Fifty miles east of Los Angeles, a small and inconspicuous facility is using something most of us would rather not think about -- household sewage -- to create a resource we can't live without -- fuel.

EnerTech Environmental, an Atlanta startup, on Thursday unveiled the United States' first commercial biosolids-to-energy facility in California's Inland Empire. Biosolids is the nice term for processed sewage sludge.

The sludge is 80 percent water when it arrives at EnerTech's plant, where it is turned into fuel simply by removing most of that liquid.

The product customers buy is 95 percent solid and interchangeable with coal, according to Chief Executive Kevin Bolin, whose grandfather invented the company's patented SlurryCarb technology.

Enertech's E-fuel is already being used as a replacement for coal at two Southern California cement kilns, though it currently accounts for only about 10 percent of their needs.

With respect to the cement industry, we can't make enough, Bolin said at the plant's ceremonial opening.

Biosolids are a renewable resource and do not add any net carbon dioxide to the atmosphere, Bolin said.

The CO2 is already in the cycle, he said. The pungent smell that permeates the area comes from a nearby wastewater treatment plant, Bolin said.

EnerTech's plant started production earlier this year and is operating at about 60 percent capacity. At full capacity, it will be able to take in 700 tons of biosolids to produce 170 tons of fuel a day.

That puts the facility on par with a roughly 7-megawatt power plant, Bolin said.

Cement kilns are ideal customers for EnerTech's product because not only does it provide a renewable replacement for coal, the non-combustible portion of E-fuel is mixed into the cement itself, Bolin said.

EnerTech receives sewage sludge from five Southern California municipalities, including Orange County, Los Angeles and San Bernardino. Because it provides a recycling service, EnerTech is paid by the cities and sanitation districts for managing their sewage sludge.

As a result, EnerTech's final product is cheaper to its customers than buying coal, Bolin said.

It's able to be cheaper than coal because the primary focus is the management of biosolids, Bolin said.

EnerTech, which counts Citigroup private equity unit Metalmark Capital and the Masdar Clean Tech Fund among its investors, expects to turn a profit next year, Bolin said.

It is expanding. The company has partnered with Mitsubishi Kakoki Kaisha Ltd on a demonstration plant in Japan, and EnerTech is looking at other opportunities in the United States and the UK, Bolin said.

EnerTech plans to expand the Rialto plant to make fuel for Rentech Inc, a Los Angeles-based synthetic fuels maker that plans to use the biosolids to make transportation fuels. It is also hopes to develop a plant in the New York City area.

EnerTech's SlurryCarb process isn't limited to human sewage. It can also treat animal manure, lumber and paper wastes and agricultural wastes.

(Reporting by Nichola Groom, editing by Leslie Gevirtz)