Recycling: Past, Present and Future

[From the desk of Gunner: Jonathan Kolber’s back again this week -- and with him he brings a small OTC company that has found a better way to recycle... Forget curbside pickup of your bottles and cans -- this company deals with energy. More specifically, the business of converting any kind of organic waste into ethanol. Enjoy...]

Recycling is a dirty problem. In the past, people didn’t view it as important because the world wasn’t looked at as a system.

As the number of people on this planet grows and many approach First World standards of living — as will happen in decades ahead with China and India — our consumption of natural resources will grow exponentially. Next to energy, the most pressing of these resources are the raw materials used to make products we consume and throw away.

This makes recycling a Janus-like, two-faced problem. One face is that of the garbage deposited in our environment, whether sequestered in landfills or floating freely in our waterways and air. The other face is that of dwindling supplies of raw materials.

Yes, a lot of people “recycle.” But today’s recycling is a half effort. It’s inefficient, much of the material can’t be reused and the sorting is labor intensive.

Landfills are an eyesore, and they’re an economic problem. All that land is used for nothing but holding refuse. Further, once refuse is deposited into a landfill, it rarely ever leaves.

When a corporation pours its garbage into the air or public waterways, it generally does so at no cost and with few consequences to the corporation. Technologies now exist for capturing much of this industrial effluent at the point of origin.

However, these technologies are rarely used because the corporations would have to pay for them and won’t unless compelled to do so. (Any corporation doing so voluntarily would operate under a significant competitive disadvantage.)

Multiple solutions have been proposed, including penalties for dumping and the ingenious scheme of trading carbon credits that’s now prevalent in Europe and starting to catch on in the United States. (There’s even a futures exchange devoted to this. Check out http://www.chicagoclimatex.com/.)

Clearly, this is not something amenable to a case-by-case private solution. A redefinition of ownership rights and responsibilities would help, and the carbon credits are a step in this direction. However, most planners overestimate the efficacy of political solutions and underestimate the power of technological ones.

The Past

Over the years, I’ve seen a lot of business plans that purported to do something technologically about the problem of recycling. One ingenious company figured out how to take plastics and remake them into bricks and wood-like slats for public benches. Another identified a process for taking tires and reducing them into a mixture of steel, petroleum byproducts and — again — scrap.

Then, of course, there are the community recycling programs. You know, the ones that have us sort our garbage into different kinds of plastic, paper, etc… and lead to us buying paper and plastic products that proudly bear labels saying, “x% post-consumer content.”

But I’ve always been troubled by the inefficiency of all of these efforts. Most post-consumer waste still winds up in the dump, and most of the various business plans I’ve seen only address the problem in narrow ways.

The Present

I’m pleased to report that Transformational Technologies Portfolio holding Nuclear Solutions Inc. (NSOL: OTC BB) has found a better way. The company has perhaps the world’s best process for converting any kind of organic waste into ethanol.

Validation of this process lays in the fact that the state of New Jersey has decided to guarantee an $84 million bond issue to fund construction of the first such plant. Not only does Nuclear Solutions have the costs of plant construction handled, they have since contracted with one of the largest ethanol distributors in the United States to take all of the plant’s output.

CEO Patrick Herda explained to me that the process produces negligible toxic byproducts, a major competitive advantage. The process reduces organic inputs such as tires to their constituent molecules, most of which are hydrogen, oxygen and carbon compounds. In this manner, nearly all of the potential energy trapped in what would otherwise be a piece of garbage can be released and converted into the form of ethanol. (I suggested that NSOL trademark the term, “The Energy Recycling Company™” and Patrick said he would do so.)

Ethanol is a portable, stable, and energy-dense form of alcohol. Fuels comprised of 85% ethanol can replace gasoline for most applications, including filling your gas tank.

This is a wonderful process, and Nuclear Solutions already has received indications of interest from other states wanting to do deals similar to New Jersey. I expect this process, along with the company’s other extraordinary technologies, to make Nuclear Solutions one of the best-performing stocks of the next five years.

However, the process is restricted to organic (carbon-based) compounds. A significant percentage of the garbage we generate is in the form of scrap metals and other non-organic refuse.

For that, we need something even more advanced.

The Future

Most analysts expect energy costs to rise indefinitely thanks to peak oil and the rapid rise of consumption in India and China. If we were permanently locked into oil the way we are today, that would be true.

I’m aware of a number of technologies on the horizon with the potential to replace fossil fuels as a source of energy. In addition to offering much greater and cheaper sources of energy, they will greatly reduce the pollution associated with fossil fuels.

Meanwhile, we’ll still have huge dumps full of waste products and even larger quantities of consumer and industrial products headed there for a final resting place. Such “industrial graveyards” will pose an even greater problem.

Fortunately, there is a solution, and it’s beckoning. In the future, when energy costs plummet, we’ll see a radically new and superior form of recycling, called “total recycling systems.” It’s based on two well-established technologies: neutron bombardment and the centrifuge. Imagine a large conveyor belt moving slowly and steadily through a tunnel. The tunnel houses a source of radioactive neutrons — the same principle that activates a neutron bomb, but controlled for steady release.

Any kind of waste material — from refuse to scrap metal to garbage — is just piled onto the conveyor belt. As it moves through the tunnel, neutron bombardment causes the scrap to be reduced from complex molecules into constituent elements and sterilized (bacteria and viruses are complex molecules). At the other end, those pure elements are moved into a centrifuge, where they’re spun until completely separate from each other — into iron, copper, nitrogen, etc. Then it’s all sterile, clean and ready for manufacture into new stuff.

Why don’t we do this now? Energy costs. This process requires tremendous amounts of energy. In the future, we’ll see these total recycling systems all across the planet — unless nanotechnology comes up with an even better solution. (I love it when technologies compete in a race to solve major problems.)

I’ll be talking about future energy sources another time. I’ve studied them, and they’re real (one beams solar power from space in a breathtaking way). While the short-term will see dislocations in oil and gas supplies, it’s just a matter of time until electricity is cheap and plentiful.

To your profitable future,

Jonathan Kolber
March 22, 2006

Penny Sleuth Contributor

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