Constructing the Future

Cheryl L. Dunson

New technology and old mindsets, foreign investors and consolidation - these factors and a myriad of others will continue to affect the shape of solid waste's future.

But with its foundation deeply rooted in regulatory and legislative compliance, the solid waste industry is geared for growth and destined to remain dynamic in the coming years, say industry leaders. However, successfully meeting the challenges and embracing the opportunities of the new millennium will depend greatly on the ingenuity and initiative of the companies and individual pioneers shaping today's industry.

Most likely, the technological advancements will continue to dramatically affect the landscape, says John Skinner, executive director and CEO of the Silver Spring, Md.-based Solid Waste Association of North America (SWANA). For example, bioreactor landfills are helping to degrade wastes more rapidly. "This concept already is being tested in several innovative demonstration projects and could result in a number of significant economic and environmental benefits for landfilling," the SWANA chief says. "By increasing landfill life and reducing the time and costs of post-closure care, bioreactor landfills may be the next great advance in landfill technology, which could permanently change the way landfills are designed and operated."

Technology Over Regulation Steve Jones, a full-time member of the California Integrated Waste Management Board (CIWMB), Sacramento, Calif., envisions the bioreactor as a concept with unlimited potential. "There's a lot of work to be done on bioreactors. ... We want to know the benefits to the environment and to the rate payer. If we can accelerate gas generation and, at the same time, minimize the impact of leachate, maybe at the end of the 30-year closure/post-closure commitment, we will have managed the facility in such a way that it doesn't pose a threat to the environment and, in turn, provided a cheaper method of landfill disposal. We probably need to get away from the hammer as regulators and keep working on cooperative ways to ensure health and safety wherever possible," the garbageman-turned-regulator says.

Today, 84 percent of Americans have access to a recycling program. The national recycling rate is 28 percent, three percent above EPA's goal. The misadventures of the 1987 garbage barge, Mobro, did more to increase recycling in America than all of the combined efforts of legislative delegations and environmental groups. With the nation focused on and fearing an apparent lack of disposal space, an emphasis to recycle and reduce waste soared.

"The actual and perceived shortfalls in landfill disposal capacity drove a lot of the investments in terms of public sector [recycling] collection and private manufacturers diverting recyclables from disposal for reuse," says Will Ferretti, executive director of the National Recycling Coalition, a Alexandria, Va.-based non-profit organization dedicated to the advancement of recycling, source reduction, composting and reuse. "The fact that basic industries in the United States now utilize, to a significant degree, recovered materials as part of their feed stock indicates that recycling development and innovations have transformed an industrial economy from a virgin base to a recovered industrial economy."

California is a prime example of a state that takes recycling seriously. According to statistics provided by CIWMB - an entity responsible for protecting the public safety, health and environment through waste prevention, waste diversion and safe waste processing and disposal - California disposes of 1 ton of waste per second and generates about a 1.6 tons of waste per second. Of the 56 million tons generated annually, 19 million tons are diverted to waste reduction and reuse programs.

Obviously, this didn't happen overnight. But "because we're a prosperous state, we have the seventh largest economy in the world and generate an incredible amount of waste per person per day," Jones says. "Our recycling rate a year ago was about 33 percent. Since then, we've placed a huge emphasis on organic and construction and demolition [recycling] programs."

One initiative currently being considered seriously by CIWMB members is regrinding construction and demolition (C&D) waste and incorporating it into road base. Another state effort is matching good composting programs with an eager agricultural industry.

"In the beginning, our recycling efforts emphasized residential and commercial programs," Jones says. "That's had a big impact because people have accepted the idea that we have to manage our waste in an integrated system. That was easy, low-hanging fruit. Now we need to promote the idea of buying recycled. If we don't have people buying new products made with recovered material, we're not completing the circle and we'll wind up with warehouses acting as landfills instead of landfills acting as landfills."

Some challenges for the new millennium and beyond include reaching EPA's recycling goal of 35 percent by the next decade, continuing to develop improved methods of collection for MSW service providers and giving credit to recycling's true value to the economy, Ferretti says.

"There's an opportunity to reach [35 percent], but it will require that we not backslide on the collection side," Ferretti cautions. "We must be mindful not to lose programs due to collection cutbacks and not get into circumstances where the collected material has no value."

Jones echoes Ferretti's concerns. "I see the public demanding the continuation of the integrated approach because they feel like it's part of their environmental ethic," the former garbageman says. "Our challenge is to make recycling easier as an industry while making it cost-effective. If we don't have people using the system and we don't make money because our costs are too high, we won't meet the mandates."

"We also need to make a more strenuous case that recycling conserves natural resources and contributes to the improvement of environmental quality while making a meaningful and significant contribution to the economy," Ferretti says. One of the most common ways municipalities drive costs through the proverbial competitive roof is by co-mingling collection, which results in contamination and material with little or no residual value, he says.

Pointing to the steel industry, which, after being written off for dead in the 1970s, made a resurgence because of new technology, Ferretti says. "Recycling had led to the creation of jobs and business opportunities, and has helped to preserve business. These are important attributes that always have been derived from recycling, but they've not been given the play they deserve."

Verti-gration and Consolidation While recycling still vies for attention, one thing is for certain - solid waste management now has a recognized professional presence. The rapid ascension of formidable Houston-based waste giants, Waste Management Inc. (WMI) and Browning-Ferris Industries (BFI) in the 1960s, and their recent consummation by smaller counterparts helped spur this movement, especially as other companies began to follow in the footsteps of their larger predecessors.

"[WMI and BFI] provided the initial leadership for technology development and innovation in the industry, although now many independent companies operate at this level," says Bruce Parker, president and CEO of the Environmental Industry Associations, Washington, D.C. "We have mechanized and automated collection equipment, as well as modern personnel management practices, environmental auditing and worker health and safety compliance protocols."

Vertical integration also has taken on new meaning. Most commonly associated with the facets of a local solid waste management plan, integration now has the means of controlling your destiny through the ownership and/or operation of vehicles and transfer stations which in turn feed disposal facilities. While not an accomplishment for every company, vertical integration has been successful for some who know their niche and limitations, says Jerry Schwartz, Waste Age magazine's former publisher and now the publication's publisher emeritus.

"From haulers making sure they bought landfills to recyclers purchasing scrap, there have been few companies that have had success with vertical integration," Schwartz says, but "particularly in the recycling industry, you don't buy out of your own industry and think you know what you're doing."

Market volatility and volume are the two factors to overcome when managing downward pricing trends, the former publisher points out, noting that this is what the scrap metal industry has been able to accomplish.

"We've seen a lot of companies sign municipal contracts thinking that pricing would continue to increase with occasional short declines," Schwartz says. "The down trends really have hurt the solid waste collection providers who can't afford to hold on to commodities until pricing improves, like members of the scrap industry have been able to do."

With the private sector gaining more control of the marketplace, Parker points to the development of trade organizations which continue to play significant roles in advancing solid waste issues. "Trade associations provide constant opportunities to increase education, become involved in state and local political initiatives, influence legislation and regulations, and in- crease the professionalism of the industry," the EIA chief says.

Merger Mania or Mayhem? Though dizzy from the recent flurry of consolidations and acquisitions, industry insiders predict bright horizons for both new and emerging companies. Speculation abounds concerning future monopolistic trends, but N.C. Vasuki, CEO of the Delaware Solid Waste Authority, Dover, believes the marketplace will be an eventual and natural regulator against such practices.

"One of our local haulers who recently sold out to BFI used to tell me, 'It doesn't matter how rich I get, I can only eat one steak at a time,'" Vasuki recalls. "I can see a trend where more small companies will be entering the business and competing with the bigger companies. Coming from a small state like Delaware, I'm mindful of our slogan: Small is beautiful."

Vasuki speculates the advent of new companies entering the industry will result in an increased quality of the nation's overall disposal system and customer service. "Naturally, we'll have fewer disposal locations and [air] emissions will become an issue," he says. "But, there are optimum efficient sizes for companies in most industries. Any time you've got a very large system, it begins to lose control of its operations in different regions. It's like everything else. When you get too big, you topple over. Then, the management style is to get rid of your non-profitable areas, downsize and concentrate on the profitable segments. A good example is Ft. Lauderdale, Fla.-based Republic Waste Services, which recently dropped its New York City operations."

Parker agrees. "Without question, the solid waste industry will enter a new and exciting cycle of regeneration, bringing new people, leadership and energy into a great industry," he predicts. "Even though consolidation has been unusually dramatic over the past few years, we already are beginning to see new companies coming into the marketplace, which follows the historical model of contraction and expansion."

In particular, Parker adds, the industry is witnessing former managers and operational employees of publicly traded companies entering the marketplace when their non-competition agreements expire.

Though still unclear on the eventual impact of consolidation in the recycling arena, Ferretti says it will have implications to recycling collection and source separation. "I see the integration of large companies in the materials processing sector creating new processes and, through other feeding manufacturer subsidiaries, creating their own feed stock."

Competitiveness and maximizing marketshare will also be factors for solid waste equipment manufacturers, which often follow in the consolidation footsteps of their customers. "I see some of the manufacturers buying others and broadening their product line to offer customers a complete source of service, as well as expand their geographic area of service," Schwartz predicts. "There are opportunities and savings in integrating engineering and purchasing."

Foreign Flavors Several experts foresee the nation's solid waste industry taking on a more global attitude during the new millennium. Whether through the presence of foreign companies purchasing American corporations or addressing solid waste issues on a more global scale, the facets of the nation's solid waste providers will take on a foreign flair.

"The foreign ownership of U.S. solid waste companies dramatically underscores the mega trend of globalization," Parker says. He notes the recent acquisition of publicly traded Superior Waste Services, West Allis, Wis., by French multi-national company, Vivendi, Paris, which boasts subsidiaries in solid waste, water and wastewater treatment, electric power and energy. Suez Lyonnaise is another French multi-national company and Vivendi competitor that owns solid waste subsidiary SITA, Nanterre, France, which has a partnership interest in BFI.

Schwartz predicts a foreign presence in the solid waste industry will mirror that of the wastewater treatment industry.

"[Foreign companies] get better profitability operating in the United States," he says. "You'll see more overseas companies buying up more and more of our waste companies. They're buying a known commodity, and they know the business. Plus, they keep management intact and come up with some pretty good ideas because they've been running their own waste businesses abroad."

Vasuki cites India as an example of the future trend in maximizing uses of waste material. "In India, they need about 1.5 to two barrels of oil per year per person," he explains. "If their demand increases just half a barrel per person per year, you're looking at 5 billion barrels. We ought to look in the future to extracting materials from our waste stream and maximizing the use of them. This would include mining our existing closed landfills and extracting materials."

As the industry takes a few management tips from its European peers, Parker predicts a huge shift from the linear model of product manufacturing to a circular model in which products are specifically manufactured with as high a percentage of recyclable components as possible so that greater product re-use will occur and less waste will be generated.

"In other words, the United States will catch up with the European 'take back' program," Parker says. "We are beginning to see this now as companies such as IBM, DaimlerChrysler and others are manufacturing products to be recycling friendly."

SWANA's Skinner predicts there will be a search for new energy sources based on renewable fuels stimulated by an increased interest in energy derived from solid waste. "[Organic wastes are] renewable biofuels which, if substituted for fossil fuels, can reduce greenhouse gas emissions," he says. "Programs put in place to deal with global warming will improve the economic feasibility of both landfill gas recovery and the utilization of heat and electricity from waste-to-energy plants."

As a whole, corporate America will embrace global stewardship and re-evaluate manufacturing processes to improve its impact on the environment.

"I suspect and hope the industrial ecology construct will become a fundamental way manufacturers will practice product stewardship so that they substantially reduce insults to the environment," Parker says.

Schwartz is in agreement with his industry peers in thinking that the future will be challenging and demanding, yet overall, bright.

"I'm quite optimistic about the solid waste industry," he says. "I see a greater population in America, which translates into more commercial and industrial waste. And the economy is changing into an e-commerce retail environment, which means there will be more product packaging which means there'll be more waste.

"And, when you consider the area of sanitation, he continues, "more people have been cured by the garbageman than the doctor."

Stay tuned. The new millennium is here and the garbageman's in the house.