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For the past decade, in light of repressive provisions in statute and a business environment that for eight years has been ranked last in the nation, California’s emerging biobased technology companies have either moved out of the state, or sited elsewhere, thermal waste-to-renewable energy projects amounting to at least $1 billion in capital investment.

During this time, California has placed in landfills more than 250 million tons of postrecycled municipal solid waste, one of the state’s most readily available and environmentally favorable sources of renewable energy. In 2012 alone, the state landfilled more than 30 million tons of MSW (municipal solid waste)—organic materials containing the energy equivalent of approximately 60 million barrels of crude oil.

Among its regulatory roadblocks, there is a scientifically inaccurate definition of gasification in the statute, which, if taken literally, would imply an emissions standard (i.e., zero emissions) that is impossible for any biorefinery, let alone any petroleum refinery or power plant, to meet.

Today, other than gasification, all conversion technologies, including low-temperature, acid or enzymatic, biochemical or mechanical processes, are categorized as “transformation,” equating them with incineration and subjecting them a more rigorous and time-consuming permitting pathway than is required to site a major solid waste landfill.

The need to revise California’s statute regarding gasification and to clarify the permitting pathway for these technologies has been universally acknowledged by a majority in the legislature, by the state’s regulatory agencies, industry stakeholders and public jurisdictions (at least 25 of which are considering these technologies as solutions to their burgeoning challenge of solid waste disposal).

The California Air Resources Board (ARB) has confirmed that organic waste is one of the only feedstocks on a life cycle basis that will meet the emissions reduction objectives of California’s Low Carbon Fuel Standard. Its staff has projected that 24 waste-to-biofuels facilities would be required in the state by 2020 to assist in meeting the goals of this program.

“High Priority”
One of the “high-priority action recommendations” listed in California’s BioEnergy Action Plan for 2006 is as follows:

“Direct the California Integrated Waste Management Board (now known as California Department of Resources Recycling and Recovery [CalReycle]) to work to promulgate changes to existing law to develop a regulatory framework for biomass waste conversion facilities, meeting environmental standards, that clearly distinguishes them from disposal and provides clear permitting pathways for their development, as well as provides diversion credits to local jurisdictions for solid waste processed by these technologies.”

Has there been one single step of progress toward these goals in the past seven years? Zero.

Throughout the past decade, an entrenched alliance of Democratic staff members for the legislature’s environmental committees, led by those of Senate President Pro Tem Darrell Steinberg, has collaborated with elements in the environmental community to thwart every attempted legislative initiative that would establish realistic standards of performance and permitting pathways for this industry.

For example, in 2010, Assembly Bill (AB) 222, a comprehensive package of corrective legislation sponsored by the BioEnergy Producers Association, passed the assembly by a 54 to 13 vote and was ready for floor passage in the senate and signature by the governor, when the senate Environmental Quality Committee demanded to hear the bill. The committee’s democratic members subsequently gutted the bill’s content, reversing its intent to the point that its sponsors had no alternative but to abandon the legislation.

In so doing, these legislators ignored (literally swept aside) more than 100 statewide endorsements, including a joint letter of support from the chairs of the California Energy Commission, the ARB and the acting director of CalRecycle.

A Prime Example
Plasco Energy Group, based in Ottawa, Ontario, is a prime example of the frustration that conversion technology providers face in attempting to do business in California.

After a two-year competitive bidding process, Plasco was selected by the Salinas Valley Waste Authority to construct a waste-to-electricity facility at its Johnson Canyon Landfill. Soon thereafter, the company applied for and obtained a formal ruling from CalRecycle that its technology could meet the statutory gasification definition, thus qualifying the project’s electricity output for California’s Renewables Portfolio Standard (RPS), a step critical to its economic viability.

The logic of CalRecycle’s ruling was simple. A legislature cannot pass a law with which no one can comply. The agency rightly interpreted “zero emissions” to mean no emissions exceeding the local standards that apply to all businesses throughout the state, including oil refineries and power plants.

When Gov. Jerry Brown’s administration took office, representatives of the coalition that had blocked corrective legislation during the previous decade moved into leadership positions at CalRecycle, and in May of last year, they rescinded the Plasco ruling.

The rescission notice came after Plasco and the Salinas Valley Solid Waste Authority had, in good faith, made an 18-month commitment of time and money to comply with California Environmental Quality Act (CEQA) and other permitting requirements in costly detrimental reliance upon what they understood to be a formal opinion by the state.

Stung by widespread stakeholder criticism of this move, the Brown administration declared that it would support legislation that would allow the Plasco project (and only the Plasco project) to proceed on a “pilot basis” and “be considered an eligible renewable energy resource under state law.”

However, the bureaucracy, it appears, had other plans. It is fairly evident they knew Assemblymember Luis Alejo, in whose district Plasco’s project was located, would undercut the governor’s commitment. A close ally of environmental dogmatists, he was prepared to block any legislation that would enable the construction of a gasification facility in his district, and that is what he did. He is reported to have told his constituents, “We don’t want these kinds of projects in my district.”

But, lo and behold, Nov. 15, 2012, Sierra Energy, Davis, Calif., received a $3 million investment from the U.S. Department of Defense to install a modular, community-scale waste gasification system at U.S. Army Garrison Fort Hunter Liggett in Monterey County—in Alejo’s district, but beyond the state’s environmental permitting authority.

“This project is part of Fort Hunter Liggett’s ongoing efforts to meet net-zero standards for both waste and energy,” says Col. Donna Williams, Fort Hunter Liggett Garrison Commander. “Disposing of the installation’s waste and using it to generate clean energy meets both of those goals.”

A military net-zero waste installation reduces, reuses and recovers waste streams—converting them to resource values with zero landfill over the course of a year. Net-zero energy installations are designed to create as much energy as they use. Fort Hunter Liggett was selected as both a net-zero energy and net-zero waste pilot site.

If you want to pursue a gasification project in California, think federal or tribal lands.

Since last July, the Salinas Valley Solid Waste Authority has made multiple requests for CalRecycle to clarify its reasons for rescinding its Plasco opinion, and to date it has not received a response. Plasco remains in the dark as to the future economic viability of its project.

What Lies Ahead
So, where do we go from here? In 2011, California’s Legislature passed AB 341, setting a policy goal that calls for the state to reduce, recycle or compost 75 percent of its solid waste by 2020 (the current mandate is for 50 percent recycling). AB 341 requires CalRecycle to report to the legislature by Jan. 1, 2014, on its proposed strategies for achieving this goal. It requires CalRecycle to review and update information on the development of markets for recovered materials “with an emphasis on new and emerging trends in resource management.” Considering the progress waste-derived renewable energy is making across North America, it is curious the legislation did not mention conversion technologies as a potential alternatives.

However, the new management of CalRecycle is using its AB 341 authority to conduct a two-year study to define what constitutes the recycling of municipal solid waste (MSW) “to the maximum extent feasible,” and thereby determine what portion of the state’s postrecycled waste stream conversion technologies will be allowed to process.

In what could be interpreted as a bureaucratic ploy to further delay the introduction of conversion technologies in the state, the administration intends to wait until this study is completed before it supports corrective legislation. The necessary legislation could be enacted in a matter of months if the Democrats on the legislature’s environmental committees would allow it.

Potentially, this leaves the biobased technology industry out in the cold until Jan. 1, 2015, because once the feedstock limitations for conversion technologies are established, it will then take at least another year for corrective legislation to pass and take effect, if indeed it passes at all.

This ambiguous rule-making process is fraught with risk for an industry that should be allowed unlimited access to the state’s waste streams in a free-market economy. It is uncertain whether material recovery facilities (MRFs) would be willing to make the investment necessary to separate materials to the degree that could be mandated by this study, and these regulations appear destined to give priority to the recycling of products, such as paper or plastics, over the recycling of carbon, for example, ignoring the concept of the highest and best use of organic waste and potentially restricting conversion technologies to recyclables that have limited potential for energy recovery.

This association (BioEnergy Producers Association) believes the issues to be addressed under AB 341 should be much more far-reaching. We maintain that by the end of this decade, there will be a new concept of recycling that embraces the recycling of carbon on a molecular level, rather than on the finished product level, and that in many states across the country renewable energy will be widely accepted as a primary step in recycling, not the last step.

Many of the nation’s biobased technology providers are in the process of making decisions about future commercial plant construction. Unless immediate action is taken to eliminate uncertainties associated with doing business in California, the second generation of these technologies also will be lost to the state.

Unless the industry rallies to this association’s support and demands that California take immediate corrective action, it is not likely the state will see the beginning of a viable waste-based alternative-energy industry before this decade ends.

The author is chairman of the board for BioEnergy Producers Association, based in California, and is a principal of Sustainable Earth Partners LLC. He also serves as a strategic consultant to the alternative-energy practice of Stern Brothers & Co. investment bank.