530SW127C
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POTENTIAL FOR CAPACITY CREATION IN THE HAZARDOUS
WASTE MANAGEMENT SERVICE INDUSTRY
ENVIRONMENTAL PROTECTION AGENCY
AUGUST 1976
A T> V
-'. H. 3-
EP 530/
SW-127c
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POTENTIAL FOR CAPACITY CREATION
IN THE HAZARDOUS WASTE
MANAGEMENT SERVICE INDUSTRY
This final report (SW-127c) describes work performed
for the Federal solid waste management programs
under contract no. 68-01-3266
and is reproduced as received from the contractor
REPRODUCED BY
NATIONAL TECHNICAL
INFORMATION SERVICE
U. S. DEPARTMENT OF COMMERCE
SPRINGFIELD, VA. 22161
U.S. ENVIRONMENTAL PROTECTION AGENCY
1976
-------
BIBLIOGRAPHIC OAtA 1. Report No. 2.
SHEET
4. Title and Subtitle
Potential for Capacity Creation in the Hazardous Waste
Managenr t Service Industry
7. Author(s)
9. Performing Organization Name and Address
Foster D. Snell , Inc.
Hanover Road
Florham Park, New Jersey 07932
12. Sponsoring Organization Name and Address
EPA, Hazardous Waste Management Division
Office of Solid Waste Management Programs
Washington, D.C. 20460
3. Recipient's Accession No.
5. Report Dale
August, 1976
6.
8. Performing Organization Rept.
No> SW-127C
10. Pro)ect/Tosk/Work Unit No.
11. Contract/Grant No.
EPA No. 68-01-3266
13. Type of Report Si Period
Covered
Final
14.
15. Supplementary Notes
EPA Project Officer - Michael Shannon
16. Abstracts
This report examines the economic and financial structure of the hazardous
waste management service industry and its potential for creating new capacity
under regulatory and non-regulatory assumptions. Hazardous waste management
facilities store, treat and dispose of wastes in facilities not associated with
the industries that generate the waste. An analysis of the industry structure
and organization including data on types of firms and plants, employment,
pricing and costing, and markets was performed. An assessment was made of the
industry's financial profile for earnings, cash flow, assests, investment, and
other financial indicators. In 1975, there were approximately 95 firms in the
industry operating 110 facilities; total industry revenues were about $100
million. The report projects that there will be capacity shortfalls of hazardous
waste management facilities in 1983 for organic chemical and metal/metal finishing
potential1y hazardous wastes.
17. Key Words and Document Analysis. T7a. Descriptors
Hazardous Wastes
Financial Analysis
Economic Analysis
Markets
Employment
Costs
Prices
Capacity
Demand
17b. Identifiers/Open-Ended Terms
I7c. COSATI Field/Group
PRICES SUBJECT TO CHANGE
18. Availability Statement
i
19. Security Class (This
Report)
UNCLASSIFIED
20. Security Class (This
Page
UNCLASSIFIED
21. No. of Pages
FORM NTis-35 (REV. 10-73) ENDORSED BY ANSI AND UNESCO.
THIS FORM MAY BE REPRODUCED
USCOMM-DC 8265-P74
-------
This report had been reviewed by the U.S. Environmental Protection Agency
and approved for publication. Its publication does not signify that the
contents necessarily reflect the views and policies of the U.S. Environmental
Protection Agency, nor does mention of commercial products constitute endorse-
ment or recommendation for use by the U.S. Government.
An environmental protection publication (SW-127c) in the solid waste management
series.
11
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TABLE OF CONTENTS
Chapter Page No.
EXECUTIVE SUMMARY
I. INTRODUCTION 1
II. HAZARDOUS WASTE MANAGEMENT SERVICE 5
INDUSTRY: INDUSTRY PROFILE
1. Types Of Firms Offering Hazardous Waste 6
Management Services
2. Hazardous Waste Management Industry 10
Capacity
3. Markets Of The Hazardous Waste Management 14
Service Industry
4. Employment In The Hazardous Waste 21
Management Industry
5. Prices 26
6. Operating Cost Characteristics-- 1975 34
7. Five Year Financial History 38
8. Factors Affecting Current Business Success 46
III. HAZARDOUS WASTE MANAGEMENT SERVICE 51
INDUSTRY: GROWTH POTENTIAL
1. Hazardous Waste Management Industry Demand 53
Requirements
2. Projected Hazardous Waste Management 62
Industry Capacity
3. Financial Demand Requirements 69
4. The Impact And Importance Of Non-Capital 84
Constraints On Decision To Expand
111
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TABLE OF CONTENTS (continued)
Chapter Page No.
IV. DISCUSSION 86
1. Projected Hazardous Waste Management 88
Industry Growth With No New Federal,
State And Local Regulation
2. Projected Hazardous Waste Management 93
Industry Growth With New Federal,
State And/Or Local Regulation
APPENDIX A GLOSSARY 105
APPENDIX B INTERVIEW GUIDE 107
APPENDIX C LIST OF INTERVIEWS BY EPA 115
REGION
IV
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LIST OF TABLES
Table No. Page No.
n-1 Hazardous Waste Management Facilities In 9
The United States - 1975
II-2 Estimated Process Capacity Of The Hazardous 11
Waste Management Industry - 1974
II-3 Markets For Hazardous Waste Management 15
Services - 1974
II-4 Market Structure Of The Hazardous Waste 1?
Management Industry - 1975
II-5 Estimated Hazardous Waste Management 19
Industry Capacity - 1974
II-6 Employment In The Hazardous Waste Industry 24
By EPA Region - 1975
II-7 Estimated Employment In The Hazardous Waste 25
Management Industry - 1975
II-8 Processes/Pricing In The Hazardous Waste 27
Management Service Industry
II-9 Representative Prices For Hazardous Waste 33
Management Services, 1975
11-10 Operating Cost Characteristics Of Hazardous 35
Waste Management Facilities, 1975
11-11 Five Year Financial History Of Hazardous 40
Waste Management Industry 1971-1975
11-12 Five Year History Of Key Financial Ratios Of 42
Firms Whose Main Objective Is Hazardous
Waste Management
11-13 Five Year History Of Key Financial Ratios Of 45
Corporations Having Divisions Or Sites Engaged
In Hazardous Waste Management 1971-1975
v
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LIST OF TABLES
Table No. Page No.
III-l Industrial Hazardous Waste Growth Projections 55
HI-2 Percent Of Hazardous Waste Disposed 57
Internally By Producing Firms - 1974
III-3 Growth Projections Of Industrial Hazardous 59
Waste Available For Contract
III-4 Distribution Of Hazardous Waste Load By 60
EPA Regions
III-5 Hazardous Waste Management Industry 63
Forecasted Volume Increase 1975-1977
III-6 Hazardous Waste Management Industry 65
Forecasted Capacity Increase For 1975
To 1977
III-7 Regional Hazardous Waste Management Capacity 66
For 1974 And 1977 By Market
III-8 Estimated 1974 And 1977 Environmentally 68
Adequate Hazardous Waste Management
Capacity
III-9 Estimated Hazardous Waste Management Industry 71
Demand And Capacity Metals/Metals
Finishing -- 1974, 1977 And 1983
111-10 Estimated Hazardous Waste Management Industry 72
Demand And Capacity Paints/Solvents/
Coatings 1974, 1977 And 1983
III-11 Estimated Hazardous Waste Management Industry 73
Demand And Capacity Organics 1974, 1977
And 1983
111-12 Estimated Hazardous Waste Management Industry 74
Demand And Capacity -- Petroleum 1974, 1977
And 1983
VI
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LIST OF TABLES
Table No. Page No.
111-13 Estimated Hazardous Waste Management Industry 75
Demand And Capacity Inorganics 1974,
1977 And 1983
111-14 Hazardous Waste Management Regional 76
Capacity Surpluses (Deficit) To Demand
1977
111-15 Hazardous Waste Management Regional 77
Capacity Surplus (Deficit) To Demand
1983
111-16 Hazardous Waste Management Industry 82
Estimated Capital Requirements To Meet
1983 Forecasted Demand
IV-1 Assumed Phased Schedule For Implementation 95
Of Hazardous Waste Legislation And Regulation
IV-2 Estimated Structure Of The Hazardous Waste 103
Management Industry In 1983, With And Without
New Federal, State Or Local Regulation
LIST OF FIGURES
Figure No. Page No.
III-l Capital Cost Of Waste Treatment Facility 79
Aqueous Waste Treatment Capacity
III-2 Capital Cost Of Waste Treatment Facility 80
Incineration Capacity
IV-1 U. S . Hazardous Waste Management Industry 104
Demand/Capacity Projections To 1983
vii
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EXECUTIVE SUMMARY
This report presents an assessment of the current hazardous
waste management service industry and the industry's potential for
expansion. The analysis was performed for the Office of Solid Waste
Management Program's Hazardous Waste Management Division of the United
States Environmental Protection Agency (EPA) under contract No. 68-01-3266
by Foster D. Snell, Inc. (Snell) a division of Booz, Allen & Hamilton, Inc.
A variety of factors are acting to increase the demand for haza::dous
waste management services; they include:
Imposition of air and water pollution control
and land disposal regulations
Industrial growth
Pesticide controls
New restrictions on ocean dumping of wastes
The increased demand may overtax the capacity of the existing hazardous
waste management industry. EPA required an assessment of the industry's
ability to meet the projected demand for hazardous waste treatment and
disposal services in order to evaluate any potential inpact of a recjulatory
program.
The Hazardous Waste Management Industry is young, small, fragmented
and growing. It is not well defined or known outside environmental agencies
or industrial sectors. In 1975, there were approximately 95 active firms
in the industry operating 110 facilities. Forty percent of the facilities
are owned by tightly held private corporations, 15 percent of the facilities
are owned by large common stock corporations and 28 percent of the Facilities
are owned and operated by subsidiaries of common stock corporations.
The common stock corporations and subsidiaries control 65 to 70 percent
of the industry's revenues. Geographically, the industry's facilities are
concentrated in industrial regions; EPA Region V has 25 percent of the
nation's sites.
Vlll
-------
The overall storage, treatment and disposal capacity of the industry is
approximately 7.3 million metric tons on a wet (with water) basis per year
(1974-1975) . However, some of this capacity represents processes which
may not be considered environmentally adequate in the future; that is, the
process may not treat or contain the waste to the degree necessary to prevent
environmental contamination. For example, the disposal of hazardous wastes
in selected areas of sanitary landfills may not contain the hazardous waste
over time, particularly if chemical reactions take place which change the
hazardous material into a water soluble form. Currently, sanitary landfills,
deep well disposal and ocean dumping are in use and in some cases officially
approved methods for disposal of hazardous wastes. For the purpose of this
report, the above methods were excluded; the remaining processes, such as
incineration, chemical fixation, use of secure landfills and others were considered
environmentally adequate and capacity estimates were developed from only
the estimates of the environmentally adequate capacity. Using this definition
the environmentally adequate capacity in 1975 was 5.3 million metric tons per
year wet basis.
Approximately 53 percent of overall industry capacity is currently used.
Seventy-two percent of the respondents interviewed in this survey reported
that the reason for low industry-wide capacity utilization was poor regulation
or poor enforcement of standards on waste producers and hazardous waste
management services. Lack of good regulation permits environmentally in-
adequate disposal, such as disposal of hazardous wastes in open dumps or
sanitary landfills. The hazardous waste management industry, which attempts
to treat and dispose of wastes, cannot compete in price with environmentally
inadequate practices.
Total employment within the industry was approximately 2,000 persons in
1975. Eleven percent of employees were professionals, primarily chemists and
chemical engineers. Most firms have internal training practices to develop
expertise. Union involvement is small with only one in five firms having labor
organizations. The average hourly wages for non-management personnel in
the industry range between $5.00 and $6.50 per hour.
Prices for treatment and disposal services are fairly uniform within the
industry. Transportation costs, which were not included in this study, are
the major factor in pricing. Transportation costs also limit the competitive
market area serviced.
IX
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Total industry revenues in 1975 were about $100 million; five firms in the
industry control one-third of the revenues. The industry's annual revenue
growth rate has been 14 percent for the last five years but the major industry
growth in volume (quantity of wastes treated and disposed) was between 1971
and 1973. The sales and profits have remained relatively constant since 1973.
An estimated 17 percent of the companies in the industry are losing money and the
majority of the smaller firms have a poor (two-thirds debt) capital structure.
Industry representatives currently consider the industry's future growth
potential as being strongly affected by new state or federal regulation. The study
examined with and without regulation cases for the years 1974-1975, 15)77 and
1983. These years were selected so that the report would correspond to the
times water quality standards increase. Hazardous waste management industry
representatives currently believe water effluent limitations will have the most
significant impact on demand for the industry's services .
Two factors are critical to any analysis of industry growth; they are the
quantity of hazardous wastes generated and the part of this quantity which is
treated and disposed by the hazardous waste management industry. For the three
years studied in this report, quantitites are:
Estimated Total U.S. Estimated Demand For
Hazardous Wastes Hazardous Waste
Year Generated Management Industry d)
(Millions of wet (2) (Millions of wet(2)
metric tons/year) metric tons/year)
1974 40.2 7.5
1977 45.8 7.9
1983 51.7 8.9
(1) Quantity of wastes available for treatment and disposal by
the hazardous waste management industry
(2) Includes weight of water
Note: Assumes regulations
Source: Foster D. Snell, Inc.
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The results of the hazardous waste management industry assessment
for 1983 are summarized below:
Item
Without Regulation
With Regulation
U.S. Demand (1) faiillion
(21
metric tons per year wet1 ;)
Number of Companies
Number of Facilities
Capacity Required to Meet
Demand on an EPA Regional
Basis (million metric tons
per year wet)
Forecasted Capacity by EPA
Regional Basis (million
metric tons per year wet)
Revenues (1975 dollars in
millions)
Employment (number)
Tangible Assets
(dollars in millions)
4.5
75 to 85
130 to 140
8.3
$150 to $160
2,100
$150
8.9
90 to 100
160 to 170
11.0
(12 with 10% excess)
9.1
$330 to $350
4,500
$400 to $500
(1) Quantity of wastes available for treatment and disposal to outside contractors
(2) Includes water weight
Source: Foster D . Snell, Inc.
The above table also illustrates the current overcapacity conditions in some
areas of the U.S., such as Region X (i.e. 11 million metric wet tons capacity
is necessary for the U.S. on a regional basis to meet the total U.S. demand
of 8.9 million metric tons (wet basis) .
XI
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With regulation, the estimated total expenditures required for the
industry to essentially double capacity and meet demand is approximately
$610 million by 1983. Ten percent excess capacity has been included in
the estimate to provide for contingencies, such as maintenance and breakdowns.
It is also assumed in this estimate that the industry will make maximum use of
existing facilities and continue current practices of using second hand
equipment, such as storage tanks, piping, etc. wherever possible.
However, the industry has a capital availability problem. Based on
the interviews, the contractor estimates that the industry can furnish only
$400 million of the needed capital from 1977 to 1983 assuming no hazardous
waste regulations are adopted and no industry action taken until 1977. Assuming
that the industry uses $100 million to upgrade existing facilities and the
remainder for additional capacity, the contractor estimates that the industry
can supply capacity to treat and dispose of 9 .1 million metric tons of hazardous
wastes per year or approximately 75 percent of the needed total capacity and
excess required if new Federal, state or local regulations are imposed. These
estimates are shown graphically below:
15
I"
a
» 13
11
.
9
1074
1977
1980
1983
YEAR
O Demand Amount of Hazardous Waste Available to Outside Contractors
Q Environmentally Adequate Capacity Necessaiy to Meet 1983 Hazardous
Waste Load Demand (1983) On A Regional Basis
A Environmentally Adequate Capacity Necessary To Meet 1983 Hazardous
Waste Load Demand (1983) On A Regional Uasis Assuming 10 Percent
Excess
Forecasted Environmentally Adequate Capacity Without Regulation (5 Percent
Annual Growth Rate)
X Forecasted Environmentally Adequate Capacity With Regulation
Source: Foster D. Snell, Inc. analysis.
Xll
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Under these conditions, and based on interviews with representatives
of hazardous waste producers and those in the service industry responsible
for treatment and disposal, the contractor estimates that hazardous waste producers
will treat the remaining 10 percent to 20 percent of wastes in-house. The con-
tractor further forecasts that hazardous waste generators will be able to assume
the responsibility of these wastes and capabilities of environmentally adequate
treatment and disposal capacity available would not significantly affect
implementation of hazardous waste management regulation.
xiii
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I. INTRODUCTION
-1-
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i.
This report presents an economic and financial assessment of the
current hazardous waste management service industry and the industry's
potential for expansion. The analysis was performed for the Office of
Solid Waste Management Program's Hazardous Waste Management Division
of the United States Environmental Protection Agency (EPA) under
Contract No. 68-01-3266 by Foster D. Snell, Inc. (Snell), a division
of Booz, Allen & Hamilton, Inc.
In the past few years, EPA has been evaluating the handling,
treatment, and disposal of hazardous wastes. The EPA's effort, conducted
by the Hazardous Waste Management Division (HWMD), Office of Solid Waste
Management Programs, has included:
Identification of hazardous wastes
Assessments of environmental impact
Methods of hazardous waste control
Requirements for waste ccntrol facilities
resulting from imposition cf control standards
Means of assuring the availability of adequate
facilities for control of hazardous waste.
Results of this research have indicated the requirements for
environmentally safe control, treatment, and disposal of hazardous wastes.
Demand for environmentally adequate treatment and disposal facilities is
anticipated to sharply increase as a result of specific regulatory action
in future periods, such as water quality standards. To assure the
availability of treatment/disposal facilities, EPA required an assessment
of the ability of the hazardous waste management service industry tc
expand to meet the projected demands.
Currently, this industry is characterized by involvement both in
reprocessing/recovery of selected wastes, treatment, and ultimate
disposal (as land disposal) of potentially hazardous wastes.
-2-
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The type of services offered by the hazardous waste management
industry are necessary to meet the projected demands of future hazardous
waste volumes. The ability of the hazardous waste management industry
to expand had to be defined. Since the hazardous waste service industry
operates in the private sector, the attitude of the financial community
towards such high risk enterprise is a major factor controlling the
ability to expand. Therefore, the EPA required an assessment of the
eccnonic structure and organization of the industry and its economic
expansion potential.
The purpose of this report is to:
Provide 1975 baseline hazardous waste
management industry data and assessment
of the industry.
Assess the ability of the industry to meet
growth requirements to 1983.
Identify the key issues and constraints
affecting capacity creation by 1983.
All forecasts are based on treatment and disposal of wastes in
an "environmentally adequate" manner. These processes were defined
by EPA for the purposes of this study as including chemical treatment,
incineration and secure landfill, but excluding land dumping, most
sanitary landfills, ocean dumping and deep well injection.
In summary, this report provides an assessment of the commercial
attractiveness of the future hazardous waste treatment and disposal
industry and estimates the resources, capabilities and constraints of
the current industry to meet the projected demand. The scope of the
study included interviews with:
Members of the current Hazardous Waste
Management Industry
The Industry Association (National Solid
Waste Management Association)
Potential new competitors
Equipment and material suppliers to the industry
Regulatory agencies
-3-
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The time period covered iri the study was .from 1974 to, approximately 1983.
This assignment was initiated in July, 1975 and completed over a
twelve month period. The methodology consisted of an analysis of
pertinent literature, supplemented with telephone and personal interviews,
The following tasks were performed.
Initial interviews with the EPA
Assembly, review and analysis of information
on the current practices and projected
changes of factors affecting the hazardous waste
management industry a list of references is
presented at the end of this report.
Development and government approval (OMB
Clearance No. 158S-75016) of interview guides.
Interviews (by telephone and in person) with
representatives of the hazardous waste manage-
ment service industry. Approximately 80%
of the industry was surveyed. This survey
consisted of 21 site visits and 62 telephone inter-
views .
Compilation of an industry historical financial
analysis and assessment of the current industry.
Forecasting the growth demand on the industry and
the potential for capacity creation.
The organization of the report follows the outline of tasks performed:
Hazardous Waste Management Service
Industry: Industry Profile
Hazardous Waste Management Service
Industry: Growth Potential
Discussion
Included in the Appendix is a Glossary, Interview Guide, and List of
Interviews.
-4-
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II. HAZARDOUS WASTE MANAGEMENT SERVICE
INDUSTRY: INDUSTRY PROFILE
-------
1. TYPES OF FIRMS OFFERING HAZARDOUS WASTE MANAGEMENT SERVICES
The hazardous waste management service industry is composed of a
variety of firms varying in size from a family-owned company having only
three employees to a common stock corporation having multi-divisions.
The majority of firms are privately-owned corporations with sales less than
two million dollars per year; the three largest firms are multi-site operations
which collectively are responsible for approximately 25 percent of the total
industry's revenues. Geographically, about 60 percent of the industry's
plant sites are concentrated in EPA Regions II, V and IX. Important charac-
teristics of the industry are presented in more detail in the following paragraphs.
1.1 Ownership Configuration and Number of Sites
In 1975, the hazardous waste management industry was com-
prised of 95 firms with 110 sites in the United States. Approximately
94% of the companies had only one site engaged in hazardous waste
management. The three largest firms of the industry have three to
six sites per company handling hazardous wastes.
The ownership of firms within the hazardous waste management
industry can be classified into the following categories:
Common stock corporations
Subsidiary or division of parent company
Private corporation
Partnership or family operated company
Municipally controlled
Of the 110 sites in the U .S . in 1975, 54 were tightly held
private corporations , partnerships , or family operated companies .
All of these companies had a single facility. There were 46 private
corporations which are tighly held with one to four owners having
over 90 percent controlling interest. There were 8 family operated
companies or partnerships, which typically had sales revenues less
than $500,000 annually. Therefore, of the 95 companies in the
industry, 57 percent were tightly held private corporations or
partnerships.
-6-
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There are 16 common stock corporations in the industry.
Typically they have annual revenues over a million dollars.
For the majority of these corporations, hazardous waste
management is not their primary business.
In addition to the 16 conrcnon stock corporations, there
are 31 sites that are either divisions or subsidiaries of parent
corporations. Therefore, 43 percent of the total site locations
are controlled through large corporations. There is a total of
32 corporations operating these 47 site locations. This segment
of the industry is responsible for approximately 65 to 70 percent
of the total industry revenues.
Only about 8 percent of the sites are municipally owned,
these sites are concentrated in California.
1.2 Size of Facilities
The most representative classification of facility size
in the hazardous waste management industry is by sales revenues;
generated through treatment and disposal of hazardous waste.
The contractor found that volumes handled in a given year varied
by type of account, material concentrations, and amount of
recycled material. Therefore, hazardous waste volumes treated
and disposed had more variability than sales revenues.
In 1975, the size of each individual site or facility sales
revenues from hazardous waste treatment and disposal were in the
following categories:
17 percent had sales revenues less than
$100,000 per year
34 percent had sales revenues from $100,000
to $1,000,000 per year
34 percent had sales revenues from $1,000,000
to $2,000,000 per year
15 percent had sales revenues greater than
$2,000,000 per year.
-7-
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1.3 Geographic Distribution of Sites
The geographic distribution of sites was concentrated in EPA
Regions n, V , and IX. These regions contain approximately 60
percent of the sites with approximately an equal proportion of
facilities with revenues over two million dollars. Regions I, VIII
and X were sparsely populated with sites comprising collectively
only 11 percent of the total facilities. The distribution of sites
offering hazardous waste management services in each of the 10
EPA regions found in the U.S. is as follows:
EPA Region V 25%
EPA Region IX 17%
EPA Region II 16%
EPA Region VI 9%
EPA Region HI 8%
EPA Region VII 7%
EPA Region IV 6%
EPA Region I 6%
EPA Region X 5%
EPA Region VIII 1%
Table II-1 provides a comparison of the types of sites ,
by EPA Region, based on facility ownership, configuration and
1975 sales revenues.
-8-
-------
TABLE II-1
HAZARDOUS WASTE MANAGEMENT FACILITIES IN THE UNITED STATES - 1975 *
Facility Ownership Configuration Sales
Subsidiary
or
Division
A
jon
I
/
'I
'II
'III
X
;
>tal
No. of
Facilities
6
18
9
7
27
10
8
1
19
5
110
Common
Stock
Corporation
2
2
2
1
4
1
1
0
2
1
12
of
Parent
Company
1
5
3
2
9
4
2
1
2
2
31
Partnership
Private
Corporation
2
11
3
4
13
3
3
0
6
1
46
or Family
Operated
Company
1
0
0
0
1
2
2
0
1
1
8
Municipally
Controlled
0
0
1
0
0
0
0
0
8
_0
_9
Less than
$100,000
2
2
4
1
3
2
2
0
3
0
19
$100,000
to
$1,000^000
3
8
0
1
8
4
3
0
7
3
_37
$1, 000, 000
to
$2,000,000
0
5
4
3
11
3
1
1
7
2
3J7_
Over
$2,000,000
1
3
1
2
5
1
2
0
2
0
17
=
Facilities listed are those offering hazardous waste management services to thg public and processing wastes in an "environmentally
adequate" manner the listing excludes, however, operations using sanitary landfills.
>urce: Foster D. Snell, Inc. Industry Interviews and Company Financial Statements
-9-
-------
2. HAZARDOUS WASTE MANAGEMENT INDUSTRY CAPACITY
Hazardous waste management firms provide a variety of services
to customers in their own states and other states. Available capacity
by state and by process is shown in Table II-2. The reported capacities
in the Table may exceed hazardous waste generation within the state,
indicating an interstate business by firm, or indicating excess or
underutilized capacity. Users of this data should be cautioned that
new facilities in one state will affect neighboring states. The Table
also shows the percent utilizations of this capacity by EPA region. A
53% utilization is the national average.
Capacity data presented in Table II-2 is in gallons per day.
This is the most conwonly used capacity and can be converted to other
capacity figures as required. Capacities in dry weights can be misleading,
since there are often chemical reactions that take place converting
material into end products that are either lighter or heavier than the
original hazardous waste. For example, sulfuric acid (formula weight 98)
can be reacted with lime (formula weight 56) to form calcium sulfate
(formula weight 136). In addition, capacities of landfills can vary
depending on how long a company wants to utilize such a facility. For
example, 100,000 gallons per day for 20 years could also be 200,000
gallons per day for 10 years. Landfill capacities in Table II-2 'were
based on what the individual firms rt sported as current operating
capacities.
Table II-2 also shows that many of the hazardous waste management
facilities have some form of resource recovery. To the extent possible,
revenues and expenses of resource recovery operations have been deleted
from all cost and price estimates in this report (however, they c»re
included in the financial history of the companies). It is iinpoirtant
to note that resource recovery operations are a major source of revenue
for the industry and form a key link in the treatment and disposal of
industrial waste. Recovery operations generally account for less; than
20 percent of the waste volume; however, depending on the price of the
material to be recovered, the recovery operation could account for
40 percent of revenues.
Facility utilization by state by process showed no specific trends.
The following were the range of utilization by process.
Chemical treatment 40% to 80% utilization
Incineration 30% to 80% utilization
Secure Landfill 30% to 80% utilization
Deepwell injection 75% utilization
Resource recovery 50% to 75% utilization
-10-
-------
TABLE II-2
ESTIMATED PROCESS CAPACITY OF THE HAZARDOUS WASTE MANAGEMENT INDUSTRY - 1974
(Thousands of Gallons per 24 Hour Day)
EPA Chemical
Reeion Treatment
... ft,
Region I
Maine
Mass.
Subtotal
Region II
New York
New Jersey
Subtotal
Region III
Maryland
Virginia
Pennsylvania
Subtotal
Region IV
Kentucky
North Carolina
Tennessee
Georgia
Subtotal
-
46
46 (45%)"
45
26
71(50%)
30
-
235
265(45%)
-
-
-
20
20 (60%)
Incineration
~
4
_4 (30%)*
108
45
153 (50%)
10
15
12
35 (75%)
15
20
9
44 (60%)
Secure Deep Well Resource
Landfill Injection Recovery
5
*
_J (30%)* _9(50%)*
190 - 17
A t\
49 12
239(50%) 57(60%)
c 5
5 ~ °
5
c 10
15(30%) 15(50%)
23 '
"
23
46 (40%)
Region V
Michigan
Illinois
Minnesota
Ohio
Wisconsin
Indiana
Subtotal
Region VI
Oklahoma
Texas
Subtotal
Region VII
Missouri
Subtotal
470
400
-
485
25
150
1,530 (50%)
5
I5.
70 (40%)
250
250 (50%)
80
75
16
150
40
361 (65%)
-
_60
60 (40%)
5
5(75%)
20
35
-
120
50
230 (50%)
10
125
135 (50%)
KB
DO
"66(60%)
25
30
"
100 45
20
i n c
195
~100 (75%) 315 (50%)
or\
-------
TABLE II-2 (2)
Chemical
Treatment
Region IX
California 51_
Subtotal £7 (80%)
Region X
Washington 28
Idaho j^_
Subtotal 28_ (50%)
TOTAL 2,337
Incineration
ii
14 (80%)
676
Secure
Landfill
639
639 (80%)
125
200
J25 (30%)
1,714
Deep Well Resource
Injection Recovery
400
400 (75%)
895
* Estimated 1974 capacity utilization
Note: The weighted average capacity utilization of chemical treatment, incineration, and secure landfill of the
hazardous waste management industry was 53% in 1974.
Source: Foster D. Snell, Inc. industry interviews
-12-
-------
highest utilizations were in Region IX for all processes, with lowest
utilizations in Region I. In Region I, hazardous waste management facilities
were not being utilized to capacity because of price competition from other
EPA regions. In Region IX, capacity is being utilized at a high rate due
to two major factors.
Enforcement of the treatment and disposal
of hazardous wastes is strict and uniform.
Siting problems for raw hazardous waste
management facilities have restricted capacity.
-13-
-------
3. MARKETS OF THE HAZARDOUS WASTE MANAGEMENT SERVICE INDUSTRY
3.1 Overall Demand
The EPA has identified 13 industry groupings which are major
generators of hazardous wastes. These 13 industries are not the only
sources of hazardous wastes , therefore the market analysis must be
considered as minimum. The metals mining industry does not utilize
outside contractors to treat or dispose of hazardous wastes and is not
included in the market analysis. The 12 other industries generated
an estimated 40.2 million metric tons of potentially hazardous wastes
per year in 1974 (wet basis - with water) . Approximately 81 percent,
or 32.7 million metric tons, of these wastes are reported to be treated
and disposed internally by the generating industries. Table II-3
presents the EPA industry groupings, together with 1974 estimated
waste loads and quantities available for outside contract.
3.2 Hazardous Waste Management Industry Categorization
of Markets
The hazardous waste management industry views the 13 EPA
groupings in terms of the wastes produced and the general typas
of treatment and disposal required to manage the wastes. The hazard-
ous waste management industry generally uses the following five
categories to describe waste markets.
Metals/Metal Finishing
Paints/Solvents/Coatings
Organics
Petroleum
Inorganics
Table II-4 presents the five categories and an estimate of the input to
each category from the 13 EPA industry groupings. The general types
of processes used for treatment are also included.
3.3 Hazardous Waste Management Industry Capacity by Type
of Market
Section 2 presented hazardous waste management capacity and
utilization segmented by process. This section presents the same
information segmented by market. The estimated capacities are
presented in the five market categories by region on a wet basis,
since the conventional industry terminology is on a liquid through-
put basis.
-14-
-------
TABLE II-3
MARKETS FOR HAZARDOUS WASTE MANAGEMENT SERVICES - 1974
(Millions of Metric Tons per Year)
Indus
Batteries
.(1)
.(2)
Inorganic Chemicals
Organic Chemicals, Pesti-
cides and Explosives
Electroplating^ '
(3)
Paint and Allied Products* 5>
Petroleum Refining^6)
/7)
Pharmaceuticals
Primary Metals Smelting
and Refiningv8)
Estimated Hazardous
Estimated Hazardous
SIC Codes
3691. 3692
281
2681, 2865, 2869,
2879, 2892
3471
285
291
283
3312, 3313, 332,
. Wastes
Dry*
0.005
2.000
2.150
0.909
0.075
0.610
0.062
17.398
Produced
Wet*
0.010
3.400
6.860
5.276
0.096
1.300
0.065
20.356
Wastes Available For
Outside
Dry*
0.003
0.300
0.430
0.636
0.071
0.366
0.053
0.348
Contract
Wet*
0.006
0.510
1.372
3.693
0,091
0.780
0.055
0.407
Percent of
Hazardous
Waste
Generation
Available
For Outside
Contract
65
Leather Tanning and
Finishing^10)
Special Machinery^1)
Textiles, Dyeing, and
Finishing^)
TOTAL
3331, 3332, 3333,
3334, 3339. 33412,
33417
2821, 2822, 2823,
2824
3011, 3021, 3031,
3069
311
355. 357
22
0.151
0.048
0.045
0.102
0.048
23.603
0.737
0.048
0.146
0.163
1.770
40.227
0.031
0.046
0.043
0.097
0.012
2.445
0.147
0.046
0.139
0.155
0.098
7.499
20
95
95
95
5.5
* Dry does not include weight of water; 'wet' includes water weight.
+ Weighted average of hazardous waste available for outside contract on a wet basis.
Sources: (on next page)
-15-
-------
TABLE n-3 (2)
Sources With EPA Contract Numbers:
(1) Versar, Inc., Assessment of Industrial Hazardous Waste Practices; Storage and Primary Battery Industries,
Contract No. 68-01-2276.
(2) Versar, Inc., Assessment of Industrial Hazardous Waste Practices, Inorganic Chemical Industry',
Contract No. 68-01-2246.
(3) TRW Inc., " Assessment of Industrial Hazardous Waste Practices, Organic Chemicals, Pesticides, and
Explosives Industries , Contract No. 68-01-2919.
(4) Battelle, Columbus Laboratories, "Assessment of Industrial Hazardous Waste Practices - Electroplating and
Metal Finishing Industries', Contract No. 68-01-2664.
(5) Wapora Inc., "Assessment of Industrial Hazardous Waste Practices, Paints Industry", Contract No. 63-01-2656.
(6) Jacobs Engineering Co., Assessment of Industrial Hazardous Waste Practices, Petroleum Refining',
Contract No. 68-01-2288
(7) Arthur D. Little, Inc., ' Hazardous Waste Generation, Treatment and Disposal in the Pharmaceutical Industry',
Contract No. 68-01-2684.
(8) Calspan Corporation, "Assessment of Industrial Hazardous Waste Practices in the Metal Smelting and Refining
Industry ', Contract No. 68-01-2604.
(9) Foster D. Snell, Inc., 'Assessment of Industrial Hazardous Waste Practices, Rubber and Plastics Industry",
Contract No. 68-01-3194.
(10)SCS Engineers, Inc., "Assessment of Industrial Hazardous Waste Practices -- Leather Tanning and Finishing
Industry", Contract No. 68-01-3261.
(11) Wapora Inc., 'Assessment of Industrial Hazardous Waste Practices, Special Machinery and Manufacturing', EPA
Contract No. 68-01-3193.
(12) Versar, Inc., "Assessment of Industrial Hazardous Waste Practices, Textiles Industry', Contract No. 68-01-3178.
-16-
-------
TABLE II-4
MARKET STRUCTURE OF THE HAZARDOUS
WASTE MANAGEMENT IDJBU&T&Y \--.l97S
Market Category
Metals/Metal
Finishing
P aints / S ol vents /
Coatings
Organics
Petroleum
Inorganics
Estimated Input
From Each EPA
Industry Group
Group Percent*
Batteries < 5%
Electroplating 80 - 90
Primary .metals
smelting and 10
refining
Special 3-7
machinery
- Paint and 100
allied products
Organic 80 - 90
chemicals
Pharmaceuticals 3-5
Rubber and 8-12
plastics
Textiles, dyeing, 5
and finishing
Petroleum
Refining
Inorganic
chemicals
Leather
tanning
100
80 - 90
10 - 20
Types of
Hazardous
Wastes
Acid
solutions
Metals
containing
sludges
Organics
Solvents
Pesticides
Biologicals
Rubber
Plastics
Oily wastes
Aqueous
solutions of
salts, metals,
etc.
Current
Treatment Methods
Neutralization
Chemical Treatment
Sanitary Landfill
Secure Landfill
Deep Well Injection
Ocean Disposal
Incineration
Chemical Treatment
Sanitary Landfill
Secure Landfill
Incineration
Biological Treatment
Chemical Treatment
Sanitary Landfill
Secure Landfill
Incineration
Deep Well Injection
Chemical treatment
Ocean Dumping
Secure Landfill
* Weighted % of category
Source: Foster D. Snell, Inc. analysis based on industry interviews,
-17-
-------
It must be emphasized that capacity calculations by market
are relative values, since the hazardous waste management facility
serves a variety of clients. For example, a plant with an incin-
erator might process paint sludges one day and refinery wastes the
next. Heavy metals may come from a metal plating process one day
and a metal smelting and refining process the next. Organic
pesticide residues, pharmaceutical wastes and waste rubber and
plastic matter containing unreacted toxic monomers could be handled
by the same plant. The estimates given are total overall capacities
for given waste types. In most instances, plants do not operate at
capacity. The overall capacity for the industry is the additive
capacity for end market area at this point in time; however, the
capacity is a variable to waste concentrations and types of materials
disposed.
The current (1974) capacity estimates for the hazardous
waste management industry include some processes which may not be
environmentally adequate in the future. For example, EPA antici-
pates that deep well injection will not be considered environmentally
adequate in future periods. Currently, however, these practices
are used and in some cases approved by local regulatory agencies.
Capacity estimates given in this section include facilities which
may not be used in the future, but currently have some form of
approval, such as a sanitary landfill which has a permit to accept
some hazardous wastes and fill these wastes in a segregated area.
(Later chapters in this report provide capacity estimates of
environmentally adequate capacity.)
The current capacity of the hazardous waste management
industry is approximately 7.1 million gallons per day or 1.8
billion gallons per year (24 hour operation, 250 days per year).
Disposal of petroleum wastes (by deep well injection, for >2xample),
which occurs predominantly in Regions V, VT, IX, and X accounts
for 43 percent of hazardous waste/treatment and disposal capacity.
Table II-5 presents the capacity estimates for the 10 EPA regions
by market. It is evident that capacity follows market as discussed
in the following paragraphs.
3.3.1 Paint/Solvents/Coatings
The largest waste treatment and disposal capacity
exists in Regions II and V indicating the concentration
of paint and coating manufacturers (Region II) and paint
and coating users (Region V). Both represent areas of
maximum industrial concentration.
-18-
-------
TABLE H-5
ESTIMATED HAZARDOUS WASTE MANAGEMENT
INDUSTRY CAPACITY 1974 (D
(Thousands of Gallons Per 24 Hour Day)
MARKET
EPA
REGION
I
II
III
IV
V
VI
VII
VIII
IX
X
TOTAL
Note: (1)
Paints/
Solvents/
Coatings
8
220
45
50
275
35
20
3
30
50
736
Metal/
Metal
Finishing
75
130
25
1,210
70
125
3
105
55
1,798
Includes deep well injection,
Organic
4
110
15
15
166
25
56
3
65
55
550
approved
Petroleum
5
20
30
15
770
1,085
20
3
640
550
3,138
Inorganics
46
95
115
5
415
65
150
3
180
55
1,129
sanitary landfill and
other processes which were used in 1974, but may not be
considered environmentally adequate in future periods.
Source: Foster D. Snell, Inc.
-19-
-------
3.3.2 Metals/fetal Finishing
Region V had the highest capacity for processing
hazardous wastes in the metals and metal finishing market.
This is primarily due to the concentration of the auto-
motive and steel industries in the midwest.
3.3.3 Organics
The ability to handle and process high organics is
spread broadly across all 10 EPA Regions with Regions II
and V having the total maximum capacity.
3.3.4 Petroleum
Approximately one-third of the hazardous waste
management industry's capacity for petroleum wastes is
concentrated in EPA Region VI. EPA Regions V, IX, and X
additionally contain significant hazardous waste management
industry capacity. The distribution of hazardous waste
management capacity indicates the regional concentration
of the petroleum industry.
3.3.5 Inorganics
The distribution of capacity to handle conventional.
inorganic hazardous wastes is broad except for a concen-
tration in Region V due primarily to the industrial
concentration of the Region.
-20-
-------
4. EMPLOYMENT IN THE HAZARDOUS WASTE MANAGEMENT INDUSTRY
Total employment in the hazardous waste management industry was about
2,000 employees in 1975. The industry is labor intensive with annual revenues
of approximately $50,000/employee. The key employment characteristics are
presented in the following paragraphs.
4.1 Skill Level of Employment
In 1975, there were an estimated 2,000 employees actively
engaged in the hazardous waste industry. Approximately 11 percent
of the employees are classified as professionals . Of the professional
employees, 75 percent are chemists or chemical engineers. Larger
firms with sales over two million dollars per year have the highest
percentage of professionals with a chemical background; in some of
the leading firms in the industry 100 percent of the professionals have
chemical backgrounds (including sales personnel) . Of the other 2i5
percent of the professionals, the majority is composed of employees
with business backgrounds who are engaged in sales, accounting
and management.
The breakdown of skilled versus unskilled employees within
the industry is difficult to define because of the following factors:
The contractor's definition of a skilled employee
is a chemical operator or technician requiring
skills to operate specific waste treatment equip-
ment or conduct specific laboratory analysis.
Employees engaged in operation of such equipment
as trucks, heavy machinery, etc. , are not classi-
fied as skilled; however, their wages are higher
than "skilled" employees.
The industry in general trains operations personnel
internally in the corporations; hence operations
personnel having skilled titles may have relatively
minor experience with waste treatment equipment.
The industry is labor intensive in drum handling
and transferring. Although the skills required in
these operations is minimal, some classify "material
handlers" as skilled.
-21-
-------
4.2 Labor Organizations
Union involvement in the hazardous waste treatment industry
is minimal with only one in five firms having labor organizations?.
The union activity is concentrated in firms with larger revenues
and corporations with hazardous waste divisions. No one union
dominates the activity in the industry. The following unions are
involved in the industry: International Brotherhood of Teamsters ,
International Chemical Workers Union, United Steelworkers of America.
4.3 Productivity Incentives
None of the companies interviewed had any type of pro-
ductivity measurement incentive built into the hourly wage.
Corporate profit sharing measures were built into employee wages
in approximately 10 percent of the firms interviewed; none of the
firms with profit sharing had union involvement. Of the firms
offering profit sharing to employees, actual revenues distributed to
employees was negligible, as the majority of firms have operated
at a loss or breakeven basis in recent years.
4.4 Average Wage and Fringe
The mean hourly wage in the industry was $5.80. Company
fringe benefits averaged 25 percent to 30 percent of the hourly
wage and are not included in the average wage. This standard was
uniform for the industry except for Michigan where the cost was at
50 percent of the hourly wage. The fringes offered in Michigan are
competitive with other industries such as the automotive industry.
The average hourly wage in different regions was quite
uniform remaining between $5.00 and $6.50. EPA Region IV had
the lowest hourly wage at approximately $4.75 per hour, while
Region IX had the highest wage rate at $8.25 per hour.
-22-
-------
4.5 Employee Training
Of the firms interviewed ,80 to 90 percent had set up internal
on-the-job training programs for new personnel. The employees
were utilized almost immediately as material handlers , but their
operations skill level in general was not established until 6 to 12 months
after being employed. Skilled employees with chemical or waste
treatment backgrounds were generally not available to the hazardous
waste industry.
Except for laboratory technicians , maintenance crews , and
heavy equipment operators, hourly employees entering the industry
did not have specific skills. There is very little job transfer
from company to company within the industry for the hourly employee,
as most of the treatment and disposal sites are geographically
separated.
Professionals entering the industry, especially in operations
management, engineering, and laboratory positions, have specific
chemical or environmental backgrounds. The professional turn-
over within the industry is reported to be approximately twenty percent
annually, which is over twice the turnover rate of the chemical industry
The operations managers for a high percentage of the small firms had
previous experience with some other established larger corporations in
the hazardous waste management industry. The prime reason for high
turnover was because the majority of companies in the industry were
small and had small professional staffs on hiring a professional, the
company wants experience in the waste treatment or disposal industry.
Tables II-6 and II-7 summarize key employment data for the
hazardous waste management industry.
-23-
-------
TABLE II-6
EMPLOYMENT IN THE HAZARDOUS WASTE INDUSTRY BY EPA REGION - 1975
Average
Percentage Non-
EPA
Region
I
II
III
IV
V
VI
VII
VIII
IX
X
TOTAL
Total
Employees
80-
530-
80-
70-
440-
220-
50-
55-
200-
80-
1,805-
100
630
120
90
520
280
60
65
260
120
2,245
Professional
Employees
12%
9%
12%
12%
13%
13%
10%
10%
14%
9%
12%
Professional
Wage
($/hr.)
$5.60
$5.50
$5.15
$4.75
$6.60
$5.00
$5 -$6.50 *
$5 -$6.50*
$8.25
$6.20
$5.85
Hft?tflnlPus Waste Industry Commfrpp!
Employees trained internally, no union involvement
Adequate labor pool, train personnel internally
Adequate labor pool
Premium paid to workers in hazardous waste industry,
skilled labor scarce --do internal mining
Lack skilled force in good economy
Lack skilled force for expansion
Do internal training
Problem getting trained personnel and chemical engineers
* Respondents classify wages as competitive to other firms within the industry.
Source: Foster D. Snell Estimates from Industry Interviews.
-24-
-------
TABLE 11-7
ESTIMATED EMPLOYMENT IN THE HAZARDOUS WASTE
MANAGEMENT INDUSTRY - 1975
Hazardous Waste
Revenues
More than $1 Million
Less than $1 Million
Total Employment
No. of
Employees
1400-1500
540-640
1940-2140
No. of
Professional
Employees
No. of
Skilled
Employees
No. of
Unskilled
Employees
Percent of Average
Companies Revenues/
with Unions Employee
36% $652,000
12% $36,000
22% $51,000
Source: Foster D. Snell, Inc. Estimates Based on Industry Interviews.
-25-
-------
5. PRICES
Prices charged for hazardous waste management services often include
a multiplicity of functions, such as transportation, storage, actual treatment
and disposal. In addition, the form and content (solid, liquid, concentration,
type of container, condition of container, safety aspects of handling wastes,
etc.) also determine prices in most cases to a greater extent than the process
used for treatment or disposal. For example, one company might transport
a waste and incinerate it for a total fee of 20
-------
TABLE II-8
PROCESSES/PRICING IN THE HAZARDOUS WASTE MANAGEMENT
SERVICE INDUSTRY
Service
Collection and
Transport
Receiving and
Storage
Neutralization
Biological
Treatment
Chemical
Fixation
Oxidation
Reduction
Flocculation
Sedimentation
Filtration/
Ultrafiltration
Ammonia
Stripping
Carbon
sorbtion
Reason for Inclusion or Exclusion
Excluded -- variable with distance
to waste generator's plant.
Excluded variable dependent
on service operation.
Included -- grouped with precip-
itation, chemical fixation, oxida-
tion/reduction and flocculation/
sedimentation. Companies who
process inorganic wastes handle all
types by a combination of processes
which are not priced (or costed)
separately.
Excluded none of the companies
interviewed had a purely biological
treatment for processing hazardous
wastes the biological treatment
was one step of the overall waste
treatment process.
Included see neutralization
Included see neutralization
Included see neutralization
Excluded none of the companies
interviewed used this process
Excluded none of the companies
interviewed used this process
Excluded -- none of the companies
interviewed used this process
Remarks
Normally included in
total service price. May
be paid by generator.
Normally included in
total service price, if
service provided.
Title used for group is
Chemical Treatment.
-27-
-------
TABLE II-8 (2)
Service
Incineration
Evaporation
Reason for Inclusion or Exclusion
Included
Excluded normally accomplished
by waste producer, or in one case,
a small part of the total treatment
process.
Remarks
Secure Landfill Included
Secure landfills only are
included; however, some
landfills that are secure
by natural geological
formations (without secun
liners) are included.
Resource
Recovery
Deep Well
Injection
Excluded variable depending on
waste and value of recovered
material.
Included
For purposes of this
study, not considered
"environr.ientally adequate
disposal.,
Source; Industry interviews and Foster D. Snell, Inc. analysis.
-28-
-------
5.1 Price Determination
Industry representatives report that prices for treatment/
disposal are primarily a function of costs. Although selected oppor-
tunities for premium pricing occur due to strict enforcement of reg-
ulations in certain areas, the competition of dumping of the wastes
forces the industry to maintain low prices. For 70 percent of the facil-
ities, the wastes are analyzed, and the disposal price determined
from a listing of overall processes and materials. The prices g;en-
erally include transportation and handling. (Operating costs are
discussed in a later section.)
A key factor in price determination is the actual waste content
and the compatibility of the waste for use in other processes at the
facility. This is normally characterized by the industry as waste-
to-waste processing in which wastes from one source can be combined
with wastes from another to form an environmentally acceptable
waste. For example, acids can be combined with bases. In contrast,
processing with purchased materials is more expensive and based
heavily on the raw material costs.
5.2 Chemical Treatment
The bulk of the inorganic chemical processing of hazardous
wastes occurs in Regions V, VI and VII corresponding to the con-
centration of metalworking and related industries, as well as steel
producing facilities. In general, the following prices are repre-
sentative for various types of chemical waste.
Acid or Base Neutralization: $0.06 to $0.12 per gallon
Chromates: $0.15 to $0.25 per gallon
Cyanides: $0.40 to $0.50 per gallon
Heavy Metals: $0.12 to $0.20 per gallon
The concentration of material in these aqueous solutions also affects
price, but no defined standard was found.
5.3 Incineration
Incineration of hazardous wastes is practiced in all the EPA
Regions except I and VIII. The cost is largely determined by the
percent combustibles within the hazardous waste mixture. There is
also a trend among some firms to utilize the waste heat from the incin-
eration process to generate steam or produce heat for a resource
recovery operation.
-29-
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Costs are also affected by the volume of the waste and
its ease of handling. Companies having incinerators complain
that their customers don't always tell them what the shipment
contains. Also, drums of "semi-solid" pourable material can
be solid and unburnable several days after transfer. The
average charge for incineration is approximately IOC/gallon
for conventional hydrocarbons and as high as $0.45 per gallon
for chlorinated hydrocarbon wastes, pesticides and other
materials.
5.4 Secure Landfill
Pricing for landfill services varied significantly, arid
were primarily based on waste type. Petroleum sludges handled
by the thousands of barrels were processed at lowest unit cost,
whereas drums of explosives, pesticide residues and similar
materials were at the upper end of the scale. Prices for
disposing of small quantities of hazardous wastes with large
volumes of municipal or non-hazardous industrial wastes were
also at the low end of the scale.
Prices are based on several units of measure; however,
for hazardous wastes, cost per cubic foot is a common volumetric
measure for utilization of lane"1 fill space.
5.5 Deep Well Injection
Deep well injection is practiced primarily in EPA Region VI
because of the presence of the oil industry which is a priire
producer of oil/salt water/oily acid wastes. Deep well injection
was not found in California (Begion IX) where landfill was the
technique of choice for similar wastes. One firm in Region V
utilizes deep well injection for waste steel pickle liquors,
but no definitive pricing was obtained. The data, therefore,
reflects pricing only in Region VT.
5.6 Price Factors
Some of the key factors reported by industry representatives
relating to pricing are as follows:
The industry cannot compete with organizations
who provide environmentally inadequate services.
Inability of hazardous waste management facilities
to compete with publicly funded landfills.
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If the price of oil or solvents goes up , incinerator
business disappears as the materials are recycled
or burned for fuel, so prices must be kept low for
this service
Treatment is considered a fringe business as long
as Federal and state agencies are watching the waste
producer. The industry must keep prices low enough
to encourage compliance, when waste generators
are not being scrutinized by environmental agencies.
Nationally, there appear to be two parallel and conflicting pricing
trends for hazardous waste management services. Some companies
who offer the treatment and disposal of hazardous wastes as opposed to
those only offering secure landfill disposal, see prices for hazardous
waste management services constant or moving downward as more wastes
are processed, i.e., volume increases yield lower overhead and
operating costs. Other firms within the same regions handling
similar wastes are increasing prices upwards as the demand to use
acceptable treatment and disposal services increases, i.e. when
unacceptable techniques of hazardous waste disposal are prohibited ,
the hazardous waste management industry can charge a premium.
For most wastes, however, disposal by open dumping,
sanitary landfill, or deep well injection offers the lowest price.
As long as these procedures are sanctioned, prices charged by the
hazardous waste management industry will have to reflect these com-
petitive pressures.
Waste generators are constantly scrutinizing their profitability.
Except in instances where a company is concerned about its public image,
plant personnel want the lowest cost operation, and do not appear to care
about the method of waste disposal. This puts a severe constraint on the
hazardous waste management industry which is attempting to handle
wastes efficaciously, but must still compete.
In addition, many of the more visible waste generators have
found that by virtue of the volume and complexity of their wastes,
in-house treatment and disposal is the preferred method of hazardous
waste management to:
Protect the identity of their products
Keep control of where the wastes go
Maintain public image as an "Environmental
Good Guy".
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In summary, pricing in future periods was forecasted to increase
at the inflationary rate of equipment and labor except in areas that have
unique demand situations for hazardous waste services. The consensus
of interviewees predicted a five to six percent annual increase in
current prices. Because the industry is currently operating at only
50 percent of capacity , an increase in demand is not predicted to
increase prices, The contractor forecasts prices to increase at a five
percent annual growth rate . The supply/demand relationship for
hazardous waste management services is dynamic since waste generators
have the option of internally treating and disposing of hazardous wastes.
Table II-9 presents the pricing summary by EPA Region.
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TABLE 11-9
REPRESENTATIVE PRICES FOR HAZARDOUS WASTE MANAGEMENT SERVICES, 1975
(Dollars Per Gallon)
Chemical Treatment of:
Incineration of.
Secure Landfill of.
Acid or Base Trimary
'A Requiring HeavY Hydro-
ion Neutralization Chromates Cyanides Metals General carbon
Duan ivei; 1,1 ,.cnr
Hydro- Inor-
carbon ganic
Chlorinated Other jjquid Weight Volume Based Ba^ed
($/ton "
or drum)
-!
Other
0.10
0.08
(1)
0.06-0.15 0.065-0.015
0.15-0.20 0.04 0.08-0.10
0.10 0.10-0.30
0.11-0.20 0.10-0.16 0.40 0.10-0.15 0.04-0.15 0.06-0.20 0.30
0.09-0.12 0.20-0.30 0.48-1.50 0.17-0.20
0.03-0.12
o.o^1'
0.06
0.10
0.07-0.14
0.10-0.20
0.15
0.50
0.12
0.06-0.15 0.15
0.06-0.30 0.10
(1'Bulk quantities
' 'per pound
(3)Pesticides
()Assume 100 ft. mixed waste is 1. 5 x water weight
(5>7.5 gal. per cubic foot
(°)per drum - 30" diameter x 36" high
' ' Selected wastes
Industry interviews by Foster D. Snell, Inc.
(3)
0.40 0.03
13. 50/ton 0.65-1.715
0.045 - 0.30
15,00/ton 0.75
0.22-0.67
10.00/
drum
5.00- 0.33-2.00
30.OO/
drum(G)
0.04-0.06 0.0225 0.25
0.03
0.03
0.22
8.50/ 1.25-1.715
drum
1.75/ 1.00
drum
NOT REPRODUCIBLE
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6. OPERATING COST CHARACTERISTICS- 1975
The operating cost characteristics of firms engaged in the hazardous
waste management industry vary primarily with the type of services offered
and the size of the firm.
There are a number of small firms within the industry with sales
revenues less than $500,000 per year, which have unique operating
cost characteristics. Some of the typical characteristics of the industry
noted in these firms were:
Negligible investment in capital expenditures ,
including utilization of rented land and contract-
ing out some of the treatment and disposal
services offered-
Negligible equity in the firm primary
liabilities were short term loans and accounts
payable.
Inventory of wastes not processed, as some firms
stockpiled wastes in <,rums until process or
facility was completed or developed.
For these reasons the operating cost data developed for the industry
were selected from established firms who preferably had been in operation
for at least four years and had annual sales over $500 ,000.
Approximately 85 percent of the firms within the industry offer ttie
collection and transportation of hazardous wastes to their facilities. The
total revenues reported by the firms include these costs whether they are
contracted out or handled internally. The collection and transport segnent
of the firms in the industry amounts to 20-25 percent of the industries' oper-
ating costs. These costs are not included, however, in the cost distribution
analysis. The following paragraphs discuss the typical operating costs by
facility. Table 11-10 summarizes the operating costs.
6.1 Full Service Facility
The larger firms in the industry with annual sales typically
over two million dollars offer a full service treatment facility including
typically: secure landfill, incineration, chemical treatment, resource
recovery, sanitary landfill, and carbon sorption. Their total
operating costs amount to approximately two-thirds of sales revenues
with labor and maintenance approaching 50 percent of sales, energy
and material at ten percent, and depreciation at nine percent. The
sales, general and administrative expenses are 17 percent of revenue
with interest and insurance expense at six percent. The total net
income before taxes for the full service facility typically is ten psrcent.
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TABLE 11-10
OPERATING COST CHARACTERISTICS OF
HAZARDOUS WASTE MANAGEMENT
FACILITIES, 1975 (D
Full Service
Sales Revenues 100%
(minus transportation)
Less: Operating Costs
Labor
Maintenance
Energy
Materials
Depreciation
Site Fees
Subtotal, Operating Costs
Gross Profit
Sales, General and
Administration 17
Interest and Insurance 6
Subtotal, Overhead 23
Expenses (3)
Net Income Before Taxes 10%
Type of Waste Service at Facility
Secure
Landfill
100%
Biological(2) Chemical
Treatment Treatment
10
5
15
15%
100%
20
6
26
12%
100%
18
__5_
23
11%
Incineration
100%
26%
22
5
5
9
67
33
23%
5
5
-
37
70
30
18%
8
5
10
21
62
38
30%
20
4
3
10
67
34
28%
20
6
8
3
65
35
14
12
26
9%
(1) Representative operating cost data was selected from firms with the following
characteristics: established in business for at least four years; total revenues
primarily in hazardous waste management; annual hazardous waste revenues
of $500,000 or greater.
(2) With some chemical treatment
(3) Indirect manufacturing costs
Source: Foster D. Snell, Inc. estimates based on industry interviews.
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6.2 Secure Landfill
Approximately 90 percent of the privately owned (not municipally
controlled) secure landfills, are part of a larger facility that offers
treatment services. Some operations have hazardous waste disposal
as their main objective; e.g. , those catering to certain types of
industries generating wastes as pesticides or radioactives . The typical
cost factors for preparation of a secure landfill, having approximately
one million cubic feet capacity are:
Cost of land - depends on area of country ,
proximity to metropolitan area, (up to $200,000
may be land owned by existing waste management
operation)
Site preparation approximately $50,000 (excavation, liners,etc.)
Purchase of one to three bulldozers depending on volume.
The major operating cost for a secure landfill is depreciation
of capital investment (37 percent of total sales revenues, 54 percent
of operating costs) . There are minimal labor, maintenance, and
energy charges, excluding the transportation segment. The sales
charges are minimal, as generally land disposal services are in
demand, and customers are refeired to or search out these services.
The secure landfill site's profits before taxes average 15 percent.
6.3 Biological Treatment Processing
The biological treatment processes studied were parts
of larger sites. They were in operation exclusively for low concen-
tration streams , having less than three percent salts.
Fof a biological treatment process, fixed costs (depreciation, site
fees, general and administrative, and interest expense) approach 50
percent of total revenues. Materials cost is also ten percent of revenues.
Being so capital intensive, labor is generally below 20 percent, main-
tenance below ten percent and energy at five percent of revenue.
6.4 Chemical Treatment Processing
Sites offering chemical treatment services generally had
ultimate disposal at a secure landfill associated with the site to
dispose of any final wastes. Most of the chemical treatment
facilities were performing some resource recovery operations in
addition to the treatment and disposal (such as recovery of oils or
insoluble chemicals with water at different acidity). Typically, a
plant's material balance would recover 2 percent to 8 percent of the
incoming waste, while 5 percent to 10 percent would ultimately be
sent to a secure landfill.
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Labor and maintenance costs of chemical treatment
processing facilities were the highest in the industry 50
percent of sales revenue. The chemical processing of wastes
was generally in small batch operations which is inherently
labor intensive. Materials costs, however, were only three
percent, due to a blending of waste streams during neutrali-
zation. The amount of capital expenditure was low, as used
equipment was installed where available in over 75 percent
of the facilities.
6.5 Facilities Offering Incineration
Only 15 percent of the incinerators had scrubbing engineered
into the design. About half of the incinerators in operation were
operating as the primary service of the site.
Incineration labor costs were 28 percent of revenues as the
sites typically did a high percentage of material transfer on-site
in drums and from bulk containers.
Interest and insurance expenses amounted to 12 percent
of revenues, the former is due to the large capital expenditure;
financed through private sources.
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7. FIVE YEAR FINANCIAL HISTORY
From 1971 to 1975 the annual growth rate in the hazardous waste;
industry in revenues has been 14 percent; there were 25 percent mores
companies in the industry in 1975 than in 1971.
In 1975, the industry was dominated by five firms which had over
a third of the total industry revenues. Hazardous waste sales revenues
vary, by firm, from $35,000 to $12 million per year. The median sales
revenue of the companies surveyed was approximately $1 million annually.
In 1975, the distribution of companies by sales level of hazardous waste
management was:
$100,000 or less 19%
$100,000 to $500,000 21%
$500,000 to $1,000,000 15%
$1,000,000 to $2,000,000 31%
$2,000,000 to $5,000,000 10%
$5,000,000 or greater 4%
Industry growth occurred primarily during the period between
1971 and 1973 when over 30 percent annual growth rate was experienced.
Growth of revenues between 1973 and 1975 has been due primarily to price
increases of services, not volume treated.
Although the industry's sales and profits have remained healthy over the
five year period, the magnitude of capital investment and financing has deter-
iorated the capital availability for the industry. The industry has changed
over the five year period in the following manner:
The number of companies has grown
from approximately 76 in 1971 to 95 in
1975. The two years which had the largest
number of new entrants in the industry were 1972
and 1973.
Profitability as a percent of revenues has remained
healthy over the five year period. Net income as a
percent of revenues has varied between 5.5 percent
to 9 percent. Profits as a percent of total tangible
equity (net worth) has been between 18 percent
and 22 percent over the period. This data indicated
that the industry has been profitable on its invested
capital.
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The working capital (current assets minus current
liabilities) position has declined since 1973. This
decline is also reflected in the current ratio (current
assets divided by current liabilities) . The industry
has kept a very low cash position, while its current
liabilities have been growing. This poor cash flow
situation is detrimental when attempting to obtain
low interest rates for long term debt.
From 1972 to 1975, the total tangible equity remained
relatively stable while the industry total tangible
assets have grown by 30 percent. This shows that
owners have not been investing additional capital
for expansion. Industry expansion has been financed
through debt and investment of current period profits
on sales.
Banks were willing to extend long term loans to the
industry until 1973. Since 1973, long term debt has
remained stable for the industry as financial institutions
have been reluctant to invest capital in the industry
because: hazardous waste management firms in
general did not have storing financial positions, and
the growth of the industry was deemed risky in future
periods.
Short term debt financing has increased from $3.2
million in 1971 to $7.2 million in 1975. This high cost
debt financing additionally points out the current
problems of the industry in obtaining lower cost
long-term capital.
Table 11-11 presents the overall industry financial parameters for a
five year period.
Firms that are active in the hazardous waste treatment industry can
be classified into two basic categories: (1) firms whose main objective
is hazardous waste management, and (2) divisions or sites of larger companies
that are engaged in the waste management industry (example: Chem-Trol
Division of SCA Services, Inc.) . The financial picture of the divisions
of larger firms has to be characterized separately as they do not fall under
the same capital restraints as the majority of firms engaged in the industry.
-3g-
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TABLE 11-11
FIVE YEAR FINANCIAL HISTORY OF HAZARDOUS WASTE
MANAGEMENT INDUSTRY 1571-1975
Accuracy of
Estimate
Item
Active Number of Companies in Industry
Industry Total Revenues (millions of dollars) 5%
Total Net Income (millions of dollars) 10%
Total Industry Working Capital (millions of dollars) 20%
Industry Current Ratio
Total Tangible Assets (millions of dollars)
Total Tangible Equity (millions of dollars)
Total Fixed Assets (millions of dollars)
Total Land (millions of dollars)
Total Debt (millions of dollars)
Total Long Term Debt (millions of dollars)
Total Short Term Debt (millions of dollars)
1971
1972
1973
1974
1975
76 82 87 91 95
46 $ 65 $ 88 $ 103 $ 107
4.1 3.7 5.6 6.6 7.5
5.2 9.0 13.0 5.0 3.8
0.1
10%
10%
10%
15%
10%
10%
10%
1.48
41
19
26
4.7
23
14
3.2
1.72
69
30
43
7.9
39
20
5.2
1.55
77
32
48
8.7
51
25
5.8
1.57
91
34
5D
3.4
59
32
5.8
1.41
90
33
49
8.5
54
26
7.2
Source; Foster D. Snell, Inc. Estimates Based on Industry Interviews and Corporate Financial Statements.
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The firms with their main objective in treatment or disposal of
hazardous waste had the following characteristics over the past five years.:
Net income has ranged between five percent and
ten percent of revenues with 1971 as the most
profitable year.
In 1975, 17 percent of the companies surveyed
were unprofitable. There was no relation between
the size of the company and being unprofitable.
Amount of working capital available in the industry
has decreased over time and the current ratio has
dropped from 1.77 to 1.28.
In 1975, approximately 40 percent of the companies
surveyed had working capital deficits. EPA Regions
I, II and III had the greatest percentage of firms
with profit and working capital problems.
The asset turnover ratio (sales/total tangible assets)
has averaged around 1.25 primarily because com-
panics are keeping a low cash position and equipment
expenditures have been kept to a minimum .
The ratio of fixed assets to total assets has been
approximately 0.6 with about one-fifth of fixed
assets invested in land.
The debt/equity ratio has increased substantially
to 1.60 in 1974 and 1975 from approximately 1.2 in
1971 through 1973. The debt increase has been
generated from increases in current liabilities as
accounts payable. Long-term debt has not been
available in 1975 and has decreased.
The short term debt-to-equity ratio has been
increasing from 0.15 in 1973 to 0.30 in 1975.
Table 11-12 presents the key financial rates of firms whose main
objective is in hazardous waste management.
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TABLE 11-12
FIVE YEAR HISTORY OF KEY FINANCIAL RATIOS
OF FIRMS WHOSE MAIN OBJECTIVE IS
HAZARDOUS WASTE MANAGEMENT
.Ratio 1971 1972 1973 1974 1975
Net Income/Sales 0.104 .0.053 0.065 0.069 0.080
Current Ratio .1.58 1.7-7 1.42 1.33 1.28
Working Capital $149 $177 $240 $74.9 $51.7
(thousands of dollars
per company)
Tangible Assets/Sales 0.84 1.01 0.76 0.80 0.76
Profits/Tangible Assets 0.124 0.053 0.086 0.086 0.106
Tangible Net Worth/ 0.45* 0.46 0.43 0.40 0.35
Tangible Assets
Fixed Assets/Total Assets 0.65 0.64 0.62 0.535 0.60
Land/Fixed Assets 0.19* 0.20* 0.20 0.173 0.17*
Total Debt/Equity 1.20* 1.19 1.18 1.60 1.64
Long Term Debt/Equity 0.71* 0.74 0.72 0.79 0.62*
Short Term Debt/Equity 0.17* 0.16 0.15 0.25 0.30
Working Capital/ - 0.43 0.71 0.20 0.21
Long Term Debt
Profits/Net Worth - 0.115 0.20 0.215 0.30
Designates estimates based on 10% or less of total market.
Source: Foster D. Snell, Inc. Estimates Based on Industry Interviews and
Corporate Financial Statements.
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Large corporations who have divisions or sites engaged in hazardous
waste management have maintained a relatively more stable financial
picture from 1971 to 1975. To calculate the financial history of this segment
of the industry, the following assumptions were used:
A corporation's contribution to the industry
was calculated only by its respective percentage
of revenues that was generated from hazardous
waste management.
The financial structure of divisions or sites was
assumed to be the same as the parent corpora-
tion (example: the financial ratios of Chem-Trol
Division are that of SCA Services) . A division's
financial structure may not be exactly similar to
the parent and has to be considered a limitation of
the financial data . However , divisions of parent
corporations obtain financing through the parent and
its availability of capital would be dependent on the
corporation's overall financial structure, not the
division.
For firms with hazardous waste management divisions or sites, the
following key characteristics over the past five years were:
Net income remained fairly consistent at 5.0%
to 6.5% of annual revenue.
The corporations have established a positive
working capital position with a current ratio
approaching 2.0 in 1974 and 1975.
Total tangible assets has remained approximately
equal to sales revenues. The profits to tangible
assets ratio has remained between 5% and 7.5%.
Tangible net worth for the industry has remained
stable at 40% of tangible assets. The ratio shows
that as the corporation increases its assets, they
maintain a consistent growth of net worth.
Fixed assets are approximately 60% of total assets.
-43-
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Land is approximately 25% of financial assets.
Short term debt has decreased as a ratio to
equity from 0.20 in 1971 to 0.08 in 1975.
Long term debt, however, had increased sub-
stantially until 1975 when a number of the leading
firms in the industry made a corporate goal to
decrease their debt/equity ratios.
Table 11-13 presents a five year history of key financial ratios for
corporations having hazardous waste management divisions or sites.
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TABLE 11-13
FIVE YEAR HISTORY OF KEY FINANCIAL RATIOS OF
CORPORATIONS HAVING DIVISIONS OR SITES ENGAGED
IN HAZARDOUS WASTE MANAGEMENT 1971-1975
Ratio
1971
0.063
1.28
1972
0.066
1.61
1973
0.063
1.81
1974
0.054
2.04
1975
0.05*
1.83
Net Income/Sales
Current Ratio
Working Capital
(thousands of dollars) $4,000* 7,300 11,430 15,031 14,000*
Tangible Assets/Sales -85 1-07 1.13 1.08 1.03
Profits/Tangible Assets 0.074 0.062 0.056 0.050 0.049
Tangible Net Worth/
Tangible Assets 0.42 0.38 0.41 0.22 0.41
Fixed Assets/Total Assets 0.62 0.57 0.63 0.60 0.62
Land/Fixed Assets 0.14* 0.14* 0.14 0.15 0.15
Total Debt/Equity 1-37 1-66 2.43 1.96 1.59*
Long Term Debt/Equity 0.64 0.45 0.93 1.29 1.03
Short Term Debt/Equity 0.20 0.18 0.13 0.07 0.08
Working Capital/
Long Term Debt - °-72 0.36 0.34 0.31
Profits/Net Worth 0.175 0.163 0.136 0.15 0.12
* Designates estimates based on less than 20% of total market.
Source: Foster D. Snell, Inc . Estimates Based on Industry Interviews and
Corporate Financial Statements.
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8. FACTORS EFFECTING CURRENT BUSINESS SUCCESS
The key factors that have had an inpact on the success of firms
within the hazardous waste management industry have been its accessibility
to market demand and the cost of capital. This section of the recort is
segmented into four areas which discuss the characteristics of the current
Key factors affecting business success
Factors having a major influence on business
success
Factors having a minor influence on business
success
Factors having no influence on business success.
8.1 Key Factors Affecting Business Success
The firms within the hazardous waste industry have the
following characteristics which were a key influence en the
potential success of the firms:
8.1.1 The Accessibility to Market Source
The total cost of hazardous waste disposal is dependent
not only on a firm's waste processing costs, but also on the cost
of transportation to the site, also an internal cost, if paid by the
facility. Waste generators naturally go to the firms offering
reliable service at the best price. It was found that the most
profitable companies offering competitive services were geo-
graphically close to their major customers.
8.1.2 Cost of Capital
A firm's ability to obtain capital at a reasonable cost
was a large factor in the determination of the firm's success.
Thirty-one of the sites were subsidiaries or divisions of
larger parent organizations which had accessibility to long
term capital. The industry in general is young , and does not
have an established reputation with private sources of debt
financing. Hence, a number of the smaller firms have had to
utilize short term financing, retained earnings, or maintain
low cash positions in an effort to obtain necessary capital
for expansion. They report these conditions have seriously
affected their ability to expand.
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8.2 Factors Having A Major Influence on the Business Success
of the Firm
The firms within the hazardous wastes management industry
had the following characteristics which were a major influence
to the success of the firm.
8.2.1 Prevailing Municipal And State Regulations
The non-uniformity of the regulations and varying
degrees of enforcement enable some firms to operate at
lower costs than others. Examples of differing regulations
include the allowable discharge limits for a state or munic-
ipality , permits for the ultimate disposal of hazardous
chemicals to landfills that are less than secure, and the
amount of "pressure" asserted by local enforcement agencies.
8.2.2 Siting Restraints
Obtaining the site permit in localities that are access-
ible to industry waste sources is a current problem. Industry
interviews reported that localities and states have technical
and other constraints which limit industrial expansion of
hazardous waste management facilities.
8.2.3 Ability to Obtain Contracts With Large Industry Source
Almost all of the hazardous wastes handled are serviced
on a contract basis. In general, the larger industrial firms
which seek to maintain a good public image are disposing of
their waste in a process approved by the local authorities.
However, in most areas of the U.S., the industrial firms
signing contracts with the "environmentally adequate"
hazardous waste service industry do not deliver volumes
of wastes that are anticipated from the contract. At. present
the most successful firms have contracts for handling wastes
from large reliable sources.
8.2.4 Multiple Service Organizations
Firms that offered full service hazardous waste treatment
and disposal service were more profitable than specialized
operations. A facility apparently needs the capability of
handling more than one industry's wastes. In addition,
multiple service firms have an established reputation in
most geographic areas. However, several instances were
reported of firms which "over-built" and were not success-
ful . The capital cost required for a full service facility was
high; volume never approached capacity, and many multi-
source facilities were unsuccessful.
-47-
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8.2.5 Inexpensive Final Disposal Cost
The most successful facilities had access to or
internally operated a relatively inexpensive source of
final disposal; e.g. deep well injection, secure landfill,
ocean disposal.
8.3 Factors Having a Minor Influence on the Business Success
of the Firm
Interviewees in the hazardous waste management industry
reported the following factors had a minor influence on the success
of the firm. (For two specific firms, they were major factors.)
8.3.1 Competence of Professional Staff
The firms that were considered the leaders of the industry
had staffs with strong technical backgrounds in chemical and
waste management disciplines. This factor is not judged as
major since a number of small firms had strong technicail
skills but were unable to obtain business.
8.3.2 Sales Force
Most successful firms maintain a sales force to obtain
new business. However, some successful firms relied on
their reputation, proximity to industry, or sales by operation
supervisors.
8.3.3 Technological Innovation
The majority of the processes offered at various sites
were technically the same, however some of the leading firms
had a technical advantage over competition. Reduced opera-
ting costs or ability to handle a particular type of hazardous
waste were the major technical advantages. Firms were able to
reduce operating costs by a superior processing technology
or offer multiple services where equipment and labor costs would
be shared with other processes or departments within the firm.
-48-
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8.3.4 Pricing
In-house treatment and disposal costs did vary between
firms , however the overall cost of disposal to the generator
is the prime cost factor of the industry. In the total treat-
ment cost, the transportation cost is a major factor. A key
pricing factor was, however, created by waste-to-waste
processing versus use of virgin materials (e.g., blending of an
acid and base for neutralization). In general, the larger
firms have more opportunity for waste-to-waste processing.
8.3.5 Control of Labor Costs
The industry currently operates at low levels of capacity.
It is labor intensive , and has seasonal fluctuations. To keep
the operational costs of the firm competitive and the companies
profitable, it is necessary to maintain a tight control on labor
and maintenance costs.
8.3.6 Size of Firm
The larger firms in terms of sales and employment reported
less regulatory agency pressure and had better opportunity to
obtain long term financing .
8.3.7 Competition From Publicly Funded Sources
The following are examples of competition reported in
interviews that were considered unfair to the private hazard-
ous waste industry:
Publicly funded landfills (as in California)
Reduced enforcement of hazardous waste
generators that are government or publicly
owned.
8.3.8 Other Factors
Other factors that contributed to the success of some
of the firms include:
Utilization of inexpensive transportation, such
as rail or barge
Establishment and advertising of emergency
spill units to aid industrial problems
An on-site laboratory to perform analysis of
incoming shipments and effluents.
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8.4 Factors That Had Relatively No Influence on the Success
of the Firm
Accessibility to trained labor pool. (However,
during the survey, the industry was not in a grow:h
period and the time factor necessary to train personnel
for various skill levels was not a problem).
The establishment of a company-owned trucking
fleet to service customers.
The need for companies to offer solvent recovery
operations.
In summary, the hazardous waste management service industry is a new
industry. Annual growth in the last five years has been 14 percent, capacity
exceeds market demand and , with few exceptions, competition from environ-
mentally inadequate but "approved" waste processors cannot be matched by
the industry.
The survey shows that smaller firms in the industry can be profitable;
however, large operations appear to have greater opportunities and rasources
for expansion. The following chapter examines the capabilities and needs of
the industry to expand.
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III. HAZARDOUS WASTE MANAGEMENT SERVICE INDUSTRY:
GROWTH POTENTIAL
-51-
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III. HAZARDOUS WASTE MANAGEMENT SERVICE INDUSTRY:
GROWTH POTENTIAL
This chapter assesses the growth potential of the hazardous waste
management industry. It projects current industry conditions into future
periods, and includes an evaluation of key non-capital restraints.
The chapter's contents are as follows:
1 HAZARDOUS WASTE MANAGEMENT INDUSTRY
DEMAND REQUIREMENTS
2 PROJECTED HAZARDOUS WASTE MANAGEMENT
INDUSTRY CAPACITY
3 FINANCIAL DEMAND REQUIREMENTS
4 THE IMPACT AND IMPORTANCE OF NON-CAPITAL
CONSTRAINTS ON DECISION TO EXPAND
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1. HAZARDOUS WASTE MANAGEMENT INDUSTRY DEMAND REQUIREMENTS
Estimating the amount of hazardous waste that will be available in the future
for treatment and disposal by the hazardous waste management industry is a
two-part process. First, the total generation of hazardous waste in future
periods must be projected. Then, an estimate of generator plant internal
treatment and disposal quantities must be developed. To maintain a con-
sistent data base, the Environmental Protection Agency's Hazardous Waste
Management Division (HWMD) industry studies for 1974, 1977, and 1983 are
used. This section is divided into two parts:
Total projected industrial hazardous waste
generation
Projected demand for the hazardous waste
management industry.
1.1 Industrial Hazardous Waste Generation in Future Periods
Based on the HWMD reports,the total industrial hazardous
waste load is projected to increase (on a wet basis) by a 4.4 percent
annual growth rate from 1974 to 1977. On a dry basis, between 1974
and 1977, the projected annual growth rate is 4.1 percent. From
1977 to 1983, the overall hazardous waste growth rates are: wet
basis 2.0 percent annually; dry basis 2.6 percent annually.
To remain consistent with industrial hazardous waste studies
contracted by the HWMD, the industrial hazardous waste estimates
used by the contractor are in 13 industry groupings; these are:
Primary and storage batteries
Inorganic chemicals
Organic chemicals, pesticides and explosives
Electroplating
Metals mining ^
Paint and allied products
Petroleum refining
Pharmaceuticals
Primary metals , smelting and refining
Textiles, dyeing, and finishing
Rubber and plastics
Leather tanning and finishing
Special machinery
(1) The metals mining industry does not use outside contractors for
hazardous waste treatment and disposal, therefore is not included
in the contractor's study.
-53-
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Table III-l presents the 1974 potentially hazardous waste
quantities by industry category with projections for 1977 and 191J3.
This data must be considered a minimum because there are other
potentially hazardous sources of wastes not covered in HWMD's
industrial hazardous waste studies
1.2 Industrial Hazardous Waste Available for Outside Contractors
In Future Periods
Each of the EPA hazardous waste industry reports estimates
the percentage of waste currently sent to outside contractors. These
estimates were used in the contractor's analysis.
The estimated percentages of waste treated internally by pro-
ducing firms is summarized in Table III-2.
For future period projections of hazardous waste available
for outside contract, the same percentage of internally treated waste
is utilized, except for petroleum industry practices which are pro-
jected to increase to 73% internal disposal by 1983.
Table III-3 presents the wet and dry projected industrial
hazardous waste load available to outside contractors in 1977 and
1983. The hazardous waste load projections are divided by sub-
tracting the amount of hazardous waste management performed
internally from the total projected hazardous waste management
load for each major industry. Table III-4 presents an estimate of
the percent of regional distribution of these wastes . It is assuired
that in any one EPA region, the percentage of wastes treated out-
side of the producers' facility will equal the national average.
In 1974 approximately 19 percent of the estimated hazardous
wastes generated by the 13 industries (excluding metal mining) was
available to outside contractors. In 1977 and 1983 the projected
amounts of industrial hazardous waste available to outside con-
tractors will decrease to 17 percent of hazardous waste generated.
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TABLE III-l (1)
INDUSTRIAL HAZARDOUS WASTE GROWTH PROJECTIONS
(Millions of Metric Tons per Year)
1974 1977 1983
Industry
Batteries ^ ^
(2)
Inorganic Chemicals
Organic Chemicals, Pesticides,
and Explosive/3)
Electroplating^4)
Paint and Allied Product^5)
f £*\
Petroleum Refining
(7)
Pharmaceuticals
Primary Metals Smelting and
Refining*8)
Rubber and PlastW9)
Leather Tanning and Finishing
Special Machinery' '
Textile Mill Products(12)
TOTAL
Dry*
0.005
2.000
2.150
0.909
0.075
0.610
0.062
17.398
0.206
0.045
0.102
0,048
23.611
Wet*
0.010
3.400
6.860
5.276
0.096
1.300
0.065
20.356
0.786
0.146
0.163
1.770
40.228
Dry"
0.082
2.300
3.500
1.316
0.084
0.647
0.070
18.211
0.243
0.050
0.094
0.050
26.647
Wet*
0.164
3.900
11.666
4.053
0.110
1.400
0.074
21.307
0.945
0.143
0.153
1.870
45.785
Prf
0.105
2.800
3.800
1.751
0.105
0.693
0.104
21.110
0,300
0.068
0.157
0.179
31.172
Wet"
0.209
4.800
12.666
5.260
0.145
1.500
0.108
24.700
1.205
0.214
0.210
0.680
51 . 697
- "Dry" does not include weight of water; "wet" includes water weight.
Sources (on next page)
-55-
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TABLE III-l (2)
Sources With EPA Contract Numbers:
(1) Versar, Inc., ' Assessment of Industrial Hazardous Waste Practices; Storage and Primary Battery Industries, '
Contract No. 68-01-2276.
(2) Versar, Inc., ' Assessment of Industrial Hazardous Waste Practices, Inorganic Chemical Industry',
Contract No. 68-01-2246.
(3) TRW Inc., "Assessment of Industrial Hazardous Waste Practices, Organic Chemicals, Pesticides, and
Explosives Industries', Contract No. 63-01-2919.
(4) Battelle, Columbus Laboratories, "Assessment of Industrial Hazardous Waste Practices - Electroplati ig and
Metal Finishing Industries', Contract No. 68-01-2664.
(5) Wapova Inc., "Assessment of Industrial Hazardous Waste Practices, Paints Industry", Contract No. 68-01-2656.
(6) Jacobs Engineering Co., 'Assessment of Industrial Hazardous Waste Practices, Petroleum Refining',
Contract No. 68-01-2288
(7) Arthur D. Little, Inc., ' Hazardous Waste Generation, Treatment and Disposal in the Pharmaceutical Industry",
Contract No. 68-01-2684.
(8) Calspan Corporation, "Assessment of Industrial Hazardous Waste Practices in the Metal Smelting and Refining
Industry", Contract No. 68-01-2604.
(9) Foster D. Snell, Inc., " Assessment of Industrial Hazardous Waste Practices, Rubber and Plastics Industry",,
Contract No. 68-01-3194.
(10)SCS Engineers, Inc., "Assessment of Industrial Hazardous Waste Practices Leather Tanning and Finishing
Industry", Contract No. 68-01-3261.
(ll)Wapora Inc., " Assessment of Industrial Hazardous Waste Practices, Special Machinery and Manufacturing', EPA
Contract No. 68-01-3193.
(12) Versar, Inc., "Assessment of Industrial Hazardous Waste Practices, Textiles Industry', Contract No. 68-01-3178.
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TABLE m-2 (1)
PERCENT OF HAZARDOUS WASTE DISPOSED
INTERNALLY BY PRODUCING FIRMS - 1974
Industry Percent of Total Waste Internally Treated *
And Disposed
Primary and Storage Batteries ^ 35%
Inorganic Chemicals '*' 85
Organic Chemicals, Pesticides
and Explosives (3) 80
$
Electroplating ^ 30
Paint and Allied Products ^ 5
Petroleum Refining ^6) 40
Pharmaceuticals &) 15
Primary Metals Smelting 98
and Refining (8)
Rubber (9) 5
Plastics (9) 80
Leather Tanning and Finishing *10' 5
Special Machinery (11) 5
Textiles, Dyeing, and Finishing ^12^ 94.5
* All firms are assumed to dispose the same portion of waste internally in
1977 and 1983, as they do in 1974. Petroleum Refining is the exception,
with internal disposal of wastes increasing to 73.%. in 1983.
Sources: (on next page)
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TABLE [II-2 (2)
Sources With EPA Contract Numbers-
(1) Versar, Inc., "Assessment of Industrial Hazardous Waste Practices: Storage and Primary Battery Industries,"
Contract No. 68-01-2276.
(2) Versar, Inc., Assessment of Industrial Hazardous Waste Practices, Inorganic Chemical Industry',
Contract No. 68-01-2246.
(3) TRW Inc., "Assessment of Industrial Hazardous Waste Practices, Organic Chemicals, Pesticides, and
Explosives Industries , Contract No. 68-01-2919.
(4) Batielle, Columbus Laboratories, "Assessment of Industrial Hazardous Waste Practices - Electroplating and
Metal Finishing Industries', Contract No. 68-01-2664.
(5) Wapora Inc., 'Assessment of Industrial Hazardous Waste Practices, Paints Industry", Contract No. 63-01-2656.
(6) Jacobs Engineering Co., "Assessment of Industrial Hazardous Waste Practices, Petroleum Refining',
Contract No. 68-01-2288
(7) Arthur D. Little, Inc., ' Hazardous Waste Generation, Treatment and Disposal in the Pharmaceutical Industry',
Contract No. 68-01-2684.
(8) Calspan Corporation, "Assessment of Industrial Hazardous Waste Practices in the Metal Smelting and Refining
Industry", Contract No. 68-01-2604.
(9) Foster D. Snell, Inc., " Assessment of Industrial Hazardous Waste Practices, Rubber and Plastics Industry",
Contract No. 68-01-3194.
(10)SCS Engineers, Inc., "Assessment of Industrial Hazardous Waste Practices -- Leather Tanning and Finishing
Industry", Contract No. 68-01-3261.
(11) Wapora Inc., "Assessment of Industrial Hazardous Waste Practices, Special Machinery and Manufacturing', EPA
Contract No. 68-01-3193.
(12) Versar, Inc., "Assessment of Industrial Hazardous Waste Practices, Textiles Industry', Contract No. 68-01-3178.
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TABLE III-3
GROWTH PROJECTIONS OF INDUSTRIAL HAZARDOUS WASTE
AVAILABLE FOR CONTRACT
1974 1977 1983
Industry
Batteries
Inorganic Chemicals
Organic Chemicals, Pesticides and Explosives
Electroplating
Paint and Allied Products
Petroleum Refining
Primary Metals Smelting & Refining
Leather Tanning and Finishing
Special Machinery
Textile Mill Products
Pharmaceuticals
Plastics
Rubber
Dry
0.003
0.300
0.430
0.636
0.071
0.366
0.348
0.043
0.097
0.012
0.053
0.031
0.046
2.436
Wet
0.006
0.510
1.372
3.693
0.091
0.780
0.407
0.139
0.155
0.098
0.055
0.147
0.046
7.499
Dry
0.053
0.345
0.700
0.921
0.080
0.390
0.364
0.048
0.089
0.012
0.060
0.038
0.049
3.149
Wet
0.107
0.585
2.333
2.837
0.105
0.840
0.426
0.136
0.145
0.103
0.063
0.178
0.049
7.907
Dry_
0.068
0.420
0.760
1.226
0.100
0.186
0.422
0.065
0.149
0.018
0.388
0.049
0.051
3.602
Wet
0.139
0.720
2.533
3.682
0.138
0.405
0.494
0.203
0.200
0.045
0.092
0.230
0.051
8.932
Source: Foster D. Snell, Inc. analysis.
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TABLE III-4
DISTRIBUTION OF HAZARDOUS WASTE LOAD BY REGIONS
(Percent of Total Hazardous Waste per EPA Region)
i_ IL IM IX JL ₯1 Vl1 _. .
Batteries(1) 1.3 12.3 22.3 4.8 36.1 6.6 0.5 0 12.0 4.1
Inorganic Chemicals^ 0.4 5.2 16.3 15.5 8.4 45.4 1.6 0 3.C! 3.9
Organic Chemicals, Pesticides, 0.1 3.6 15.0 21.5 2.8 54.6 0.9 0.1 1.5: 0.2
Explosives(3)
Electroplating(4) 14.5 11.6 5.5 5.6 44.4 5.0 3.8 1.9 6.5 3.4
Paint and Allied Products^5) 2.2 15.5 9.2 13.9 31.6 6.5 5.9 0.6 13.J 1.3
Petroleum Refining^6) 0 4.9 7.2 3.4 18.0 43.1 3.5 3.8 13.1 S.O
Pharmaceuticals(7) 3.7 51.7 9.8 7.6 20.5 0.5 2.0 0 4.2 C
Primary Metals Smelting & Refining^ 0.2 4.5 25.3 6.5 38.6 2.8 1.1 2.6 16.4 2.0
(9)
Rubber 6.9 3.3 8.1 22.8 37.0 7.0 5.8 1.2 7.6 0.3
Plastics^9) 4.1 13.8 11.6 24.7 16.8 17.2 1.2 0.2 5.4 5.1
Leather Tanning & Finishing^10) 34.3 12.2 4.3 3.2 26.1 0.4 9.2 1.4 8.^- 0.5
Special Machinery 14.4 13.5 8.6 13.8 25.5 5.2 2.3 2.6 11. {i 2.6
Textile Mill Products(12) 17.6 10.1 4.2 57.6 4.0 5.4 0.2 0.1 0.] 0.7
Weighted Average Available to 8.5 9.0 9.5 10.4 29.1 20.8 2.9 1.6 6._(i 1.6
Outside Contractors*
* Weighted Average based on 1974 hazardous waste loads not internally treated by waste generators.
Sources : (see next page)
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TABLE III-4 (2)
Sources With "A Contract Numbers:
(1) Versar, Ih , "Assessment of Industrial Hazardous Waste Practices; Storage and Primary Battery Industries, '
Contract No. 68-01-2276.
(2) Versar, Inc., ' Assessment of Industrial Hazardous Waste Practices, Inorganic Chemical Industry',
Contract No. 68-01--2246.
(3) TRW Inc., "Assessment of Industrial Hazardous Waste Practices, Organic Chemicals, Pesticides, and
Explosives Industries , Contract No. 68-01-2919.
(4) Battelle, Columbus Laboratories, "Assessment of Industrial Hazardous Waste Practices - Electroplating and
Metal Finishing Industries', Contract No. 68-01-2664.
(5) Wapora Inc., " Assessment of Industrial Hazardous Waste Practices, Paints Industry", Contract No. 68-01-2656.
(6) Jacobs Engineering Co., "Assessment of Industrial Hazardous Waste Practices, Petroleum Refining',
Contract No. 68-01-2288
(7) Arthur D. Little, Inc., ' Hazardous Waste Generation, Treatment and Disposal in the Pharmaceutical Industry",
Contract No. 68-01-2684.
(8) Calspan Corporation, "Assessment of Industrial Hazardous Waste Practices in the Metal Smelting and Refining
Industry ', Contract No. 68-01-2604.
(9) Foster D. Snell, Inc., " Assessment of Industrial Hazardous Waste Practices, Rubber and Plastics Industry",
Contract No. 68-01-3194.
(10) SCS Engineers, Inc., "Assessment of Industrial Hazardous Waste Practices -- Leather Tanning and Finishing
Industry", Contract No. 68-01-3261.
(11) Wapora Inc., "Assessment of Industrial Hazardous Waste Practices, Special Machinery and Manufacturing', EPA
Contract No. 68-01-3193.
(12) Versar, Inc., "Assessment of Industrial Hazardous Waste Practices, Textiles Industry', Contract No. 68-01-3178.
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2. PROJECTED HAZARDOUS WASTE MANAGEMENT INDUSTRY CAPACITY
Projected treatment and disposal capacity of the hazardous waste
management industry is dependent on anticipated expansion plans, capital
expenditures necessary for regulatory compliance, and elimination of
environmentally inadequate disposal capacity.
In 1975 the industry was operating at approximately 50 percent of
designed capacity. None of the companies interviewed reported facilities
operating at designed capacity. In general, the industry capacity is being
utilized four to five days per week on an eight hour a day basis. However,
the industry, except for Region I, plans to increase the volume of hazardous
waste treated or disposed by 1977 . The industry plans to expand its
operations by:
Adding secure landfills, incineration, chemical
fixation, deep well or resource recovery
facilities at existing sites .
Placing sites in other states .
Developing and implementing new treatment
methods .
Adding storage, mixing and handling facilities.
Adding sales personnel to cover new markets.
Adding manpower to further utilize existing
equipment,
The projected increase in volume of hazardous waste treated or
disposed by the hazardous waste management industry in the 1975 to 1977
period, based on industry interviews, is presented in Table III-5.
These projected increases are the average increase in volume handled
as projected by hazardous waste management firms. These increases are
not directly related to projected capacity in future periods. In the con-
tractor's opinion, the projected capacity increases are a combined effect
of enforcement of EPA regulations, future industrial waste loads, and
compliance by industrial sources; all resulting in an increase in business
for the hazardous waste management industry .
2.1 Capacity Expansion to 1977
From the expected increases in demand, all EPA regions except
Regions I and VIII, are planning either new plants, new processes,
additional sites, or additional equipment. Since the industry is
currently utilizing only one-half its designed capacity, the increased
projected volumes by the hazardous waste management industry in
Table III-5 do not represent capacity additions.
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TABLE III-5
HAZARDOUS WASTE MANAGEMENT INDUSTRY
FORECASTED VOLUME INCREASE
1975-1977
Forecasted 1977
EPA Region Industry Increase
(percent increase of 1975 actual volumes)*
T <5
II 20
III 25
IV 15
V 25
VI 25
VII 15
VIII <5
IX 20
X 50
* Hazardous waste management industry's forecasted increase of 1977
actual volume handled to 1975 actual volume.
Source: Foster D. Snell, Inc. industry interviews.
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Capital expenditure plans "by the industry include two typos
of action:
Additions to maintain current capacity; for
example, adding a scrubber to an incinerator
in areas where air quality standards would
force plant closing
Addition of new facilities or equipment.
The impact of both these actions will increase the total amount of
"environmentally adequate" capacity in 1977. Table III-6 presents
a summary of the planned design capacity increases for the 1975
to 1977 period. Only one interviewee in the survey reported con-
sideration of capacity increases after 1977, and the post-1977 plan was
still in the market study stage . The lack of post-1977 planning was
reported to be created by uncertain market conditions , and the
reported claim of the industry that the existing capacity would heve
to be further utilized prior to new capital expenditures .
The 13 industry categories as identified by the HWMD are
segregated into five market categories which have similar waste
treatment and disposal methods as identified by industry interviews.
(The classification of the 13 industries to five market categories is
presented on Page 14).
The increased waste service capacity will primarily serve
markets in the metal/metal finishing and organics (e.g ., pesticides)
industries. Table III-7 presents 1974 capacity by regional markets,
planned capacity increases, and projected 1977 capacity . Capacity
is reported on a wet basis to be consistent with study findings.
2.2 Environmentally Adequate Capacity , 1977
The EPA discourages the disposal of hazardous wastes by ocean
dumping, and deep well injection (as well as disposal in non-secure
landfills) . Each of these methods is permissible under certain
circumstances. For the purposes of this study , the capacity ol" firms
disposing hazardous waste through either ocean dumping or deep
well injection is subtracted from the projected hazardous waste
treatment/disposal capacity figures.
Many firms have permits to dispose of hazardous wastes in
unsecure landfills along with some proportion of conventional wastes.
Although permitted by states and municipalities, EPA feels this tech-
nology is environmentally unacceptable unless the landfill is secure.
Based on the interviews , approximately five landfills , outside: of
California, would meet secure landfill standards of the estimated 80
hazardous waste management industry landfills currently handling
some form of potentially hazardous waste.
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TABLE III-6
HAZARDOUS WASTE MANAGEMENT INDUSTRY FORECASTED
CAPACITY INCREASE FOR 1975 TO 1977
Forecasted Capacity Increase
EPA Region (Percentage of 1975 Available Capacity) *
VIII
IX
0%
II 10
III 20
IV 2.5
V 15
VI 12.5
VII 10
X 20
U.S. Average: 9-11%
* 1977 capacity in comparison to 1975 capacity.
Source: Foster D. Snell, Inc. estimates based on industry interviews.
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TABLE HI-7
REGIONAL HAZARDOUS WASTE MANAGEMENT CAPACITY FOR
1974 AND 1977 BY MARKET
(Millions of Metric Tons Per Year On a Wet Basis)
Metals Paints Organics Petroleum Inorganics Totals
Region 19*74 1977 19/I4 1977 1974 1977 1974 1977 1974 1977 1974 1977
I - - 0.008 0.008 0.004 0.004 0.005 0.005 0.052 0.052 0.069 0.069
II 0.072 0.072 0.225 0.230 0.112 0.155 0.020 0.025 0.108 0.108 0.537 0.590
III 0.125 0.185 0.046 0.046 0.015 0.024 0.031 0.031 0.130 0.130 0.347 0.416
IV 0.024 0.025 0.051 0.051 0.015 0.017 0.015 0.015 0.006 0.006 0.111 0.114
V 1.167 1.302 0.281 0.346 0.139 0.255 0.510 0.560 0.471 0.490 2.568 2.953
VI 0.067 0.100 0.036 0.052 0.026 0.075 1.108 1.174 0.074 0.074 1.311 1.475
VII 0.121 0.137 0.020 0.020 0.057 0.080 0.020 0.020 0.170 0.170 0.388 0.427
VIII 0.003 0.003 0.003 0.003 0.003 0,003 0.003 0.003 0.003 0.003 0.315 0.015
IX 0.089 0.106 0.031 0.039 0.084 0.086 0.764 0.781 0.191 0.195 1.149 1.207
X 0.053 0.105 0.051 0.068 0.056 0.108 0.561 0.597 0.062 0.062 0/783 0.940
TOTALS 1.721 2.035 0.752 0.863 0.501 0.807 3.037 3.211 1.267 1.290 7.278 8.206
Source-; Foster D. Snell, Inc.
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The effect on firms who landfill treated wastes cannot
be determined at this time. The assumption is that if the firm
"treats" the waste and then landfills it, the waste can be dis-
posed in a landfill not meeting all the requirements of a secure
landfill and, therefore, the waste capacity is not seriously
affected by this limitation. Firms , however, that dispose of hazard-
ous wastes directly into sanitary landfills will either have to stop the
practice or ship the waste to an approved disposal site. The net
effect may be an increase in business for a secure landfill firm and
a decrease for non-secure landfill.
The most significant impact of environmentally inadequate
capacity reductions occurs in the petroleum category (elimination
of deep well disposal capacity) with a 44.2% drop in available capacity
Major waste load capacities are affected as follows:
Paint 2.8% drop in capacity
Metals 19.7% drop in capacity
Organics 21.2% drop in capacity
Petroleum 44.2% drop in capacity
Inorganic 2.4% drop in capacity
Paints are only marginally affected since a majority of these wastes
are incinerated rather than being disposed in ocean or deep well
sites. Metals are affected due to the elimination of deep well sites.
High organics that may now be landfilled are affected significantly
by restriction in siting. Inorganics are only affected to a minor
degree by site restriction .
Capacities for 1975 and 1977 on a wet basis of hazardous waste
management firms adjusted for the effects of ocean dumping , deep
well injection and sanitary landfill elimination are presented in
Table III-8.
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TABLE m-8
ESTIMATED 1974 AND 1977 ENVIRONMENTALLY ADEQUATE HAZARDOUS WASTE MANAGEMENT
CAPACITY (Millions of Metric Tons Per Year on a Wet Basis -- Less
Deep Wells, Ocean Dumping and Sanitary Landfill)
Metals
Region 1974 1977
I
II 0.066 0.066
III 0.104 0.164
IV 0.014 0.015
V 0.964 1.099
VI 0.042 0.075
VII 0.082 0.098
VIII
IX 0.065 0.082
X 0.046 0.098
TOTAL 1.383 1.697
Paints Organics
1974 1977 1974 1977
0.006 0.006 0.003 0.003
0.211 0.216 0.105 0.148
0.046 0.046 0.008 0.017
0.051 0.051 0.015 0.017
0.281 0.346 0.098 0,214
0.032 0.048 0.020 0.069
0.017 0.017 0.038 0.061
-
0.031 0.039 0.057 0.069
0.051 0.068 0. 051 0.103
0.726 0.837 0.395 0.701
Petroleum
1974 1977
0.005 0.005
0.020 0.025
0.031 0.031
0.005 0.005
0.332 0.382
0.281 0.347
0.004 0.004
Inorganics
1974
Total
1977 1974 197
0.040 0.040 0.054 0.0
0.096 0.096 0.498 0.5
0.121 0.121 0.310 0.3'
0.006 0.006 0.091 0.0!
0.414 0.433 2.089 2.4'
0.054 0.054 0.429 0.5!
0.130 0.130 0.271 0.3:
0.457 0.474 0.157 0.161 0.767 0.85
0.561 ^.597 0.057 j).Q57 0.766 0.9S
1.696 1.870 1.075 1.098 5.275 6.2(
Source; Foster D. Snell, Inc.
-68-
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3. FINANCIAL DEMAND REQUIREMENTS
To meet the demand of waste load projections of 1977 and 1983 on
outside hazardous waste management facilities , capital expansion is
required. Assuming new Federal Regulation is imposed that will require
treatment or disposal of all potentially hazardous wastes by 1983, then the
demand of the hazardous waste management would be approximately 9
million metric wet tons of hazardous waste in 1983 (Table III-3) . With the
hazardous waste management industry operating at 50 percent of capacity,
it handled approximately 3.7 million metric wet tons of hazardous waste in
1975. To almost triple the waste volume handled, the contractor estimates
that the industry would need approximately 4,000 employees, including
460 professionals. This section presents the demand/supply analysis
in three parts:
Matching demand by region to capacity
Capital construction needed by region to
meet demand
Lead time and capital constraints to growth
3.1 Demand/Capacity Relationships in 1977 and 1983
The estimated projections for demand by EPA region from types
of waste as presented in Section 1 of this chapter, are utilized for
the industrial demand in future periods. The industrial surveys
which supplied the data base are completed; however, the
estimates of demand discussed in this chapter are subject to
change, since:
The metals mining industry was entirely deleted
from the study as outside contractors are
not used for treatment or disposal of hazardous wastes
The percentage of waste which is treated or
disposed of externally by producing companies
is large in many industries these industries
may change their waste disposal practices in
future periods to treat more internally .
There are other industries besides the 13
identified by HWMD for study that are potentially
hazardous waste generators.
The 13 industry categories as identified by the HWMD are segre-
gated into five market categories which have similar waste treatment
and disposal methods as identified by industry interviews.
-69-
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Tables III-9 through in-13 present the capacity and demand
of the hazardous waste management industry for each of the five
market areas defined in 1974, 1977 and 1983 (the capacities used
for 1977 and 1983 were only those being identified as environmentally
adequate).
The 1983 capacity reported in Tables III-9 through 111-13 are
the same as 1977 capacity projections. The 1983 capacity was assumed
to be equivalent to 1977 capacity for the purpose of calculated future
financial demand requirements as:
None of the firms interviewed by the contractor
had any capital expansion plans after 1977
(the industry in general did not make capital
expenditure projections past a two year projection) .
As there were no capital expenditure commitments
after 1977, the financial demand requirements for
the period 1977-1983 can be represented accurately
by assuming 1977 as the base period.
Comparing demand with capacity provides estimates of hazard-
ous waste management industry surplus or deficits on a regional
basis. Analysts using these data are cautioned that inter-regional
capacity/demand relationships are not recognized. That is , extreme
deficits (or surpluses) in neighboring regions may be eliminated
through cross regional flows .
Capacity deficiencies appear in the following market categories:
Metals particularly electroplating hazardous
wastes -- have insufficient treatment facilities
in all regions except Region X.
Organics pesticides and other organic
hazardous waste treatment facilities have in-
sufficient capacity in the major producing
regions.
Sufficient environmentally acceptable capacity to meet demands
was available in most regions for the paint, petroleum, and inorganic
industry markets. Tables XII-14 and in-15 present the regional capacity
surpluses and deficits by EPA region for 1977 and 1983, respectively.
-70-
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TABLE III-9
ESTIMATED HAZARDOUS WASTE MANAGEMENT
INDUSTRY DEMAND AND CAPACITY -- METALS/
METALS FINISHING 1974, 1977
AND 1983
EPA
Region
I
II
III
IV
V
VI
VII
VIII
IX
X
Total
1974
Demand
0
0
0
0
1
0
0
0
0
0
4
.558
.468
.320
.254
.840
.205
.148
.085
.319
.064
.261
Capacity
0.000
0
0
0
1
0
0
0
0
0
1
.072
.125
.024
.167
.067
.121
.003
.089
.053
.721
1977
Demand
0.
0.
0.
0.
1.
0.
0.
0.
0.
0,
3,
433
378
298
216
505
172
116
068
276
053
515
Capacity* D
0.000 0
0
0
0
1
0
0
0
0
0
1
.066
.164
.015
.099
.075
.098
.000
.082
.098
.697
0
0
0
1
0
0
0
0
0
4
1983
em and
.566
.493
.376
,274
.927
.217
.150
.087
.353
.072
.515
Capacity *
0.000
0.066
0.164
0.015
1.099
0.075
0.098
0.000
0.082
0.098
1.697
* Capacities used for 1977 and 1983 are considered environmentally adequate.
Source: Foster D. Snell, Inc. analysis.
-71-
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TABLE 111-10
ESTIMATED HAZARDOUS WASTE MANAGEMENT INDUSTRY
DEMAND AND CAPACITY PAINTS/SOLVENTS/COATINGS
1974, 1977 AND 1983
(Millions of Metric Tons Per Year Wet Basis)
EPA 1974 1977 1983
Region Demand Capacity Demand Capacity* Demand Capacity
I 0.002 0.008 0.002 0.006 0.003 0.006
II 0.014 0.225 0.016 0.216 0.021 0.216
III 0.008 0.046 0.009 0.046 0.012 0.046
IV 0.013 0.051 0.015 0.051 0.020 0.051
V 0.030 0 281 0.035 0.346 0.045 0.346
VI 0.006 0.036 0.007 0.048 0.009 0.048
VII 0.005 0.020 0.006 0.017 0.008 0.017
VIII 0.000 0.003 0.000 0.000
IX 0.012 0.031 0.014 0.039 0.019 0.039
X 0.001 0.051 0.001 0.068 0.001 0.068
Total 0.091 0.752 0.105 0.837 0.138 0.837
* Capacities used for 1977 and 1983 are considered environmentally adequate.
Source: Foster D. Snell, Inc.
-72-
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TABLE III-11
ESTIMATED HAZARDOUS WASTE MANAGEMENT INDUSTRY
DEMAND AND CAPACITY -- ORGANICS
1974, 1977 AND 1983
(Millions of Metric Tons Per Year Wet Basis)
EPA
Region
I
II
III
IV
V
VI
VII
VIII
IX
X
1974
Demand
0,029
0.110
0.237
0.403
0.095
0.784
0.018
0.002
0.029
0.011
Capacity
0.004
0.112
0.015
0.015
0.139
0.026
0.057
0.003
0.074
0.056
1977
Demand
0.031
0.158
0.387
0.621
0.120
1.320
0.026
0.002
0.044
0.017
Capacity *
0.003
0.148
0.017
0.017
0.214
0.069
0.061
0.069
0.103
1983
Demand
0.025
0.177
0.422
0.646
0.150
1.429
0.032
0.003,
0.050
0.017
Capacity *
0.003
0.143
0.017
0.017
0.214
0.069
0.061
0.069
0.103
Total
1.718
0.501
2,726
0.701
2.951
0.701
* Capacities used for 1977 and 1983 are considered environmentally adequate.
Source: Foster D. Snell, Inc.
-73-
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TABLE m-12
ESTIMATED HAZARDOUS WASTE MANAGEMENT INDUSTRY
DEMAND AND CAPACITY -- PETROLEUM
1374 , 1977, AND 1983
(Millions of Metric Tons Per Year Wet Basis)
EPA 1974 1977 1983
Region Demand Capacity Demand Capacity * Demand Capacity"
I 0.000 0.005 0.000 0.005 0.000 0.005
II 0.038 0.020 0.041 0.025 0.020 0.025
III 0.056 0.031 0.060 0.031 0.029 0.031
IV 0.027 0.015 0.029 0.005 0.014 0.005
V 0.140 0.510 0.151 0.382 0.073 0.382
VI 0.337 1.108 0.363 0.347 0.174 0.347
VII 0.027 0.020 0.029 0.004 0.014 0.004
VIII 0.030 0.003 0.032 0.016
IX 0.102 0.764 0.110 0.474 0.053 0.474
X 0.023 0.561 0.025 0.597 0.012 0.597
Total 0.780 3.037 0.840 1.870 0.405 1.870
* Capacities used for 1977 and 1983 are considered environmentally adequate.
Source: Foster D. Snell, Inc.
-74-
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TABLE 111-13
ESTIMATED HAZARDOUS WASTE MANAGEMENT INDUSTRY
DEMAND AND CAPACITY INORGANICS
1974 , 1977 AND 1983
(Millions of Metric Tons Per Year Wet Basis)
EPA
Region
I
II
III
IV
V
VI
1974
Demand
0.050
0.044
0.089
0,083
0.079
0.231
Capacity
0.052
0.108
0.130
0.006
0.471
0.074
1977
Demand C<
0.049
0.048
0.101
0.095
0.085
0.265
apacity
0.04
0.096
0.121
0.006
0.433
0.054
1983
0.073 0.040
0.063 0.096
0.126 0.121
0.118 0.006
0.113 0.433
0.327 0.054
VII 0.021 0.170 0.022 0.130 0.030 0.130
VIII 0.002 0.003 0.002 0.003
IX 0.029 0.191 0.031 0.161 0.041 0.161
X 0.021 0.062 0.023 0.05 0.029 0.057
Total 0:649 1.267 0.721 1.098 0.923 1.098
* Capacities used for 1977 and 1983 are considered environmentally adequate.
Source: Foster D . Snell, Inc.
-75-
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TABLE III-14
HAZARDOUS WASTE MANAGEMENT REGIONAL CAPACITY SURPLUSES
(DEFICIT) TO DEMAND - 1977
(Millions of Wet Metric Tons Per Year)
Region
I
n
in
IV
V
VI
VII
vni
IX
X
Total
Metals
(0.433)
(0.312)
(0.134)
(0.201)
(0.406)
(0.097)
(0.018)
(0.068)
(0.194)
0.045
(1.818)
Paints
0.004
0.200
0.037
0.036
0.311
0.041
0.011
0.000
0.025
0.067
0.732
Organics
(0.028)
(0.010)
(0.370)
(0.604)
0.094
(1.251)
0.035
(0.002)
0.025
0.086
(2.025)
Petroleum
0.005
(0.016)
(0.029)
(0.024)
0.231
(0.016)
(0.025)
(0.032)
0.364
0.572
1.030
Inorganics
(0.009)
0 . 048
0.020
(0.089)
0 . 348
(0.211)
0 . 108
(0.002)
0.130
0.034
0.377
Source: Foster D. Snell, Inc.
-76-
-------
TABLE III- 15
HAZARDOUS WASTE MANAGEMENT REGIONAL
CAPACITY SURPLUS (DEFICIT) TO DEMAND - 1983
(Millions of Wet Metric Tons Per Year)
Region
I
II
ni
IV
V
VI
vn
vm
IX
X
Total
Metals
(0.566)
(0.427)
(0.212)
(0.259)
(0.828)
(0.142)
(0.052)
(0.087)
(0.271)
0.026
(2.818)
Paints
0.003
0.195
0.034
0.031
0.301
0.039
0.009
0.000
0.020
0.067
0.699
Organics
(0.022)
(0.029)
(0.405)
(0.629)
0.064
(1.360)
0.029
(0.003)
0.019
0.086
(2.250)
Petroleum
0.005
0.005
0.002
(0.009)
0.309
0.173
(0.010)
(0.016)
.421
.585
1.465
Inorganics
(0.033)
0.033
(0.005)
(0.112)
0.320
(0.273)
0.100
(0.003)
0.120
0.028
0.175
Source: Foster D . Snell, Inc.
-77-
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3.2 Capital Expenditure For Capacity
To meet the demand of future periods, capital expenditures
for new facilities are necessary. It is assumed that demand has to
be met on a regional basis for the nine regions which may be capa-
city deficient in 1983. This section presents the estimated capital
expenditures necessary to meet demand on a regional basis in 1983.
The capital costs used for plants are based on EPA estimates and
modified by industry interviews. The contractor assumes no plant is larger
than 1,000,000 gallons per day of aqueous treatment or 607 tons per
day of incineration.
The capital cost estimates for various types and sizes of facilities
are presented in Figures III-l and III-2. The plants can be scaled
within the range shown by these preliminary cost estimates.
3.3 Capital Expenditure Requirements for 1983
To meet the demand requirements of the hazardous waste manage-
ment industry in 1983, capital expenditure estimates were required in
addition to the projected capacity increases of the industry to 1977.
Since there was relatively no data available on anticipated capacity
increases after 1977, the contractor calculated the capital expenditures
that would be necessary by the hazardous waste industry from
1977's capacity to 1983 demand. In this manner, the total expendi-
tures necessary for the six year period can be estimated to meet the
capacity requirement necessary for 1983 projected demand. Th<3
following assumptions were used to calculate capital requirements
for 1983 :
Capacity has to be met on a regional basis. Inter-
regional capacity/demand relationships are not
recognized as the cost of transportation to treat
or dispose of a hazardous waste is a major factor
in the overall cost of hazardous waste management.
The capital cost of transportation equipment (e.g . ,
hazardous waste management industry owned trucks)
is not included.
No inclusion of capital expenditures necessary
by the industry to maintain existing facility
capacity.
Existing technology of waste treatment processes
and disposal.
-78-
-------
w en
O H
u J5
ii
tJ O
< Q
3
§
8s
tI *'
fa
FIGURE III-l
CAPITAL COST OF WASTE TREATMENT FACILITY
AQUEOUS
100.0
10.0
1.0
0.01
0.1
AQUEOUS WASTE TREATMENT CAPACITY
(Millions of Wet Metric Tons Per Year)
i.o
Source: Swift, W.H. Program for the management of hazardous wastes
v.l. (Richland, Wash.) , Battelle Memorial Institute,
Mar. 1, 1973. July, 1973. 385 p.
-79-
-------
FIGURE m-2
CAPITAL COST OF WASTE TREATMENT FACILITY
INCINERATION
CO w
O |H
U £
*1 'o
< P
p 3
E ~
100.0 _
10.0
1.0
0.002
I I I
i i i i i i i
0.01
INCINERATION CAPACITY
(Millions of Wet Metric Tons Per Year)
o.i
0.2
Source: Swift, W.H. Program for the management of hazardous wastes
v.l. (Richland, Wash.) , Battelle Memorial Institute,
Mar. 1, 1973. July, 1973. 385 p.
-80-
-------
To meet the demand requirements of 1983 an estimated $570
million will have to be invested in capital expenditures beyond
1977's hazardous waste management capacity projections . The $570
million expenditure is the estimated cost of completely new facilities.
However, approximately 40% of the interviewees indicated that
facilities at their present location would and could be expanded to
meet capacity requirements . In most cases , existing facilities
would be adequate to serve doubled capacity at full utilization;
for example, laboratories are currently used only 10% to 20% of the
time and would not require duplication . In addition, the practice
of the industry is to use second-hand equipment as much as
possible.
Industry representatives estimated that an estimated 20% to
30% savings could result from expanding in current locations and
use of used versus new equipment. As a result, the contractor
estimates that the cost to the industry to increase capacity to meet
1983 demands would be approximately $400 million. Upgrading
of current capacity to meet new environmental standards is estimated
to cost $100 million .
Table 111-16 presents the capital requirements necessary to
meet 1983 demand by EPA region with national totals.
3.4 Lead Time For New Capacity
Industry representatives claim that the following lead times
for installation of hazardous waste management facilities after site
approval are required:
Aqueous treatment 6 to 12 months for
batch process; and up to 2 years for con-
tinuous processing
Incineration 12 to 24 months
Site approval is estimated to require from six months to two
years and is dependent on the market and municipality (or state]
need for the facility .
The contractor considers these estimates vsilid since rncnnt
installations have been constructed within these limits. In addition,
the technologies are known .
-81-
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TABLE m-16
HAZARDOUS WASTE MANAGEMENT INDUSTRY ESTIMATED
CAPITAL REQUIREMENTS TO MEET 1983 FORECASTED DEMAND*
(Millions of Dollars)
Region Aqueous Waste Treatment Incineration Total
I
II
III
IV
V
VI
vn - -
VHI 16.4 5.3 21.7
IX 22.4 - 22.4
X - -
$ 51.4
39.9
27.9
38.5
46.5
41.2
$ 4.4
-
48.2
79.2
-
147.2
$ 55.8
39.9
76.1
117.7
46.5
188.4
Total $ 284.2 $284.3 $ 568.5
*Capital Requirements do not include capital investments forecast by industry
to generate 1977 capacity.
Source: Foster D. Snell, Inc.
-82-
-------
On-the-job training techniques now being used may delay
the employee growth of the industry to the projected demands of
4,000 employees in 1983, but it was not estimated to be a problem
by the majority of companies interviewed. As a result of expan-
sion, industry representatives estimate new facilities may not be
able to reach designed capacity until six months to one year
after installation.
3. 5 Capital Constraints to Growth
The majority of the companies interviewed reported that reduced
capital availability was a key deterrent to expansion. In many cases,
the poor capital availability resulted from the capital structure of the
business. The practice of using short term debt for leveraging low
equity levels increases the risk of bank financing. In addition, low
utilization of capacity reduces cash inflow, while the high fixed costs
continue. As a result, the industry was characterized by several
respondents as operating at minimum and risky cost flow positions.
until enforcement was increased. For those organizations where
capital availability was not a critical problem, such as the Icirge
conglomerates, the interviewees reported similar disinterest in
significant investment until hazardous waste regulation is increased.
Approximately 80 percent of the interviewees reported that if hazardous
waste management regulation is increased and enforced including
prohibition of existing sanitary landfill and open dumping capital
availability problems would be substantially reduced.
3.6 Industry Growth Assuming Static Conditions
The hazardous waste management industry has grown over the
past five years. The sales (hazardous waste revenues) growth rate
has been 14 percent annually since 1971 (Section II-7) . Capacity is
forecast to increase at approximately 5 percent per year to 1977
(Table III-6: 9-11% increase from 1975 to 1977 period) .
Assuming that the real growth of the hazardous waste management
industry has been 8 percent annually (6 percent annual price increases)
and projecting 1975 hazardous waste volumes to 1983 - the industry would
handle approximately 6.7 million wet metric tons per year of hazardous
waste in 1983. If environmentally adequate capacity expanded at a 5 percent
annual growth rate from 1977 to 1983, the industry would have approximately
8.3 million wet metric tons per year of environmentally adequate
capacity.
The projected volume and capacity data reflect that the industry
would be operating at approximately 80 percent of capacity in 1983.
-83-
-------
4. THE IMPACT AND IMPORTANCE OF NON-CAPITAL CONSTRAINTS
ON DECISION TO EXPAND
All of the companies contacted had one or more non-capital constraints
on their ability or desire to expand. This section presents the comments
related to longer range business projections.
The major constraint was the degree of enforcement of regulations, which
represents a problem to over 70 percent of the companies. The constraint
ranges from total lack of enforcement to non-uniform enforcement on the
waste producers. In effect, the hazardous waste management industry's
market is not required to treat wastes in an environmentally adequate manner.
Problems were also cited in differences between state and local regulations
within states and differences between states. This constraint was rr.ost
prevalent in Regions I, II, IV, VII and X, without any clear cut distinction
between type of company or size.
Competitive pressures are affecting 44 percent of tho companies adversely.
Companies in the waste treatment segment of the industry complained about
landfills that receive public funding as unfair competition. Companies also felt
that the cost of their service to a waste producer was a "fringe" that could
be eliminated at any time by the producer who didn't care where the waste
went. This constraint was most pronounced in Regions I, n, HI and IV ,
representing the Northeast, Mid-Atlantic and border states, without any
clear cut distinction on company size.
Siting is a constraint to 42 percent of the companies. This fcictor takes the
form of opposition to either obtaining new sites or expanding old ones.
Public opposition to "garbage dumps" or "chemical plants" has stopped
many companies from considering expansion. This constraint tends to
be more of a problem in less industrialized regions , such as IV, VI, VII,
IX and X.
Other regulations affect expansion plans in 30 percent of the cases. Com-
panies having incinerators must meet clean air standards. Companies treating acid
and caustic wastes cannot dispose of the neutral salt due to water control
standards. Regions I, IV, VII and X, have the highest concentration of
companies having difficulty.
Manpower availability represented a significant problem to only 15
percent of the interviewees. Obtaining and keeping trained personnel, both
laborers and management, was a constraint; primarily in Regions I and V.
-84-
-------
Approximately 10 percent of the companies interviewed forecast
technological development and expansion within the industry to be a
problem in future periods. Availability of equipment to meet the market
needs is uncertain, and the rapidly escalating cost of equipment and instal-
lation is a financial problem. Alternative investments were minor constraints.
Other constraints evinced significant comment from respondees as
representing problems. One or more of the following constraints were
mentioned as a problem in 65 percent of the companies interviewed:
Concern over governmental agencies entering the
business in competition with private industry, such
as municipal landfills or publicly funded projects.
Tendency for major waste producers to treat their
own wastes, either for economic reasons or to gain
public image for instituting environmental programs.
Trend in waste producing industry to eliminate
products that generate hazardous waste, i.e. ,
water-based paints instead of solvent-based,
plastic not metal parts.
Trend in waste producing industry to recover,
re-use, or recycle products that were once either
treated efficaciously or dumped; this change is
due to the cost of raw materials versus disposal costs.
Enforcement of regulations is more stringent on
hazardous waste management companies than on
waste producers.
Federal government, particularly the military, are
widespread and prolific disposers of hazardous wastes
in non-efficacious manner, leading to the establish-
ment of double standards for government and private
industry.
Non-uniformity of language, and interpretation of
hazardous waste regulations from all levels of
government leading waste producers to "cheapest
and easiest" method of hazardous waste disposal.
Lack of public awareness of problems , potential
solutions, and benefits, public only sees "bad side".
-85-
-------
IV. DISCUSSION
86
-------
IV. DISCUSSION
This chapter presents the results from the survey of the hazardous
waste management service industry. These results regarding growth and
industry structure, are presented in two sections to illustrate the range of
possible futures for the industry, that is, with and without new Federal,
state and local hazardous waste regulation and enforcement. Conclusions
regarding the impact of these alternatives on the operations and services
of the industry are also included. The key conclusions are summarized in
a Table at the end of the chapter. The conclusions focused on the 1975 to
1983 time period, since these dates represent milestones for existing air and
water regulations.
For each of the regulation options, the following factors are examined:
Industry demand and growth rate
Industry structure
Number of companies and ownership
Number of facilities
Operations
Employment
Asset requirements
Capital and other constraints to growth
Revenues
Prices
-87-
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1. PROJECTED HAZARDOUS WASTE MANAGEMENT INDUSTRY GROWTH
WITH NO NEW FEDERAL. STATE AND LOCAL REGULATION"
All of the respondents interviewed expect increased hazardous waste
regulation and enforcement by 1983. They based this forecast on the known
provisions of the clean air and water acts and the increasing interest in
industrial waste disposal by state and local authorities.
1.1 Industry Demand/Growth Rate
At best, the impact of the above regulations on the industry
is forecast to continue existing trends in demand and industry growth.
Current growth rates are approximately five percent per year in capacity
with a slightly higher (6% to 8%) increase in the volume of wastes
treated and disposed. Factors , such as the volume of wastes treated
internally, limit the capacity growth to approximately 5 percent per
year. At a growth rate of 5 percent with no regulation, the industry
is projected to have 8.3 million metric tons per year (wet basis) environ-
mentally adequate capacity in 1983 (6.2 million of metric tons capacity in
1977, Table HI-8) .
1.2 Industry Structure
Currently, the hazardous waste management industry is in an over
capacity aifuatacaiutilizing approximately 53 percent of capeicity nation-
wide . The result of this condition is a number of facilities which are
marginally profitable or losing money. In contrast, other operations
'are earning attractive profits. Both types of businesses are viewed
as acquisition candidates by the large ^olid waste conglomerates
selected marginal firms are attractive because of locations, permits
and established customers , and the profitable firms because of the
established position and profits.
Essentially, the hazardous waste management industry is in a
"shake out" period in terms of ownership. Without new Federal
state or local regulation and enforcement r industry representatives
forecast 10 to 20 of the marginally profitable companies will either
be acquired or go out of business because of a lack of financial
resources. Since approximately 17 percent of the companies are
currently unprofitable, the estimate appears valid.
Only one to two new company entrants in the market
are forecast over the next five years and these are small specialized
facilities. However, stronger organizations expect to expand; the
net expansion is forecasted by industry representatives to be four
to five facilities per year.
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The -980 to 1983 industry structure is therefore forecasted to
be 75 to 85 organizations operating 130 to 140 facilities. Since the
larger firms expect to acquire some currently marginally profitable
organizations and install new facilities, by 1980 to 1983four to five
organizations should dominate the market and be responsible for
approximately 50 percent of the volume treated.
1,3 Operations
Potential alternatives for waste producers also serve to
constrain hazardous waste management industry capacity growth
to the current 5 percent per year average; these include:
Increased processing of hazardous wastes by
producers particularly if generators are
held liable for damage or injury resulting from
hazardous waste treatment or disposal
Removal of hazardous substances from production
operations.
In any case, the number of small (one to 10 drums) lots is expected
to increase. Although the practice to process small quantities exists
now, the hazardous waste management industry's response has been to
aggregate the hazardous waste in a collection tank which is
left on the waste producer's site and periodically collect the wastes.
In addition, without new Federal, state or local regulation,
processing operations should continue to use existing technology
and types of equipment. The technology is known, equipment applied
is generally environmentally adequate, and in many cases,
the equipment requires little first cost investment. For example,
aqueous treatment can be conducted in lagoon batch processing
operations with the only on-site capital cost item being excavation,
pond liners and pumps . These low budget systems have costs of less
than $100,000 per site and are capable of treating up to two million
gallons per year. The capital estimates in earlier chapters show that
sophisticated continuous systems have capital costs that are orders of
magnitude above the low budget systems. However , the continuous
systems normally incorporate some form of lagoon treatment, so
the low budget systems can be upgraded to improve environmental
adequacy and capacity as the market develops.
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1.4 Employment
Because of the current underutilization of capacity, the majority
of interviewees forecast the volume of wastes currently treated and
disposed could be doubled with an average 30 percent increase in labor.
Four companies provided estimates to illustrate this claim, and the
estimate was judged valid by the contractor. As a result, with a
60 percent volume increase to 8.3 million metric tons per year forecast
of waste treated and disposed (without regulation) , the number of
employees in the industry by 1983 is estimated as 2,600 including
approximately 260 professionals.
1.5 Assets
To support a 5 percent capacity growth rate, the assets of the
industry must be increased by approximately $60 to $70 million (1975
dollars) by 1983. This estimate includes the costs of maintaining capacity
and depreciation. The spending rate is approximately $20 to $25
million per year with the current 10 percent depreciation rate. The total
1975 to 1983capital outlay with no regulation is approximately $200 to
$250 million.
1.6 Capital and Other Constraints to Growth
Four of the larger companies interviewed reported capital spend-
ing rates of over $1 million per year on new hazardous waste manage-
ment facilities. In addition, over the past five years, the industry
assets have increased by approximately $10 million per year, even
though the financial structure of many of the companies was poor.
Therefore, the contractor estimates that the industry can continue to
support capital expenditures of $20 to $25 million annually. Increased
utilization should provide up to 20 percent of the needed capital and the
existing patterns of using short and some long^rm debt will continue.
Continued use of shorMerm debt is forecast because of the reluctance
of banks and other investors to supply long-term debt. Since the profits
of the business are attractive in some instances , short term debt
including personal loans is the only alternative, and a low risk option
for smaller firms.
With respect to non-capital constraints, the major issue is the
degree of enforcement of regulations . This issue was discussed earlier;
the forecast is for a gradual increase in enforcement, creating a 6
percent to 8 percent annual volumetric demand increase. The key issue
then becomes facility siting, which interviewees reported is increas-
ingly difficult. Industry responses to siting questions during the
survey varied as follows:
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40 percent of the interviewees reported siting
difficulties (permits, licenses, etc.) primarily
confined to North-Atlantic states .
60 percent of the interviewees reported that siting
was not a problem in three cases local govern-
ments assisted siting since the communities wanted
a hazardous waste management facility to service
local industries.
Since relatively few new sites will be required (four to five per
year) without new Federal, state or local regulation, the contractor
forecasts that siting will not be a significant problem except in
the North-Atlantic regions .
1.7 Rey6n.He!3
At the projected growth rates , revenue of the industry should
increase at a rate slightly lower than the volumetric demand growth
rate or approximately 5 percent per year. The use of currently under-
utilized capacity will permit growth in revenue and profit without
corresponding increases in costs. Pressures to remain competitive
will limit price increases (discussed in the following section) and
have the effect of increasing revenue at the slightly lower rate than
volumetric throughput would indicate. The result by 1983 is that
the industry will have estimated revenues of $150 to $160 million
(1975 dollars) , if no new regulation is imposed.
1.8 Prices
Virtually all of the interviewees reported competition from low
priced operations which simply collect and deposit hazardous wastes
in dumps, sanitary landfills or other locations. The result of this
competition is a difficulty in raising prices and a tendency to main-
tain prices as a function of operational costs. Without new haz-
ardous waste management regulations, competition from low-cost
operations is expected to only gradually decrease. The net
effect is forecast to be strict control on costs and strong pressure not
to increase prices in the hazardous waste management industry. Fore-
casts of price increases are, therefore, primarily related to increased
costs of labor, materials and equipment. In general, interviewees
anticipated 5 percent to 10 percent annual increases in these areas
which would be reflected in slightly lower annual hazardous waste
management service price increases of approximately 5 percent per year,
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In summary , without new Federal, state or local regulations, the
hazardous waste management industry expects continuation of current
business patterns at least through 1983. In general, a capacity growth
rate of only 5 percent per year is forecast. Because of marginal profit-
ability 10 to 20 percent of the hazardous waste treatment and disposal
organizations are expected to be acquired or go out of business in the
1975-1983 period. However, stronger, currently profitable companies
expect to expand. The net result forecast by the contractor is that by 1980
to 1983 , 75 to 85 companies will be operating 130 to 140 facilities. The larger
organizations, which have better access to capital sources, are alsoi
expected to assume greater control of the industry. Prices in the industry
are forecast to increase at 5 percent per year, reflecting both anticipated
general inflation and the pressure of competition acting to maintain price
levels.
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2. PROJEi ED HAZARDOUS WASTE MANAGEMENT INDUSTRY GROWTH
WITH NEW FEDERAL, STATE AND/OR LOCAL REGULATION
This section assesses the potential of the hazardous waste management
industry to expand in response to new hazardous waste regulation. For the
purpose of this assessment, the following assumptions were used:
Legislation requiring environmentally adequate
treatment and disposal of hazardous wastes is
enacted and vigorously enforced in 1977.
Demand for "environmentally adequate" hazardous
waste services increases to handle approximately
9 million wet metric tons of hazardous waste in 1983.
(Projected waste load from Table III-3) .
The cost of providing new facilities is approximately
$570 million from 1977 to 1983.
A phased implementation schedule.
In the survey, all of the respondents were questioned regarding the
ability of the industry to meet a requirement for doubling or tripling capacity
by 1983. The majority of respondents did not believe any regulation would
have such a significant impact in this time period since:
U.S . industry would oppose rapid implementation
of regulation which would divert significant resources
from production capacity increases to non-productive
work.
Guidelines and standards would require time
for formulation
Enforcement activities would have to be
increased and personnel are not being trained.
Siting approval delays construction and
operation of hazardous waste management
service facilities.
Industry comments regarding a requirement to increase capacity focused
on the scheduled timing of enforcement, and types of equipment required.
All the interviewees reported that aggressive, impartial enforcement was
mandatory.
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The lead times required to double capacity will have a substantial
impact on the ability of the hazardous waste management industry to respond
to the demand. In the majority of interviews , some form of phased imple-
mentation was desired by the interviewees to minimize growth problems and
reduce costs. Consequently, a phased program of implementation was assumed
to reduce supply/demand problems and enable the industry to bring capacity
on stream. The assumed steps in a new hazardous waste regulation are shown
in Table IV-1. Basically, the legislation/regulation enactment was assumed
for 1977, and the full implementation assumed by 1983 to coincide with clean
water regulations.
2.1 Estimated Industry Demand/Growth Rate
Analysis of the demand on the hazardous waste management
industry, presented in Table 111-15 of this report, identified a net U .S .
deficit of approximately 5 million metric tons of waste on a wet basis
capacity per year by 1983 with demand being met on a regional basis.
To meet this demand by 1983, the current environmentally adequate industry
must essentially double capacity from 1975 to 1983. (Although 1C75 to
1983 is an eight year period, only six years are estimated as relevant ,
assuming regulations are not adopted until 1977.) For the purposes
of this report, approximately 10 percent excess capacity in the
industry was assumed. As a result, current capacity must be increased
by 100 percent by 1983 to over 12 million metric tons per year. Since
current utilization is approximately 50 percent of capacity, throughput must
increase by 350 percent. These total estimates require a 12 percent
annual capacity growth and a 22 percent annual growth in throughput
from 1977 to 1983. Three firms in the industry interviewed for this
study are currently growing at these rates without significant
difficulty . However, the ability of the industry to meet this require-
ment is subject to various constraints which are discussed in
the following paragraphs.
2.2 Industry Structure
Hazardous waste management industry representatives expected the
current industry "shake out" to continue regardless of regulation. Oper-
ators of profitable firms attributed the failing financial conditions of mar-
ginal operations to poor management, as well as poor markets. Examples of
poor management included over-building , particularly with new high cost
components, inadequate sales efforts, poor targeting of customers
to permit waste-to-waste treatment; over-staffing, etc. The majority
of interviewees reported, however, that new regulation would enable
more companies to stay in business and create business conditions
which would attract new entrants . The net result forecast by the
contractor is relative stability in the overall number of firms or 90
to 100 companies by 1983.
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TABLE IV-1
ASSUMED PHASED SCHEDULE FOR IMPLEMENTATION OF
HAZARDOUS WASTE LEGISLATION AND REGULATION
Year Actions
1975 to 1977 Development of legislation and regulatory standards.
1977 to 1979 Passage of legislation and regulations at federal and state
levels to:
Identify hazardous waste streams
Establish standards for environ-
mental quality and contamination
by hazardous waste streams
Begin implementation of standards .
1979 Implement standards for environmental quality, for
example,banning open dumping or disposal in sanitary
landfills.
1979 to 1983 Enforcement of standards.
1983 National compliance with standards.
Source: Foster D. Snell, Inc. based on industry interviews.
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Although a 100 percent increase in capacity is estimated as
required, it would not be reflected in a corresponding increase in the
number of facilities. Approximately 40 percent of the interviewees
reported that existing sites were adequate for more than 100 percent
increase in capacity. The number of new sites and facilities required
is essentially a trade-off between the economics of scale of
larger facilities and the costs of transportation. In most
cases facilities can and do service a state-wide area. Based on the
1983 demand by region, the contractor estimates that to reach the
assumed required capacity, approximately 50 to 60 additional sites will
be required. The estimate also includes approximately 20 secure
landfills. These sites will be larger than those estimated for growth
with no regulation and in most cases will offer both chemical treat-
ment and incineration. The location of the new sites is forecast to
be in the deficit regions shown in Table 111-15.
Although the number of companies is forecast to remain relatively
constant, the dominance of larger companies in the industry is forecast to
increase. Industry representatives reported that capital availability
for the smaller firms is a deterrent to expansion. These firms
would need to demonstrate one to two years of good earnings potential
to even attract the knowledgeable investor. However , the larger firms
or subsidiaries have the means for faster capital formation and can
lead the market. As a result, with new regulation, four to five
large companies should gain an increased market share.
2.3 Operations
The primary impact of new regulation will be on operations.
Throughputs are forecast to increase to near capacity levels, and new
equipment must be designed, ordered, installed and placed on stream.
However, as with the conditions of no regulation, hazardous waste
management industry representatives report they would adopt a
"wait and see" attitude since:
Internal treatment by waste producers may
increase
Hazardous substances may be removed from
production processes
The industry presently has sufficient waste
treatment/disposal capacity.
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Since larger waste producers are expected to continue the
current trend to concentrate hazardous wastes into small lots,
the number of small lots is expected to increase, similar to the
case of no regulation.
Two options exist for processing equipment to increase
environmentally adequate capacity by 1983; these include:
Sophisticated chemical treatment and disposal
facilities at an industry-wide cost of approxi-
mately $780 million, including:
New environmentally adequate facilities
with capacity to meet forecasted demand
$570 million .
New environmentally adequate facilities with
capacity to provide for 10% excess capacity
$110 million
Upgrading of existing capacity to meet new
regulatory standards $100 million.
Maximum use of existing facilities and continued
utilization of used but serviceable equipment at
an estimated industry-wide cost of $610 million, including:
Environmentally adequate facilities with
capacity to meet forecasted demand
$425 million-
Environmentally adequate facilities with
capacity to provide for 10% excess
capacity $85 million.
Upgrading of existing capacity to meet
new regulatory standards $100 million .
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A more detailed discussion of these costs was presented earlier.
The costs are also discussed in Section 2.5 and 2.6 which follow.
Industry representatives consider it unlikely that all current practices
will prove environmentally adequate under the scrutiny of new
hazardous waste regulation and upgrading will be required. In
addition, because of the marginal profit experiences of existing
companies which have installed sophisticated equipment, repre-
sentatives of the industry do not forecast installation of complex
chemical treatment equipment. Consequently, a compromise
treatment/disposal method is forecast which is adaptable to higher
technology if business conditions warrant, but in any case provides
environmentally adequate treatment. That is, the industry will
probably select the lower cost option outlined above.
The impact of this decision would have negligible impact on
the technology of operations. However, the impact of increased
throughput is forecast to have substantial impact on the business
aspects of hazardous waste treatment operations. At high capacity
utilization, flexibility is limited, for example:
Storage facilities may be limited because of
costs , therefore wastes may not be economically
stored for long periods to take advantage of
waste-to-waste conversion
Production scheduling is required
Maintenance must be scheduled
Downtime is expensive
In short, the problems are similar to those faced in any production
industry the chemical industry is a good example.
The ability of small firms in the hazardous waste management
industry to manage operations under these conditions is doubtful.
The problems currently associated with poor management, such as
over-building, inaccurate market judgment, etc. , lead to the conclu-
sion that the overall management of operations must be improved.
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2 . 4
Current hazardous waste management industry employment
is approximately 2,000 persons , including 230 professionals. The
contractor estimates that at a maximum, to increase capacity by
100 percent and improve operations , the number of industry employees
must increase by a factor of two . The net result is an industry that
employs approximately 4,000 persons, including 450 professionals.
Of even greater importance are the management skills required
to manage and operate plants operating at high utilization levels.
A requirement will also exist for skilled technicians . Personnel with
these skills are available in the chemical process industry, but must
be recruited and trained in hazardous waste management.
£
Thaj six months to one year time required to recruit and train
employees also points to the need for the phasing of implementation
of new hazardous waste regulation .
2 . 5 Asserts
To support the increase in environmentally adequate hazardous
waste management, industry capacity estimated expenditures range
from $610 to $770 million. These have been discussed in earlier
sections. The most likely response, based on industry interviews,
is at the low end of the range . This corresponds to an investment of
approximately $100 million per year by the industry or four times the
current spending rate .
2.6 Capital and Other Constraints to Growth
The hazardous waste management industry currently has capital
availability problems . Since individual company expenditures are
small, the current investment is supported by short term debt, including
delay of payments to suppliers and even personal loans to proprietors .
The ability of the industry to increase current capital spending by
four times or more is doubtful.
Based on the industry interviews , the following scenario is
forecast:
From ]975 to 1977, the industry will continue to
grow at current 5 percent annual rates .
-99-
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In 1977 new hazardous waste regulation may
be adopted by federal, state and local government
From 1977 to 1979, all companies will utilize
existing capacity to meet demand.
After one or more years of improved
earnings, larger companies will begin
to invest in the industry.
After one to two years of improved
earnings, the well managed smaller
firms should use improved balance
sheets to seek new investment capital.
From 1979 to 1983, based on markets, the larger
companies should begin site construction and
operation
Existing sites will be expanded in
one to two years
New sites will require up to three
years for site approval and construction.
During the 1979 to 1983 period, the smaller firms
will also begin seeking capital and site approvals
and plant construction.
None of the companies interviewed believed the profitable firms could
support an industry-wide 100 percent increase in capacity because of
lack of available markets and restrictions on capital. At best, an
annual spending rate of $40 to $50 million annually over the 1977 to
1983 period is forecast for the larger corporations. The ability
of the smaller concerns to invest is limited by the need to demonstrate
earnings potential and is forecast to be approximately $10 million
per year over the 1979 to 1983 period. Consequently, the contractor
estimates that the industry will only be able to support a maximum
of $400 million of the $610 million required or 66 percent of the estimated
requirement to meet demand and provide some excess. Assuming $100
million is used to upgrade existing capacity and the remainder for addi-
tional capacity, the 1983 capacity of the industry under these conditions
is estimated at 9.1 million metric tons wet of 80 percent of total U.S.
demand. Table IV-2 illustrates demand and capacity estimates.
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However, other sources for additional funding exist, as well as
options for ownership of treatment processes . Waste producers and
local or state organizations may support the additional expenditures.
In addition, existing federal small business loan programs could be
used. The ability and willingness of these organizations to support
industry growth is beyond the scope of the survey, but several inter-
viewees reported existing relationships which provide similar
assistance. Furthermore, if waste generators are faced with the
inability to dispose of hazardous waste to hazardous waste management
firms , the only option is internal management of wastes. The majority of
interviewees expected internal treatment to expand, since the cost of
treating for one or two compounds in a waste stream by plant is
normally less than the cost of treatment in a general purpose facility.
With respect to other constraints, siting will be a problem .
However, the industry expects any new regulation to have provisions
requiring the establishment of sites. Employment is not forecasted as
a problem if the regulations are phased.
As a result, the contractor forecasts that the environmental
adequacy of hazardous waste treatment will not be a problem under
new Federal, state or local regulation; however, waste generators
may have to assume up to a 10 to 20 percent greater burden of treat-
ment than currently expected. The hazardous waste service industry
should be able to serve approximately 75 to 85 percent of the
demand by 1983, if the new regulations are aggressively enforced.
2.7 Revenues
At the projected growth rates, and considering the impact of
capital restraints, the industry revenues are estimated to increase
by a factor of three (1975 dollars) by 1983. Greater utilization of
capacity is reported to be the chief factor in maintaining, and even
decreasing prices in some instances. Up to a 50 percent price
differential was reported in the survey between plants operating near
capacity , and those operating at low (30 percent to 50 percent)
utilization levels. As a result, in 1975 dollars, revenues of the
industry by 1983 are estimated to range from $330 to $350 million.
The impact of an assumed 5 percent general inflation (that is the
same revenues expressed in 1983 dollars) is estimated to increase
these annual revenues to $460 to $500 million.
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2.8 Prices
The majority of interviewees reported on the increased effi-
ciencies of greater capacity utilization. This factor is forecast to
permit price stability in the market (in terms of 1975 dollars) as
utilization is increased. However, general inflation, particularly
resulting from higher costs of skilled labor and equipment, are
expected to impact on prices. Based on a combination of the above
factors, the contractor estimates that the net result will be general
price increases of approximately 5 percent annually.
The estimated growth of the hazardous waste management industry,
with and without new Federal regulation, is summarized in Table IV-2.
Figure IV-1 summarizes the capacity/demand relationships of the U.S.
hazardous waste management industry from 1974 to 1983 assuming constant
annual growth rates with and without new Federal regulation.
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TABLE IV-2
ESTLWTED STRUCTURE OF THE HAZARDOUS WASTE MANAGEMENT
INDUSTRY IN 1983, WITH AND WITHOUT NEW FEDERAL, STATE OR
LOCAL REGULATION
Item
U.S. Demand^ (million
metric tons per year wet^2))
Number of Companies
Number of Facilities
Capacity Required to Meet
Demand on an EPA Regional
Basis (million metric tons
per year wet)
Forecasted Capacity by EPA
Regional Basis (million
metric tons per year wet)
Revenues (1975 dollars in
millions)
Employment (number)
Tangible Assets
(dollars in millions)
Key Assumptions
Annual Capacity Growth
Rate: 1977-1983
Regulation
Without Regulation
4.5
75 to 85
130 to 140
8.3
$150 to $160
2,100
$150
5%
Patchwork, state or
local standards for
hazardous waste
control.
With Regulation
8.9
90 to 100
160 to 170
11
(12 with 10% excess)
9.1
$330 to $350
4,500
$400 to $500
12%
(to reach 12 million
metric tons per year)
Phased, nationwide
Federal, state or
local regulation on
hazardous wastes.
(1) Quantity of wastes available for treatment and disposal
(2) Includes water weight
Source: Foster D. Snell, Inc.
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15
w1 14
en
CO
« 13
o3
£12
11
10
CO CO
O G
--- O
O H
.3 8
en
§
FIGURE IV-1
U.S. HAZARDOUS WASTE MANAGEMENT INDUSTRY
DEMAND/CAPACITY PROJECTIONS TO 1983
6 -
1974
1977
1980
1983
YEAR
Demand Amount of Hazardous Waste Available to Outside Contractors
Environmentally Adequate Capacity Necessary to Meet 1983 Hazardous
Waste Load Demand (1983) On A Regional Basis
A Environmentally Adequate Capacity Necessary To Meet 1983 Hazardous
Waste Load Demand (1983) On A Regional Basis Assuming 10 Percent
Excess
Forecasted Environmentally Adequate Capacity Without Regulation (5 Percent
Annual Growth Rate)
X Forecasted Environmentally Adequate Capacity With Regulation
Source: Foster D. Snell, Inc. analysis.
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APPENDIX A
GLOSSARY
105
-------
APPENDIX A
GLOSSARY
Biological Treatment
Chemical Treatment
Deep Well Disposal
Disposal Site
Environmentally Adequate
Hazardous Waste
Ocean Dumping
Secure Landfill
A treatment process in which biologically
active growths in the presence of oxygen
feed on organic wastes.
Any of the following processes used to treat
hazardous wastes: neutralization, reduction,
precipitation, oxidation, calcination , ion
exchange, evaporation, ammonia stripping,
flocculation or settling.
A system of disposing of filtered hazardous
waste into deep wells where it is contained
in the pores of permeable subsurface rock
separated from other ground water supplies
by impermeable layers of rock or clay.
Location where any final deposition of waste
occurs.
Does not cause any substantial present or
potential hazard to human health or the
environment.
Any waste or combination of wastes which pose
a substantial present or potential hazard to
human health or the environment because such
waste or wastes are non-degradable or persist-
ent in nature; can be biologically magnified;
can be lethal; or may otherwise cause or tend
to cause detrimental and cumulative effects.
Process of utilizing the ocean as the ultimate
disposal sink for all types of waste materials.
A landfill handling wastes that meets the
guidelines of California's Class I definition
of a landfill.
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APPENDIX B
INTERVIEW GUIDE
-107-
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OMB No. 158S75016
DATA ACQUISITION FORM
For
EPA Contract No. 68-01-3266
Potential For Capacity Creation Of Hazardous
Waste Treatment And Disposal Industry
Foster D. Snell, Inc. is conducting this survey to provide a data base
regarding the current and future availability of environmentally adequate
hazardous waste treatment and disposal facilities. The survey includes:
Documenting the current industry structure.
An assessment of the industry's ability to expand
to meet the requirements of new control standards.
The assessment includes evaluation of capital and non-capital constraints to
growth, such as industry-client marketing practices, competition and siting
problems.
The Snell Program Manager for this study is:
Foster D. Snell, Inc.
Hanover Road
Florham Park, New Jersey 07932
(201) 377-6700
Name/Title of Contact
Company Address/Phone Number:
(indicate parent or owner if
company is a subsidiary)
Snell Interviewer Date
Visit Phone Interview
Foster D Snell, Inc.
Page 1 of 7
Revised October 1975
-108-
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1. DESCRIPTION OF AVAILABLE PROCESSES
(1) Plant Location and Age (Denote additions and age)
(2) Obtain Services Offered (Obtain a flow diagram if available and
indicate what wastes and processes are used by the facility for
resource recovery define if capacity is wet or dry basis) .
Service Waste Treated Current
(Process) Capacity (D Utilization (%) Remarks
Collection and
Transport
Receiving/Storage
Neutralization
Biological
Precipitation
Chemical Fixation
Oxidation-
Reduction
Flocculation-
Sedimentation
Filtration/Ultra
Filtration
Ammonia Stripping
Carbon Sorption
(indicate who re-
generates carbon)
Incineration
Evaporation
Landfill (indicate
location and type)
Resource Recovery
Deep Well Injection
Other
(1) Identify if capacity and utilization is on a one or two shift basis, five or seven days per week, etc.
Page 2 of 7 -109-
Revised October 1975
-------
(3) Discuss problems with fuel/energy availability, particularly for
incineration.
(4) Air Pollution Control (Equipment, problems, etc.)
(5) Water Pollution Control (Equipment, problems, etc.)
(6) Discuss state or local license requirements and problems.
2. EMPLOYMENT
Obtain the following facility employment data, segment professionals, such
as chemists, industrial engineers, etc., from other skills. Identify
management background, such as chemistry or engineering.
Number of Employees:
Skill Levels:
Labor Organizations:
Average Wage and Fringes:
Productivity Measurement:
(Example: gallons/day/employee)
3. MARKETS AND SALES
(1) Tabulate Sales Breakdown and Geographic Range of Markets:
Type Of Wastes Quantity
Customer Treated Treated Processes Price Of Sales
Or Market (Refused) (Ib. or gal.) UsedU) Service^2) ($)
(1) Use terms shown in Process Description section, such as Collection and
Transport, Neutralization, etc.
(2) Define how prices are determined.
Foster D Snell, Inc.
Page 3 of 7
Revised October 1975
-110-
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(2) Discuss the typical sale of your service (i.e. sales call, customer
call, lab analysis, etc.) .
(3) Discuss the likelihood of price changes in the future (obtain reason
for change) and estimate the effect of the change on demand and
supply of services. Ask about the impact of general business
conditions on prices.
4. COST CHARACTERISTICS
(1) Discuss a Typical Revenue Distribution for the Facility (estimates ,
not proprietary data are desired and fixed versus variable costs
should be identified)
Historical Increase
Item Percent of Sales Decrease in Past 5 Years
(percent per year)
Sales 100%
Expenses
Material
Energy
Labor
Transportation
Selling
G8A
Site Fees
Interest
. Vehicles
. Other equipment
Profit before tax
Tax
Profit after tax
Foster D Snell, Inc
Page 4 of 7
Revised October 1975 -111-
-------
(2) Discuss the Following Financial Indicators:
Investment ($): Plant $ , Working Capital $
Short term versus long term debt:
Market values of assets:
Ownership configurations:
Availability of credit: (if poor, obtain reason)
(3) Discuss cash flows:
5. POTENTIAL FOR EXPANSION
(1) Discuss the services (processes) required for this plant to serve
industry in this area when standards such as water effluent guide-
lines are imposed. Identify how the company would go about
expanding.
Cost Of
Market Service Capacity Capacity t*3) Lead
and Waste Required Required^3) Capital Operating Time
(a) For process equipment with "optimum" economies of scale
indicate when required.
(b) Current price and price when required per lb. or gal.
Foster D Snell, Inc.
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Revised October 1975 -112-
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(2) Disjuss your Employee Requirements (number, skills, etc.) for
Expanded Facilities:
(3) Discuss the Impact of a Proposed Expansion on the Following Factors:
Item Impact
Capital Requirements
and Availability
Sales ($ and volume)
Pricing
Cost Characteristics
Financial Indicators
(4) Discuss the Impact and Importance of the Following Non-Capital
Constraints on Your Decision to Expand Capacity.
Constraint Comments
Competitive (captive and
non-captive as it affects
ease of entry)
Potential Technological
Advances
Manpower and/or Skill
Availability
Siting (availability and
public opposition)
Foster D Snell. Inc
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Revised October 1975 -113-
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(4) (continued)
Constraint Comments
Degree of Enforcement
of Regulation
Impact of Other Environmental
Programs, Particularly Those
Regulating Hazardous Wastes
Alternative Investments
Inflationary Practices
Other
6. DISCUSS IF INTERVIEWEE RECOMMENDS OTHER KEY INDUSTRY
INFORMATION SOURCES
Foster D Snell. Inc.
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Revised October 1975 -114-
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APPENDIX C
LIST OF INTERVIEWS BY EPA REGION
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APPENDIX C (1)
LIST OF INTERVIEWS BY EPA REGION
Region 1
The Crago Company, ME
Eastern Smelting and Refining, MA
Silresim Chemical Corporation, MA^)
Montvale Laboratories, MA
Ventron Corporation, MA
S.C.A. Services, Inc., MA
Region 2
Recycling Laboratories, NY
Chem-Trol Pollution Services, Inc., NY (!)
Chemical Waste Disposal Corporation , NY
Frontier Chemical Waste Process, Inc., NY
Pollution Abatement Services , NY
Mercury Refining Company, Inc., NY
Chemical Control Corporation, NJ(1)
Marisol, Inc., NJ
National Converters, Inc., NJ
Scientific, Inc., NJ
Modern Transportation Company , NJ
Princeton Disposal Services, NJ
Scientific Chemical Processing, Inc., NJ
Gaess Environmental Services, NJ
Region 3
American Recovery Corporation, PA
Chemfix, PA
Sitkin Metal Industries, Inc ., PA
New Jersery Zinc , PA W
U.S. Utilities Service Corporation, PA
Liquid Waste Disposal of Virginia, VA
Rollins Environmental Services, DE
Region 4
Liquid Waste Disposal, Inc., KY (!)
Destructo-Chenway, NC d)
Wasteplex, Inc. , TN(1)
Lanham Waste Control, (B.F.I, subsidiary), GA
Industrial Pollution Control, Ky. (2)
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APPENDIX C (2)
LIST OF INTERVIEWS BY EPA REGION
Region 5
Industrial Liquid Waste Disposal, IN(1)
American Chemical Service, IN
Seymour Manufacturing, IN
American Recovery Corporation , IN
Kaski Construction Company , OH
Chem-Dyne Corporation, OHd)
Systems Technology Corporation , OH
Erieway Pollution Control , OH
Ohio Liquid Disposal, Inc. , OHU)
Browning-Ferris of Ohio, Inc . , OH
Waste Research and Reclamation Company, Inc. , WI
Rodgers Laboratories, WI
Hyon Waste Management Services , Inc . , IL
Interstate Pollution Control , IL
Simmons Refining , IL
B.F.I. Chemical Services Division, IL
Pollution Controls Corporation , MN
Approved Chemical Treatment, MI
Environmental Waste Control, Inc. , MI^1^
Liquid Disposal Company , MI
Prenco, MI
Chem-Met Services , MI
Nelson Chemicals , MI
Region 6
Browning-Ferris Industries, Inc., TX^2)
Malone Service Company , TX
Bioecology Systems , Inc . , TX
Texas Ecologists, Inc., TX
Texas Liquid Waste Disposal Company, TX
Petrolite Corporation, TX d)
U.S. Pollution Control, Inc., OK
Region 7
Conservation Chemical Company,
Findett Corporation , MO
Wheeling Disposal Services, MO
Region 8
Denver Waste Disposal (Denver Cleanup) , CO
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APPENDIX C (3)
LIST OF INTERVIEWS BY EPA REGION
Region 9
Casmalia Disposal Site, CA
Environmental Protection Corporation, CA^)
Industrial Tank Company, CA W
Omar Rendering Company, CA
Los Angeles County, CA W
Ventura County Department of Public Works, CA
Nuclear Engineering Company, Inc., CA
Liquid Waste Management, CA
Roberts Liquid Disposal, CA
Richmond Sanitary Services , CA
Edgington Oil Refinery, CA
Superior Oil Company, CA
Chancellor-Ogden, Inc., CA W
Region 10
Wescon, Inc., ID d)
Chemical Processors, Inc., WA fi)
Resource Recovery Corporation, WA
Other
National Solid Waste Management Assoc., D. C. ^)
Notes:
(1) Personal Visit to Facility
(2) Visited Through Corporate Headquarters
Source: Foster D. Snell, Inc.
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BIBLIOGRAPHY
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