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plants are concentrated in the major manufacturing areas of the country and employ approx-
imately 190,000. The office, computing and accounting machines segment is changing rapidly
due to innovations in production technologies and electronic applications. This segment employs
about 175,000 people.
b. Segmentation
The two segments of the special machinery manufacturing industry are analyzed separately
in this report.
c. Structure
The office, computing and accounting machines segment has approximately 1,000 plants
and a moderately high concentration ratio; in contrast, to the special machinery industry
segment has 4,000 plants and a low concentration ratio (Table VIII-105).
d. Supply and Demand
The price elasticity of demand for office, computing and accounting machines is moderate,
due to a moderate degree of product substitution coupled with import competition that varies
from moderate to high, depending on the product. The situation is similar for special industry
machinery, except that some product groups face negligible import competition and product
substitution. The expected annual growth in demand through 1981 runs from 5% to 99c depending
on the product. No supply constraints are anticipated in the near term.
e. Profitability
Since 1972, the profitability for these two segments of special machinery manufacturing has
fluctuated with the state of the economy while generally trending upward. As of 1976, the median
after-tax profit on sales was about 4.5% for each of the segments while the median profitability on
net worth was roughly 11.5% for both segments (Table VIII-106).
/. Capital Investment
New capital expenditures for the office, computing and accounting machines segment
increased 67% between 1972 and 1976. Over the same period, in the special industry machinery
segment, new capital expenditures increased 34% (Table VIII-106).
2. Economic Impact on Special Machinery Manufacturing
a. Cost of Compliance and Economic Impact of Option B
The estimated incremental annual cost of compliance under regulatory Option B to go from
Level I to Pathways Level III is shown in Table VIII-107. The cost of compliance as a percent of
production value for the special machinery manufacturing industry segment is 0.4% and for the
office, computing and accounting machine segment, 0.1%. The range of error is -23% to +55%.
Under this regulatory option, plant closures and other adverse economic impacts are not
expected (Table VIII-108). Job losses in the special machinery segment are possible.
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b. Cost of Compliance and Economic Impact of Option A
The estimated incremental annual cost of compliance under regulatory Option A to go from
Level I to Pathways Level III is shown in Table VIII-109. The cost of compliance as a percent of
production value for the special machinery segment is 1.7% and for the office, computing and
accounting machine segment, 0.3%. The range of error is from -40% to +56%.
Under this regulatory option, plant closures are not expected (Table VIII-110). Job losses in
the special machinery segment are possible.
c. Cost of Compliance and Economic Impact of Option C
The estimated incremental annual cost of compliance under regulatory Option C to go from
Level I to Pathways Level III is shown in Table VIII-111. The cost of compliance as a percent of
production value for the special machinery segment is 0.2% and for the office, computing and
accounting machines segment it is 0.04%. The range of error is from -23% to +59%.
Under this regulatory option, plant closures and other adverse economic impacts are not
expected to take place (Table VIII-112).
P. ELECTRONIC COMPONENTS
1. Characterization of Electronic Components
a. Industry Description
The electronic components industry encompasses the manufacture of six different com-
ponents which are used in a variety of final products including radios, computers, and navigation
systems. The structure of this industry is complicated by the frequency of technological in-
novation, the variety of product markets, the volatility of demand, and the interrelationships
between component markets. The major components manufactured in this industry are electron
tubes, semiconductors, capacitors, resistors, inductors, and integrated circuit packages.
b. Segmentation
For purposes of this project, the electronic components industry has been analyzed as a
single entity.
c. Structure
There are approximately 3,000 plants in the electronic components industry. The four-firm
concentration ratio varies considerably among products but the average is about 45% (Table VIII-
113).
d. Supply and Demand
The growth in demand is expected to be 6% to 7% per year in real terms for the electronics
components industry through 1981. The price elasticity varies from low to moderate, because
259
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evaluated. No capacity constraints are anticipated over the forecast period.
e. Profitability
The profitability of the electronic components industry reflects the general state of the
economy in addition to the industry's shifting product mix and volatile demand. The median firm
in the industry earned almost 5% on sales and just over 12% on net worth in 1976 (Table VIII-114).
/. Capital Investment
New capital expenditure in the electronic components industry grew rapidly between 1972
and 1974, and after a substantial drop in 1975, had yet to recover fully the 1974 high by 1976
(Table VIII-114).
2. Economic Impact on Electronic Components
a. Cost of Compliance and Economic Impact of Option B
The estimated incremental annual cost of compliance under regulatory Option B to go from
Level I to Pathways Level III is shown in Table VIII-115. The cost of compliance as a percent of
production value for the electronic components industry is 0.3%. The range of error is from -26%
to +57%.
Under this regulatory option, plant closures and other adverse impacts are not expected
(Table VIII-116).
b. Cost of Compliance and Economic Impact of Option A
The estimated incremental annual cost of compliance under regulatory Option A to go from
Level I to Pathways Level III is shown in Table VIII-117. The cost of compliance as a percent of
production value for the electronic components industry is 1.1%. The range of error is -40% to
+57%.
Under this regulatory option, plant closures and other adverse economic impacts are not
expected (Table VIII-118).
c. Cost of Compliance and Economic Impact of Option C
The estimated incremental annual cost of compliance under regulatory Option C to go from
Level I to Pathways Level III is shown in Table VIII-119. The cost of compliance as a percent of
production value for the electronic components industry is 0.2%. The range of error is -25% to
+58%.
Under this regulatory option, plant closures and adverse economic impacts are not expected
(Table VIII-120).
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Q. BATTERY INDUSTRY
1. Characterization of the Battery Industry
a. Industry Description
The battery industry consists of 125 firms which operate about 250 manufacturing plants.
However, the industry is dominated by 10 major companies. Although there are many small,
independent battery plants, close to 90% of the value of shipments comes from plants employing
100 or more persons. The battery industry also includes the captive plants of major original
equipment manufacturers.
b. Segmentation
The battery industry is segmented according to the major battery types: (1) storage (second-
ary) batteries; and, (2) primary batteries. The two main types of storage batteries are lead-acid
(typified by the SLI automotive battery) and nickel cadmium. The two principal primary battery
types are carbon-zinc and alkaline-manganese, used primarily in flashlights and radios.
c. Structure
There are approximately 230 storage battery plants, 200 of which are the lead-acid battery
type (Table VIII-121), The concentration ratio is 57% for storage batteries and 92% for primary
batteries. Product substitution is low for both segments, whereas import competition is low to
moderate for primary batteries and low for storage batteries. As a result, the price elasticity of
demand tends to be lower for storage batteries than for primary batteries.
d. Supply and Demand
A 3% increase in unit demand through 1981 is expected in the storage battery segment, and
a 2.3% per year increase is expected in the primary battery segment. Both these segments are
operating at about 80% of capacity, so there appears to be adequate supply over the foreseeable
future.
e. Profitability
The 10 major battery manufacturing firms are estimated to have an average after-tax profit
of about 4.6% of sales. The smaller companies have more difficulty in maintaining profitability
when faced with the capital costs of the new equipment needed to remain competitive as well as
the costs of meeting government regulations. In recent years, many of these small firms have
abandoned less-profitable manufacturing operations in order to distribute batteries purchased
from the major firms (Table VIII-122).
/. Capital Investments
New capital expenditures increased steadily for both segments in the 1972 to 1976 period
(Table VIII-122). Capital expenditures per sales dollar are greater for storage batteries than for
primary batteries.
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2. Economic Impact on the Battery Industry
a. Cost of Compliance and Economic Impact of Option B
The estimated incremental annual cost of compliance under regulatory Option B to go from
Level I to Pathways Level III is shown in Table VIII-123. The cost of compliance as a percent of
production value for the storage battery segment of the battery industry is 0.4% and for the
primary battery segment, 0.1%. The range of error is from -26% to +64%.
Under this regulatory option, plant closures and other adverse economic impacts are not
expected (Table VIII-124).
b. Cost of Compliance and Economic Impact of Option A
The estimated incremental annual cost of compliance under regulatory Option A to go from
Level I to Pathways Level III is shown in Table VIII-125. The cost of compliance as a percent of
production value for the storage battery segment of this industry is 1.7% and for the primary
batteries, 0.3%. The range of error is from -42% to +60%.
Under this regulatory option, plant closures and other adverse economic impacts are not
expected (Table VIII-126).
c. Cost of Compliance and Economic Impact of Option C
The estimated incremental annual cost of compliance under regulatory Option C to go from
Level I to Pathways Level III is shown in Table VIII-127. The cost of compliance as a percent of
production value for storage batteries is 0.4% and for primary batteries, 0.1%. The range of error
is from -25% to +64%.
Under this regulatory option, plant closures and other adverse economic impacts are not
expected (Table VIII-128).
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IX. CHARACTERIZATION AND IMPACT ON
HAZARDOUS WASTE TRANSPORTATION AND
HAZARDOUS WASTE MANAGEMENT FACILITIES
A. INTRODUCTION
This chapter contains a description of the types of facilities engaged in the transportation of
hazardous waste and a discussion of the economic impact of each of the three RCRA Options
upon the cost of transportation. Similarly, it contains a description of firms in the business of
hazardous waste management (treatment, storage and/or disposal of hazardous waste) and an
analysis of the impact of each of the three RCRA Options upon the price/cost of these TSD
services.
The analysis of total cost (Chapter VII) included the costs of compliance for both the
transportation and TSD activities. Further, the cost of compliance and economic impact dis-
cussed in Chapter VIII includes the impact upon generator industries of higher cost/prices for
hazardous waste transportation and treatment, storage and/or disposal.
The analysis of economic impact and cost/price increases includes only the direct impact of
the cost of compliance under each RCRA option studied. Potential shortages of TSDF capacity
and any associated price increases are excluded from this study.
B. CHARACTERIZATION OF HAZARDOUS WASTE TRANSPORTATION1
1. Introduction
The basic role of the transportation sector in the hazardous waste management network is to
convey hazardous waste from the point of generation to an off-site waste facility for storage,
treatment, resource recovery, and/or disposal. The modes of transportation involved in this
activity are: motor truck, rail, barge, air, and pipeline, with truck by far the dominant mode and
rail a distant second. The portion of hazardous waste transported by truck has been estimated as
over 95%, and hazardous waste quantities transported by air and pipeline are minimal. Therefore
this discussion focuses upon truck transportation.
2. Industry Description/Segmentation
Three groups of participants have been identified as transporters2 of hazardous waste. They
are:
• Generator/Transporter — Generators, including industrial, commercial, and gov-
ernmental organizations, that act as private carriers and self-haul hazardous
wastes, invariably by truck, to off-site waste management facilities.
1. The information in this section Is based upon Characterization and Economic Impact Assessment of Hazardous
Waste Transportation Regulations, report to the U.S. Environmental Protection Agency by Arthur D. Little, Inc.,
August 1978.
2. The transporter is, by definition, the party providing the motive power for the shipment. Thus, a generator of
hazardous waste who owns and loads a rail tank car is considered a Generator/Transporter only if that party also
operates the locomotive.
275
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• General Transporter — Common and contract carriers that transport hazardous
waste from the point of generation to the disposal destination.
• Disposal Processor/Transporter — Operators of hazardous waste management
facilities that act as contract or private carriers in transporting hazardous waste
from the point of generation to the final waste management destination.
These participants, especially the Generator/Transporter, generally do not view themselves
as being part of an industry devoted to hazardous waste transportation, and indeed these
transportation activities do not conform to the customary definition of an industry. Rather, they
view themselves as being engaged in an activity which is part of a larger set of business activities;
they engage in hazardous waste transportation because of convenience or for economic reasons.
General transporters are in the business of hauling cargo which is only sometimes hazardous
waste. Many of the waste management facilities (Disposal Processor/Transporter) are engaged in
waste transportation as a complement to their other waste management activities.
The choice of transport mode depends upon the distance of the waste management facility
from the point of generation, the frequency of collection, the environmental setting, the plans for
usage of the hazardous waste, and the like. For example, a firm located on or near a waterway
may utilize barge transportation. Or firms that have wastes transported more than 50 miles may
employ truck or rail services.
The following matrix below indicates the relative amounts of hazardous waste moved by
each combination of sector transportation mode.
Generator/ Disposal Processor/ General
Transporter Transporter Transporter
Air None None Very Small
Rail None None Moderate
Highway Small Large Large
Waterway None None Small
Pipeline Very Small Very Small None
3. Supply/Demand
The supply and demand elements of this sector are dictated by the quantities and charac-
teristics of the hazardous waste generated. A small firm generating a low volume of hazardous
waste is more likely to use its own trucks to transport the wastes off-site. Also, this may be the
case when contract transporters refuse to handle small quantities of waste. On the other hand,
firms generating high volumes of hazardous waste may require contract transporters to collect the
wastes daily, weekly, or as necessary, if they do not transport waste themselves.
Treatment, storage and disposal facilities (TSDF's) sell transportation service as a means of
obtaining a hazardous waste to treat or dispose. About 67% to 75% of disposal facilities also
provide transportation service. They also typically accept waste transported by generators and
transportation companies.
276
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Transportation companies hauling hazardous waste are predominantly trucking companies,
except for a few instances of barge transport or rail shipment of battery parts and other
miscellaneous wastes.3 For trucking companies, hazardous waste is but a small portion of their
total business and they view the shipment of hazardous waste in the same way as the shipment of
hazardous material.
Transportation companies can be contract haulers, in which case the price is a figure
mutually agreed upon by the generator or hauler. In some cases, particularly where interstate
transport is involved, the transport rate may be a tariff price, particularly for rail (non-bulk, tank
car) shipments and possibly also for some truck transport.
Treatment, storage and disposal facilities which provide transportation service often do not
break out the transportation charge. Where they do, the range varies widely, from $.075 to $1.00
per ton-mile, and there is no consistency from company to company for price variations. Since
TSDF's do not generally keep track of transport costs, the price for transport could be below the
average transportation cost per ton-mile under some conditions.
4. Profitability
Pro-forma financial statements, developed from a composite of sources are shown in Table
IX-1. Each of the sources was also based upon a composite of companies so there could be a
good deal of variability from company to company. However, the pro-forma financial state-
ments were consistent with investment costs and depreciation periods for truck equipment. A
trucking company also has other capital assets than trucks, which amount to 16% of fixed
assets. General and administrative expenses for this type of company amount to 15% of sales.4
In general, the financial risk perceived for a trucking company is less than that for a TSDF
of comparable size. Transport companies do not have the long-term liability of TSDF's, do not
have their pollution problems, and are more numerous (i.e., there is a greater experience base for
the evaluation of financial risk). Also, the assets of truck companies engaged in hazardous waste
transport are trailers and tractors which are fungible with those used in the transport of other
commodities. In simple terms, this means that if a bank must repossess a truck because of
payment default, there is a market for such vehicles so the bank has less at risk if the truck
company cannot meet its payment obligations. Trucking companies are generally able to finance
equipment purchase. Smaller companies may be required to put up more of a down payment than
larger companies (20% versus 10%) in the case of purchased equipment with bank financing.5
Also, the truck company has the option of leasing the equipment.
To contrast this with the financial characteristics of TSDF's (Section D), the latter can also
probably obtain similar financing for truck equipment but not for investments in incineration
equipment, pollution control equipment and landfill construction.
3. Generators own or lease the rait tank cars used for hazardous waste, representing the overwhelming bulk of rail
transport.
4. Motor Carrier Industry Financing, Regular Common Conference, Washington, D.C. 1968.
5. Ibid.
277
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TABLE IX-1
FINANCIAL PROFILE FOR TRANSPORTERS OF
HAZARDOUS WASTE
Income Statement
Revenue 100.0%
Expenses 84.2%
Depreciation 9.9%
Interest Income 1.2%
Interest Expense 1.7%
Profit Before Tax 5.5%
Tax 2.6%
Profit After Tax 2.9%
Balance Sheet
Assets Liabilities
Cash 8.6% Accounts Payable 15.8%
Marketable Securities 0.5% Long Term Debt 28.8%
Accounts Receivable 23.8% Equity 55.4%
Total Current Assets 33.1%
Fixed Assets 66.9%
Source: Derived by Arthur D. Little from Annual Statement Studies, Robert
Morris Associates, 1976 Edition and Motor Carrier Industry Financing,
Regular Common Carrier Conference, Washington, D.C., 1968.
5. Market Structure
There is potential substitution of one mode of transport for another and substitutability
among transportation services that could be provided by generators, transporters or hazardous
waste management facilities. In addition, some generators have the option of on-site disposal
which requires no transportation service. The decision for a generator to self-haul or use an
outside service is made at the plant level. Also, a plant generating a small volume of waste is more
likely to self-haul than a plant generating a large volume, because of the probable inability to find
a permitted contractor to handle a small quantity of waste, as well as the fact that off-site
disposal may be less costly, given the scale economies involved with disposal (Chapter V). The
nature of hazardous waste disposal and the role of hazardous waste transport in this process
indicate that the price elasticity of demand for the transportation activity is likely to be inelastic.
6. Capacity Utilization and Growth
While commercial TSDF's have been operating at about 50% of capacity in recent years,6
transportation equipment at TSDF's has been operated at 75% to 80% of capacity. Current data
describing the length of time trucks were utilized per day (8-14 hours) indicate that utilization is
Potential for Capacity Creation in the Hazardous Waste Management Services Industry, Environmental Protection
Agency PB-257 187, August, 1976, pp 11-12.
278
-------
closer to 100%. Generators who self-haul appear to have the lowest capacity utilization rates
because they typically make one short-haul per day. The implication of current capacity utiliza-
tion rates is that TSDF's can handle some expansion in hazardous waste transported without
purchasing additional equipment while many transporters would require additional equipment if
the amount of hazardous waste transported off-site increases significantly.
C. IMPACTS ON TRANSPORTATION SECTOR
1. Cost of Compliance by Truck Type
Under Options A and B, the increase in operating cost as a consequence of RCRA will be
greater for transportation of drummed waste and other waste that the truck operator must
manually handle during loading and unloading operations (Table IX-2). This is attributable to
the allocation of additional truck driver's time to have the manifest signed. The relative increase
is greater for truck Models 4 and 5 because they represent transportation of drummed waste, a
high annual mileage, scenario.
The increase in operating cost under Option C will be less than half of the Option A and B
cost because the manifest or shipping papers will no longer require a signature.
The EPA expects an annual hazardous waste spill incidence of about 200. The relatively
modest cost of spill clean-up used here amounts to from 3.2% to 4.5% percent or more of annual
operating cost, and the total cost of spill clean-up is estimated at $345,000.
2. Economic Impact of Options A, B and C
Two company financial models, one for a transporter and one for a treatment, storage and
disposal facility also engaged in transportation, were analyzed to determine the impact of the cost
of compliance with transportation activity regulated by RCRA.
a. General Transporter
To establish a baseline for gauging impact, the precompliance revenues consistent with
historic truck company rates-of-return and the revenues required to recover the cost of com-
pliance with RCRA were generated (Table IX-3). The precompliance price per ton-mile implicit
in the model is $0.122 for the 14-truck composite.
The effect of compliance is measured in two ways:
(1) The decrease in return on capital (profitability) if rates do not increase; and
(2) The increase in revenues (prices) necessary to recover the cost of compliance, and
earn the historic rate of return.
In the absence of a price increase, profitability will decline by 19% under Options A and B.
However, an increase in revenue of 3.4% overall is needed to maintain the historic rate of return.
The impact of compliance upon the transportation company, assuming a balanced mixture of
vehicle types, is between those for the high impact and low-impact models.
279
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There could be a differential impact upon rates that generators pay if the differential cost
impact per truck, type or trip is precisely reflected in rates and this will cause a higher rate
increase for short-haul, low-volume drummed waste generators.
6. Treatment, Storage and Disposal Facilities (TSDF's)
In addition to the direct costs of owning and operating trucks, TSDF's have other expenses
and pricing policies which can result in a different impact on rates than indicated by examining
trucks alone. An increase in truck expenses can be offset by increases in revenues from transpor-
tation activities, and/or disposal operations.
A change in transportation expenses due to related compliance activities will require a lower
increase in total revenue required to recover costs than for the transportation company. The
impact of the cost of compliance with RCRA was measured in the same two ways as for the
general transporter.
Under Options A and B the decline in profitability in the absence of a price increase will be
4%, and a price increase of 0.7% is required to cover the cost of compliance with RCRA
transportation activity (Table IX-3). The impact on the TSDF produces a lower decrease in profit
than for the transportation company because transportation represents only 22% of the former's
revenues.
D. CHARACTERIZATION OF TREATMENT, STORAGE AND
DISPOSAL FACILITIES
1. Introduction
Treatment, storage and disposal facilities constitute an industry which is small and frag-
mented. The industry arose as environmentalists, state agencies and local governments, as well
as the EPA, became more aware of the danger posed by casual disposal of hazardous wastes.
2. Industry Structure
As of 1975, there were 95 corporations operating 110 TSDF's7. In addition, some municipal
facilities are also designated as handling hazardous wastes. About 43% of the facilities are large
common stock corporations or subsidiaries of common stock corporations while another 40% are
closely held corporations (Table IX-4). The former group controls 65% to 70% of industry
revenues.
The corporations which are not closely held tend to be larger and part of multi-facility
operations. The large TSDF corporations combined accounted for 47 sites (43% of the total) and
65-70% of revenues in 1975.8
In 1975, sales revenue from hazardous waste operations ranged between $35,000 and $12
million per firm; the median sales value was $1 million (Table IX-5). In the same year, total
7. Potential fur Capacity Creation in the Hazardous Waste Management Services Industry, Environmental Protection
Agency, PB 257-187, p. 7.
8. Ibid
282
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TABLE IX-4
FORM OF OWNERSHIP
TREATMENT, STORAGE AND DISPOSAL FACILITIES
1975
No. of % Industry
Form Facilities % Total Revenue
Common Stock Corporation 16 15 .
( 65-70
Division/Subsidiary of I
Another Corporation 31 28
Closely Held Company 54 49 )
> 30-35
Municipally Controlled 9_ 8_ *
110 100
Source: Potential for Capacity Creation in the Hazardous Waste Management Service
Industry, Environmental Protection Agency, P.B.-257-187, p. 9
TABLE IX-5
DISTRIBUTION OF COMPANIES BY SALES
TREATMENT, STORAGE AND DISPOSAL FACILITIES
1975
Sales Volume % Firms
Up to $100,000 19
$100,000-$500,000 21
$500,000-$1,000,000 15
$1,000,000 - $2,000,000 31
$2,000,000 - $5,000,000 10
$5,000,000 or greater 4
Median Value = $1,000,000
Source: "Potential for Capacity Creation in the Hazardous Waste Manage-
ment Service Industry," Environmental Protection Agency, PB-257-
187, August 1976.
283
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employment was about 2,000 in TSDF's, with about 230 of these classified as professionals.9
Approximately 175 of these employees were chemists or chemical engineers with the remainder of
the professionals being in sales, accounting, and management.10
3. Market Structure
Barriers to entry/expansion described by firms in the hazardous waste management in-
dustry include:
• Uneven enforcement of regulation, producing price pressure compared with non-
environmentally adequate disposal;
• Competition from municipal disposal sites (forcing price downward);
• Siting constraints, preventing expansion of old sites or opening of new ones; and
• Resistance from residents of an area to locating a TSDF nearby.
4. Supply and Demand Characteristics
TSDF's provide disposal and treatment of hazardous waste in the form of secure landfills,
landfarms, incineration, chemical treatment, and, in some cases, recycling. Sanitary landfills,
deep well injection and ocean dumping services are generally not adequate methods of hazardous
waste disposal. In addition, inadequate disposal service is said to be provided by illegal dumpers.
Some facilities offer a full range of disposal and treatment services whereas others offer only one.
Similarly, some facilities will accept a wide variety of wastes whereas others are quite restrictive
as to what they will accept for treatment.11
The prices of treatment, storage and disposal services "often include ... transportation,
storage, actual treatment and disposal."12 Other factors which cause differences in disposal cost
include form (solid, liquid, concentrate), and container characteristics (type, condition, etc.),
and these factors can cause greater variation in disposal price than the method of disposal.
Companies surveyed reported that prices for treatment or disposal are based on cost and that
competition forces the industry to maintain low prices.13 Premium pricing is possible in areas
where regulations are strictly enforced.14
Generators of hazardous waste (Chapter VIII) purchase hazardous waste disposal services
rather than self-dispose for a variety of reasons. First, a generator may not have available land to
construct a landfill or other treatment/disposal process. Second, a generator may not have
sufficient volume of waste to enable self-disposal for a lower price than a TSDF can do so. Third,
a generator may wish to reduce the liability associated with operating a disposal facility itself.
Hazardous waste disposal services can be purchased through a long-term contract or on a
spot basis. The former is more likely for a regular type and steady volume of hazardous waste.
Spot disposal is more likely for an unusual or non-regular hazardous waste.
9. Ibid, p. 21.
10. Ibid.
11. Ibid.
12. Ibid, p. 26
13. Ibid, p. 29
14. Ibid.
284
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The industry capacity is concentrated in the midwest, Region V (Table IX-6). Resource
recovery services are offered by many TSDF's and while recovery operations account for up to
20% of waste volume, they can produce up to 40% of facility revenue.
Of the total 7,103 thousand gallons per day of capacity, one-third takes the form of chemical
treatment, 24% is "secure landfill," 20% is resource recovery capacity, 13% deep well injection
and 10% incineration (Table IX-6). The overall capacity utilization rate was 58% and thus some
4.1 million gallons of hazardous waste were disposed in TSDF's in 1974. There is considerable
variation in capacity utilization among disposal methods and among regions.
While "secure landfill" capacity is listed in most regions, these landfills will not all be in
compliance with provisions of RCRA. According to EPA listings of TSDF's,15 there are seven
secure landfills outside the State of California, located as follows:
Illinois (1)
Missouri (1)
Nevada (1)
New York (2)
Texas (2)
As a result, most landfills will incur costs associated with technical requirements for landfills,
including the requirements for monitoring and leachate collection.
5. Profitability
There is a wide range of facility size in terms of revenue in the hazardous waste management
industry. An EPA contractor who collected financial data classified the industry into:16
• Firms whose main objective was hazardous waste management; and
• Divisions or operations of large companies.
The basis of the division was that larger firms have a somewhat different capital structure
and have fewer constraints in obtaining capital.
During the 1971-1975 period, smaller firms had a higher margin on sales (net income/sales)
and sales turnover (sales/tangible assets) than larger firms and thus had higher returns on net
worth and tangible assets (Table IX-7). This is consistent with the finding that most treatment,.
storage and disposal facilities did not have strong financial backing and were considered high
risks by financial institutions.
In 1975, 17% of the firms principally engaged in treatment, storage and disposal activities
were unprofitable and there was no relationship between size and profitability.17 While this would
be a reflection of the downturn in generator manufacturing activity in 1975, it could also indicate
that there is a substantial marginal segment in the industry.
15. Hazardous Waste Management Facilities in the United States - 1977, EPA/530/SW-2463, January, 1977.
16. Potential for Capacity Creation in the Hazardous Waste Management Service Industry.
17. Ibid, page 83.
285
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TABLE IX-7
SELECTED FINANCIAL RATIOS FOR TSDF'S
1971-1975 AVERAGE
Type of Firm
Principally HWM
HWM Division
Net Income/Sales 0.074 0.059
Current Ratio 1.476 1.714
Sales/Tangible Assets 1.119 0.969
Land/Fixed Assets 0.187 0.144
Fixed Assets/Total Assets 0.609 0.608
Total Debt/Equity 1.362 1.802
Profits/Net Worth 0.191 0.149
Profits/Tangible Assets 0.091 0.058
Source: Derived from Potential for Capacity Creation in the
Hazardous Waste Management Industry, pp. 42 and 46.
E. IMPACTS ON TREATMENT, STORAGE AND DISPOSAL SECTOR
1. Economic Impact
The economic impact of RCRA upon TSDF's is evaluated in this section for each option
studied and for the following TSD methods;
• Landfills
• Incinerators
• Landfarms
• Lagoons
The analysis is based upon the models of each disposal method described in Chapter V.
However, it examines the impact in a stand-alone framework. Additional or lesser costs and
impacts could be incurred by generators as a consequence of required changes in treatment,
storage or disposal methods.
Estimates were made of long-run price increases necessary to recover the costs associated
with compliance activities under RCRA Options A, B and C (Table IX-8). The differences
among the options are in the financial requirements, recordkeeping and reporting costs, the
administrative costs and in the monitoring and testing cost.
287
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2. Cost and Impact on Landfills
a. Price of Disposal Service
Options B and C have successively less stringent financial requirements in that the post-
closure monitoring and maintenance fund covers 20 years and 10 years of care respectively
(compared with 40 years in Option A) and the post-closure cost of liability will be provided by
separate legislation (Table IX-9). As a result of the compliance cost, the price of commercial
landfill disposal can be expected to increase by 258% under Option A, 162% under Option B, and
158% under Option C.
When the compliance activity requires expenditures in proportion to landfill size, e.g.,
lining materials, the increase in price required to cover cost is roughly equivalent per cubic meter.
Where compliance costs are not borne proportionally to size — e.g., financial requirements —
the absolute dollar value of price increases and also the percentage increase in price are consid-
erably larger for the small landfill than for the large landfill.
b. Demand for Disposal Service
An EPA contractor estimated18 that approximately twice the volume of hazardous waste
would be disposed in off-site TSDF's after regulation. Given the impact on price (or cost to a self-
disposer) of the RCRA, the nature and extent of a from on-site to off-site disposal is not clear.
Several types of shifts might occur and to some extent they are offsetting. For example, the price
of disposal service (or self-disposal) in a small landfill will approach that for certain types of
incineration. While self-disposers who landfill may find it more economical to dispose off-site
rather than comply, in some parts of the country where landfills are small, it may be more
economical for a generator to incinerate on-site or off-site rather than dispose of hazardous waste
in a landfill if that is a feasible method of disposal for the waste.
c. Change in Scale Economies
The increases in disposal cost under RCRA are not strictly proportional for small and large
landfills. As a result, RCRA will change scale economies somewhat, and cause a absolute change
in the cost per ton of disposal for small landfills. As a result, there is an incentive for landfills to
become larger.
d. Financing Requirements
Even if one assumes that landfills will realize long-run price increases immediately, they
could still require external financing in order to comply with RCRA because capital expenditures
are required and cash flows may not be sufficient to finance investment internally.
3. Incineration
a. Price Impacts
The compliance activities required for the incineration method of waste treatment are less
burdensome than for landfills, primarily because they do not have post-closure financial require-
ments; however, monitoring and testing costs will represent a significant cost of compliance.
18. Ibid, p. 94.
289
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The only retrofitting of incineration systems would be for air pollution equipment (Chap-
ter V). Some 15% of the incineration facilities surveyed in an EPA contractor study19 had air
pollution equipment in place. Based upon the directory of TSD facilities published by the EPA20,
this translates into 5 facilities with air pollution equipment and 26 without.
The increase in cost of incineration from compliance with the RCRA options studied for
incineration of various wastes21 depends upon the volume of wastes handled and the process used
for incineration (Table IX-10). The relative impact of RCRA is lower for high-cost incineration
(low volume/high hazard). Under Option A, incineration costs will increase by 11% to 57%, while
under Option C, costs will increase by 9% to 50%. Thus, the variability among incineration costs
attributable to waste type and incineration method is far greater than the differences between the
RCRA options studied.
b. Demand for Incineration
Incineration may be cost-competitive with small landfill after compliance, especially for
generators who self-dispose. Therefore, some voluntary shifts from landfill to incineration may
occur. In addition, the Pathway III method of disposal is incineration for some wastes currently
landfilled, which will increase the demand for incineration services.
c. Capacity
As in the case with landfills, some incineration facilities will probably discontinue treat-
ment of hazardous wastes rather than comply. This would most likely occur where the in-
cineration system is not in compliance with the technical requirements of Section 3004, thus
requiring investment of the same order as for a new facility.
The incineration capacity in off-site, independent TSDF's in 197422 was on the order of
800,000 to 900,000 metric tons per year, which is less than half the level of disposal volume that
must be incinerated under Pathway Level III. However, the capacity of on-site systems is not
known.
There could be a capacity shortfall in incineration disposal in the early years of the
regulation, especially given the 12- to 24-month lead time23 required to install new capacity.
4. Landfarming
Landfarming is a Pathway III disposal method for some types of wastes from the petroleum
refining industry. Monitoring and testing requirements are by far the largest component of
compliance cost (Table IX-11) because testing costs vary with waste volume whereas most other
costs exhibit scale economies, i.e., they decrease with increases in facility waste volume.
While the cost of landfarming will exhibit a substantial increase under each of the three
options studied (75%, 68%, and 67%, respectively), the cost of landfarming will still be sub-
stantially below the costs of landfill disposal or incineration treatment.
19. Ibid.
20. Hazardous Waste Management Facilities, EPA, 1977.
21. See Appendix C for an indication of process associated with each incinerated waste.
22. Potential for Capacity Creation in the Hazardous Waste Management Service Industry, p. 11-12.
23. Op. cit., p. 81.
291
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TABLE IX-10
CHANGE IN COST OF HAZARDOUS WASTE INCINERATION DUE TO RCRA
Type of Waste and Volume of Incineration
Baseline Financial
Requirement
Options A & B
Option C
Recordkeeping and Reporting
Option A
Options B & C
Administrative
Option A
Options B & C
Training
Contingency
Monitoring and Testing1
Option A
Option B
Option C
Total Increase
Option A
% Baseline
Option B
% Baseline
Option C
% Baseline
Phenol
22,800
M3/yr
CostM3
140.00
3.50
2.80
0.10
0.10
1.05
0.70
0.40
3.25
11.60
10.40
10.40
19.90
14%
18.35
13%
17.76
13%
Rubber
6000M3/yr
CostM3
1 1 7.00
13.30
10.60
0.40
0.40
3.95
2.65
1.50
3.25
44.10
39.65
39.55
66.50
57%
60.75
52%
57.95
50%
PCB Capacity
5000M3/yr
CostM3
741.00
16.00
12.75
0.50
0.50
4.75
3.20
1.80
3.25
52.90
47.60
47.50
79.20
11%
72.35
10%
69.00
9%
PVC Waste
6000M3/yr
CostM3
582.00
13.30
10.60
0.40
0.40
3.95
2.65
1.50
3.25
44.10
39.65
39.55
66.40
11%
60.75
10%
57.95
10%
1. Includes investment in equipment (Technical Cost)
Source: Derived from Chapter V.
292
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TABLE IX-11
CHANGE IN COST OF HAZARDOUS WASTE LAND FARMING DUE TO RCRA
$/M3
Option A Option B Option C
Baseline(100,000 M3/yr) 5.00 5.00 5.00
Technical 0.15 0.15 0.15
Financial Requirements 0.20 0.20 0.15
Recordkeeping and Reporting 0.03 0.02 0.02
Administration 0.24 0.16 0.16
Training 0.09 0.09 0.09
Contingency 0.16 0.16 0.16
Monitoring and Testing 2.87 2.60 2.60
Post Compliance Cost 8.74 8.38 8.33
Total Increase 3.74 3.38 3.33
Percent Baseline 75% 68% 67%
Source: Derived from Chapter V.
5. Lagooning
The technical costs in Table IX-12 include the cost of a liner system as well as the
monitoring equipment required to comply with monitoring requirements. Under each of the three
options studied the costs of lagoon storage/disposal will more than double. However, the cost per
cubic meter will be lower than the post-RCRA costs of landfilling the waste.
293
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TABLE IX-12
CHANGE IN COST OF HAZARDOUS WASTE LAGOONING DUE TO RCRA
$/M3
Option A Option B Option C
Baseline1 (13,680 M3/yr $4.70 $4.70 $4.70
Technical 2.05 1.90 1.90
Financial Requirements 1.45 1.45 1.10
Recordkeeping and Reporting 0.20 0.15 0.15
Administrative 1.75 1.20 1.20
Training 0.65 0.65 0.65
Contingency 0.10 0.10 0.10
Monitoring and Testing2 1.80 1.70 1.65
Post Compliance Cost 12.20 11.85 11.45
Total Increase 8.00 7.15 6.75
% Baseline 170% 152% 144%
1. Excluding liner and sampling equipment.
2. Based upon one "shipment per day".
Source: Derived from Chapter V.
294
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X. CHARACTERIZATION AND IMPACT ON
FEDERAL FACILITIES
A. INTRODUCTION
The effort described in this chapter was undertaken for the purpose of defining the economic
impact of RCRA Subtitle C regulatory options on Federal facilities. The scope of work included:
(1) Identification of Federal facilities that generate and/or treat/store/dispose of hazardous
waste, as defined in Section 3001 draft regulations. (2) Estimation of the volumes of hazardous
wastes generated by typical Federal facilities. (3) Estimation of incremental control costs in-
curred by Federal facilities as a result of any changes in present treatment and disposal practices
likely to be effected in response to proposed RCRA regulations.
B. FEDERAL FACILITIES LIKELY TO BE IMPACTED BY RCRA
The following Federal agencies are potential generators of hazardous wastes:
Department of Defense (DOD)
National Aeronautics and Space Administration (NASA)
Tennessee Valley Authority (TVA)
General Services Administration (GSA)
Department of Agriculture
Housing and Urban Development (HUD)
U.S. Government Printing Office (Department of Treasury)
Veterans' Administration (VA)
Health, Education, and Welfare (HEW)
Federal Communications Commission (FCC)
Department of Interior (DOI)
U.S. Postal Service
Department of State
Department of Transportation (DOT)
Department of Energy (DOE)
None of the agencies have carried out a comprehensive hazardous waste inventory. From
available data, the total annual rate of hazardous waste generation is estimated to be approx-
imately 300,000 MT/year (exclusive of utility wastes). Most agencies believe current estimates
significantly understate the actual waste generation rates. Utility wastes (flue gas desulfurization
sludges and fly ash) from TVA coal-burning boilers are estimated at more than 1,000,000
MT/year, wet basis.
The largest generator of potentially hazardous wastes within the Federal government is
DOD. However, DOD has not yet undertaken a comprehensive hazardous waste inventory.
Contact was made with branches of DOD — the Army, the Navy and the Air Force. Some
information was obtained, but it was generally incomplete and of variable quality. Data required
for development of a compliance plan will be obtained, according to DOD representatives, after
the RCRA Subtitle C regulations have been promulgated.
295
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The second largest generator of potentially hazardous wastes within the Federal government
is believed to be NASA. A third Federal agency identified as likely to be significantly impacted by
RCRA regulations is TVA. The high-volume waste streams from TVA installations are fly ash and
flue gas desulfurization sludges, which if hazardous by virtue of their characteristics, would fall
under the category of "Special Wastes." Special waste standards for TSDFs handling these
wastes have been established under proposed Option B, Section 3004, RCRA regulations.
Other Federal agencies appear to generate relatively minor quantities of hazardous waste, if
any. A summary of potential sources of hazardous wastes within the Federal government is given
in Table X-l.
C. WASTE STREAM CHARACTERIZATION AND
CURRENT DISPOSAL METHODS
Available data characterizing potentially hazardous waste streams generated by Federal
facilities are spotty and incomplete. Estimating waste generating rates is difficult, because of
problems with the definition of hazardous waste given in Section 3001 as it applies to Federal
facilities. The problem with the listing of hazardous wastes under Section 3001 is that it is based
on industry-specific data, organized by SIC numbers for manufacturing industries. Although the
same SIC number^ apply to Federally owned and operated business establishments as to private
establishments engaged in similar activities, the Federal and private facilities are not generally
competitive and therefore are often not recognized as engaged in similar work.
Most Federal facilities have not run the prescribed tests, and often do not know enough
about their waste streams to determine whether or not the streams have hazardous character-
istics. Therefore, it will require new sampling and analysis of wastes to establish a reasonably
accurate inventory.
Apart from some apparent confusion between water effluents and hazardous wastes, the
available data probably represent reasonable estimates of the quantities of wastes generated, in
the categories reported. Due to some lack of understanding of the kinds of wastes that should be
designated as hazardous, the quantitative estimates are probably low.
1. Department of Defense
a. Nauy
The Navy has estimated that ships and shore establishments generate approximately
19,000,000 gallons/year of liquid wastes and 17,000 MT/year of solid wastes that are likely to fall
under the RCRA definition of "hazardous." The total estimated quantity of hazardous waste is
approximately 97,000 MT/year (assuming a liquid density of 8.34 Ibs/gal).
296
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TABLE X-1
FEDERAL FACILITIES LIKELY TO BE IMPACTED BY RCRA
Agency
DOD
NASA
Facility(ies)
Army Depots (11-12 active)
Army Ammunition Plants
Navy
Air Force:
Logistics Command
Strategic Air Command
Tactical Air Command
Training Command
Systems Command
JPL, Pasadena, CA
Johnson Space Center
Houston, TX
Marshall Space Flight Center
National Space Technology
Laboratories
Michaud Assembly Facility,
New Orleans, LA
Goddard Space Flight Center
Lewis Research Center
Cleveland, OH
Ames Research Center,
Moffett Field, CA
Langley Research Center,
Hampton, VA
TVA
Potential Sources of Hazardous Wastes
Plating wastes; paint sludge
Baghouse ash; scrubber water sludge;
clogged filters; leaching pit residues;
other ordnance wastes
Waste oils and solvents; ordnance wastes;
paint sludge; pesticide wastes; PCB's;
corrosion inhibitors; sandblast grit; batteries
Industrial waste sludges; solvents; cleaning
agents
Photographic wastes; solvents; cleaning
agents
Solvents
Pesticides; solvents; cleaning agents
Solvents
Solvents; plating wastes; sludges; waste
oils; propellents
Solvents; sludges; plating wastes; photo-
graphic wastes
Sludges; photographic wastes; corrosion
inhibitors
Photographic wastes; solvents
Solvents; sludges; waste oil
Solvents; plating wastes; photographic
wastes
Oils; photographic wastes; pesticides;
fluorescent lamps; mercury
Solvents; miscellaneous lab. chemicals
Solvents; sludges; photographic wastes
Fly ash; bottom ash; flue gas desulfuriza-
tion sludge
297
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TABLE X-1 (Continued)
Agency
GSA
Facility (ies)
Public buildings
National Strategic Stockpile
Department of Agriculture
DO I
Department of Treasury
HUD
HEW
VA Hospitals
DOE Laboratories
DOT
Department of Justice
Department of State
FCC
Postal Service auto maintenance shops
Potential Sources of Hazardous Wastes
Asbestos removed from old ceiling tile
systems, roofing, and dust insulation;
PCB-containing transformers, capacitors
and ballasts; fly ash and bottom ash from
fuel boilers and furnaces
Contaminated pallets and other items
Pesticides
Pesticide containers
Coin-minting
Asbestos from demolished buildings
Pathogenic and carcinogenic lab wastes
Pathogenic wastes
Chemicals, lab. wastes
None
None
None
None
Waste oil
298
-------
Current methods of disposal are reported to be approximately as follows:
Waste Type(s)
Solvents and hydraulic fluids
Ordnance wastes
Total
Quantity
MT/yr
20,000
1,200
37,000
8,000
14,000
17,000
97,000
Current Disposition
Used as supplemental fuels
and in fire training
Open burning
Sanitary landfill
Secure landfill
Sanitary sewers
Long-term storage
With the exception of solvents, waste oils and ordnance wastes, as indicated, no information was
provided on current disposal methods by waste type (i.e., the types of wastes currently going to
sanitary landfill, secure landfill, sanitary sewers and long-term storage).
The Pathways Level III waste management modes for Navy wastes are as follows:
Waste Type(s)
Paint sludge
Oil sludge
Indust. treatment sludge
Acids
Caustics
Plating wastes
Mercury
Corrosion inhibitors
Decontam. metals
Sandblast grit
Batteries
Firefighting agents
Misc. solids
Strippers and thinners
Pesticides
PCB's
Misc. liquids
Ordnance
Solvents
Hydraulic fluids
b. Air Force
Quantity
MT/yr
Pathways Level III
Disposal
55,000
Secure chemical
landfill
22,000
20,000
Incineration
Use as supplemental
fuel in fire training
Table X-2 summarizes the responses of Air Force installations to a letter from the Pentagon
requesting information on types of chemical wastes, annual quantities, and methods of dis-
position. The total rate of hazardous waste generation as estimated from the table is 50,000
MT/year.
299
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TABLE X-2
WASTES GENERATED AT AIR FORCE INSTALLATIONS, 1977
Disposal Method (s)
Waste Type
Solvents
Paint Wastes
Strippers and Thinners
Waste Oils
Industrial Treatment Sludge
Acids
Caustics
Plating Wastes
Pesticides
PCB's
Chromates
Cyanides
Photographic Wastes
Rocket Fuel
Miscellaneous Chemicals
Quantity, MT/Yr
900
60
200
40
16,000
400
400
2
20
10
200
900
30,000
5
500
Current
DPDO;* recovery; contract;
secure landfill; used as
fuel; sanitary landfill
DPDO; secure landfill;
contract
Secure landfill; sanitary
sewer; contract; DPDO
DPDO; secure landfill
Secure landfill
Sanitary sewer; contract
Contract
DPDO; secure landfill;
contract
DPDO; sanitary landfill
Storage; DPDO; contract;
secure landfill
Off -site government;
sanitary sewer; DPDO
Contractor; alkaline
chlorination
DPDO; Deepwell
injection; sanitary sewer
Chemical oxidation in
treatment pond
Sanitary sewer; DPDO;
PAID
Recovery or incineration
Secure landfill
Incineration
Incineration
Secure landfill
Secure landfill
Secure landfill
Secure landfill
Incineration
Incineration
Secure landfill
Alkaline chlorinate
Secure landfill
Chemical oxidation
Secure landfill
secure landfill
Total
50,000
"DPDO - Defense Property Disposal Organization.
Source: Arthur D. Little, Inc., summary of raw data supplied by the Air Force.
300
-------
Much of the waste is transferred to the jurisdiction of the Defense Property Disposal
Organization (DPDO). The DPDO has traditionally handled primarily scrap and surplus stock,
for which there are fairly well-established markets. The disposal of chemical wastes is a relatively
recent activity. Generally, the wastes are held in storage while an attempt is made to locate a
customer interested in purchasing the material for use. No limit appears to have been set on
storage times. When it becomes clear that the wastes are not a reusable resource, an environ-
mentally adequate disposal method is sought. In the case of Herbicide "Orange," over 9,000 MT
were stored for several years — 2,000 MT in Gulfport, Mississippi, and 7,000 MT in Johnson
Island in the Pacific — prior to incineration at sea in 1977.
c. Army
Annual quantities of hazardous waste generated by the Army are not available. The major
generating facilities include 11 or 12 active Army depots and 15 or so Army ammunition plants.
About 40 additional Army bases may generate smaller quantities of waste.
Material that would be classified as hazardous waste is being stored at Army installations.
About 150,000 MT of obsolete and surplus ordnance is being stored at 12 Army bases and 29 Navy
bases. It is the intent of DOD to demilitarize this material as soon as feasible. More than 70,000
MT of obsolete chemical agents and related wastes are stored at 10 Army installations, awaiting
the development and testing of appropriate TSD technology.
2. NASA
The total estimated rate of hazardous waste generation at NASA facilities is approximately
6,000 MT/year. (Table X-3)
3. TVA
By 1980, TVA expects to have limestone wet scrubbers in operation on two of its 12 boilers.
The combined rate of generation of flue gas desulfurization sludge and fly ash is expected to be
about 1,000,000 MT/year, on a wet basis (50% water).
4. Other Federal Agencies
Information available from other Federal agencies is mostly qualitative.
An inventory of non-radioactive hazardous waste produced by Federal agencies other than
DOD was developed for Region IX by a Federal Task Force. (1) Data were received from 43 units
of 26 agencies contacted (only GSA did not respond). Hazardous waste is generated in the normal
activities of only six of the agencies responding. Results (Table X-4) are reported in three
categories as follows:
(a) Research and Development Agencies
Includes: Agricultural Research Service (USDA)
Energy Resource and Development
Administration (ERDA)
U. S. Geological Survey (USDI)
301
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TABLE X-3
WASTES GENERATED AT NASA INSTALLATIONS
Waste Type
Degreasing Solvents
Other Solvents
Water Pollution Control
Sludges
Electroplating Residues
Paint Wastes
Hydraulic Cutting Oil
Cooling Tower Sludges
Etching Acids and Sludges
Photographic Wastes
Propellents
Miscellaneous Chemicals
Total
Quantity, MT/Yr
500
90
900
400
60
90
300
3,000
3
800
6,000
Disposal Method (s)
Current
Contractor; recovery;
deepwell injection;
sanitary landfill
PA III
Recovery/incineration
Contractor; recovery; Recovery/incineration
deepwell injection;
sanitary landfill
Contractor; lined lagoon; Secure landfill
deepwell injection
Contractor; deepwell
injection
Secure landfill
Contractor; lagoon (lined); Secure landfill
landfill
Contractor; secure landfill; Incineration
incineration
Contractor; lagoon (lined); Secure landfill
landfill
Contractor; deepwell
injection; lagoon
Secure landfill
Contractor; sanitary sewer; Secure landfill
deepwell injection;
incineration
Contractor
Incineration
Contractor; secure landfill; Secure landfill
lagoon; incineration
Source: Arthur D. Little, Inc., summary of responses from NASA installations to a letter request for
information.
302
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TABLE X-4
HAZARDOUS WASTE GENERATION BY FEDERAL AGENCIES
(OTHER THAN DOD) IN REGION IX
Agency Category, MT/yr
Waste Type
Acids
Caustics
Pesticides
Paint Sludge
Solvents
Chemical Toilet Wastes
Tank Bottom Sediment
Oil
Drilling Mud
Contaminated Soil and Sand
Laboratory Waste
General
Totals (MT/yr)
Containers (No.)
1
R&D
30
10
0.5
20
6
9
4000
100
2
1
4200
300
2
Land
Management
0.2
0.8
30
3
10
400
50
40
20
70
600
7600
3
Regulatory
and
Control
3
0.9
1
2
25
0.2
200
3
200
100
Total
30
10
30
25
40
400
50
250
4000
120
5
70
5000
8000
Source: Region IX Federal Task Force
(b) Land Management Agencies
Includes: U.S. Forest Service (USDA)
Bureau of Land Management (USDI)
Bureau of Reclamation (USDI)
National Park Service (USDI)
(c) Regulatory and Control Agencies
Includes: Animal and Plant Health Inspection
Services (USDA)
U.S. Coast Guard (DOT)
Postmaster General (USPS)
Environmental Protection Agency (EPA)
Bureau of Alcohol, Tobacco, and
Firearms (DT)
U.S. Customs Service
303
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The Task Force suggests that larger volumes of hazardous waste are actually generated; i.e.,
that "the assessment was reasonably complete ..., although probably a minimum value." The
quantity of potential hazardous wastes generated by non-DOD agencies in Region IX is estimated
to be of the order of 5,000 MT/year.
D. COSTS OF COMPLIANCE WITH RCRA
The first compliance activity for Federal facilities will be the development of hazardous
waste inventories. The inventories would be similar in form to the EPA industry assessment
studies, and would include for each Agency:
• Number and location of hazardous waste generating facilities
• Types and quantities of hazardous wastes generated by each facility
• Current TSD method for each waste, including on-site/off-site distribution and
distance from the point of generation to off-site TSD facilities.
• Current TSD costs, including technical costs and transportation costs, broken
down to the extent possible with respect to capital amortization, labor, materials,
equipment, utilities, etc.
Because of the paucity of the available data base, any estimate at this time of the total cost
of compliance of Federal facilities with proposed RCRA regulations would be grossly inaccurate.
Unit costs of compliance for each Federal facility identified as a generator of hazardous
waste will be about the same as those listed in Chapter V, with the possible exception of financial
responsibility. For GOGO (government owned/government operated) or GOCO (government
owned/contractor operated) TSD facilities, it is unclear whether the insurance or surety bond,
and the closure and post-closure fund requirements for financial responsibility will be the same as
for privately owned facilities. The current requirements for posting of funds are designed to insure
that funds will be available for post-closure care if the owner/operator of a TSDF should go
bankrupt or disappear. Federal agencies can be assumed to exist for site life plus 20 years;
therefore, a closure and post-closure fund may be unnecessary.
Hazardous wastes generated by Federal facilities fall into two broad categories. The first
encompasses wastes resulting from manufacturing, maintenance, laboratory, utility, pollution
control, and other operations, which are closely analogous to similar operations in the private
sector. For these wastes, current TSD practice is similar in the private and public sectors, and
TSD options for compliance with the regulations are also similar. The decisions with respect to
on-site vs. off-site TSD, contractor vs. self-transport, and choice of permitted TSDF will be made
similarly on the basis of least cost and perceived risk.
The second broad category of wastes consists of those unique to the Department of Defense,
for which there is essentially no counterpart in the private sector. This category includes
conventional ammunition wastes, obsolete and surplus ammunition and ordnance, and highly
toxic chemical agents slated for demilitarization. Conventional ammunition wastes are currently
destroyed by open burning or open demolition. Neither practice is likely to meet RCRA regu-
lations, and alternative methods of thermal destruction are likely to increase costs by several fold.
Even if ammunition wastes were to be exempt from proposed prohibitions of open burning,
304
-------
significant changes would be necessary in current practices because there is evidence of con-
tamination of the soil beneath the burning and demolition grounds, with the potential of leaching
to groundwater. New facilities would have to be designed, or existing ones upgraded, to protect
the groundwater resource as required by the regulations.
Obsolete and surplus ammunition and ordnance are stored, awaiting disposal, at 41 DOD
facilities in 25 states. Design of safe and environmentally acceptable disposal technology is
difficult, and must be done with meticulous care. The 90-day limitation on storage of these wastes
is thus impractical, and permit requests for longer-term storage will have to be filed to meet the
requirements of the RCRA regulations. The added costs of obtaining the permits are negligible in
comparison with the current non-RCRA related costs of long-term storage and demilitarization
activity.
Obsolete and surplus chemical agents (such as BZ, Orange, phosgene, etc.) are also typi-
cally stored for periods of time far in excess of 90 days prior to demilitarization/destruction.
Again, disposal is difficult and dangerous. The chemical demilitarization methods designed and
ultimately implemented would generally meet and far exceed proposed RCRA regulations.
However, permit requests would have to be submitted for long term storage during the period that
treatment/disposal technology is being selected, designed and tested.
RCRA regulations are intended to control the management of hazardous wastes which are
generated after the date of promulgation of the regulations. The regulations are not directed
towards the cleanup of inactive existing sites which may be sources of environmental con-
tamination. The largest program in the country designed to identify and control migration of
contaminants from improperly managed waste disposal sites of the past is the Installation
Restoration (IR) Program of the Department of Defense.
305
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XI. LIMITS OF THE ANALYSIS
The limits of the analysis are in three categories: data availability; analysis methodology;
and topics covered. Data availability is the primary limitation of the analysis. Important analysis
limitations are as follows.
The hazardous waste generation estimates were based upon assumptions made in the
hazardous waste assessment reports for the ratio between waste generation and production and
then assumptions about production in 1977 and beyond. These estimates were made over a
several year period beginning in 1973. In many cases the projected production values and
therefore the waste generation estimates have been found to be significantly different from actual
1977 production. In some cases these differences have been corrected. In others it is not possible to
determine the specific assumptions used in the assessment reports. In addition, the degree to
which the waste generation estimates (and from them the cost of compliance estimates) are in
error is unknown.
The definition of hazardous waste used in the assessment reports differed by industry and
may be different from what was ultimately to be included in the regulations. The list proposed in
the regulations contains additional wastes not covered by this study. The additional wastes are
either outside the 17 generating industries or were not thought hazardous at the time the
assessment study was conducted.
The assessment reports and the study which updated the cost estimates generally provided
information aggregated to a total industry level. The data are much less complete for industry
segments at the product or plant level, which is the only level at which there is a good correspon-
dence between production and waste generation. Also, there is little information on whether
waste is processed on-site or off-site at the product level, though estimates of the on-site/off-site
division at the total industry level have been made. The reliability of these estimates must be
questioned because of the absence of underlying information at the segment level.
None of the separate generator industry economic impact studies used the compliance cost
estimates reported here, which included the financial requirements and administrative costs. As
a result, the compliance costs for a number of industry segments are much higher than was
assumed in the individual industry studies. For the industry segments now having compliance
costs of 29r to 15% of production value, as compared with previous costs of less than 1%, the
previous economic impact analysis results cannot be extrapolated to the current cost levels. Plant
closures and production curtailments are likely results of this level of cost. As a result, the
impacts of the higher costs have been qualitatively discussed in this report.
The impact analyses of the transportation sector and the off-site waste management
industry have not included the potential for a shift in hazardous waste flow in the HWMN. A
shift of waste off-site could exceed the available capacity and significantly alter the economic
impacts assumed under a static analysis.
The impacts of non-operational requirements have not been addressed. These impacts
could result from requirements that facilities not be located in a 100-year flood zone, for example.
307
-------
The constraints on new capacity as a result of local opposition to building hazardous waste
management facilities have not been considered in this analysis. These constraints may prevent
facilities from being located near urban areas and increase transportation costs significantly.
Severe problems in this area could impede the successful implementation of the regulations. At
present, there is no basis on which to predict the magnitude of this problem.
308
-------
XII. ARTHUR D. LITTLE, INC., PROJECT TEAM
Richard Williams1 — Project Director
Sandra Burgeon1 — Project Coordinator
June D'Arcangelo Thomas Martin1
Armand Balasco Subhash Malhotra
Elliot Barber Stanley Margolin
Caroline Barker Ray McMahan
Joan Berkowitz1 James Monk
Gordon Cheng Helen Ojha1
William Copacino Thomas Renda
Louise Firth1 Kathryn Saterson
Arlyne Jackson Blair Shick1
Sandra King Douglas Shooter1
David Kleinschmidt Bruce Stangle
David Lovering Ann Whittier
Richard McCarthy Melba Wood
1 Principal authors.
309
-------
APPENDIX A
FLOW CHART
FOR COMPUTER MODEL
A-i
-------
APPENDIX A
The model consists of two programs. Program A performs the calculations and Program B
prints the report.
The data used in the program are summarized in Tables IV-1, IV-2, IV-3, IV-4, VII-7 and
VII-8.
The methodology and equations used in the model are explained in Section D of Chapter IV,
"Methodology for Calculating the Costs of Compliance."
The source language of the model was PL/I; containing approximately 500 statements.
A-3
-------
-------
PROGRAM B
Retrieve
Data
Names of
Segments
I
Multiply Initial
Cost x. 1627,
Add to Recurring
= "Annualized Cost"
Repeat for
Each
Segment
Calculate Total
Cost of
Segment
I
Calculate%
of Production
Cost
I
Print Name,
Costs,
% Production
I
Calculate Total
by Section and
Grand Totals
A-7
-------
APPENDIX B
SUMMARY
ECONOMIC IMPACT ANALYSIS OF HAZARDOUS
WASTE MANAGEMENT REGULATIONS ON ADDITIONAL
GENERATING INDUSTRIES
Prepared by
Energy Resources Company, Inc.
B-l
-------
APPENDIX B
SUMMARY
This report has been prepared in support of the U.S.
Environmental Protection Agency's development of an economic
impact assessment of anticipated hazardous waste management
regulations. The regulations, which will soon be proposed,
are authorized by the Resource Conservation and Recovery Act
of 1976 (RCRA, PL 94-580). This study involves the examination
of two sets of draft RCRA regulations on seven industries
which are generators of potentially hazardous wastes.
1.1 Regulatory Background
The Resource Conservation and Recovery Act of 1976
authorized EPA to promulgate such regulations for the
control of hazardous wastes as may be necessary to protect
human health and environment. EPA has developed two sets of
draft regulations which provide for varying levels of
environmental control. These are described below:
RCRA Option A; Regulations for Enhanced Protection
of Public Health and Environment. This set of draft
regulations provides for the maximum level of control
in the handling and disposal of hazardous wastes.
RCRA Option B; Proposed Actions. This set of draft
regulations incorporates a number of modifications to
Option A requirements. Most importantly, RCRA Option B
provides a modified definition of what constitutes a
"hazardous waste." It also proposes separate disposal
requirements for certain large-volume "special wastes."
B-3
-------
An abbreviated comparison of major sections of RCRA
Options A and B is provided in Table 1-1. Only several
elements which are of particular importance in the assessment
of economic impacts are shown in the table. Section 3001,
which covers the definition of hazardous wastes, is signifi-
cantly different between RCRA Options. In particular, the
test protocol for potentially toxic wastes (The Toxicant
Extraction Procedure [TEP]) was modified. Also, some of
the toxicity tests, including that for aquatic toxicity, are
not included in Option B. Section 3004, under only Option B,
provides for definition of separate disposal requirements
for "special wastes." These requirements have not been
defined to date.
1.2 Industry Coverage and Basic Methodology
The six industries covered are shown in Table 1-2.
Quite obviously, the industries covered vary from large
(electric utilities, the paper industry) to small (chemical
warehouses, drum reconditioners). A brief analysis was also
made of waste generation among metal and mineral distributors.
A summary of findings for that industry is included as
Chapter 20.
For each industry, model and worst-case plants (or
firms) were developed as an analytical tool. The model
plant was defined to be representative of industry firms.
Regulatory impacts on this firm are then an indication of
impacts on most industry firms. The worst-case plant was
defined to represent those plants which will face above-
average compliance problems. These impacts are useful in
estimating the likelihood of plant closures. The worst-case
B-4
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impacts for most industries are likely to occur at small,
economically vulnerable operations, and the worst-case firms
have been designed accordingly.
1.2.1 Data Sources for Estimating Compliance Costs
The methodology for estimating compliance costs varies
by industry. Consistent use wab made of the work of two
other EPA contractors, Arthur D. Little (Integrated Economic
Impact Assessment of Hazardous Waste Management Relations,
EPA, October 1978) and Battelle Columbus Laboratories (Cost
of Compliance with Hazardous Waste Management Regulations,
September 1978). The ADL study was used as the basis for
estimating administrative costs (administrative costs are
here interpreted to include monitoring and testing, reporting,
training, contingency, and financial responsibility costs).
However, a number of judgments had to be made concerning
the applicability of various tasks and the costs which would
be incurred in the various industries. As a result, the
administrative costs should be considered ERCO estimates,
based on the definition of tasks as supplied by ADL.
1.2.2 Limits of the Analysis
The estimates made in this study were based on data
derived from a variety of sources. Each of the estimates
and the basic data sources involve some degree of error. No
estimation was made of the total probable error range for
the cost estimates.
The waste stream designations made are also approximate.
Available data in some cases were not sufficient to clearly
assign a waste into the "hazardous" or "nonhazardous"
B-7
-------
category. Conclusions were drawn based upon the existing
knowledge. This study was not designed to make a final
identification of hazardous wastes in all of the study
industries.
This study involves static analysis of the costs of
compliance with regulations. It was assumed that access to
all necessary treatment or disposal facilities would be
available as needed at the estimated price or cost. Thus,
for example, no estimation was made of the effect of
increased demand due to regulation on the cost of services
at hazardous waste facilities. Also no forecast was made of
the future availability of such facilities.
1.3 Summary of Hazardous Waste Generation
The total hazardous waste generation by the six in-
dustries is provided in Table 1-3. The electric utility
industry generates by far the largest amount of potentially
hazardous wastes.
The total volume of hazardous wastes under the RCRA
Options A and B is the same for all industries except pulp
and paper. Several large volume wastes generated by pulp
and paper mills are likely to be designated hazardous wastes
only under RCRA Option A. The waste streams are wastewater
treatment sludge, bark, and wood wastes and secondary fiber
wastes.
The contribution of each waste stream to total industry
wastes is shown in Table 1-4. Coal ash dominates the waste
generation picture for electric utilities. Approximately 60
million metric tons (MT) of ash were generated in 1977 compared
B-8
-------
TABLE 1-3
HAZARDOUS WASTE GENERATION BY SELECTED INDUSTRIES3
HAZARDOUS WASTE GENERATION,
1977 (000 MT)
INDUSTRY
AS DEFINED
UNDER
OPTION A
AS DEFINED
UNDER
OPTION B
Electric utilities
Pulp and paper
Gasoline service stations
and automotive repair shopsb
Drum reconditioners
Chemical warehouses
Agricultural services'3
aERCO estimates.
^Estimated waste volumes for
64,000
8,486
1,123
170
5
579
1978.
64,000
1,820
1,123
170
5
579
B-9
-------
TABLE 1-4
MAJOR HAZARDOUS WASTE STREAMS FOR SIX INDUSTRIES (1977)
INDUSTRY
Electric utilities
Pulp and paper
WASTE STREAMS
Coal ash
FGD sludge
Oil ash
Wastewater treatment
sludgec
Chemical pulping wastes
Bark and wood wastes0
Coal ash
Secondary fiber
VOLUMEb
(000 MT)
60,300
3,700
20
2, .580
523
2,700
978
1,694
Service stations
and repair shopsd
Gas stations
Repair shops
New car and truck
dealers
Fleets
Drum reconditioners
Chemical warehouses
Agricultural services*3
reclamation wastes0
Waste oil 619
Waste oil 183
Waste oil 242
Waste oil 79
Process wastes 170
Repackaging wastes 5
Pesticide containers 29
Dilute pesticide solutions 550
and waste pesticides
aERCO estimates.
&Ash, FGD sludge, and bark quantities are expressed in
dry weights. Approximate wet weights
°Wastes are hazardous only under the Option A version
of Section 3001.
^Estimated waste volumes for 1978.
B-10
-------
to roughly 4 million MT of sludge. A small volume of oil
ash, which generally has a higher metals content (greater
toxicity) than coal ash, was also generated. Coal ash is
also generated in the paper industry in the amount of almost
1 million metric tons.
The largest volume waste streams among the other
industries are waste oil (1.1 million MT) and dilute pesti-
cide solutions (0.5 million MT). The total hazardous waste
production for the drum reconditioning industry and for
chemical warehouses was 170,000 MT and 5,000 MT respectively,
1.4 Summary of Compliance Costs
Total industry compliance costs under RCRA Options A
and B are shown in Tables 1-5 and 1-6. Under Option A
compliance costs total $1.1 billion, of which 75 percent are
technical costs and 25 percent are administrative costs.
Administrative costs are defined as the sum of monitoring,
testing, reporting, training, contingency, and financial
responsibility costs. The largest costs are incurred by
the electric utilities industry ($606.6 million) and the pulp
and paper industry ($354 million). Approximately $70 million
in compliance costs would be incurred by both gasoline
service stations and automotive repair shops. The major
portion of Option A compliance costs under these industries
are administrative costs. Total compliance costs equal
approximately 1 percent of 1977 production value in all
industries.
Compliance costs under RCRA Option B are substantially
lower, although this is partly due to the interpretation
given to the existing draft regulations. In particular.
B-ll
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technical compliance costs for electric utilities have been
set at zero, pending the definition of facility standards
for utility wastes. Costs are also significantly lower for
the pulp and paper industry. The reduction is due to the
likelihood of a "nonhazardous" label for most of the
industry's wastes under RCRA Option B. Administrative costs
for gasoline service stations and auto repair shops are also
lower under Option B. Overall, RCRA Option B compliance
costs for these six industries are $231 million.
1.5 Summary of Industry Impacts
The expected decline in net income (pretax) for the
model and worst-case plants in each industry are shown in
Table 1-7. These calculations were made under the assumption
that no price change occurs which allows the firms to ps.ss
through compliance costs. Large declines in net income
were noted for the agricultural services and drum recondition-
ing industries. Relatively small changes were noted for the
model and worst-case plants in other industries. No numerical
estimate was made of the decline in net income for the model
plant in the electric utility industry. The regulatory
process for electric utilities was not formally modelled,
but the effect of RCRA on net income would, in all likelihood,
be small. A small decline in net income would be expected
due to the effect of normal regulatory lag on the ability of
utilities to recover costs.
The overall industry impacts are presented for the
two RCRA Options in Table 1-8. In these estimates, the
likelihood of price increases and other factors were con-
sidered. The following definitions were used in defining
the likelihood of plant closure: (1) "unlikely" means chere
B-14
-------
TABLE 1-7
MODEL PLANT IMPACTS UNDER RCRA OPTIONS A AND
% DECLINE IN NET INCOME
OPTION A
OPTION B
INDUSTRY
Agricultural services
Drum reconditioners
Paper and pulp
(Kraft mill)
Automotive repair shops
Gasoline service
stations
Chemical warehouses
MODEL
24
23
3
5
3
1
WORST-CASE
46
37
5
7
14
4
MODEL
23
23
2
3
2
1
WORST-CASE
44
36
3
4
9
3
aERCO estimates.
^No numerical assessment of the change in model plant
net income for electric utilities was made. Small impacts
would be expected due to regulatory lag.
B-15
-------
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B-16
-------
is estimated to be less than a 25 percent chance that 10
percent of the industry plants will close, (2) "possible"
means there is a 25 to 50 percent chance that 10 percent of
the industry plants will close, and (3) "probable" means
there is a 50 to 75 percent chance that 10 percent of the
industry plants will close. Price increases, all of which
were estimated to be 3 percent or less, were defined as small.
Plant shutdowns appear most likely in the agricultural
services industry. This industry includes a large number of
small, economically vulnerable firms. Plant shutdowns are
also possible in the drum reconditioning industry, as
indicated by the estimated drop in net income for the model
and worst-case plants. However, strong market conditions for
this industry make it less likely that many firms will cease
operations. Impacts on other industries should be small.
Some plant closures could occur in the pulp and paper
industry under RCRA Option A. However, it is extremely
unlikely that 10 percent of the industry's mills would
close.
No production cutbacks were forecast. Plant closures,
where they occur, will be due to the combined influences of
competitive and regulatory pressures. Remaining industry
firms should, therefore, be able to handle the market
demand.
A slight import increase is seen from the electric
utility industry as a result of RCRA. The increase should
occur from those utilities which are equipped to burn both
coal and oil. In 1977, there were 96 utilities which burned,
coal and at least 100,000 barrels of oil. Some firms may
increase oil purchases due to the added expense of coal ash
disposal.
B-17
-------
APPENDIX C
INCINERATION COSTS
FOR SELECTED WASTE STREAMS
AND
PROCESSES
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