With Hummingbird founder David Butterfield…
Why is your company called Hummingbird?
Hummingbirds are magical birds, they appear almost everywhere throughout North America. They play a valuable role in their ecosystems. They are beautiful. Why wouldn’t you call your company Hummingbird?
There is a wonderful native American folk tale called The Flight of the Hummingbird which is a parable for the environment, written by Michael Nicoll Yahgulanaas, with an afterward by the Dalai Lama. In the tale, the Hummingbird does what he can, which is our own vision. Besides, Norma Butterfield, my wife, has long been known as the Hummingbird.
Why are there two companies?
Tax has a lot to do with it. We have investors in both countries, and the tax treaties are far from perfect. We also began as a Canadian research company and our connections to research here in Canada are strong. As well, Canada is a favourable economic and political climate for research and development. As well as home to several of our principals.
On the other hand, the U.S. is the best market in which to develop actual projects. It is big and project financing is available. Several of the principals, including the most experienced developers live in the Phoenix area. In these economic times, it just makes business sense to structure the business as two companies.
What about the rest of the waste?
As you can see from the chart, provided by lovefoodhatewaste.org, organics make up about seventy percent of waste. A lot of this can be recycled or composted, and the balance of the organics Hummingbird can handle.
Eleven percent is plastic, and if it is plastic alone, it can nearly all be recycled now, but isn’t because the right incentives like carbon trading are lacking and the wrong incentives like oil exploration subsidies are in place. Some of the plastic isn’t recyclable because its manufactured as part of a product that combines organics and plastic. The classic case being a plastic soled leather shoe. You an compost or recycle for energy the leather, or you could recycle the plastic, but when they are coupled they must go to the landfill. These type of products need to be re-designed. Bio-plastics will be a big part of the re-design solution.
Eight point four percent is metals, most of which can be recycled. Although the same problems arise with government incentives and mixed material products. Smart policies and proper designs are the answer here as well.
Glass, four point nine percent, can be re-used, or if not, recycled. The recycling takes an awful lot of new energy.
Rubber and Textiles make up seven point nine percent. The same issues arise, natural fibres can be composted or used for renewable energy. Fossil fuel based rubber and textiles are very difficult to deal with, but with proper re-design can be recycled. For a great example of how to go about this, check out my colleague Ray Anderson’s Interface carpet. http://www.interfaceglobal.com/
What is the demand market size?
Enormous. Over fifty billion dollars a year, the bulk of which is dealing with organics. Right now, Hummingbird has the only zero waste solution, I believe we can be a billion dollar company within the decade.
How is gasification different from incineration?
In terms of emissions, it is night and day. Gasification is much more controlled. In the first stage the organic material is decomposed, very much like in nature, only nature takes a much longer time. In pyrolysis, heat is given off just like in composting, but at much higher temperatures, and therefore a quicker reaction occurs. Because the oxygen in pyrolysis is controlled, the gases that are driven off are still highly combustible. These gases, known as syngas, are recombined in a second stage with oxygen generating an enormous amount of usable heat. Unlike incineration, the syngas combusts in a space separate from the fuel and ash, therefore very little particulate is created.
The most important difference however is the fuel material itself. Municipal Solid Waste contains many scary compounds co-mingled with fossil fuel based products and the organic waste, some of these compounds turn into carcinogens when exposed to high temperatures. It is a case of poison in, poison out. The key thing is to sort out the organics first. Once waste is all mixed together it is virtually impossible to sort it all back out again. If you gasify (not incinerate) organics (not municipal waste) you can produce clean carbon neutral renewable energy.
Why do you say you are carbon neutral? Don’t you produce CO2 like fossil fuels?
Carbon dioxide is part of the natural cycle. Plants grow by taking the carbon out of the carbon dioxide in the air, and when they decompose, the carbon recombines with oxygen to reform carbon dioxide in the atmosphere. We don’t change this natural cycle, we only accelerate it in a way that allows us to capture the energy that is naturally given off.
Fossil fuels, on the other hand, were formed hundreds of millions of years ago at a time when carbon dioxide levels in the atmosphere were as much as twenty times than what they are today. That was a much hotter and wetter climate where giant ferns grew up to one hundred and fifty feet tall, and plants did not decompose like they do today because at that time the bacteria had not yet evolved to break down the carbon. It was the original green house effect.
When humans burn fossil fuels we add this ancient carbon into the atmosphere, creating a significantly different climate from the one we are used to.
How does urban biomass fit with solar and wind?
Biomass facilities are the perfect complement to solar and wind because they produce energy 24/7 and therefore are a reliable source of renewable energy. Obviously, solar and wind can only produce energy intermittently and need a constant state power source, like biomass or geothermal.
Biomass facilities also consume much less area then wind or solar for comparable amounts of energy. Urban biomass has the added advantage of taking the source of their fuel from urban areas, where energy demand is greatest and transmission grids are most overloaded. In addition, they solve the major piece of the landfill problem and lead to significantly greater levels of recycling for other municipal waste.
How do you get your financing?
Corporate finance is all private equity. No debt.
The stimulus program, under the American Recovery and Re-Investment Act, has been wonderful for renewable energy projects like ours. In combination with other available federal and state incentives, we are able to provide complete project financing packages with about fifty percent debt, and about two times coverage on the debt service.
Each project must be analyzed to ensure the appropriate revenue is available. Hummingbird has relationships which, in most metropolitan areas, assures a steady long term supply stream of source separated organic material from commercial waste producers, but local landfill fees can vary tremendously from place to place, and it is these fees which are the facilities first line of revenue. Likewise, the value of the heat varies significantly on location and most importantly on a nearby consumer of heat that can use renewable energy not used for electricity production. The value of renewable electric power also varies state to state.
Local government policies significantly impact our business in various ways. In jurisdictions which have, or are planning to, ban organics from landfills virtually guarantee a growing supply of material for us to bid on. A better option for municipalities and Hummingbird, is the taxing of organics going to landfills which allows businesses that recycle organics to benefit from carbon credits.
