Why You Need to be Skeptical

Here is an excellent posting by Geoffrey Styles looking into a typical claim of a wonderful new technology that will help "green" the planet. Styles walks you through the kind of back-of-the-envelope estimating that is required as an initial appraisal of some new claim:

The other day I read a story in my local paper concerning a new technology for converting waste plastic into synthetic oil. The prototype "Envion Oil Generator" had been temporarily deployed at a solid-waste facility in Montgomery County, MD, and its owners were touting its benefits to the Washington Post. As I read the article, I found myself considering it on two levels: whether the reported details made sense, and whether the reporter was encouraging his readers to approach new inventions such as this with sufficient skepticism. We're living through a nearly unprecedented explosion in energy-related technology, and it's vital that the public not swallow every claim they encounter, because a large fraction of these technologies will ultimately prove to be either impractical or uneconomical, while some of them are in fact impossible, because they depend on the violation of basic physical laws. We might not all have the background for making detailed judgments about this, but I can suggest a few questions to ask in these situations, even if you don't have a science or engineering degree.

The first question is whether the description of the basic process seems logical. For example, in the case of the "Oil Generator" is it reasonable to expect that plastic could be turned back into something like crude oil by means of essentially just heating it up? After all, plastic is mostly derived from crude oil and natural gas in the first place, so perhaps heating it would cause it to decompose back into its constituents. If you Google on "plastic recycling", you'll see that this normally entails separating it strictly by type--those little numbers in the triangle that usually appears somewhere on an item--and then melting it. But that doesn't give you "oil"; it gets you back to the raw plastic, which can be used to make clothing, carpets, or some other recycled product. However, if you heat them further under the right conditions, the polymer chains of the plastic break down in a process called "thermal depolymerization." The result of that is a liquid that might resemble crude oil. OK, so far.

The next aspect you might look at is the whether any obvious physical laws are broken. Do the claims for the device hint at something impossible, such as getting more energy or mass out than are put into it? For example, the article indicates that this device can turn 10,000 tons of plastic per year into up to 60,000 barrels of oil. Is that plausible? A little Googling should turn up the fact that a typical crude oil has a specific gravity of around 0.85. That means that a gallon of it would weigh just over 7 lb., and a 42-gallon barrel would come in just under 300 lb., or 0.15 short tons. So the claim here is that 10,000 tons of plastic could turn into as much as 9,000 tons of usable oil. Personally, I'd say that sounds pretty optimistic, and I'd guess that a yield under 5 barrels per ton was likelier, particularly if the gas produced as a byproduct from the process is supposed to generate most of the energy for this conversion. At a minimum, though, this gizmo doesn't appear to bend any physical laws.

If you know a bit of organic chemistry, you could delve a little further into this, looking up the chemical structure of such common plastics as Polyethylene Terephthalate (PET or Type 1), Polystyrene (Type 5), and Polyvinyl Chloride (PVC or Type 3). De-polymerizing a random mix of those is either going to yield a stew of specialized petrochemical molecules, or if you break them down further you might get back to more basic chemicals full of double bonds and benzene rings. Neither result has much in common with the typical constituents of good-quality crude oil that refineries turn into gasoline, diesel or jet fuel, so it raises a key question about the value of the product this technology produces.

That brings us to the economics. The article quotes the company as claiming that the process costs only $10 per barrel of oil produced. It's not clear whether that $10 is just the operating cost or is meant to include the capital cost of the device, which apparently totals $6-7 million. Using the "PMT" function in Excel it took about 1 minute to determine that at an 8% cost of capital--about the best a small business could hope for in the current environment--the amortized hardware cost would be at least $611,000 per year over a 20-year life. Spread that over 60,000 bbls and you're already over $10/bbl, before you've paid for the first employee or the first kWh of purchased electricity. And since a device like this is unlikely to operate around the clock every day of the year, and the realistic yield is probably lower than 6 bbls/ton, it's not hard to come up with an effective fixed cost per barrel of around $20, over and above whatever variable costs are involved.

And then we come to the environmental impact of all this, and that hinges on assessing realistic alternatives. If the plastic would otherwise be buried in a landfill, this looks like a win-win, as long as the process complies with all local pollution regulations for stationary sources. However, if the device is chewing up plastic that could otherwise be recycled, the latter seems by far the better route, in terms of energy consumption and displacement of oil byproducts that would otherwise be used to make virgin plastic. It's also clear that a significant fraction of the input plastic is converted to CO2 and emitted to the atmosphere. Whether its emissions are higher or lower than those associated with burying the waste and producing new plastic isn't obvious.

Ultimately, all we can really conclude about the Oil Generator is that if it operates as advertised--a big if for any new technology--and if there is indeed a viable market for its output at some discount to crude oil, then this might leave a reasonable profit margin for the owners. That would also depend on how much rent the operators must pay, if any, for the land it sits on, how much plastic they could really run through it, and whether they would have to pay for that plastic or might even get paid to dispose of it. This is not meant as an endorsement of the company's claims, but then that wasn't the point of this exercise, which was more about taking my readers through the application of some basic critical thinking. Although the Post reporter didn't undertake all this analysis, he at least included a suitably skeptical viewpoint, instead of giving in to the breathless enthusiasm that seems so prevalent these days in reporting on any new technology with an environmental angle.

I highly recommend Geoffrey Styles' blog Energy Outlook if you are interested in issues dealing with the energy industry.