advertising
Link to jump to start of content The Seattle Times Company Jobs Autos Homes Rentals NWsource Classifieds seattletimes.com
The Seattle Times Business & Technology
Traffic | Weather | Your account Movies | Restaurants | Today's events

Thursday, July 27, 2006 - Page updated at 12:00 AM

Print

Trash-to-diesel technology raises eyebrows

Seattle Times business reporter

FIFE — As the machinery mounted on a flatbed truck chugged and rumbled — purportedly converting landfill trash into diesel fuel — Issaquah entrepreneur Michael Spitzauer spoke confidently about how he and his company, Green Power, were out to reshape the world.

The first plant, Spitzauer says, is to open next year on tribal land in this Tacoma suburb; a second, in Montana, soon after. Within a decade, 1,500 plants are to open across the country, all simultaneously solving the solid-waste and imported-oil problems.

"The big oil companies in Europe and this country have made threats to us, but even if they would do something to our lives, this company will go on," Spitzauer said. "Our plant works, and we will make diesel for the people."

But doubts have been raised about the claims made for Green Power's technology and about Spitzauer's personal history — a history that includes a fraud conviction in his native Austria, a lengthy extradition battle in a separate case, and the bankruptcy of his previous business venture.

In an interview, Spitzauer, 38, said none of that was relevant to Green Power and its prospects.

"What easier way is there to discredit somebody than to look at something in their past?" he said. "We are here for the future."

But David Mahmood, chairman of Allegiance Capital, a Dallas investment bank that had agreed to raise capital for Green Power earlier this year but pulled out in May, said Spitzauer was a good salesman but not someone he was interested in doing business with.

"We have found Mr. Spitzauer's statements to be somewhat over the top," Mahmood said. "He overpromises and underdelivers."

As for the waste-to-diesel technology, he said, "I didn't think it was viable and/or financeable."

Spitzauer said the first plant would cost $82 million to build. Green Power has arranged financing from unspecified private investors, he said, and has no plans to seek additional investors.

advertising
Fife demonstration

Spitzauer and his associates were in Fife to demonstrate their trash-to-diesel technology to about 100 onlookers, whose reactions ranged from intrigued to enthusiastic.

"I went in skeptical and came out optimistic that they have something viable," said Peter Moulton, who manages the Harvesting Clean Energy program for Climate Solutions, an Olympia-based nonprofit group.

Ralph Hale, a member of the family that is negotiating to lease about 20 acres to Green Power, summed up the venture's appeal: "Put garbage in one end and get diesel out the other end — it'll change the world if it works."

The process, as explained by Spitzauer and inventor Christian Koch of Germany, starts with organic waste — such as paper, plastic and textiles, but not glass or metal. The waste was dried, ground up and mixed with waste oil, lime and what Koch described as aluminum silicate, the catalyst at the heart of this process.

The mixture was then poured into a hopper, with what they say is diesel fuel coming out of a spigot. (Although the small demonstration unit required waste oil as part of the feedstock, Spitzauer and Koch said, the production unit would be much larger and would generate its own oil.)

Saying his process mimicked the natural transformation of decomposed organic matter into hydrocarbon fuels, Koch told the crowd: "We have shortened the time from 300 million years to three minutes."

After the demonstration, Moulton said there are still unanswered questions about the process — from whether it will work at an industrial scale to whether significantly more energy goes into producing the diesel than the fuel contains.

But, he said, "I didn't sense anything from them in the way of hiding any technology."

But Eric Stuve, head of the chemical-engineering department at the University of Washington, said it was unclear just how Koch's process worked or how different it is from existing technologies that can convert organic matter to fuel or oil.

Contradictory info

Stuve, who was not at Wednesday's demonstration but reviewed a 16-page technical brochure about the process, said the description lacked sufficient detail to definitively evaluate the technology and contained several scientific errors and contradictory statements.

"Whether this thing can function as promised remains to be seen," Stuve said. "I can't say that it's impossible, but my guess is that it may be technologically feasible but economically infeasible at this time."

Philipp Schmidt-Pathmann, president of Waste Recovery Seattle International, a company that licenses German waste-incineration technology, said of Green Power's process: "The bottom line is, not much is known about it."

Green Power made an appearance on German TV about six months ago, he said, but "nobody has heard anything about them ever since."

"They made a lot of claims, but there's no proof that I have seen," Schmidt-Pathmann said.

In June, Green Power demonstrated its technology to city leaders in Cheyenne, Wyo., who were looking for alternatives to building a new landfill. The city came close to signing a contract with Green Power but backed off after the local newspaper reported details of Spitzauer's past.

He was convicted of fraud in Austria in 1992, serving three years of a six-year sentence. In 1997, after Spitzauer married a U.S. woman and became a permanent U.S. resident, Austria sought his extradition on different fraud charges. Spitzauer fought extradition for close to four years; in October 2001, the provincial court of Salzburg dropped the request.

In the meantime, however, a U.S. jury convicted Spitzauer of lying on his permanent-residency application by saying he had never been convicted of a crime. He was sentenced to six months in federal custody, court records show.

In May 2002, Spitzauer started Talidesigns Group, a company that sold jewelry and women's clothing online and through "road shows" at Costco stores.

In January 2005, however, U.S. Bank sued Talidesigns, claiming the company kited checks, resulting in nearly $444,000 in overdrafts. The company filed for bankruptcy protection five days later and is being liquidated.

Seattle Times business reporter Kristi Heim contributed to this story.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com

Copyright © 2006 The Seattle Times Company

Marketplace

advertising

More shopping