One Man’s Trash Is Another’s Clean Fuel

Methane has a lot of potential, but it can also do a lot of harm. When it isn’t transmuted into something else, methane is an extremely strong pollutant, 82 times as potent as carbon dioxide. For years, landfill operators had to resort to burning it from atop a tall metal minaret called a flare, resulting in tons of wasted potential energy.

In a lesson about how the energy transition is likely to play out, landfill operators’ ability to make use of excess gas has exploded in recent years. New facilities are being created to convert trash into renewable natural gas, molecularly identical to the gas that heats homes. The process cuts down greenhouse-gas emissions while creating a low-carbon energy source, and it supports energy independence by opening up vast quantities of previously untapped fuel.

The potential has spurred major sanitation and energy companies to break into this new market. This year Houston’s Waste Management Corp. announced an $825 million investment to boost renewable natural-gas capture. In October the British company

BP

agreed to acquire

Archaea Energy

(which one of us founded and the other invested in), a company that designs, builds and operates RNG plants in the U.S. to convert waste emissions. Archaea produces 6,000 oil-equivalent barrels a day through 13 RNG facilities with plans to construct 88 more to serve rising demand. Our only input is trash.

Quiet, private innovation in gas processing made this possible. Archaea sells largely to voluntary buyers who wish to lock in clean gas at fair prices. RNG still comes at a premium compared with other fuel sources, but driving down the cost of producing RNG will mean more of it is available to buyers on attractive terms. We are working to lower the price of RNG by creating standardized and modular production facilities with decreased operating costs, higher processing efficiency, and uptime rates that start above 90%.

Historically, energy investment has been about more deal making. But the technologies that will provide the next leap in energy abundance—solar, batteries and even electrolysis of water into hydrogen—call for something new: high-precision, iterative engineering. Small-scale breakthroughs in gas processing enabled us to improve the portion of usable natural gas recovered from landfills to 95%, up from an industry standard of 75%.

The energy future may mirror computing’s past. Rapid cycles of learning yielded step changes in efficiency. When critical thresholds are passed, trillions of dollars in uncoordinated economic potential are unleashed. It happened with metal-oxide semiconductors in the 1990s and is happening with lithium-ion batteries today. But the economy receives this benefit only if a price system untouched by government is allowed to exist.

Some of the predictions in “Back to the Future” proved too far-fetched. Flying cars seem as distant today as they were in the 1980s. But power from trash? Today trash represents a permanent carbon-negative source of natural gas. Voluntary transactions in RNG, and the micro-scale process improvements that have boosted this market, suggest a far more circular economy on the horizon.

Mr. Stork is a cofounder and CEO of Archaea Energy Inc. Mr. Malchow is founding partner of the venture-capital fund Hanover and a director of Archaea.