Houston-area companies break ground on landfill gas-to-diesel project

Work has started to prepare a site in Oklahoma City for a new gas-to-liquids plant that will convert landfill gas into petroleum products. (Envia Energy)
Work has started to prepare a site in Oklahoma City for a new gas-to-liquids plant that will convert landfill gas into petroleum products. (Envia Energy)

Construction will soon begin on the first of a series of gas-to-liquids plants under development by an array of Houston-based companies to produce petroleum products from landfill gas.

Envia Energy on Friday morning broke ground on the project, which is slated to become operational in the first half of next year. Envia is a joint venture between Houston-based Waste Management, NRG Energy and Ventech Engineers International in conjunction with Velocys, a U.K.-based company with offices in Houston that’s been working on small-scale gas-to-liquids, or GTL, projects.

Velocys CEO Roy Lipski said in a statement that the Oklahoma City project could mark a turning point in the industry’s efforts to commercialize landfill gas. The project’s small size and standardized construction makes its more nimble than larger plants, allowing developers to ramp-up operations quickly, the company said. Under the construction process employed by Envia, up to 70 percent of the plant will be finished before it’s shipped to the field, lessening the risks of delays and cost overruns that plague larger projects, Envia said.

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The plant will be built next to Waste Management’s East Oak landfill in Oklahoma City, marking the first step in a plan by the joint venture to develop several such plants across the United States to suck up landfill gas and combine it with natural gas to produce products including a cleaner-buring diesel, naphtha and synthetic waxes.

“Developing greater and more flexible capabilities to leverage biogas, stranded and traditional natural gas reserves and potentially captured carbon dioxide into a source for higher value, clean burning diesel fuels and other products makes sense for Americans looking for greater energy independence and cleaner energy supplies,” John Ragan, NRG’s executive vice president and Gulf Coast regional president, said in a statement.

The joint venture partners chose Oklahoma City to demonstrate the ability of such small-scale plants because Waste Management built a similar, smaller such plant there in 2009. The Envia project, which will use some of the infrastructure already in place, will be larger and aimed at generating revenue, the companies said in a statement.

The potential is vast if Envia can successfully prove that it can make money transforming landfill gas. About 250 million tons of solid waste is dumped in U.S. landfills each year, accounting for about 17 percent of the methane gas generated by humans, according to Envia. Such plants could also be deployed in oil patches to soak up some of the natural gas unlocked by drilling operations that can’t be transported to market because of a lack of pipelines or too-high transportation costs.

Site preparation work has already stated and Envia has secured its main contracts. The Fischer-Tropsch reactors and plant modules are being fabricated. The project is expected to generate up to 150 construction jobs. Once operational, the plant will employ 13 full-time employees.

Envia has identified other potential locations for such plants, but has not yet decided where else to build.

The company said the economic benefits of the project remain strong, despite the recent collapse in oil prices that weakened its competitive advantage against crude. That’s because oil prices will likely continue to be volatile over the course of the project’s 20-year life, making Envia’s project an attractive alternative against the traditional refinery.