Environmental Analysis Essay
Landfill gas is generated during the decomposition of organic substances in municipal and industrial wastes. Since it is made up of powerful greenhouse gases, primarily methane gas and carbon dioxide, the prevention of escape to atmosphere is desirable and has the added benefit of being utilised as a renewable energy source (Clarke Energy, 2014). One such company focussed on dealing with this issue is Landfill Gas Industries Pty Ltd (L.G.I. Pty Ltd) they are ‘a specialist designer, supplier, installer, and operator of systems that capture, extract and burn gas produced in landfills’ (L.G.I. Pty Ltd, 2014). L.G.I. Pty Ltd has several opportunities that could impact the company’s operations in Australia, such as government regulation, the number of councils and landfills available and the fact that all landfills require a solution to the landfill gas problem. However L.G.I. Pty Ltd also has several threats potentially impacting its operations, for example from large energy generators, large waste companies and opposition to landfill gas.
With the continuing pace of global environmental awareness and a general growing consensus about the potential damage of greenhouse gases, the Australian Government may introduction legislation and associated taxation such as the use of carbon credits that are designed punish landfill owners with unabated gas emissions (Department of the Environment, 2011). A company such as L.G.I. Pty Ltd is well placed to install systems that can reduce these emissions and in turn reduce the financial penalties of operating a landfill, many of which are run by local councils and therefore paid for directly by ratepayers. With 565 local government councils in Australia (The Department of Infrastructure and Regional Development, 2014) and each with a need to process its residents’ garbage, many of which themselves operate landfill sites and/or have legacy landfills within their boundaries.
Whilst the market has a finite limit there is considerable appeal for councils to adapt such technologies at their landfills and has the potential to generate ‘huge savings for [councils] and the environment’ (Landfill Gas Pty Ltd, 2008). L.G.I. Pty Ltd is committed to take advantage of councils’ needs by having ‘developed successful landfill gas installations on sites of all scales across Australia’ (Landfill Gas Industries Pty Ltd, 2014). Wherever there is a landfill, there is potential dangers aside from the environmental concerns unless mitigation techniques are employed, such as the risk of fire and explosion which for example occurred in Loscoe, England in 1986 when a nearby house was destroyed (Danish EPA, 2001). There is also the potential of gas migration to occur below the surface and in turn contaminate the groundwater (Environment Protection Authority, 2008). If a landfill site is not suitable for electricity production, gas mitigation is nonetheless desired for safety and hygiene reasons. L.G.I. Pty Ltd ‘manufactures and installs its own range of state of the art flares’ (Landfill Gas Industries Pty Ltd, 2014) allowing the flammable gases to be safely burnt off.
Therefore all current and legacy landfill sites are potential business for L.G.I. Pty Ltd The first major threat to L.G.I. Pty Ltd comes from existing large energy generators, such as AGL, Origin and Energy Australia, these 3 companies have a combined market share of over 60% of the energy sector (IBISWorld, 2014). As these companies have the need to supply electricity to their customers they have the desire to source viable and sustainable generation methods, AGL for example already ‘owns and operates several renewable landfill gas and biogas (sewage) generation facilities across Australia’ (AGL, 2014). If these companies decide to expand in this sector and compete for this resource, they could undermine L.G.I. Pty Ltd’s potential simply by means of more efficient access to financial capital required to setup and by the greater potential political bargaining power they possess such as when competing for tenders.
Such as with large energy generators, large waste companies also pose a potential threat for L.G.I. Pty Ltd. Many councils utilise outsourced waste collection, processing, recycling and landfill operators to fulfil their needs. Operators such as Veolia and Sita which operate landfills as part of their business must ‘manage odour across [their] landfills in accordance with the Environmental Protection Licence’ (Sita, 2014). These operators have their own equipment and methods for gas mitigation and therefore pose a threat to L.G.I. Pty Ltd if more councils outsource their waste needs to private companies, they in turn aside from environmental requirements have a commercial obligation to seek profit. There is nonetheless opposition to companies that seek to turn landfill gas into electricity, for several reasons such as its relative high costs, local air pollution but namely it suggests that it is acceptable to dump waste at landfill sites rather than pursue waste minimisation or recycling initiatives (Shrank, 2011). Veolia states that it ‘encourages waste minimisation and recycling’ (Veolia, 2014), however if a financial incentive exists if it fails that endeavour then people are right to be sceptical.
The threat of a change in public opinion and awareness towards waste disposal could potentially impact L.G.I. Pty Ltd, particularly if they are seen as not encouraging waste minimisation or if their operations produce an unacceptable amount of air pollution. Landfill gas is an unavoidable by-product of our modern society and it possess several risks if left unmanaged to public health and safety. L.G.I. Pty Ltd is well placed to mitigate these risks and also potentially return a financial benefit to its clients, specifically local councils. In terms of opportunities, L.G.I. Pty Ltd faces a finite barrier in terms of number of landfills in Australia, it may seek to export its expertise to markets overseas to pursue further growth.
It may also be of benefit to lobby government to encourage further legislation and taxation penalties regarding greenhouse gas emissions, potentially expanding its market. Of the threats facing L.G.I. Pty Ltd, the biggest is represented by existing the large companies in the electricity generating and waste disposal sectors, who invariable have better access to capital and lobbying power to further develop this industry. Finally, public opinion could negatively impact L.G.I. Pty Ltd if they are seen to be exploiting a resource which ideally should be minimised in the first instance.
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