As WasteExpo kicks off, we thought it would be a good time to talk with Bruce Parker, president and CEO of the Environmental Industry Associations, about the state of the waste industry. Read on to his take on the effects of the recession on the industry, climate change legislation and NSWMA's new educational and public relations campaign.
How much impact is the recession having on the waste industry?
Our industry is relatively recession resilient, but this recession has left virtually no business sector untouched, including the solid waste and recycling industry. The drop in commercial and residential construction, and the dramatic decrease in commodity prices in late 2008 - which made recyclables less valuable - have negatively affected revenue and profits in varying degrees.
With consumption down, there is less garbage to haul and dispose. The landfill operators are like canaries in a mine because they know what’s happening to the economy before others. According to newspaper articles and other sources, landfill volumes are down all over the country.
But there also is good news. First, most companies have been effectively dealing with this recession in a variety of ways, including reductions in hours of operations at facilities, temporary or permanent layoffs, adjusting collection routes for greater efficiencies , raising disposal and other fees—and this applies to the public sector as well. And, let’s not forget about the waste equipment manufacturers, most of whom also have been hard hit by this recession.
The second piece of good news is that the solid waste industry is structurally and financially strong overall. One good barometer for this fact is the interest and availability of private equity money to help companies expand, finance acquisitions, recapitalize, etc., and there continues to be a lot of these private equity funds anxious to invest in the solid waste industry because of its stability.
Congress is working on legislation to address climate change. How big of a role could the industry have in the effort to mitigate climate change, and do you expect the legislation to affect the industry?
The industry is presently having a noticeable role in reducing greenhouse gas (GHG) emissions and promoting clean, renewable fuels.
Innovation and leadership from the solid waste industry is making it possible for Americans to use waste as a source of renewable and sustainable energy. Because waste-based-energy is becoming an important source of revenue for our industry, solid waste companies will continue expanding energy production. One of the largest waste companies in the U.S. recently announced a goal of doubling its landfill-gas-to-energy production during the next decade.
In some cases, landfill gas is used to fuel turbines and generators at landfills where the electricity can be delivered to the local power grid. It also is piped directly to nearby manufacturing plants, schools, government buildings and other facilities to heat and cool buildings and power machinery. In other cases, the gas is processed and turned into transportation fuel, such as compressed natural gas and liquefied natural gas, to power garbage trucks.
According to the U.S. Environmental Protection Agency (EPA), as of April 2009, the solid waste industry operated 470 landfill-gas-to-energy projects in 43 states. These efforts deliver more than 260 million standard cubic meters per day of landfill gas and 1,500 megawatts of electricity to corporate and government users, enough renewable energy to power or heat 1.6 million homes.
Why is this so important? First, because EPA estimates that using methane from landfills as a source of energy provides an annual environmental benefit that is equivalent to eliminating the GHG emissions produced by burning 195 million barrels of oil. Second, landfill-gas-to-energy also is helping advance our national security goal of reducing our dependence on foreign oil.
Importantly, the EPA has identified another 520 landfills as potential candidates for similar energy projects, and continued innovation will allow us to expand the use of landfill gas for energy. For example, a “bioreactor” is the name for a landfill where liquids are added to the waste and re-circulated to make the trash decompose faster. It is a promising new technology that speeds the production of landfill gas.
Landfill owners and operators are beginning to install solar panels to generate renewable energy. One such project in Texas is expected to produce nine megawatts of power, enough to power 5,500 area homes. Our members are working with truck manufacturers to develop a new generation of waste collection trucks that will use alternative fuels and employ the latest technologies to save fuel, reduce GHG emissions and improve overall air quality. A waste equipment manufacturer recently introduced a solid waste compactor that uses solar energy.
With regard to whether the climate change bill, “The American Clean Energy and Security Act of 2009” (H.R. 2454), will affect the industry, the answer is “yes.” But, I don’t believe it will have a major impact because 85 percent of U.S. GHG emissions are carbon dioxide (CO2), and the bill is primarily directed at sources of CO2, such as power plants, transportation and industrial processes. Moreover, in the bill’s final form methane sources are not subject to a cap. The bill is complex and over 600 pages, and we are still working our way through it so we can evaluate with certainty what impact it will have on landfills.
Other than climate change and the recession, what are the biggest issues facing the solid waste industry?
As you know, solid waste is a local business, and that’s why NSWMA has 23 state chapters. But we are highly regulated at the state and local level, so we are constantly lobbying against unreasonable and/or unnecessary laws and regulations. This is especially true when, as now, states and local government are struggling with record budget deficits and looking for sources of revenue. Guess who they see as a piggy bank — us! In the last year and a half, local governments in over fifteen states have considered replacing existing free market competition for solid waste collection with so-called “franchise,” “district,” or “organized collection” systems. Some of these situations involve residential routes, while others, most notably the city of Chicago, involve commercial collection. Franchises include a franchise tax.
Landfill taxes always have been an issue, but are now more so than ever because of the budget crisis facing most states and local governments. The Wisconsin Legislative Joint Finance Committee has proposed adding a $7.10 per ton tax to the state’s existing $5.90 disposal tax, which, if passed, would bring the tax to $13.00—the highest in the country. One of the motivations behind the tax is to discourage out-of-state waste. The Pennsylvania legislature is proposing a new “recycling and waste management” tax of up to $4.00 per ton on waste generated within its borders. In all, taxes on a ton of garbage in Pennsylvania include $2.00 to a recycling fund, $4.25 for an environmental stewardship fund and an average of $2.33 for municipal host fees, for a total of $8.58. A $4.00 increase on top of that would represent a 47 percent hike to $12.58 per ton. Ohio, Florida and one or two other states also have proposed landfill taxes.
Last, flow control continues to be an issue. As of the end of May of this year, local governments in about 20 states have considered or implemented flow control. Some flow control laws were reinstated following the U.S. Supreme Court’s decision in United Haulers v. Oneida-Herkimer, which upheld flow control in instances in which the facility is owned and operated by local government. Other laws were defeated or put on hold due to strong opposition from NSWMA members and local business coalitions, and others were implemented.
At the federal level NSWMA and some of its larger members have been very active in evaluating or commenting on proposed EPA regulations. We have submitted comments on the proposed rule for reporting greenhouse emissions and on proposed revisions to AP-42 emission factors for municipal solid waste landfills. We also have evaluated proposed changes to the federal fuel standard to make sure that solid wastes qualifies as a renewable fuel.
NSWMA launched its “Environmentalists.Every Day” campaign within the last year. Explain to the readers the purpose of the campaign and what they need to do if they are interested in participating.
In a nutshell, the purpose of this educational campaign is to help the public, the media, and state and local elected and appointed officials better understand the vital role we play in their lives. Over time, our goal is to create a bank of goodwill that our members and others can draw upon when solid waste issues are on the table, such as permitting or expanding a landfill or transfer station, or opposing flow control or service fees and disposal taxes. The list goes on!
Importantly, we also have materials directed to employees of member companies so they can better understand, appreciate and feel proud of the essential role they play in the industry. The broad campaign messages are:
• We provide an essential service in local communities across the country by protecting the environment and public health.
• We are generating clean, renewable energy from solid waste.
• We are leaders in recycling and composting.
• We have developed innovative landfill technologies to protect the environment.
• We are an industry that uses science and technical expertise.
• We contribute to our local communities economically, socially and environmentally.
For attendees wishing to know more about the campaign please attend the “Environmentalists. Every Day. — Improve Your Community Profile” boxed lunch that will be held on Tuesday, June 9, from 12 p.m. to 1:30 p.m. in Rooms S231-S233 of the Las Vegas Convention Center. You should also go to our website: http://www.environmentalistseveryday.org/spreadtheword
What do you want the attendees to take away from Waste Expo?
A positive feeling that they had a great time, relaxed, and felt the good vibrations of being with friends and peers bonded together in knowing that they belong to the best industry in America.