This report analyzes the capital and environmental cost of energy recovery from municipal sludge and feedlot manure. Literature on waste processing and energy conversion and interviews with manufacturers were used for baseline data for construction of theoretical models using three energy conversion processes: anaerobic digestion, incineration, and pyrolysis. Process characteristics, environmental impact data, and capital costs are presented in detail for each conversion system. The energy recovery systems described would probably be sited near large sources of sludge and manure, i.e., metropolitan sewage treatment plants and large feedlots in cattle-raising states. Although the systems would provide benefits in terms of waste disposal as well as energy production, they would also involve additional pollution of air and water. Analysis of potential siting patterns and pollution conflicts is needed before energy recovery systems using municipal sludge can be considered as feasible energy sources.