A new plant in Oregon could help transform the waste industry with a remarkable new technology: Garbage goes in, oil comes out.

The plant, to start running in the coming weeks, will convert discarded plastics into oil that could be sold on crude markets. The pilot plant is owned and operated by Houston-based Waste Management, which sees it as the latest breakthrough in converting waste into energy.

Waste Management has been wringing energy from garbage for decades. Hundreds of its industrial plants nationwide burn methane gas captured from its landfills. The company has 131 landfill gas-to-energy projects, 17 trash-incineration plants and other projects that generated enough electricity in 2011 to power 1.17 million homes.

The business objective is to create new energy products out of waste and perhaps eventually eliminate the need for trash storage in landfills altogether, Waste Management CEO David Steiner said. It's also investing in such technology as replacing coal with pellets made from garbage and converting trash into ethanol.

The investments are not huge for the 44,300-employee company, which brings in more than $13 billion a year in revenue, most of it from waste collection.

But Steiner said they are necessary amid changing consumer views toward waste and landfills.

The CEO said he was inspired five years ago after seeing a television commercial for a car it claimed had been made without contributing any waste to landfills. Regardless of whether the claim was true, it spurred Steiner to consider what a future without landfills would mean if his company failed to adapt.

"We could say that's a huge threat, let's go out and try to fight it. Let's go out and try to say, 'No, no, no. You're wrong. Zero landfill is a bad thing,' " Steiner said. "Or we could embrace it as an opportunity."

The company determined it could earn up to $15 billion a year if it could efficiently separate and resell the nearly 100 million tons of garbage it collects annually.

That has been nearly impossible because most garbage is mixed, mangled and too contaminated for reuse, but it's less of an issue when converting to energy.

Technology licensed

The company declined to detail its investments in about 30 startup companies working on advanced waste technologies dealing with conversion and recycling. Waste Management previously said the amounts typically range from $5 million to $10 million per project. It holds a minority stake in most of the startups, but owns some processes outright.

Steiner believes the investments in technology will give the company an edge over competitors. The goal, he said, is to reshape the industry.

"This is the kind of thing that can change the game dramatically," he said, drawing a comparison with the introduction of Apple's iPod more than a decade ago.

Waste Management licenses the plastics-to-oil technology, which it will put to work at the pilot plant in Portland, Ore.

Although the plant could utilize plastics taken out of everything from shrink wrap to yogurt containers, it will rely mainly on discarded material from local manufacturing plants, mostly wrap, sheeting and hard plastics like those found in toys.

Plastic is made largely from petroleum. By recovering that petroleum, the Portland plant is projected to produce about 75,000 barrels of oil a year. That is 29 times the rate of the average oil-producing well in Texas, according to the Railroad Commission of Texas.

The plant will be the first of its kind, using a new technology to create something out of waste plastics that can sell at today's domestic oil prices near $90 a barrel, said Bill Caesar, Waste Management's president of recycling and organic growth.

"Sometime by the third quarter of next year, we will be able to make a call on whether or not it's working the way we expect it to and where else we're going to start building," Caesar said.

Substitute for coal

The company also owns the process for transforming garbage into pellets that could be used as a substitute for coal. Waste Management has a plant for the so-called SPEC fuel pellets in San Antonio and is building another plant in Philadelphia.

Caesar said the pellets can be burned by coal plants with a fraction of the emissions generated by coal.

Another project focuses on turning waste into gas that could be used as a feedstock for manufacturers or converted into fuels like ethanol.

Several analysts commended the company's efforts to pursue greater energy production from waste, but warned they may not go anywhere.

The country isn't interested enough at this point and might not be anytime soon, said Michael Hoffman, an analyst for Wunderlich Securities.

He said waste-collection prices likely would have to increase to support the procedures, unless the company is able to operate the new conversion processes while charging the same fees it does today.

But Hoffman acknowledged that growing public concern over landfills could change that - if customers become willing to pay more for green options.

Cheaper than landfills

Waste Management executives have "positioned themselves to be an early mover when it occurs," he said. "But at the moment … there's just not enough economic value for what they're being paid to dispose of it."

Most waste companies have shied away from investing in conversion technology, instead focusing their cash on operational changes to cut costs and boost earnings, said analyst Barbara Noverini of the investment research firm Morningstar.

Steiner said that while public interest has developed more slowly than he had hoped, he is confident in the future for the new services. He said he hopes to be able to offer services at the same or cheaper rates than traditional landfill options.

"Look," Steiner said, "if everybody else is selling landfill space and I am selling a green, cheaper solution … I'm going to sell more of it."