MUSKEGON - With the Michigan Alternative Renewable Energy Center and its strong environmental and sus-tainability movement, the Muskegon area has the potential to become a critical player in biogas and composting.

Bill Stough, president of Sustainable Research Group, believes Muskegon could be home to a consortium that diverts food and other organic waste and generates value-added products such as energy and compost for agriculture uses.

Stough presented a community-based organizational business model on biogas and composting at a recent seminar held at MAREC in Muskegon. Stough and Dan Blackledge, former owner of Mario Bio-energy LLC, formed the Metropolitan Energy and Organics LLC specifically to bring the technology to market.

Stough and Blackledge have talked to people in Lansing, Kalamazoo and Grand Rapids, but the interest level has been the highest in Muskegon. Stough said many businesses are looking for opportunities to use their skills in new ways. Attendees at the seminar came from companies with technical backgrounds and expressed hope in expanding their products or services into sustainable areas.

"What we are suggesting is the community comes together under the umbrella of a nonprofit organization to develop essentially a commercial business that would use organic waste as seed stock," Stough told MiBiz.

The raw material would be used as input for energy production and the development of soil amendments in the form of compost.

"One end product is compost and one is methane gas. There's no question that the markets are there for both of those," Blackledge told MiBiz. He said the pieces in place make it a viable opportunity.

Stough said the methane gas would go to industrial or commercial users who use natural gas and then the waste from that process will be used to manufacture compost and then sold to agricultural interests. He noted that "off the shelf" technology is currently available, but financing has been a barrier.

"The initial capital required for the energy portion is pretty high — several million dollars depending on how it is specified," said Stough, noting venture capitalists and other investors in startup companies typically want very high rates of return of about 30 percent.

A nonprofit organization as an umbrella group would help generate interest, serve a public mission and raise money from a broader array of investors, according to Stough. He said a nonprofit organization could go after grants from the government and foundations as well as loans and donations from other investors, not to mention American Recovery and Reinvestment Act programs.

Stough said there's also an opportunity for Muskegon to develop a compost testing facility where anyone from around the country who wanted to test a compost recipe for energy production could send it to the facility for analysis and feedback.

Blackledge said potential stakeholders could be the city of Muskegon, MAREC, or companies who produce the food and engineers.

"The system is designed to be very modular and scalable. We can start small and grow with the demand," Stough said.

He said an existing nonprofit could take the lead or a new nonprofit could be formed.

"The idea would be to farm out or to contract with a for-profit entity to do the work. The composting operation itself would be a regular company, but have ties to the nonprofit umbrella organization, whose mission is to help it become successful," Stough said.

The initiative would create stable jobs that could not be exported out of the community.

The green jobs would provide a closed-loop service for the generation of waste, add value to a waste stream and a cyclic, reuse approach.

Although there is a lot of interest in Muskegon, the challenge is to figure the right mix of companies to make this happen.

MAREC Interim Director Arn Boezaart said the overall concept of a bio-energy consortium has a lot of merit. New technology makes processing bio-energy more viable and also makes it more economically affordable.

"We're very open to advancing the use of new technology or applications of advanced technology to benefit the region and the state. We're very open to having discussions with someone about that," Boezaart told MiBiz.

He said the bio-consortium makes sense for the Muskegon region, including parts of Oceana and Ottawa counties, because of the agri-business sector, plenty of open space, publicly owned land and accessible highways.

Goals for the project outlined by Stough at the meeting include use of an anaerobic digester to create biogas that would be sold as fuel and converted to electricity. The plan calls for turning the digestate and biosolids into compost that would then be sold as an agricultural soil amendment.

The nonprofit would contract with a commercial business to operate the biogas/compost facility, manage daily operations, market the biogas and compost and then return a percent of revenue back to the nonprofit.

Blackledge said a follow-up meeting of interested parties is planned to move the concept forward.