Piles of Garbage for this Green Company
Matthew is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
On the surface it might seem downright silly to claim that a company like Waste Management (NYSE: WM) is a green company. They make their money hauling away other people’s garbage, after all. But if you look beyond the surface of hauling away all manner of smelly garbage, you will see that Waste Management is a bona fide green company.
Exhibit A in case the Waste Management’s green credentials is that the company is actually the largest recycler in North America. Their recycling business is a huge factor in the sustainability of many industries and commodities. Take aluminum for example. Large scale production of aluminum began in the 1880s. Despite the nearly 130 years of time, roughly 75% of all aluminum ever produced is still in use today. How is that? Aluminum is infinitely-recyclable, without losing any quality or durability during the recycling process. Thanks to Waste Management and its smaller peers, Republic Services and Waste Connection, aluminum is the most recycled metal in the world.
Keeping existing aluminum in use equates to less of a need for new aluminum to be mined by companies like Alcoa (NYSE: AA). Less mining is a positive for Alcoa and consumers alike, not to mention the environment. The recycling of aluminum uses 95% less energy than when it was first made. The initial mining, extracting and refining of aluminum is an extremely energy intensive process. Using recycled aluminum keeps Alcoa’s overall costs from rising. Lower costs for Alcoa result in lower prices for its finished goods, which is found in everything from soda cans to cars and airplanes.
Electric Vehicle Battery Recycling
One of the worries about an electric car future is what do we do about these massive batteries at the end of their product-life? Handled improperly, the electric vehicles batteries made by the likes of A123 Systems (NASDAQOTH: AONEQ) could be a huge environmental nightmare. Even at the end of its product-life, these batteries are worth a lot of money to the right company with the expertise to recycle them. Recycling toxic vehicle batteries is right in Waste Management’s purview. Today, the lead-acid batteries found in traditional gas vehicles are the single most recycled product in the United States. The lead and sulfuric acid inside those vehicle batteries could easily damage the environment if not for Waste Management and similar companies. In the right hands, the majority of the contents in a lead-acid car battery are reused, recycled or neutralized. The same can be done with electric vehicle batteries.
Renewable Electricity from an Unlikely Source
Waste Management has turned itself into quite the renewable energy quasi-utility. Waste Management’s waste-to-energy facilities take solid waste from landfills and convert that waste into useable renewable electric energy. Waste Management’s waste-to-energy facilities generate enough energy to power 650,000 homes every day. To put that into better context, in 2009 all the solar power in this country was responsible for 800,000 megawatt-hours of energy. In that same year, Waste Management’s own waste-to-energy facilities were responsible for 8.6 million megawatt-hours of energy, more than ten times the total solar power output.
Turning Gas into Gas
Waste Management is the only waste company nationally that builds and operates its own landfill gas plants. What makes these plants so green is the conversion of landfill gases (LFG) into clean-burning liquefied natural gas (LNG). This conversion directly prevents pollutants, that would otherwise enter the atmosphere, from doing so. No other form of renewable energy can make that claim.
Landfill gases occur naturally from the decomposition of organic waste. If left on their own, these landfill gases will escape from the landfills and be released into the atmosphere. Instead, Waste Management captures these gases and converts them into useable forms of energy.
From Garbage to Fuel
Waste Management’s LFG to LNG conversion is also used by the company directly. Waste Management uses this converted LNG in their fleet of natural gas trucks. Let’s think about that for a second. Waste Management’s natural gas trucks collect garbage that will be converted into LNG. Waste Management then uses that LNG to fuel its fleet of truck, which will be used to collect additional garbage. That’s quite an accomplishment; a truly impressive cycle of renewable energy usage and production.
The beauty of natural gas trucks over diesel trucks is that natural gas produces nearly-zero air-particulates and provides a significant reduction of green-house gases compared to diesel. Waste Management currently owns over 300 LNG trucks and 1,400 compressed natural gas (CNG) trucks. Over the next 5 years, Waste Management plans to make 80-90% of its new truck purchases natural gas trucks.
These are just a few of the many ways in which Waste Management is making its contribution to the environment. Waste Management isn’t only doing these green initiatives because they are the right thing to do. They are also doing these green initiatives because they are the profitable thing to do. The right thing to do and the profitable thing to do; what a great combination.
WhichStocksWork owns shares of Waste Management. The Motley Fool owns shares of Waste Management. Motley Fool newsletter services recommend Waste Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.