| Mike Gratz is a businessman with a vision. He’s working
to transform the way the food and beverage industry thinks
about its waste streams. The small company he cofounded and
leads as president, NewBio E Systems Inc. (www.newbio.com),
has developed a patented system that turns industry’s
conventional solid and liquid waste disposal practices on
their head.
Where most people see waste, Gratz sees energy. Those waste
streams contain high-strength organic solids. Instead of paying
to have them hauled off to landfills or using them for land
application or animal feed, Gratz advocates harvesting them
and exploiting an anaerobic process that reduces them by up
to 99.99% and converts them to methane gas that can be burned
to generate energy.
 |
| NewBio president Mike Gratz, Ohio
Governor Bob Taft, and Professors Lynn Willet and Floyd
Schanbacher of Ohio State University. |
That is, waste becomes energy—the clean, renewable kind
that can be certified for the purpose of obtaining renewable
energy credits that have a market value of their own. State
incentives for renewable energy favor the economics, too.
The energy generated by a NewBio anaerobic digester can be
used by the plant itself to defray its energy requirements—and
costs. NewBio projects that in many cases the payback period
for an investment in equipment is two to five years. As energy
prices rise, the economics become increasingly attractive.
“If a truck is hauling organic waste from a plant, there’s
an opportunity to generate energy,” Gratz contends, “and
we can calculate how much.” If it’s a high-strength
waste, it’s a high-energy waste. “Many food plants
don’t realize the energy potential in hauled material.”
But why dispose of the residuals from a potato chip plant
when you could use them to generate some of the energy you
need to operate the plant in the first place?
Moreover, the costs of disposing of residual solids continue
to rise, while disposal options shrink.
Gratz says NewBio’s anaerobic process can yield enough
energy from residual solids to reduce a plant’s energy
demand by 5–20%. “It offers food processors a way
to manage environmental issues by integrating renewable energy
into a sustainable development business strategy,” he
contends.
Gratz views this opportunity as exciting, and it is. What
has been a problem and an expense can be transformed into
an asset. Indeed, Gratz objects to the term “waste,”
preferring “residual solids.”
NewBio’s
Big Bets
Headquartered in Minneapolis, MN, NewBio was formed in 1997
and began commercial operations in 1999. It changed its name
in January 2005 to NewBio E Systems Inc. The “E”
doesn’t literally stand for anything, but Gratz chooses
to think it refers to environment and energy.
Gratz, who holds a degree in economics, has spent over 22
years working with wastewater treatment and other environmental
products and services. His team consists of five full-time
staff (four engineers and one craftsman) and many contractors.
NewBio estimates its target market—roughly 8,000 facilities
in the US—at $2 billion a year and growing. The wastes
that hold energy potential can take the form of wastewater,
isolated waste streams, product that can’t be sold, and
material that’s hauled off for disposal offsite.
Are many food processors even thinking about “sustainable
development business strategies”? Maybe not, but environmental
and energy pressures are pointing clearly in that direction.
So, while the conventional thinking is that methods of handling
food processors’ waste streams are well-established and
there’s nothing new to be learned, NewBio is making some
big, related, bets.
- Because NewBio’s anaerobic process can treat high-strength
residual solids in wastewater; it’s highly efficient;
and it’s scalable, it will appeal to a broad customer
base on its technical and cost-saving merits— and particularly
to small and medium-sized processors not well served by
existing technology.
- NewBio’s ability to handle solids is compelling.
“Chemical oxygen demand” (COD) is the measure
of organic material present. Many alternative anaerobic
technologies can treat COD in solution. “It’s
when you add in the solids that the number of choices goes
down to basically some type of lagoon operation,” Gratz
says. “Lagoons are land intensive and not viable in
most locations. That’s why we’re excited about
what we can do.”
- Food processors will come to appreciate NewBio from a
risk-management standpoint; in virtually destroying all
high-strength residual solids, anaerobic digestion destroys
legal liability.
- The cogeneration option will prove attractive economically.
It converts nearly all the organic feedstock to gas. Roughly
one-third is carbon dioxide and; two-thirds are methane
that can be burned to generate electricity and heat.
- NewBio’s invitation to outsource wastewater treatment
and cogeneration will appeal to customers on management
and cost-saving merits.
- NewBio, its customers, local landfills, the local municipal
water treatment system, and the environment will all come
out winners.
While this may seem compelling on paper, Gratz and his team
understand that to penetrate the market they must help potential
customers reconceptualize waste treatment and understand the
benefits their system can deliver. Thus, their marketing strategy
centers on demonstrating results. They conduct pilot studies
that permit them to tailor their process to specific waste
streams.
In doing so, they’re building the database on actual
performance and cost savings that make their case persuasive.
Their Web site invites visitors to make their own calculations
of cost savings by entering information about their waste
streams and, for each potential customer, NewBio performs
a calculation based on the nature of the specific waste stream.
What’s New
About It?
insert: graphic of NewBio system from slide #10, PowerPoint
presentation and adapt for use
NewBio’s first eureka moment came when Gratz and his
colleagues recognized that, in most treatment applications,
a significant portion of the energy potential is contained
in a small portion of the residual solids. Other technologies
can digest COD at a high rate only if it’s soluble. NewBio’s
breakthrough is digesting high levels of solids at a high
rate, converting high concentrations of suspended solids and
fats, oils, and grease to methane. Specifically, it can
- capture the solids;
- grind them into a slurry, with a particle size of .125-inch
diameter, to maximize exposure to the waterborne bacteria
that digest organic matter; and
- prolong contact for enough time to permit the “bugs”
to do their work efficiently.
 |
| The NewBio Anaerobic Treatment
System utilizes a downflow process with an intermittently
backwashed sand filter to retain biomass and solids. |
 |
| A typical co-generation system. |
The treatment system couples biochemistry and chemical, mechanical,
and process control engineering. The patented sand filter
in the BioAccelerator is a key. It uncouples the transit time
for the water in wastewater from that of the solids, so that
the solids can be retained until they’re biologically
reduced to soluble COD in the tank.
As Gratz explains it, the purpose of a bioreactor is “to
provide the perfect conditions for sustaining a biological
process at the highest rates possible.” NewBio provides
those conditions. The process requires such things as nutrient
balance (nitrogen and phosphorus) and trace metals (iron,
nickel, and others) for growth. Many of these elements are
present in a waste stream, but when they aren’t, NewBio’s
chemical delivery system adds them, as needed.
Computerized process controls, including sampling and monitoring,
permit the process to be continuously “tuned.” All
major operating parameters can be controlled remotely, via
the Internet.
insert: photo of cogeneration unit from slide #13, PowerPoint
presentation
COD is a measure of potential energy; the number of pounds
of COD generated in waste streams can thus be directly converted
to an estimate of its methane potential. For every pound of
COD digested, approximately 6,200 BTUs of energy are created.
The methane can be fed into an internal combustion engine
that’s been designed to accept biogas as a fuel. The
engine turns a generator that generates electricity; heat
is captured as the engine and stacks are cooled by water.
NewBio aspires to be perceived as an onsite power plant.
“When you think of power plants, you think of highly
automated systems with people sitting in a control room. That’s
our goal, and the reason we developed our remote process management
system,” Gratz explains.
Toward Sustainable
Salad Dressing
A number of pilot projects are under way, but one large company
is already on board, enthusiastically. Litehouse Foods, a
family-owed company, is the second-largest manufacturer of
refrigerated salad dressing in the US. It boasts $100 million
in gross sales, 400 employees, and a product line of 1,300
varieties of dressings, dips, and sauces that are sold across
the US and Canada. Headquartered in Sand Point, ID, Litehouse
also operates a production site in Lowell, MI.
Paul Kusche, who describes himself as “an old food guy,”
knows the industry intimately. He led Litehouse’s efforts
to solve its worsening and costly waste problem. Its multiple
products meant that waste streams changed constantly. To comply
with regulations, each vessel had to be scraped down daily
and vacuumed, and the contents hauled away.
Kusche solved the problem in Lowell by putting two NewBio
digesters to work in 2001. In Sand Point, Kusche worked with
the city to install, in 2004, two NewBio digesters on land
the city owns. The city owns and operates the digesters. The
strategy is to use NewBio’s treatment and cogeneration
capabilities to help attract clean industry. Litehouse is
a customer. For NewBio, Litehouse has offered an opportunity
to demonstrate that its process can successfully digest high-strength
solids and fats at a high rate. Gratz and Kusche have come
to be virtual business partners.
The Sand Point units were ramped up over 6–8 months.
“You have to grow the bugs,” Kusche advises. “Think
of the digester as a giant stomach. You buy biosolids to serve
as seed stock. They may once have eaten beer; now they have
to learn to eat salad dressing—fats and oils.” The
NewBio units were brought online slowly and “tuned,”
in a smooth transition, “to make sure things were done
right.”
Does the NewBio process work? “Absolutely!” Kusche
exclaims. And, he adds, support is exceptional. NewBio personnel
are not only available whenever needed; they’re continuously
upgrading software and processes, and learning how to do what
they do even better. Another feature is the fact that the
automated system has required less than two hours a day to
operate—including maintenance.
The city is now exploring the possibility of becoming a customer
for electricity and heat generated from its own digesters.
In that scenario, NewBio would own and operate the co-generation
equipment, selling electricity and heat to the city at below
market rates. The city would use the electricity and heat
to operate the digesters. “We would also use the installation
to refine our engineering design for the interface between
gas generation [the digester] and gas utilization [co-generation]),”
Gratz says
Demonstrating
and Piloting Performance
As noted, because NewBio tailors its process to individual
waste streams, its marketing efforts are essentially demonstration
projects. They’re conducted by means of self-contained,
mobile pilot plants, each housed on a 53-foot trailer that
can be delivered to any site. There, full-scale system components
are used to test design assumptions for specific applications.
NewBio can evaluate material handling and biological conversion
on a significant volume of actual waste streams. The BioAccelerator
can handle between a few hundred and a few thousand gallons
of wastewater per day.
To date, NewBio technology has been applied to wastewater,
biodegradable solids, and fats and oils from the potato processing,
beverage, meat processing, prepared foods, salad dressing,
and dairy industries.
In September 2005, NewBio released the results of a pilot
test conducted at a major snack food manufacturing plant in
Ohio. The pilot was a cooperative effort between NewBio, the
food processor, Ohio State University’s Ohio Agricultural
Research and Development Center, and the nonprofit Center
for Innovative Food Technology. Independent labs were used,
as well.
The goals were to 1) simulate a full-scale loading rate,
2) determine treatment efficiency, and 3) determine optimum
factors for a full-scale plant. During two test runs, NewBio
varied the COD load to determine how different waste sources
performed. Then a “recipe” was created that would
allow the pilot to simulate a full-scale waste stream and
completely consume all residual food solids in a slurry, using
approximately 25% of the wastewater currently discharged.
The pilot ran from September 2004 until mid-December 2004.
A detailed final report says, “Pilot testing indicates
that conversion of the manufacturer’s waste materials
to energy is relatively straightforward and easily achievable.”
And, “The study proved conclusively that NewBio’s
technologies can take solids with high amounts of suspended
solids and oils, and recover energy in useable amounts.”
That report, complete with hard data, can be found on NewBio’s
Web site. It’s worth consulting for a sense of how rigorous
testing is, and how solidly the process is grounded in science.
Pursuing Scientific
Research
NewBio has a powerful business philosophy. Not content to
simply market what it’s already patented, it’s pursuing
ways to further enhance its anaerobic and cogeneration processes.
As Gratz explains it, “We want to understand and learn
all we can in order to turn waste into energy.”
 |
| Pilot test at a food manufacturing
plant in Ohio. |
Ohio has the fourth-largest food processing sector in the
nation and, consequently, a lot of food waste. NewBio and
the Ohio Agricultural Research and Development Center are
parties to a multidisciplinary venture called the Integrated
Biomass to Energy Research Project, which has received $3.25
million in state and federal funding. A third party is a fuel
cell developer that is investigating how to bypass combustion
entirely; its fuel cells would convert methane to electricity.
Biomass to Energy is supported by the state of Ohio’s
Third Frontier Project, an economic-development initiative
that has among its goals the development of advanced technologies
to exploit the state’s biomass wastes.
Professor and biochemist Floyd Schanbacher directs Biomass
to Energy and is lead researcher on the project. His agenda
is to investigate how the microbiology and biochemistry of
the biomass conversion process can be optimized to increase
both the yield and quality of biogas energy and the efficiency,
reliability, and versatility of biomass utilization.
“We’re looking at a new aspect of an existing field,”
he says. “Digesters have been around for a long time,
but they’re limited in what they can digest, or are too
complicated for most applications. NewBio overcomes some problems.”
In seeking funds for research, Schanbacher made the case that
seemingly boring anaerobic microbiology and digestion are
actually an advanced technology, and that cutting-edge microbiology
and molecular biology can be applied to optimize the process.
Third Frontier funding will pay for intermediate scale digesters
that hold 1,600 gallons, enough to test continuous feeding
of specific feedstocks under real-world conditions. Developing
sensors, controls, and predictive models are part of the research
agenda.
“Scalability is NewBio’s forte,” Schanbacher
reflects, because NewBio can meet, cost-effectively, the needs
of small and intermediate-sized processors that produce a
limited amount of biomass but severely burden wastewater treatment
facilities in the small communities in which they operate.
The Cow as Advanced
Technology
Biomass to Energy is based in Ohio State University’s
Deparment of Animal Sciences. How do animals get in on the
act? Schanbacher explains that cows are far more efficient
at digesting organic material than any existing technology.
“They’re the most efficient digester we know.”
They extract the energy from feed stock and burp methane gas,
doing in two days what it could take up to three weeks to
accomplish with equipment. And, they’re mobile. The NewBio
process can take as little as a few days, depending on the
feedstock.
Schanbacher’s research team is developing molecular
and metabolic tools to characterize how bacteria in cows’
digestive systems convert organic matter to gas. They’re
using that knowledge to optimize microbial metabolism and
biochemistry for specific feedstocks, defining what specific
bacterial populations—with what characteristics—are
required by each, or how particular feedstocks can be combined
to meet the nutritional requirements of bacteria.
“It takes a village,” Schanbacher observes, to
make an anaerobic process work. A consortium of many different
types of bacteria must pass food sequentially along a dependent
chain. “You can’t shortcut any steps.”
Among their goals are further minimizing organic residue;
increasing the loading rate for solids and fats, oil, and
grease to reduce capital costs; and further accelerating the
anaerobic process.
In another line of inquiry, researchers are investigating
how the anaerobic process can be modified to produce cleaner
biogases. The NewBio process now produces very small amounts
of ammonia and hydrogen sulfide when methane is burned, and
those detrimental gases can corrode equipment.
Sources of Resistance
Why hasn’t NewBio taken the food processing industry
by storm? Gratz candidly acknowledges obstacles.
- Inertia. Beyond the old refrain, “But we’ve
always done it this way,” is, “It’s not core
to my business.” Food processors are used to paying
municipalities to treat waste; they’re used to buying
energy from utilities. NewBio wants to transform this mindset,
so food processors will understand that by exploiting the
potential value in “waste,” they can directly
boost their bottom line.
- Risk aversion. NewBio is still a new technology, and
some plant operators want to use only an amply proven technology.
If NewBio were to fail and a plant had no means of dealing
with its wastes, it might have to shut down. This is exactly
why NewBio begins with pilot demonstrations and proceeds
to full-scale operation slowly and carefully, testing for
reliability at every step of the way.
- Fear of standby charges. Some worry that cost savings
from generating power will be eaten up by power companies
that demand standby charges to maintain service. Those companies
have a legitimate concern; they must recover fixed capital
costs and meet operating costs. Gratz speculates that public
utility commissions will have to sort this out as renewable
energy portfolio standards are implemented around the country.
Twenty-one states and the District of Columbia have adopted
such standards, which require that a certain percentage
of electricity sold in a state be generated from renewable
sources.
- Similarly, some processors wonder if municipalities that
have become accustomed to revenue streams from industry
will find some other way to sustain them.
More broadly, Gratz believes that a significant obstacle
to the growth of renewable energy has been a perception that
a new source of energy will deprive existing sources of revenue.
“The reality is that we need to see the pie as growing.”
Energy demands (and sewer demands, too), he maintains, never
decline nationwide. “This is an educational issue.”
NewBio’s Prospects
As NewBio has evolved, its focus has shifted from simply reducing
customers’ costs to “marketing a new source for
a much-needed input—energy,” Gratz says. As of September
2005, the company had generated over $3 million in revenue,
and it was signing a contract with Ohio State University for
a $1.4 million research project. It was also launching a pilot
that should lead to the first major order in 2006 for a facility
producing over 1 MW of electricity.
Gratz wants NewBio to become a design/build/own/operate company,
and he wants to work with economic-development and research
partners to develop a regional NewBio facility that would
generate 1 MW of electricity. It would be anchored by a food
processor that needs all of the energy but produces only 40-–50%
of the waste stream; other food processors could send their
waste streams to it. The cost of transporting waste is already
being incurred, he notes; shipments would simply be rerouted,
and all parties would benefit from economies of scale.
The economics of this aren’t straightforward, as the
costs of power are “all over the place.” But Gratz
believes they can be calculated adequately, and he’s
convinced this could be viable.
It isn’t easy marketing a new idea—even one that
offers such substantial benefits. Gratz believes small companies
may prove most receptive. He works long days to advance his
cause. But in the six years since NewBio was formed, the conditions
that can promote its success have only grown more favorable
and, if he and his team can persevere, they may succeed in
creating a future in which “waste” is perceived
as the economic and environmental asset it actually is.
CHRISTINE VAN LENTEN is a writer living
in Brooklyn, NY.
OW
- November/December 2005 |
