to the breweries. Anheuser-Busch says it wants to be more environmentally friendly. Doug Muhleman oversees the project and says the landfill gas is also bottom-line friendly.

DOUG MUHLEMAN, GROUP VP FOR BREWING & TECH., ANHEUSER-BUSCH: It does help. The volatility of fuel prices is very difficult for any company that uses energy. The brewing process is very energy intensive so it has a big effect on us. So anything that we can do to take the volatility out of our costs and hedge for the future, is going to be good for our business.

YASTINE: Making the switch does have its costs. In Anheuser-Busch's case, boilers and other industrial equipment had to be converted to burn methane. And the pipeline from the landfill to its Houston brewery was six miles in length. But energy consultant Mike Bedley says those costs aren't usually deal breakers.

MIKE BEDLEY, ANALYST, APEX POWER SERVICES: Capital costs may range from $5 to $15 million anywhere from $500,000 to $1 million per mile, but a landfill that has the equivalent of $6, $8, $10 million of available gas, it could obviously pay itself off in five to 10 years, which would be a good investment.

YASTINE: Landfill owners are also recognizing the untapped energy potential of their sites. Operators like Waste Management have begun selling landfill gas to heavy energy users, generating another stream of cash from those mountains of trash. Jeff Yastine, NIGHTLY BUSINESS REPORT, Miami.