RIALTO, Calif. — At the end of a dusty dirt road here, next to a cement factory and a junkyard, an Atlanta company is working on the next new energy source: fuel from human waste.

By the end of this year, the $160 million plant that EnerTech Environmental Inc. is building in this community east of Los Angeles is expected to take hundreds of tons of sewage sludge — which technically isn't just treated human waste, but anything and everything that passes through the drain — from local sanitation districts. The plant will process the sludge with a mixture of high heat and high pressure, turning it into pellet-like "e-fuel" that can run small power plants.

The poo-to-power process is the brainchild of former Atlanta ad man Kevin Bolin and his grandfather, a Florida retiree.

In addition to being a former chemical engineer, "my grandfather is kind of a mad inventor," said Bolin, 45. A former accountant and advertising executive for Atlanta television station WAGA-TV, Bolin today is fluent in the workings of effluent and sharp in the ways of finance and business. "It was really a dream of mine to help form a company and commercialize some of these inventions," he said.

Though unusual and untested on such a scale, the grandfather-grandson team's project is getting accolades from local officials and investors, who say it could become a viable way to address high energy costs while simultaneously relieving overburdened sanitation systems.

"This stuff comes to us seven days a week, 24 hours a day," said Ed Torres, director of technical services for the Orange County, Calif., Sanitation District, one of five local sewage systems that have signed on with the EnerTech plant. "We can't just turn the valve off. We have to do something with it."

Currently, Orange County and other local sanitation districts dispose of the sludge mainly by trucking it to farms — some of them hundreds of miles away in Arizona — where it fertilizes livestock feed crops or nonedible plants.

Tougher environmental regulations and high diesel fuel costs, however, are making that practice increasingly prohibitive.

In all, the five Southern California sanitation districts have agreed to pay EnerTech $390 million for taking about 670 tons of sewage sludge per day for the next 25 years.

"In the past, that might have been fairly expensive," said Mike Sullivan, supervising engineer for the Los Angeles County Sanitation District, another participant. "But with other alternatives disappearing and the cost of diesel fuel rising, it's becoming much more (attractive)."

Getting paid to process the smelly sludge will generate about 97 percent of EnerTech's revenues, said CEO Bolin. He expects the other 3 percent to come from selling the "e-fuel," first to local cement kilns and other businesses that run their own power plants, and perhaps eventually to bigger utilities.

The fuel, Bolin said, can replace coal, but is cleaner in terms of carbon emissions. It has been certified as a "renewable fuel" by the state of California. Local air-quality regulators also have issued a permit for EnerTech's processing plant.

"What we're doing is basically addressing a problem in need of a technical solution," Bolin said. "We're converting a waste — sludge — into something that's beneficial."

Bolin and his grandfather, 92-year-old Norman Dickinson of Melbourne, Fla., aren't the only ones betting big on the idea. Last April, his company raised $160 million to start construction on the Rialto plant through the sale of bonds to Deutsche Bank. Earlier this year, it raised $42 million more from investors including Citigroup Inc. and the Masdar Clean Tech Fund, a United Arab Emirates venture fund.

In May, EnerTech was selected to build a small demonstration plant in Masdar City, a first-of-its-kind city being built in the United Arab Emirates that uses only renewable energy.

"Investing in EnerTech Environmental is a key part of the overall Masdar ambition," Alex O'Cinneide, a partner in the Masdar Clean Tech Fund, said in a statement. "Their innovative technology is the kind of smart clean technology that has the potential to alter the way developers consider future projects."

This isn't the first time somebody has tried to turn sludge into something more beneficial. In states including Georgia, Texas and Florida, cities operate sludge-incineration plants that produce power or ash that can be used as fertilizer.

About two decades ago, officials spent hundreds of millions of dollars on a sludge processing operation in Los Angeles that was supposed to do exactly what EnerTech's plant is supposed to do — turn sludge into fuel. That project, however, failed miserably.

EnerTech's Bolin is quick to point out that his project is much different. The so-called "Carver-Greenfield" project back then used oil and forced evaporation to separate biosolids from sludge, but the process gummed up pipelines and ultimately shut down the system.

"It was much more complicated," said Bolin, who wasn't involved with that project. "We dumbed it down into what's actually a very simple process."

Through a system of pipes and tanks, EnerTech's plant will essentially heat up and pressurize biosolids to the point where they react and break down into carbon and gas. The resulting mushy "slurry" mixture is dried and turned into "e-fuel."

Still, nobody is absolutely sure EnerTech's "SlurryCarb" process will work on the scale planned here. The company has tested the process only with much smaller demonstration plants in Atlanta and in Japan — tests that Bolin is quick to say worked out better than expected.

Local officials here say they aren't too worried about the plant's prospects, especially since — unlike with the project 20 years ago — they don't have any money at risk up front.

"We're all hoping it works, but at this scale, it's never been proven," said Torres of the Orange County Sanitation District. "At least here, we're not investing a dime. If it doesn't work, we'll just go someplace else" with the sludge.