Spotlight on Garbage

The Next Big Play Is Garbage

Shares of the biggest players in the U.S. trash business, Waste Management and Republic Services, have traded at highs since President Biden signed the climate, tax and healthcare bill in August https://t.co/sUclfJCD12

— The Wall Street Journal (@WSJ) May 28, 2023

The Wall Street Journal comments Wall Street’s Next Big Play Is Garbage

Shares of the biggest players in the U.S. trash business, Waste Management and Republic Services have traded at record highs since President Biden signed the climate, tax and healthcare bill in August. 

“They’re sitting in this extraordinary position,” said Michael Hoffman, an analyst at investment bank Stifel. “Garbage will be on the forefront.” 

WM and Republic are building plants to isolate methane from the fumes emitted by rotting garbage and pipe it into the natural-gas grid to be burned in power plants, furnaces and kitchens. They are also equipping recycling facilities with the latest in automation to better sort and process materials for the consumer-goods companies that are under pressure to keep their packaging out of landfills and the ocean.

“Yes, there’s a year-over-year impact, but recycling is still profitable,” said Tara Hemmer, WM’s chief sustainability officer. “It still is one of our highest return-on-capital investments.”

A lot of hard-to-fill jobs will be replaced by optical sorters, which use infrared cameras to spot valuable materials in the jumble and blow the desirable bits into separate bins with pinpoint puffs of air, Hemmer said.

“In the past we might have had mixed-paper bales that had cardboard embedded in them,” she said. “Now we’re able to pull more of that cardboard out, it goes in the cardboard bale, and the price point on cardboard is much higher than mixed paper.”

Last year’s climate bill sweetened the economics of trash gas. A federal proposal to offer additional credits for biogas projects that produce power for electric vehicles could make the incentives even stronger.

Free Money Quote of the Day

“Landfill gas is essentially the only scalable biofuel that doesn’t have a food-for-fuel trade-off,” said Goldman Sachs analyst Jerry Revich. “These projects don’t need any subsidies, but they will take the free money.”

Next Big Play

The next big play is not garbage. This was a Wall Street Journal page one story.

The next big play is generally something on page 20 that eventually makes it to page one.  

Nonetheless, free money is something companies always appreciate, damn the consequences. 

Biden's Solar Push Is Destroying the Desert and Releasing Stored Carbon

The negative consequences of free money for garbage are relatively minor. Solar energy is another matter. 

For discussion, please see Biden's Solar Push Is Destroying the Desert and Releasing Stored Carbon

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