I wrote a letter to a local biomass energy company, Taylor Biomass Energy asking them if they had considered converting waste into CNG and here was their very quick and interesting reply:

Dear Sir,
We have not considered the use of methane from waste for transportation use for a number of reasons.  First, such recovery requires that all waste go to the landfill - contrary to our primary goal of keeping material out of the landfill.  Secondly, the production of methane by a landfill, is via the production of landfill gas, a mixture of methane, carbon dioxide, and other contaminants.  Recovery of methane from the mixture would be quite expensive and energy inefficient.  Finally, gasification of the sorted and separated wastes provides the option to produce a variety of liquid fuels by way of synthesis of the gas.  In this manner, such products as ethanol, mixed alcohols, or other fuel can be produced with higher overall efficiencies and with little residue remaining to be disposed of in the landfills.

I hope this answers your questions.

Regards,
Taylor Biomass Energy

It appears that the idea of a closed system for Sanitation vehicles specifically using CNG may be a bit optimistic given current technology, but the idea of making some type of transportation fuel may be practical.

So what should Sanitation vehicles be powered by? Well, as we know, the North American natual gas situtation may deteriorate quicker than the global oil markets. And even after the installation of LNG facilities in our area, it is hard to predict whether that market will be more or less reliable than global oil markets.

The most important piece of information missing is the emissions difference between the 26 CNG trucks in operation and Ultra Low Sulphur Diesel fueled trucks.

What about methane from the city's STP's instead of landfill gas. I remember when I lived in Bay Ridge (15 years ago) and saw the flares from the Owls Head STP. I hope the city is capturing that gas for reuse.
I remember reading in Kate Asher's wonderful book "The Works" that they burn that to generate electricity to run the plant and send some out to the grid
...contrary to our primary goal of keeping material out of the landfill....

Yes, don't need CNG based garbage trucks. Need less garbage. A LOT LESS. Garbage is not an item of commerce, meaning the Commerce Clause does not apply. States should simply ban the incineration or landfilling of "trash". Eliminate trash. Easier said than done, but must be done.

cfm

It is hard to get economical progress by hitting the problem with the lawbook.

Over here in Sweden there has been a success with taxing landfills, it has mostly led to large scale garbage incineration that turns the waste into heat, chilling and electricity.
It has also somewhat helped the sorting of garbage usefull for  biogas production or reuse within he building industry and so on.

Our greens realy dont like this since the idea were that there would be no garbage and instead we have more then ever but soon very few new landfills. They are arguing for taxation on garbage incineration, I do not think this will work.

My guess is that we will have this garbage stream untill we hit a depression and people no longer can afford to buy as much new things and parts of the wastes turn valuble.

My recommendation is to in the meantime try to get misc products to contain less harmfull substances such as certain flamability inhibitors and become easier to burn and recycle.

Getting people to not make garbage is a loosing battle, try to get them to make better garbage instead.