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Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
Island Financial Resource Impacts from Microbial Ecosystem
Fermentation for the Treatment of Organic Waste Streams
Edward A. Calt, CEO BioEconomics, Inc.
(919) 844-2680 ECalt@IntegratedBioChem.com
Dr. Kelly Zering Associate Professor, North Carolina State University
(919) 515-6069 KZering@NCSU.edu
Dr. Helut Hergeth Associate Professor, North Carolina State University
(919) 515-6574 HHH@NCSU.edu
Theodore Feitshans, JD Associate Professor, North Carolina State University
(919) 515-5195 Ted_Feitshans@NCSU.edu
Abstract
Managed Ecosystem Fermentations (MEF) can bring business, financial and environmental
benefits to island economies by generating multiple revenue streams from organic waste that
currently requires expensive disposal. MEF systems do not require sterile feedstocks and are
capable of multiple concurrent products, offering a ten-fold increase in revenue compared to
stand-alone biogas using the organic waste feedstock and reducing disposal volumes by 90%.
MEF consumes many organic waste materials including feed grade (FG) fruit and vegetable
waste, municipal solid wastes (MSW) and sewage sludge (SS). Different feedstocks make
different products, increasing local economic diversity. Carbohydrates and cellulose in FG
materials are converted to High Protein Animal Feed (HPAF), displacing soybean meal
imports. MSW and SS can be used to produce enzymes, proteins and amino acids for use in
other industrial processes providing export revenue. All of the MEF systems can produce
enough byproduct bio-methane to self-power their process with a potential surplus thereby
reducing fuel imports.
A	
  Distributed	
  Manufacturing	
  Architecture	
  for	
  multiple	
  MEF	
  systems	
  in	
  a	
  localized	
  region	
  
connects	
   each	
   unit	
   to	
   a	
   central	
   control	
   room	
   for	
   constant	
   monitoring	
   and	
   real-­‐time	
  
connection	
   to	
   off-­‐island	
   technical	
   expertise	
   will	
   supplement	
   the	
   local	
   labor	
   pool,	
  
allowing	
  higher	
  level	
  technologies	
  to	
  be	
  applied	
  by	
  local	
  people	
  who	
  are	
  trained	
  by	
  this	
  
remote	
  collaboration.	
  	
  Distributed	
  Manufacturing	
  allows	
  continuous	
  monitoring	
  of	
  many	
  
systems	
   by	
   one	
   central	
   facility	
   providing	
   a	
   three-­‐fold	
   labor	
   utilization	
   improvement	
  
when	
  25	
  or	
  more	
  systems	
  are	
  in	
  the	
  group,	
  compared	
  to	
  stand	
  alone	
  staffing	
  level	
  
	
  
	
  
	
  
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
1. The Cost of Waste in Island Economies
Island economies feel the economic and environmental impact of waste treatment more
quickly than larger landmasses, but these differences are only a matter of degree and time.
People everywhere need a clean environment for good health and efficient economic activity.
Many islands have acute environmental problems associated with organic waste from food
processing plants and the wastes associated with municipalities. The properties of these
wastes are similar in island and continental communities, but islands face higher disposal
costs due to scarcer landfill space or shipping these wastes to other shores. The only higher
cost would be to do nothing and face the inevitable decline of tourism.
Supporting the lowest total cost for complete and final disposal of these organic wastes is a
core function of good governance. It is a prerequisite for a growing tourism industry and an
improving standard of living for all residents. The major difference is in the cost of treatment
method used. Any new technology proposed must be economically sustainable below the cost
of the status quo and provide better environmental results than present practices. Within this
constraint there are several guidelines to help assess new ideas:
• Is the waste treated locally to avoid expensive transportation of low value materials?
• Does the process produce revenue? Is this revenue greater than the cost of operation?
• Does this new process provide a better value than the status quo; cost less and reduce
pollutant release?
Managed Ecosystem Fermentation (MEF) is an industrial biotechnology process that uses a
diverse microbial community to digest organic materials and produce a portfolio of products.
The microbial ecosystem approach can be utilized to address the environmental issues posed
by cellulose, carbohydrates and other organics in urban waste streams, specifically the wastes
from food processing and the organic fraction of municipal solid waste.
The MEF process is more complex than typical anaerobic digesters, but offers a potential of
much higher revenues from the same input streams because it can deliver multiple products.
The business comparison between MEF and the frequent alternatives used by island
economies is presented below.
2. Environmental Basis For MEF Technology
In the development the MEF process, several realities have become apparent. These four
concepts became the basis for the development of the business case for the technology.
• First, no species can survive in its own waste stream.
• Second, for a new technology to take hold it must offer the society a better value
proposition than the current methods in use.
• Third, for a technology to make permanent environmental improvements, it must be
economically sustainable.
• Finally, biomass is the only renewable source of organic chemicals.
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
Microbial ecosystems are very common in nature. They involve multiple bacteria, fungi,
protozoa, and other microbes, interacting in various ways. Examples of natural microbial
ecosystems would be the digestive microbes in ruminant animals such as cows, goats and
sheep. These natural ecosystems are also present in the digestive microbes in insects such as
termites, or the soil bacteria in the forest floor. They are used in a few industrial processes,
such as anaerobic digestion (A/D) and wastewater treatment plants. However, most industrial
microbiology is focused on single species fermentation, such as beer, vinegar, bio-ethanol
fuel, and pharmaceuticals.
There are some areas where Natural Microbial Ecosystem (NME) processes and a Managed
Ecosystem Fermentation (MEF) process have the same characteristics:
• Ecosystem fermentations do not require a sterilized feedstock. No animal sterilizes all
its food. This is also true for the MEF process and wastewater treatment plants.
• Ecosystem fermentations can provide a stable output for years at a time and exhibit
stable response characteristics. The microbes in the human digestive system can live
for many years without failure. Humans get an upset stomach, but rarely a complete
failure to digest food.
• Ecosystem fermentations can be adapted to consume a wide variety of organic
materials. Our own diets demonstrate how varied these feedstocks can be.
There are some very important differences between natural microbial ecosystems and MEF
processes:
• MEF exists only within a mechanical environment that can be manipulated to control
the fermentation.
• MEF can be modified to use a specific feedstock to produce specific materials.
Conversely, MEF can be modified to consume specific materials, such as certain
organic toxins.
• MEF control system parameters include feedstock management, control of external
environmental factors, and control of the species within the microbial consortium.
• All of the outputs from the MEF process can be used by society in one form or
another.
3. The Business Basis for MEF
The application of Managed Ecosystem Fermentations to the problems of organic waste can
significantly change the economics of disposal. The MEF process can produce multiple
chemicals and materials that can generate enough revenue to change disposal from a cost to a
revenue center. The MEF process will generate three classes of output material, each of
which has commercial value, often in multiple pathways.
1. The biomass of this fermentation is the aggregate amount of cells, protein, enzymes
and amino acids grown inside the process vessel. These materials can be separated,
dried and packaged for several uses, depending on the source of the feedstock. The
easiest material to produce is a pelletized organic fertilizer that can be made from any
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
feedstock. Feedstock from food processing plants that is Feed Grade (FG) material
can be used to produce a High Protein Animal Feed (HPAF) having properties similar
to soybean meal. The HPAF and fertilizer processes use the same equipment train.
2. Residual feedstock material is the indigestible fraction of the organic matter and is
extracted from the process and dewatered for other purposes. This is expected to be a
very small fraction of the FG materials. Municipal Solid Waste (MSW) materials will
likely see additional plastic recyclables in this stream, but it is still a minor flow.
3. Reclaimed water can be returned to the host facility for non-potable uses such as
cooling tower makeup or landscape irrigation. Since most organic waste streams are
50% to 90% moisture, this is a significant volume of water for large waste generators.
The MEF process equipment is similar to a two-stage anaerobic digester train. Equipment for
the additional separation and packaging of MEF is also off-the-shelf, so the need for
equipment development is limited. The real difference between MEF and other fermentation
processes is the level of instrumentation and controls necessary to manage the microbial
community and recover the additional products.
Large MEF installations provide a stable operation as a result of the large tank volumes that
buffer the rates of change in the fermentation. This characteristic allows labor to focus on the
routine operations related to feeding the raw materials and removing the finished products
from the process. The sophistication is in the control system, which has an Internet link to
real-time expertise located in off-island. Having remote support available further reduces
risk, as unusual conditions can be identified and addressed quickly.
The MEF process operates with a significant build-in safety mechanism. MEF is an anaerobic
process and will cease when exposed to air (oxygen). Since all of the microbes in the
fermentation are natural and many are also found in soils, the chance for environmental
pathogens from the system is very low. Periodic testing for pathogenic activity is part of the
standard Quality Assurance / Quality
Control program, as a further safeguard.
3.1.	
   Compare	
  MEF	
  to	
  the	
  Status	
  
Quo	
  of	
  Waste	
  Treatment	
  
The economics of several waste
treatment approaches can be seen in
Figure 1. It illustrates the average cost
using a landfill to dispose of organic
wastes within the continental United
States. It can be seen that by using MEF
to produce High Protein Animal Feed
(HPAF) or a fertilizer moves the disposal
issue from an economic drain to better
than break even.
The shift in economics of waste disposal Figure 1
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
comes from no longer throwing organic material away, but rather viewing it as a valuable
feedstock and converting it into materials that are used on a daily basis. The graph illustrates
the shift in economics from having to spend cash to treat the waste stream, to what can pay for
the deployment and running of the technology. The costs shown here reflect average industry
disposal costs for the continental United States; island economics will have the same ratios,
but more pronounced differences because of the increased cost of transportation and the
scarcity of suitable landfill sites.
The primary metabolites of this fermentation are carbon dioxide and volatile fatty acids
(VFAs). The VFA material can be easily separated to make enough biogas to power the
process, even in the initial installations. Biogas generators are known technologies available
from several sources. There are additional carboxylic acids produced, from C5 through C22,
but these are low concentrations and may not be commercially significant with today's
recovery technologies.
3.2.	
   Compare	
  MEF	
  to	
  other	
  Advanced	
  Waste	
  Treatment	
  Technologies	
  
There are several alternatives to landfilling municipal waste, including advanced composting,
anaerobic digestion and energy from combustion. Each of these addresses the land use issue,
but has other drawbacks.
Composting of organic waste does provide a beneficial soil amendment material, but compost
has a high bulk and low market price. Composting requires a significant land area, plus the
labor and fuel to turn the piles over as needed. The net effect of these characteristics makes
large scale composting of municipal and food processing waste unattractive financially.
Waste-to-energy plants have been used in the US for many years, with variable success.
While they are good at reducing the volume of waste placed in landfills, the emission
controls, chemical corrosion and thermal efficiency are significant headaches. Wet garbage
does not burn efficiently; high moisture content will significantly reduce the performance of
this technology. Combustion of plastics creates toxic chlorides and hydrocarbons compounds
requiring expensive flue gas cleanup to meet air emissions standards. In addition, the sales of
steam and electricity are usually not adequate revenue sources to cover the operating,
maintenance and capital service costs.
Anaerobic Digestion (AD) is well suited for wet waste streams because it is a wet process.
These plants have found wide acceptance in Europe, but each unit built or planned in the US
has been closed (CIWMB 2008). AD units produce a single product (biogas), which is a
60:40 mixture of methane and carbon dioxide. This material must be used on site, as it is not
acceptable for pipeline quality natural gas. Thus, AD units produce electricity as their only
sales product. The major drawback for AD is the low price for gas or electricity in the
continental US. Europe has stable, long-term subsidy programs that encourage alternative
technologies.
Of these alternative methods of waste treatment, AD is the least complex system to operate
and has a good record of digesting municipal organic wastes in other countries. MEF is
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
similar to the AD process, but with the intention of extracting multiple value streams from the
wet fermentation and making the process profitable without subsidies.
3.3.	
   Compare	
  MEF	
  to	
  other	
  Industrial	
  Biotechnology	
  
What is the competitive position of MEF compared to other industrial fermentations? Most
other industrial fermentations in use today depend on using a single bacteria or yeast. Such
fermentations require very controlled conditions to maintain a stable and sterile environment.
The largest cost in most other fermentations, after raw materials, is the protection from other
microbes. The sterility requirements drive up the capital and operating cost of the process. In
contrast, the MEF process uses a free and non-sterile feedstock, as well as a non-sterile
fermentation vat. This means that MEF will avoid the two largest expense categories of other
fermentations: paying for raw materials and the costs related to sterility of feedstock and
equipment.
The industrial biotechnology process gathering the most attention today is bio-ethanol, made
from corn and proposed to use cellulose in the future. MEF is not a direct fuels technology,
but can produce some of the enzyme mixtures appropriate for this market.
Biofuel producers have the significant business problem that they are subject to the volatility
of the commodities market on both the buy side and the sell side of their operation. This
means that the biofuel producer has no pricing power. On the raw materials side, the
producer has no purchasing power, given the near-monopoly status of the largest players in
the grain markets. On the product side, biofuels are subject to a monopsony market of many
producers but very few buyers (only the petroleum companies) because ethanol must be
blended into normal gasoline as a motor fuel. These two market conditions put the biofuels
producer in a position of little economic power, inflicting uncontrollable volatility in their
cost structure.
4. How Much Potential Feedstock?
Because MEF can consume a very wide variety of organic materials, it makes manufacturing
sense to design the process around feedstocks with the lowest acquisition cost. Fortunately,
there are many potential sources with feedstock available at no cost or even negative cost.
The first choice is the feed grade scraps from food processing plants. These facilities make
consumer food, so they run year-round and eliminate the issue of feedstock seasonality.
The second choice for raw materials is the organic fraction of municipal solid waste (OF-
MSW), which is becoming a major disposal issue with many communities. Placing a facility
at the collected waste transfer center or landfill site would eliminate secondary transportation
of this material. The ability to digest OF-MSW, diverting it away from the landfill, will
extend the life of the landfill and reduce the disposal costs to the municipality by about 25%.
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
There is plenty of material available. According the Food and Agriculture Organization
(FAO) of the United Nations, in a report titled “Global Food Losses and Waste” (FAO 2011)
approximately one third of the food produced for human consumption is wasted every year.
The report accounts for approximately 850 million tons annually of organic waste from food
processing plants and municipalities in Europe, North America and Industrialized Asia.
While the reasons for this waste are left to others to address, MEF technology can convert
much of this waste stream into something that can benefit society. These two elements of this
food waste are in concentrated locations, making them appropriate for the economies of scale
that can make MEF even more cost effective.
Table 1 Food losses for all categories of food; Millions of Tons Per Year
Food losses, all categories of food.
Millions of Tons Per Year
Europe &
Russia
North
America
Industrialized
Asia
Processing and Packaging Losses (includes FG) 76.3 65.1 97.7
Post Consumer at Household Level (OF-MSW) 189.5 197.2 223.6
In addition to these major sources of food waste, the largest 15% of Confined Animal Feeding
Operations (CAFO) sites in the United States produce more than 400 million tons of manure
per year. MEF technology can also provide the CAFO operators an effective means to
dispose of animal mortalities. This feedstock would be used to produce a probiotic fertilizer.
In order for MEF to be economically sustainable, a sufficient amount of raw material must be
available at each site. A large food processing plant can generate up to about 20 or more dry
tons per day of organic waste material and these large plants tend to be congregated
regionally. The intake volume of many landfills is in the order of 10,000 to 100,000 dry tons
per day. When these two sources are considered, even a small percentage, less than 1% of the
total waste streams, is adequate to make the MEF process economically viable. The MEF
process can also support the aggregation of multiple waste streams as part of the overall
system architecture, which is discussed below.
	
  
	
  
4.1.	
  	
  What	
  Can	
  Be	
  Done	
  With	
  This	
  Feedstock?	
  
The answer to this question is in understanding where cellulose fits in the chemical world we
inhabit. Essentially, cellulose, carbohydrates and other organics can be converted into many
of the basic chemicals that we utilize everyday. Figure 2 below shows that many organic
materials can be biologically converted into some basic chemicals and enzymes. These
chemicals and enzymes are later used to build higher value products.
The MEF process converting organic wastes into the metabolites and biomass has been
confirmed using gas chromatography. The process has been run in vitro for 60 days with a
daily addition of the feedstocks using residential food scraps, garbage with newsprint or the
sludge from a paper mill. The control of the process is discussed elsewhere (Tull, 2011).
Research has also shown that the process is inherently stable, so remote monitoring and
control are technically feasible for MEF processes.
Figure	
  2	
  
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
A two-step process converts waste into final products. The first step is done at the source of
the waste generation, shown in the diagram above. Most organic waste streams generally have
between 50% and 90% water content. The remote conversion unit (RCU) converts the waste
and concentrates the output from the MEF process, allowing for the return of reclaimed water
to the Host facility for reuse.
Two primary locations would be at large food processing plants and municipal solid waste
collection sites or landfills. In each case, the organic wastes are already geographically
concentrated,
minimizing
primary
transportation
expense to the
RCU for
initial
conversion.
The second
step occurs at
the Central
Plant (CP)
where these
concentrated
intermediates
from all the
RCU sites are
combined and
converted into
finished goods
for sale.
The process shown in the figure 2 is very general in that many different feedstocks can be
digested into a relatively uniform set of outputs. This process stability is what enables cows
and goats to eat a wide variety of materials and remain healthy. In the industrial setting, this
feature allows the primary fermentation process, the RCU to be located at the source of the
waste and produce a relatively stable set of products that are largely independent of the waste
stream. This process flexibility allow the same equipment design to be utilized for many
different waste streams, which will minimize the equipment design investment, minimize
transportation costs of semi-finished goods, and facilitates centralized control over the final
product. The waste mass has then been reduced in the RCU by at least 90%, making it
economical to transport the concentrated product mix to the CP.
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
4.2.	
  	
  MEF	
  Production	
  Architecture	
  
The second part of the manufacturing process occurs at the
Central Plant, where all the intermediate products from
each RCU are aggregated. This centralization allows an
economy of scale to be implemented in the final product
processing because the CP can support approximately 100
RCUs in a 50-kilometer radius. The Figure 3 illustrates
multiple RCUs being geographically serviced by one
central plant. This strategy places the conversion into
higher value products where it can be more effectively
controlled and reduces the investment at each source of
waste generation. This is called a Distributed Integrated
Manufacturing Process (DIMP). Under this architecture,
the CP using WIFI technology in a mesh network monitors
each RCU remotely. This permits the ability to dispatch trained personnel to deal with any
issues related to the specific fermentation. And utilize skilled labor more effectively
The business role of the CP is to separate the intermediate products and package or convert
them into higher value products that command higher prices. The CP will have special
equipment designed to produce larger batches of specialty chemicals at the quality standards
needed to meet or exceed market requirements and customer logistics.
5. Where Is The Money?
The core business issue with every new process is to make it sufficiently financially attractive
in order to draw investment capital for process development and deployment. There are two
sides to this equation: the costs involved in operating the system and revenues that can be
generated by product sales.
5.1.	
   Costs	
  of	
  Operating	
  MEF	
  Units	
  	
  	
  
The cost structure for MEF systems consuming organic waste is unusual because it is
obligated to consume all the waste presented, independent of the market for the products
made. The facility hosting the MEF process is given a put for their waste, and the MEF
process is obligated by contract to accept and process all of it. This arrangement provides a
very flat cost structure. While this may be a problem when the lower technology products are
dominant, it becomes a very strong advantage as future technology allows the recovery of a
wide variety of higher value products with very little increase in operating expenses.
The engineer's task is to design a process that will minimize the major costs and provide
multiple cash flow streams. In the case of MEF, the process has minimized several of the
major manufacturing costs:
1. Raw materials are free or have a negative cost from host facility tipping fees. This is
the other side of the “put” purchased by the host facility for waste disposal.
Figure	
  3	
  
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
2. Co-locating at the point of generation minimizes transportation of raw material. The
host facility can deliver the waste by pipeline or conveyor belt, not a truck.
3. Using remote monitoring for process control minimizes direct labor.
4. MEF also provides sufficient biogas to cover the energy needs of the process. Biogas
can be burned in an engine-generator set to produce electric power for the pumps and
presses, and the waste heat used in the product drying system. This design feature
will minimize utility expense, often a major expense in manufacturing.
5.2.	
   First	
  Revenue	
  Sources:	
  Feed	
  and	
  Fertilizer	
  
The ability of the MEF process to convert cellulose, carbohydrates and other organics into
protein is the core of the first product set. The biomass is collected, pelletized and dried using
conventional commercial equipment, as found in the pet food or cereal industry.
When FG feedstocks from food production plants are used, the resultant biomass is also FG,
so the final product can be sold as a HPAF. This material will have physical and nutritional
properties similar to soybean meal. Recent prices on soybean meal, a benchmark high-protein
animal feed has ranged from $375 to $450 per ton. The expected yield of HPAF is 28% of
the incoming dry mass of fruit and vegetable scraps, so that a plant providing 20 dry tons per
day (200 tons per day at 90% moisture) would support the production of 5.6 tons per day of
HPAF for annual revenue of about $800,000 from sales of this product.
When the feedstock is adulterated, as in the case of municipal waste, the product is organic
fertilizer, and not for animal consumption. This pelletized material has a market price range
starting at $200 per ton and increasing with packaging. The yields would be the same as the
FG model on a per dry ton basis of organic material. The municipal waste systems will also
generate some small amounts of additional revenue from the recyclable metals; glass and
plastics removed from the feedstock streams during processing. While keeping these
recyclables out of the landfill is beneficial, it is not expected to be a large source of revenue at
today's prices.
While the production of fertilizer and animal feed provide the basis to make the disposal of
organic waste a break even proposition, the additional value inherent in the MEF output
stream is that the opportunity exists to make higher value products available as separation
technology improves.
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
5.3.	
   Better	
  Products:	
  Enzymes	
  and	
  Amino	
  Acids	
  
Animal feed and
fertilizer are useful to
island economies, but
there are more valuable
products in the output
streams of the MEF
process. There are
many different products
that can be made from
the metabolites that
have selling prices
much higher than
biogas. The MEF
Product Capability
shown in Figure 4
demonstrates the
multitude of products
that can be made at the
CP from the initial
products shipped from
each RCU.
One of the important features of any ecosystem fermentation is the diversity of microbes, and
therefore a diversity of enzymes, the primary tools of the microbes. As an example, rumen,
the digestive microbial ecosystem for cattle, can contain over 30,000 enzymes (Science 2011).
Enzymes are known to catalyze over 4,000 biochemical reactions, and likely many more. The
value of enzymes comes from their ability to lower the energy required for a specific
biochemical reaction. Table 2 shows the expected producer market price of some of the more
important enzymes found rumen and expected in MEF working with organic wastes
feedstocks.
What are not known yet are the yields of each enzyme, because that will be a function of the
microbial inventory within the MEF and the feedstock characteristics provided to it. In any
case, the technology to automatically extract these high value materials with little additional
process labor will make a huge impact on profitability as revenues increase while costs
remain relatively constant.
Figure	
  4	
  
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
Table 2
Markets for Some of the Expected Enzymes and Amino Acids in MEF processes
Enzyme or Amino Acid Price per Ton Application
Alpha-amylase
$15,000 Textiles, Starch syrups, laundry and dish washing
detergent, fermentation of ethanol, animal feed
Cellulase
$16,636 Cellulostic ethanol production, laundry detergent,
textile finishing, animal feed
Pepsin $2,000 Cheese production
Lysozyme $11,800 Antibacterial (germicidal in dairy industry)
Hemicellulase $3,790 Baking, fruit juice, wood pulp processing.
Aspartic Acid $2,150 Acrylic acid
Lysine $2,400 Nylon precursor
Proline $2,800
Carbohydrases
$500 Tank cleaners, pulp and paper, textiles, fermentation
ethanol
Penicillin acylase $6,400 Chemical synthesis
Histidase $16,000 Cosmetics
Peroxidase $6,100 Laundry and wood pulp bleaches
Alkaline protease $280 Detergent
There are two critical business issues for expanding the revenue stream. First, that the outputs
from the MEF process are sufficiently valuable to make the process economically sustainable.
Second, there are sufficiently varied outputs to be able to say that the economics of MEF
technology will improve with the ability to separate out more enzymes, proteins, amino acids,
fatty acids, and other chemicals. Each one of these outputs becomes a new revenue stream for
the business as the ability to separate and recover it comes online. The availability to increase
the number of revenue streams over time with better technology greatly reduces the financial
risk of the process. Essentially, the revenue per ton processed increases as the new extraction
methods become available.
The next business question deals with the quantities available in the output stream.
Laboratory tests have shown that the outputs are in low concentrations. However, there are
extraction technologies that exist today in use in the pharmaceutical industry that are designed
to perform extractions in low concentrations. The good news is that the overall MEF process
can be scaled to very large sizes, so even low concentrations can add up to significant revenue
streams.
5.4.	
   Economics	
  for	
  Host	
  Facilities	
  	
  
There are two economic benefits to the facilities using the MEF technology. First, the cost of
disposing of the organic waste material is reduced by 20% and possibly more. Second, there
is now a new supply of water that can be used within the facility for cooling or other
applications.
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
5.5.	
   Economic	
  Development:	
  Secondary	
  Effects	
  
In terms of the local economy, there can be a significant benefit. The analysis to date
indicates that a central plant operating with 100 remote conversion units would require
approximately 100 skilled employees. This is because the central plant would need to operate
24 hours per day, 7 days per week, as any other chemical process facility. MEF is a
continuous process that will require constant monitoring.
The second benefit to the community is the reduction of waste and the reduced potential for a
disease reservoir in the untreated waste and the related vermin and insects which can be a
transmission vector to people.
The third benefit is reduced demand for potable water as the reclaimed water can displace
some of the related demand at the host facility.
The fourth benefit is reduced landfill pressures as the material volume is reduced by at least
75% in the MEF process.
6. Attracting Capital
The final questions become one of what will these units cost and what are the returns. The
initial analysis indicates that the investment for a central plant and 100 remote conversion
units would run between $50 million and $80 million. That said, as the work has progressed
with this process more off-the-shelf technology appears to be available to be integrated into
the equipment. This means that the potential exists to lower this capital investment. The cash
return on cash invested returns appear to be approximately 20%. This rate of return is based
on employment, equipment and construction estimates in the continental United States.
7. Summary
When organic wastes are viewed as a resource instead of a liability, then new ideas can take
root, producing jobs and products for the local economy. We are on the cusp of a biological
revolution, as demonstrated by the continuing discoveries of the range of microbial
environments and capabilities. Industrial biotechnology based on microbial ecosystems can
parallel the processes found in nature and provide with much higher reliabilities with a much
wider ranges of products that are available from processes in use today. Biomass can be a
foundation for an industry that does provide a renewable source of organic chemicals
At this point in the MEF development process, testing has confirmed the process is stable and
sustainable outside an animal. Research papers on ruminant animals confirm many of the
observed processes. The process has the potential to be sufficiently attractive for investment
with an initial estimate of a 20% return on investment. What remains to be done is raise the
capital necessary to scale up the processes to the meet the demand of waste treatment systems
and to push for new separation technologies that will continue to open doors to new products
for many years to come.
Island Financial Resource Impacts from Microbial Ecosystem Fermentation
	
  
8. References
1. Price of Brent Sea Crude on the London Exchange on April 26, 2011.
2. Department of Energy (DOE)
http://www.ornl.gov/info/news/pulse/no330/story4.shtml
3. United Nations Report: Global Food Losses and Waste May 11, 2011
http://www.fao.org/news/story/en/item/74192/icode/
4. Current Anaerobic Digestion Technologies Used for Treatment of Municipal Organic
Solid Waste; California Integrated Waste Management Board, March 2008
5. Current Anaerobic Digestion Technologies Used for Treatment of Municipal Organic
Solid Waste; California Integrated Waste Management Board (CIWMB), March 2008
	
  

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Island financial resource impacts from microbial ecosystem fermentation

  • 1. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   Island Financial Resource Impacts from Microbial Ecosystem Fermentation for the Treatment of Organic Waste Streams Edward A. Calt, CEO BioEconomics, Inc. (919) 844-2680 ECalt@IntegratedBioChem.com Dr. Kelly Zering Associate Professor, North Carolina State University (919) 515-6069 KZering@NCSU.edu Dr. Helut Hergeth Associate Professor, North Carolina State University (919) 515-6574 HHH@NCSU.edu Theodore Feitshans, JD Associate Professor, North Carolina State University (919) 515-5195 Ted_Feitshans@NCSU.edu Abstract Managed Ecosystem Fermentations (MEF) can bring business, financial and environmental benefits to island economies by generating multiple revenue streams from organic waste that currently requires expensive disposal. MEF systems do not require sterile feedstocks and are capable of multiple concurrent products, offering a ten-fold increase in revenue compared to stand-alone biogas using the organic waste feedstock and reducing disposal volumes by 90%. MEF consumes many organic waste materials including feed grade (FG) fruit and vegetable waste, municipal solid wastes (MSW) and sewage sludge (SS). Different feedstocks make different products, increasing local economic diversity. Carbohydrates and cellulose in FG materials are converted to High Protein Animal Feed (HPAF), displacing soybean meal imports. MSW and SS can be used to produce enzymes, proteins and amino acids for use in other industrial processes providing export revenue. All of the MEF systems can produce enough byproduct bio-methane to self-power their process with a potential surplus thereby reducing fuel imports. A  Distributed  Manufacturing  Architecture  for  multiple  MEF  systems  in  a  localized  region   connects   each   unit   to   a   central   control   room   for   constant   monitoring   and   real-­‐time   connection   to   off-­‐island   technical   expertise   will   supplement   the   local   labor   pool,   allowing  higher  level  technologies  to  be  applied  by  local  people  who  are  trained  by  this   remote  collaboration.    Distributed  Manufacturing  allows  continuous  monitoring  of  many   systems   by   one   central   facility   providing   a   three-­‐fold   labor   utilization   improvement   when  25  or  more  systems  are  in  the  group,  compared  to  stand  alone  staffing  level        
  • 2. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   1. The Cost of Waste in Island Economies Island economies feel the economic and environmental impact of waste treatment more quickly than larger landmasses, but these differences are only a matter of degree and time. People everywhere need a clean environment for good health and efficient economic activity. Many islands have acute environmental problems associated with organic waste from food processing plants and the wastes associated with municipalities. The properties of these wastes are similar in island and continental communities, but islands face higher disposal costs due to scarcer landfill space or shipping these wastes to other shores. The only higher cost would be to do nothing and face the inevitable decline of tourism. Supporting the lowest total cost for complete and final disposal of these organic wastes is a core function of good governance. It is a prerequisite for a growing tourism industry and an improving standard of living for all residents. The major difference is in the cost of treatment method used. Any new technology proposed must be economically sustainable below the cost of the status quo and provide better environmental results than present practices. Within this constraint there are several guidelines to help assess new ideas: • Is the waste treated locally to avoid expensive transportation of low value materials? • Does the process produce revenue? Is this revenue greater than the cost of operation? • Does this new process provide a better value than the status quo; cost less and reduce pollutant release? Managed Ecosystem Fermentation (MEF) is an industrial biotechnology process that uses a diverse microbial community to digest organic materials and produce a portfolio of products. The microbial ecosystem approach can be utilized to address the environmental issues posed by cellulose, carbohydrates and other organics in urban waste streams, specifically the wastes from food processing and the organic fraction of municipal solid waste. The MEF process is more complex than typical anaerobic digesters, but offers a potential of much higher revenues from the same input streams because it can deliver multiple products. The business comparison between MEF and the frequent alternatives used by island economies is presented below. 2. Environmental Basis For MEF Technology In the development the MEF process, several realities have become apparent. These four concepts became the basis for the development of the business case for the technology. • First, no species can survive in its own waste stream. • Second, for a new technology to take hold it must offer the society a better value proposition than the current methods in use. • Third, for a technology to make permanent environmental improvements, it must be economically sustainable. • Finally, biomass is the only renewable source of organic chemicals.
  • 3. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   Microbial ecosystems are very common in nature. They involve multiple bacteria, fungi, protozoa, and other microbes, interacting in various ways. Examples of natural microbial ecosystems would be the digestive microbes in ruminant animals such as cows, goats and sheep. These natural ecosystems are also present in the digestive microbes in insects such as termites, or the soil bacteria in the forest floor. They are used in a few industrial processes, such as anaerobic digestion (A/D) and wastewater treatment plants. However, most industrial microbiology is focused on single species fermentation, such as beer, vinegar, bio-ethanol fuel, and pharmaceuticals. There are some areas where Natural Microbial Ecosystem (NME) processes and a Managed Ecosystem Fermentation (MEF) process have the same characteristics: • Ecosystem fermentations do not require a sterilized feedstock. No animal sterilizes all its food. This is also true for the MEF process and wastewater treatment plants. • Ecosystem fermentations can provide a stable output for years at a time and exhibit stable response characteristics. The microbes in the human digestive system can live for many years without failure. Humans get an upset stomach, but rarely a complete failure to digest food. • Ecosystem fermentations can be adapted to consume a wide variety of organic materials. Our own diets demonstrate how varied these feedstocks can be. There are some very important differences between natural microbial ecosystems and MEF processes: • MEF exists only within a mechanical environment that can be manipulated to control the fermentation. • MEF can be modified to use a specific feedstock to produce specific materials. Conversely, MEF can be modified to consume specific materials, such as certain organic toxins. • MEF control system parameters include feedstock management, control of external environmental factors, and control of the species within the microbial consortium. • All of the outputs from the MEF process can be used by society in one form or another. 3. The Business Basis for MEF The application of Managed Ecosystem Fermentations to the problems of organic waste can significantly change the economics of disposal. The MEF process can produce multiple chemicals and materials that can generate enough revenue to change disposal from a cost to a revenue center. The MEF process will generate three classes of output material, each of which has commercial value, often in multiple pathways. 1. The biomass of this fermentation is the aggregate amount of cells, protein, enzymes and amino acids grown inside the process vessel. These materials can be separated, dried and packaged for several uses, depending on the source of the feedstock. The easiest material to produce is a pelletized organic fertilizer that can be made from any
  • 4. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   feedstock. Feedstock from food processing plants that is Feed Grade (FG) material can be used to produce a High Protein Animal Feed (HPAF) having properties similar to soybean meal. The HPAF and fertilizer processes use the same equipment train. 2. Residual feedstock material is the indigestible fraction of the organic matter and is extracted from the process and dewatered for other purposes. This is expected to be a very small fraction of the FG materials. Municipal Solid Waste (MSW) materials will likely see additional plastic recyclables in this stream, but it is still a minor flow. 3. Reclaimed water can be returned to the host facility for non-potable uses such as cooling tower makeup or landscape irrigation. Since most organic waste streams are 50% to 90% moisture, this is a significant volume of water for large waste generators. The MEF process equipment is similar to a two-stage anaerobic digester train. Equipment for the additional separation and packaging of MEF is also off-the-shelf, so the need for equipment development is limited. The real difference between MEF and other fermentation processes is the level of instrumentation and controls necessary to manage the microbial community and recover the additional products. Large MEF installations provide a stable operation as a result of the large tank volumes that buffer the rates of change in the fermentation. This characteristic allows labor to focus on the routine operations related to feeding the raw materials and removing the finished products from the process. The sophistication is in the control system, which has an Internet link to real-time expertise located in off-island. Having remote support available further reduces risk, as unusual conditions can be identified and addressed quickly. The MEF process operates with a significant build-in safety mechanism. MEF is an anaerobic process and will cease when exposed to air (oxygen). Since all of the microbes in the fermentation are natural and many are also found in soils, the chance for environmental pathogens from the system is very low. Periodic testing for pathogenic activity is part of the standard Quality Assurance / Quality Control program, as a further safeguard. 3.1.   Compare  MEF  to  the  Status   Quo  of  Waste  Treatment   The economics of several waste treatment approaches can be seen in Figure 1. It illustrates the average cost using a landfill to dispose of organic wastes within the continental United States. It can be seen that by using MEF to produce High Protein Animal Feed (HPAF) or a fertilizer moves the disposal issue from an economic drain to better than break even. The shift in economics of waste disposal Figure 1
  • 5. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   comes from no longer throwing organic material away, but rather viewing it as a valuable feedstock and converting it into materials that are used on a daily basis. The graph illustrates the shift in economics from having to spend cash to treat the waste stream, to what can pay for the deployment and running of the technology. The costs shown here reflect average industry disposal costs for the continental United States; island economics will have the same ratios, but more pronounced differences because of the increased cost of transportation and the scarcity of suitable landfill sites. The primary metabolites of this fermentation are carbon dioxide and volatile fatty acids (VFAs). The VFA material can be easily separated to make enough biogas to power the process, even in the initial installations. Biogas generators are known technologies available from several sources. There are additional carboxylic acids produced, from C5 through C22, but these are low concentrations and may not be commercially significant with today's recovery technologies. 3.2.   Compare  MEF  to  other  Advanced  Waste  Treatment  Technologies   There are several alternatives to landfilling municipal waste, including advanced composting, anaerobic digestion and energy from combustion. Each of these addresses the land use issue, but has other drawbacks. Composting of organic waste does provide a beneficial soil amendment material, but compost has a high bulk and low market price. Composting requires a significant land area, plus the labor and fuel to turn the piles over as needed. The net effect of these characteristics makes large scale composting of municipal and food processing waste unattractive financially. Waste-to-energy plants have been used in the US for many years, with variable success. While they are good at reducing the volume of waste placed in landfills, the emission controls, chemical corrosion and thermal efficiency are significant headaches. Wet garbage does not burn efficiently; high moisture content will significantly reduce the performance of this technology. Combustion of plastics creates toxic chlorides and hydrocarbons compounds requiring expensive flue gas cleanup to meet air emissions standards. In addition, the sales of steam and electricity are usually not adequate revenue sources to cover the operating, maintenance and capital service costs. Anaerobic Digestion (AD) is well suited for wet waste streams because it is a wet process. These plants have found wide acceptance in Europe, but each unit built or planned in the US has been closed (CIWMB 2008). AD units produce a single product (biogas), which is a 60:40 mixture of methane and carbon dioxide. This material must be used on site, as it is not acceptable for pipeline quality natural gas. Thus, AD units produce electricity as their only sales product. The major drawback for AD is the low price for gas or electricity in the continental US. Europe has stable, long-term subsidy programs that encourage alternative technologies. Of these alternative methods of waste treatment, AD is the least complex system to operate and has a good record of digesting municipal organic wastes in other countries. MEF is
  • 6. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   similar to the AD process, but with the intention of extracting multiple value streams from the wet fermentation and making the process profitable without subsidies. 3.3.   Compare  MEF  to  other  Industrial  Biotechnology   What is the competitive position of MEF compared to other industrial fermentations? Most other industrial fermentations in use today depend on using a single bacteria or yeast. Such fermentations require very controlled conditions to maintain a stable and sterile environment. The largest cost in most other fermentations, after raw materials, is the protection from other microbes. The sterility requirements drive up the capital and operating cost of the process. In contrast, the MEF process uses a free and non-sterile feedstock, as well as a non-sterile fermentation vat. This means that MEF will avoid the two largest expense categories of other fermentations: paying for raw materials and the costs related to sterility of feedstock and equipment. The industrial biotechnology process gathering the most attention today is bio-ethanol, made from corn and proposed to use cellulose in the future. MEF is not a direct fuels technology, but can produce some of the enzyme mixtures appropriate for this market. Biofuel producers have the significant business problem that they are subject to the volatility of the commodities market on both the buy side and the sell side of their operation. This means that the biofuel producer has no pricing power. On the raw materials side, the producer has no purchasing power, given the near-monopoly status of the largest players in the grain markets. On the product side, biofuels are subject to a monopsony market of many producers but very few buyers (only the petroleum companies) because ethanol must be blended into normal gasoline as a motor fuel. These two market conditions put the biofuels producer in a position of little economic power, inflicting uncontrollable volatility in their cost structure. 4. How Much Potential Feedstock? Because MEF can consume a very wide variety of organic materials, it makes manufacturing sense to design the process around feedstocks with the lowest acquisition cost. Fortunately, there are many potential sources with feedstock available at no cost or even negative cost. The first choice is the feed grade scraps from food processing plants. These facilities make consumer food, so they run year-round and eliminate the issue of feedstock seasonality. The second choice for raw materials is the organic fraction of municipal solid waste (OF- MSW), which is becoming a major disposal issue with many communities. Placing a facility at the collected waste transfer center or landfill site would eliminate secondary transportation of this material. The ability to digest OF-MSW, diverting it away from the landfill, will extend the life of the landfill and reduce the disposal costs to the municipality by about 25%.
  • 7. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   There is plenty of material available. According the Food and Agriculture Organization (FAO) of the United Nations, in a report titled “Global Food Losses and Waste” (FAO 2011) approximately one third of the food produced for human consumption is wasted every year. The report accounts for approximately 850 million tons annually of organic waste from food processing plants and municipalities in Europe, North America and Industrialized Asia. While the reasons for this waste are left to others to address, MEF technology can convert much of this waste stream into something that can benefit society. These two elements of this food waste are in concentrated locations, making them appropriate for the economies of scale that can make MEF even more cost effective. Table 1 Food losses for all categories of food; Millions of Tons Per Year Food losses, all categories of food. Millions of Tons Per Year Europe & Russia North America Industrialized Asia Processing and Packaging Losses (includes FG) 76.3 65.1 97.7 Post Consumer at Household Level (OF-MSW) 189.5 197.2 223.6 In addition to these major sources of food waste, the largest 15% of Confined Animal Feeding Operations (CAFO) sites in the United States produce more than 400 million tons of manure per year. MEF technology can also provide the CAFO operators an effective means to dispose of animal mortalities. This feedstock would be used to produce a probiotic fertilizer. In order for MEF to be economically sustainable, a sufficient amount of raw material must be available at each site. A large food processing plant can generate up to about 20 or more dry tons per day of organic waste material and these large plants tend to be congregated regionally. The intake volume of many landfills is in the order of 10,000 to 100,000 dry tons per day. When these two sources are considered, even a small percentage, less than 1% of the total waste streams, is adequate to make the MEF process economically viable. The MEF process can also support the aggregation of multiple waste streams as part of the overall system architecture, which is discussed below.     4.1.    What  Can  Be  Done  With  This  Feedstock?   The answer to this question is in understanding where cellulose fits in the chemical world we inhabit. Essentially, cellulose, carbohydrates and other organics can be converted into many of the basic chemicals that we utilize everyday. Figure 2 below shows that many organic materials can be biologically converted into some basic chemicals and enzymes. These chemicals and enzymes are later used to build higher value products. The MEF process converting organic wastes into the metabolites and biomass has been confirmed using gas chromatography. The process has been run in vitro for 60 days with a daily addition of the feedstocks using residential food scraps, garbage with newsprint or the sludge from a paper mill. The control of the process is discussed elsewhere (Tull, 2011). Research has also shown that the process is inherently stable, so remote monitoring and control are technically feasible for MEF processes. Figure  2  
  • 8. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   A two-step process converts waste into final products. The first step is done at the source of the waste generation, shown in the diagram above. Most organic waste streams generally have between 50% and 90% water content. The remote conversion unit (RCU) converts the waste and concentrates the output from the MEF process, allowing for the return of reclaimed water to the Host facility for reuse. Two primary locations would be at large food processing plants and municipal solid waste collection sites or landfills. In each case, the organic wastes are already geographically concentrated, minimizing primary transportation expense to the RCU for initial conversion. The second step occurs at the Central Plant (CP) where these concentrated intermediates from all the RCU sites are combined and converted into finished goods for sale. The process shown in the figure 2 is very general in that many different feedstocks can be digested into a relatively uniform set of outputs. This process stability is what enables cows and goats to eat a wide variety of materials and remain healthy. In the industrial setting, this feature allows the primary fermentation process, the RCU to be located at the source of the waste and produce a relatively stable set of products that are largely independent of the waste stream. This process flexibility allow the same equipment design to be utilized for many different waste streams, which will minimize the equipment design investment, minimize transportation costs of semi-finished goods, and facilitates centralized control over the final product. The waste mass has then been reduced in the RCU by at least 90%, making it economical to transport the concentrated product mix to the CP.
  • 9. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   4.2.    MEF  Production  Architecture   The second part of the manufacturing process occurs at the Central Plant, where all the intermediate products from each RCU are aggregated. This centralization allows an economy of scale to be implemented in the final product processing because the CP can support approximately 100 RCUs in a 50-kilometer radius. The Figure 3 illustrates multiple RCUs being geographically serviced by one central plant. This strategy places the conversion into higher value products where it can be more effectively controlled and reduces the investment at each source of waste generation. This is called a Distributed Integrated Manufacturing Process (DIMP). Under this architecture, the CP using WIFI technology in a mesh network monitors each RCU remotely. This permits the ability to dispatch trained personnel to deal with any issues related to the specific fermentation. And utilize skilled labor more effectively The business role of the CP is to separate the intermediate products and package or convert them into higher value products that command higher prices. The CP will have special equipment designed to produce larger batches of specialty chemicals at the quality standards needed to meet or exceed market requirements and customer logistics. 5. Where Is The Money? The core business issue with every new process is to make it sufficiently financially attractive in order to draw investment capital for process development and deployment. There are two sides to this equation: the costs involved in operating the system and revenues that can be generated by product sales. 5.1.   Costs  of  Operating  MEF  Units       The cost structure for MEF systems consuming organic waste is unusual because it is obligated to consume all the waste presented, independent of the market for the products made. The facility hosting the MEF process is given a put for their waste, and the MEF process is obligated by contract to accept and process all of it. This arrangement provides a very flat cost structure. While this may be a problem when the lower technology products are dominant, it becomes a very strong advantage as future technology allows the recovery of a wide variety of higher value products with very little increase in operating expenses. The engineer's task is to design a process that will minimize the major costs and provide multiple cash flow streams. In the case of MEF, the process has minimized several of the major manufacturing costs: 1. Raw materials are free or have a negative cost from host facility tipping fees. This is the other side of the “put” purchased by the host facility for waste disposal. Figure  3  
  • 10. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   2. Co-locating at the point of generation minimizes transportation of raw material. The host facility can deliver the waste by pipeline or conveyor belt, not a truck. 3. Using remote monitoring for process control minimizes direct labor. 4. MEF also provides sufficient biogas to cover the energy needs of the process. Biogas can be burned in an engine-generator set to produce electric power for the pumps and presses, and the waste heat used in the product drying system. This design feature will minimize utility expense, often a major expense in manufacturing. 5.2.   First  Revenue  Sources:  Feed  and  Fertilizer   The ability of the MEF process to convert cellulose, carbohydrates and other organics into protein is the core of the first product set. The biomass is collected, pelletized and dried using conventional commercial equipment, as found in the pet food or cereal industry. When FG feedstocks from food production plants are used, the resultant biomass is also FG, so the final product can be sold as a HPAF. This material will have physical and nutritional properties similar to soybean meal. Recent prices on soybean meal, a benchmark high-protein animal feed has ranged from $375 to $450 per ton. The expected yield of HPAF is 28% of the incoming dry mass of fruit and vegetable scraps, so that a plant providing 20 dry tons per day (200 tons per day at 90% moisture) would support the production of 5.6 tons per day of HPAF for annual revenue of about $800,000 from sales of this product. When the feedstock is adulterated, as in the case of municipal waste, the product is organic fertilizer, and not for animal consumption. This pelletized material has a market price range starting at $200 per ton and increasing with packaging. The yields would be the same as the FG model on a per dry ton basis of organic material. The municipal waste systems will also generate some small amounts of additional revenue from the recyclable metals; glass and plastics removed from the feedstock streams during processing. While keeping these recyclables out of the landfill is beneficial, it is not expected to be a large source of revenue at today's prices. While the production of fertilizer and animal feed provide the basis to make the disposal of organic waste a break even proposition, the additional value inherent in the MEF output stream is that the opportunity exists to make higher value products available as separation technology improves.
  • 11. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   5.3.   Better  Products:  Enzymes  and  Amino  Acids   Animal feed and fertilizer are useful to island economies, but there are more valuable products in the output streams of the MEF process. There are many different products that can be made from the metabolites that have selling prices much higher than biogas. The MEF Product Capability shown in Figure 4 demonstrates the multitude of products that can be made at the CP from the initial products shipped from each RCU. One of the important features of any ecosystem fermentation is the diversity of microbes, and therefore a diversity of enzymes, the primary tools of the microbes. As an example, rumen, the digestive microbial ecosystem for cattle, can contain over 30,000 enzymes (Science 2011). Enzymes are known to catalyze over 4,000 biochemical reactions, and likely many more. The value of enzymes comes from their ability to lower the energy required for a specific biochemical reaction. Table 2 shows the expected producer market price of some of the more important enzymes found rumen and expected in MEF working with organic wastes feedstocks. What are not known yet are the yields of each enzyme, because that will be a function of the microbial inventory within the MEF and the feedstock characteristics provided to it. In any case, the technology to automatically extract these high value materials with little additional process labor will make a huge impact on profitability as revenues increase while costs remain relatively constant. Figure  4  
  • 12. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   Table 2 Markets for Some of the Expected Enzymes and Amino Acids in MEF processes Enzyme or Amino Acid Price per Ton Application Alpha-amylase $15,000 Textiles, Starch syrups, laundry and dish washing detergent, fermentation of ethanol, animal feed Cellulase $16,636 Cellulostic ethanol production, laundry detergent, textile finishing, animal feed Pepsin $2,000 Cheese production Lysozyme $11,800 Antibacterial (germicidal in dairy industry) Hemicellulase $3,790 Baking, fruit juice, wood pulp processing. Aspartic Acid $2,150 Acrylic acid Lysine $2,400 Nylon precursor Proline $2,800 Carbohydrases $500 Tank cleaners, pulp and paper, textiles, fermentation ethanol Penicillin acylase $6,400 Chemical synthesis Histidase $16,000 Cosmetics Peroxidase $6,100 Laundry and wood pulp bleaches Alkaline protease $280 Detergent There are two critical business issues for expanding the revenue stream. First, that the outputs from the MEF process are sufficiently valuable to make the process economically sustainable. Second, there are sufficiently varied outputs to be able to say that the economics of MEF technology will improve with the ability to separate out more enzymes, proteins, amino acids, fatty acids, and other chemicals. Each one of these outputs becomes a new revenue stream for the business as the ability to separate and recover it comes online. The availability to increase the number of revenue streams over time with better technology greatly reduces the financial risk of the process. Essentially, the revenue per ton processed increases as the new extraction methods become available. The next business question deals with the quantities available in the output stream. Laboratory tests have shown that the outputs are in low concentrations. However, there are extraction technologies that exist today in use in the pharmaceutical industry that are designed to perform extractions in low concentrations. The good news is that the overall MEF process can be scaled to very large sizes, so even low concentrations can add up to significant revenue streams. 5.4.   Economics  for  Host  Facilities     There are two economic benefits to the facilities using the MEF technology. First, the cost of disposing of the organic waste material is reduced by 20% and possibly more. Second, there is now a new supply of water that can be used within the facility for cooling or other applications.
  • 13. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   5.5.   Economic  Development:  Secondary  Effects   In terms of the local economy, there can be a significant benefit. The analysis to date indicates that a central plant operating with 100 remote conversion units would require approximately 100 skilled employees. This is because the central plant would need to operate 24 hours per day, 7 days per week, as any other chemical process facility. MEF is a continuous process that will require constant monitoring. The second benefit to the community is the reduction of waste and the reduced potential for a disease reservoir in the untreated waste and the related vermin and insects which can be a transmission vector to people. The third benefit is reduced demand for potable water as the reclaimed water can displace some of the related demand at the host facility. The fourth benefit is reduced landfill pressures as the material volume is reduced by at least 75% in the MEF process. 6. Attracting Capital The final questions become one of what will these units cost and what are the returns. The initial analysis indicates that the investment for a central plant and 100 remote conversion units would run between $50 million and $80 million. That said, as the work has progressed with this process more off-the-shelf technology appears to be available to be integrated into the equipment. This means that the potential exists to lower this capital investment. The cash return on cash invested returns appear to be approximately 20%. This rate of return is based on employment, equipment and construction estimates in the continental United States. 7. Summary When organic wastes are viewed as a resource instead of a liability, then new ideas can take root, producing jobs and products for the local economy. We are on the cusp of a biological revolution, as demonstrated by the continuing discoveries of the range of microbial environments and capabilities. Industrial biotechnology based on microbial ecosystems can parallel the processes found in nature and provide with much higher reliabilities with a much wider ranges of products that are available from processes in use today. Biomass can be a foundation for an industry that does provide a renewable source of organic chemicals At this point in the MEF development process, testing has confirmed the process is stable and sustainable outside an animal. Research papers on ruminant animals confirm many of the observed processes. The process has the potential to be sufficiently attractive for investment with an initial estimate of a 20% return on investment. What remains to be done is raise the capital necessary to scale up the processes to the meet the demand of waste treatment systems and to push for new separation technologies that will continue to open doors to new products for many years to come.
  • 14. Island Financial Resource Impacts from Microbial Ecosystem Fermentation   8. References 1. Price of Brent Sea Crude on the London Exchange on April 26, 2011. 2. Department of Energy (DOE) http://www.ornl.gov/info/news/pulse/no330/story4.shtml 3. United Nations Report: Global Food Losses and Waste May 11, 2011 http://www.fao.org/news/story/en/item/74192/icode/ 4. Current Anaerobic Digestion Technologies Used for Treatment of Municipal Organic Solid Waste; California Integrated Waste Management Board, March 2008 5. Current Anaerobic Digestion Technologies Used for Treatment of Municipal Organic Solid Waste; California Integrated Waste Management Board (CIWMB), March 2008