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By Jeremy Golden, Benzinga
According to the EPA, an estimated 15 million tons of asphalt shingles find their way into landfills annually, the equivalent of over 22 million barrels of oil per year. A growing concern among environmentalists, roofing waste is considered one of the top four construction or demolition materials discarded in landfills. The high percentage is attributed to a lack of options for diversion or recovery.
Founded to address this problem, Sky Quarry, Inc. is actively paving the way toward a potential solution for the ongoing multi-billion dollar waste asphalt shingle (WAS) problem. The company’s “Waste-to-Energy Solutions” convert toxic waste into sustainable products, recycling finite materials, reducing landfill waste and reducing harmful emissions in the process – while working to meet the growing demand for sustainable solutions across industries like construction, aviation and heavy transportation.
When shingles are dumped, it can take the materials as long as 300 years to biodegrade, contaminating nearby groundwater and soil – particularly if the landfill is not properly managed or maintained. With millions of tons of installed asphalt-based roofing systems in need of replacement within the next 40 years, as well as an increasing shortage of landfill space, Sky Quarry believes waste diversion methods are increasingly becoming more necessary.
Built To Last
Sky Quarry believes that its closed-loop recycling process can solve this problem, by recovering both material and oil through the use of their proprietary extraction technology. This process promotes the reuse of material, including up to 95% of the asphalt bitumen, while reducing emissions and dependence on foreign oil. The process is water-free, eco-friendly and recycles up to 99% of the solvent it uses and recovers up to 99% of the hydrocarbons.
In addition, fiberglass, limestone powder and aggregate granules can be recovered with Sky Quarry's recycling process, allowing the company to potentially reach multiple markets; namely the paving industry, shingle and carpet manufacturers, partially sustainable fuel and carbon fiber, among others. The asphalt paving market alone was already a multi-billion dollar market in 2021 and it is expected to register a CAGR of over 5% over 2022-2027.
Sky Quarry’s business model aims to be just as sustainable as its technology. The company receives a “waste management fee” or so-called “tipping fee” from the waste haulers when they drop off the material for recycling, amounting to $40-$120 per ton. Virtually all revenue from the WAS-recovered oil goes directly to the company’s gross profit.
In 2020, the company acquired PR Spring in Utah, which was built for oil sands extraction. The company intends to repurpose this facility and utilize its technology to extract bitumen from waste shingles, employing a similar process to the original extraction method. From this extraction, Sky Quarry will be able to create products like asphalt paving liquid and reclaimed heavy oil. This reclaimed material will be further refined at its foreland refinery in Nevada.
In 2022, Sky Quarry purchased Foreland Refining Corporation in Nevada, which processes about 480,000 bbls of oil per year. With the expectation of refining blended sustainable oil — from PR Spring — by 2024, Sky Quarry intends to increase this to one million bbls of partially sustainable oil per year. Sky Quarry believes the Eagle Springs asset is undervalued in the market, with the company anticipating that a rebuild replacement value for the facility could exceed $70 million.
Sky Quarry is in the process of establishing smaller facilities that will receive and process WAS material in preparation for its journey to its facility in Utah — before that, Sky Quarry will remove the sand and granules to be sold regionally to local industries. These facilities are expected to provide up to 400,000 to 500,000 tons of asphalt shingle feedstock to the company’s PR Spring extraction facility. The objective of these facilities is to bring in up to $5 million in revenue per facility as Sky Quarry looks to leverage the modular nature of the recycling outposts for business scalability and rapid deployment.
The demand for sustainable fuels has never been higher. The Federal Administration is hoping to inspire a dramatic increase in the production of sustainable aviation fuels as the administration looks to achieve net-zero economy-wide emissions no later than 2050. Sky Quarry’s mission also aligns with President Biden’s Build Back Better Initiative, which includes target incentives to grow domestic supply chains in critical industries and communities on the frontlines of the energy transition. The framework boosts the decarbonization effort through grants, loans, tax credits and procurement to help drive capital investment. The ability to take advantage of these incentives is one of many reasons Sky Quarry is built to last.
Sky Quarry believes it will be skilled at bridging nature and technology, delivering both environmental and societal benefits to many industries. This boundary-pushing company may be one to watch in the coming years.
Featured photo by Luke Southern on Unsplash
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