May 11 (Bloomberg) -- Waste Management Inc., North America’s largest garbage hauler, says trash gets no respect from Barack Obama and the “green-energy” crowd.

Waste Management, Republic Services Inc. and Covanta Holding Corp. say their success producing power from landfills and waste incinerators is being ignored as the U.S. doles out $60 billion in energy grants and tax breaks from President Obama’s economic stimulus. The companies say they may also be shortchanged as Congress develops long-term rewards for alternative fuels.

“We’ve become the unseen renewable energy source that no one pays attention to,” Waste Management’s Chief Executive Officer David Steiner said in an interview. “Why not help us? We are underrepresented because we are the garbage guys.”

Obama has called for an 11-fold increase in the use of renewable power to reduce dependence on coal plants blamed for global warming. While waste-based energy would make Obama’s goal more achievable, environmentalist groups such as Environment America have long opposed the garbage companies as polluters and say burning trash releases toxic chemicals.

“From an environmental perspective, the best solution is to generate less trash, and the garbage industry is not very interested in that solution,” said Anna Aurilio, Washington office director for Environment America.

Incineration, Methane

The waste industry produces energy by incinerating solid waste to produce steam that drives a turbine, and by capturing the gas methane from garbage decomposing in landfills.

Nothing in the federal stimulus legislation bars spending on trash-to-energy projects, according to Jeffrey Genzer, an attorney for the National Association of State Energy Officials in Alexandria, Virginia. States are opting for energy-efficiency projects instead because waste proposals require time-consuming environmental reviews, Genzer said.

The stimulus bill provides $38 billion for Energy Department spending, of which $11 billion is being doled out by states. Other agencies like the Interior and Defense departments also got stimulus money for energy initiatives. Trash-to-energy projects can qualify for part of an additional $20 billion in tax breaks.

The Wheelabrator division of Waste Management started the first garbage incineration plant in the U.S. in Saugus, Massachusetts, in 1975. The longest-running plant producing gas from landfills has been operating in Contra Costa, California, since 1982, according to the Environmental Protection Agency.

Doubling Revenue

Nationally, 450 landfills and 87 incinerators produced about 24 million megawatt-hours of electricity in 2007, about 2 days of U.S. electricity use, according to Energy Department data. By comparison, wind energy contributes about 3 days of U.S. power a year and solar produces 76 minutes’ worth.

Waste-to-energy projects will “drive Waste Management’s growth domestically and internationally,” Steiner, 49, said in the interview.

The company is in talks to build waste-to-energy plants in China and Europe, where governments are more willing than the U.S. to make garbage-power part of their green energy policies, Steiner said.

Houston-based Waste Management aims to double power generation’s contribution to 20 percent of revenue by 2016, according to Steiner. The company reported $13.4 billion in revenue last year.

Republic, the second-largest U.S. waste hauler, wants to “double or triple” revenue in the next three to five years from producing electricity, according to Bill Held, senior director of renewable energy. Power generation, almost all of it from capturing methane, is now about 1 percent of the Phoenix- based company’s revenue, which was $3.69 billion last year.

Waxman’s Measure

Covanta, based in Fairfield, New Jersey, operates 38 facilities in the U.S. that capture methane from landfills to produce energy that the company sells to utilities.

Waste Management fell 14 cents, or less than 1 percent, to $26.86 at 4:02 p.m. in New York Stock Exchange composite trading, and has fallen 19 percent this year. Republic dropped 35 cents, or 1.5 percent, to $23.42 and was down 5.5 percent for the year. Covanta fell 14 cents to $16.29, declining 26 percent this year.

The garbage-hauling industry hasn’t been among the top lobbyists in Washington, according to the Center for Responsive Politics, which tracks spending aimed at shaping policy. Waste management companies spent $4.6 million lobbying last year, compared with $32.5 million by alternative-energy groups.

Climate-change legislation proposed by Representative Henry Waxman, a California Democrat, would count methane from landfills but not power from trash incineration toward requirements for the use of renewable energy. A group of House Democrats led by Representative Rick Boucher of Virginia has urged including both.

Landfill Stigma

Waxman’s measure also wouldn’t let U.S. agencies count energy from burning garbage toward their requirements for use of renewable energy, and would count incineration as an emitter of greenhouse gases. Waxman has been negotiating with Boucher’s group over compromise climate-change legislation.

“There’s still a stigma attached to landfills and landfill gas,” Held of Republic said.

Part of the stigma comes from dioxin and mercury, toxic chemicals released when garbage is incinerated.

Dioxin is classified as a likely human carcinogen and has caused changes in the hormone systems of animals and humans and alterations in animal fetal development, according to the EPA. The agency links mercury to impaired neurological development in children and fetuses.

Greenpeace, Belinda Carlisle

After a campaign about the dangers of dioxin by advocates such as the group Greenpeace and the pop singer Belinda Carlisle, federal regulation of the chemical changed. Total emissions of dioxin from waste-to-energy plants in the U.S. were reduced to 15 grams a year in 2005 from 4,400 grams in 1990, according to Ted Michaels, president of the Energy Recovery Council, an industry and municipality-sponsored group based in Washington

“That doesn’t appease the environmentalists,” Michaels said. “Apparently they want a zero-emission standard, but if they did that they’d have to go after backyard barbeques and fireworks at baseball games.”

To contact the reporters on this story: Rob Delaney in Toronto at robdelaney@bloomberg.net; Daniel Whitten in Washington at dwhitten2@bloomberg.net

Last Updated: May 11, 2009 16:11 EDT