Resource Recovery Plant Implementation Guides For Municipal Officials Interim Report


EPA/530/SW-152
OCTOBER 1975
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An environmental protection publication in the solid waste management
series (SW-152).  Mention of commercial products does not constitute
endorsement by the U.S. Government.  Editing and technical content of
this report are the responsibility of the Resource Recovery Division
of the Office of Solid Waste Management Programs.

Single copies of this publication are available from Solid Waste
Information, U.S.  Environmental Protection Agency, Cincinnati, Ohio
45268.

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RESOURCE RECOVERY PLANT IMPLEMENTATION:  GUIDES
            FOR MUNICIPAL OFFICIALS
                 INTERIM REPORT
        This report (SW-152) was written
               by Alan Shilepsky
    U.S.  Environmental  Protection Agency
                    1975

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                     Contents


  I.   Introduction 	 1

 II.   Steps to Resource Recovery	 2

III.   Study 	3

      Resource Recovery Task Force	3
      Areas for Study	4
      Setting Local  Goals	6
      Outside Planning/Implementation Assistance	7

 IV.   Selection—			-	13

      Major Decisions to be Made	 13
      Technology - Market 	 14
      Ownership - Operation	 15
      Financing 			17
      Procurement Strategy 	 17

  V.   Procurement		24

      Procuring a Consulting Engineer 	 24
      Procuring a System Contractor	26

      Footnotes 					33
      Appendix  	35

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                  RESOURCE RECOVERY PLANT IMPLEMENTATION


                               Interim  Report

by Alan Shilepsky*

     Interest in resource recovery is growing rapidly.  Scores of cities
are investigating processing systems that will divert their solid wastes
away from incinerators and landfills and back into the economic system,
to serve as replacements for expensive fuels and scarce virgin raw
materials.  Not only does this new approach to the centuries-old garbage
problem make economic sense, but it is in accord with the public's
demand that wasteful, "throw-away" attitudes be reversed.

     Cities caught up in the rush for resource recovery do have a problem
though, because they have little to guide them in making choices in this
new field.  The prior experiences of city officials offer limited guidance
to the sophisticated technologies, procurement problems, and management
alternatives involved in resource recovery.  Consequently, officials
often find decisions on resource recovery difficult and perplexing due
to the high capital requirements, the wide range of largely unproven
alternatives, the market and operational uncertainties, and the range of
procurement and management alternatives.  They may ultimately decide to
wait until they see how other cities implement resource recovery.  The
result, of course, is that many cities that could solve a major part of
their solid waste problem via resource recovery may lose years in the
waiting.

     The U.S. Environmental Protection Agency (EPA) recognizes the gravity
of the problem city officials face.  Consequently, EPA's Office of Solid
Waste Management Programs (OSWMP) is developing a series of guides that
will facilitate the acquisition of resource recovery plants.  This series
will be based on OSWMP's experiences as well as those of pioneering cities
1n the resource recovery field.

     Entitled Resource Recovery Plant Implementation:  Guides for Municipal
Officials, this series will examine in detail  a variety of important imple-
mentation issues, including planning, technology, markets, financing,
procurement, contracts, and an accounting format.  A separate guide will
treat each individual issue and will be published as it is completed.
The complete set of Guides will be available in early 1976.

      This Interim Report is being made available now to assist those
municipal officials who are beginning the task of resource recovery
implementation today.  A more detailed version is under development,
and will be published in March of 1976 as the  Planning and Overview
Guide of the Implementation Guide series.  OSWMP welcomes comments on
this report and will  consider them during the  preparation of the final
version.
     *Mr. Shilepsky is a physical scientist/policy analyst in the Resource
Recovery Division of the U.S. Environmental Protection Agency's Office
of Solid Waste Management Programs.

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                         STEPS TO RESOURCE RECOVERY

     Resource recovery, namely the recapture and reutilization of
material and energy products from municipal solid wastes, can be accomplished
in two ways.  Recovered resources can be segregated at the source (e.g.
the home) and separately collected, or they can be separated out of the
waste stream by means of high-technology mechanical processing systems.
The Office of Solid Waste Management Programs recommends both these
approaches, but this report concerns itself only with the latter.

     There are three major steps to the implementation of high-technology
resource recovery: study, selection, and procurement, in that order.
Each of those steps is important to eventual success and must be conscientiously
executed in its turn.  A general description of each follows:

     Study.  The study step lays the groundwork for the other two
steps, for it creates the Task Force that is necessary to bring resource
recovery into practice and ic generates the knowledge base that is
essential for informed choice later on.  It also specifies the city's
general goals in solid waste management and resource recovery, which are
important inputs to the selection step.

     Selection.  The selection step is the major decision step in
resource recovery implementation because through it the city determines
the general outlines of the resource recovery package to be procured.
This includes questions of technical concept, management alternatives,
financing, and strategy for actually procuring the recovery plant.  In
practice, this step is usually combined with the study step into a
single "planning" step, the product of which may be a comprehensive
feasibility study and resource recovery plan.

     Procurement.  The procurement step starts with a conceptual plan
for resource recovery  and ends with an operating plant.  It includes
hiring the facility designer and builder, formulating a mutually acceptable
legal arrangement between the parties involved in procurement, and
securing financing for the system.

     The city must obtain the active involvement of experts in each of these
 three steps.  Impartial planning, engineering, and legal assistance is
 necessary in the study and selection steps in order to devise a workable
 plan.  Later, in the procurement step, a system designer must be chosen to
 actually design a plant.  Project success will depend on how wisely the city
 chooses and utilizes these various types of assistance as the implementation
 progresses.

     A discussion of the three major steps follows, with emphasis on the
issues and problems that OSWMP has found to be most significant to date
for cities involved in  implementation.

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                                   STUDY
                       Resource Recovery Task Force

     Before any resource recovery effort can begin, those in political
authority in the interested city or region must charge a single group--
it might be called the Resource Recovery Task Force—to plan a recovery
system and shepherd its implementation.  A specific set of tasks and a
schedule for completing them must be stipulated.  The political authority--
it may be the mayor or the city or county council--must also assure that the
Task Force will be able to execute its responsibility effectively, and does
this by providing it with the following three elements necessary for
success.

     Broad Participation.  The Task Force might have as its core an
existing group, like the department of public works or the city planner's
office, or it could be specially constituted, like an ad hoc interdepartmental
committee set up by the mayor.  In any case, its effectiveness depends
on inputs and participation from all  parts of the community that are
necessary for success.  Besides obvious participants such as the department
of public works, the city attorney's  office and the budget office,
others that might be included are local environmentalists, State officials,
private collection and disposal companies, any company that may prove to
be a major user of recovered products (e.g.  a iocai electric utility),
and neighboring cities, if their wastes will be necessary to make the'
economics of a plant acceptable.

     A Task Force that lacks broad participation brings only one point
of view to the planning process, and  may devise a plan that contains
embarrassing blind spots.  For instance, a Task Force composed only of
public works officials may develop a  recovery plan that can not be
implemented for legal or financial reasons,  or which overlooks the
problem of market acceptability of the recovered products.  Likewise,
city planners may overlook technical  or operational difficulties.  Such
questions should be raised and settled early in the planning and implementation
process while there is still flexibility, and while they can still be
adjusted for without a great loss of  money,  time, or morale.  The best
way to raise them early is to have a  broadly constituted Task Force ^hat
will  bring many perspectives to bear  on the problem.


      Sufficient Authority.  The Task Force must  have enough authority to
execute its responsibility effectively,  including the authority to hire
consultants,  negotiate with system  designers, and  prepare  requests for
proposals.  The Task  Force must also have the authority to  make  recommen-
dations  on  system  designers,  financial  plans, and  contractual arrangements.

     Since there are many powers necessary to implementation that are
not delegateable by the mayor (or whomever else set up the group), the
Task Force must have and maintain access to him, and keep him apprised

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of its activities and decisions.   In particular,  the Task Force must not
get so far out in front of him that he can not or will not support it at
critical stages in the implementation process.

     Adequate Resources.  A third Task Force requirement is  sufficient
resources, in terms or money, time, and manpower.   Though cities are often
reluctant to allocate large sums of money for planning activities,  the
investment is well worth it.  Cities under one million population can
usually contract for resource recovery planning assistance for less than
a fraction of a percent of the $10 to $100 million or more a large-scale
recovery plant will cost.  Therefore, planning assistance can easily pay
for itself many times over by helping optimize system selection at the
outset.

     Personnel resources are even more important than money, because the
problems in recovery implementation are complex and far-reaching.  The
city must commit knowledgeable staff and sufficient time to the activity,
especially in the case of the person whose responsibility it is to
direct the Task Force and see that its implementation schedule is followed.
Not only must the lead person be able, but he also must devote the
majority of his time to this assignment; otherwise resource recovery
will bog down when his other responsibilities demand attention.

     A mistake made in some cities is to set up an ad hoc Task Force
comprised solely of the department heads of the relevant city departments,
all of whom have concerns much more immediate than resource recovery and
who probably focus on this problem only during the infrequently called
meetings.  Then, if adequate full-time staff support is lacking, and if
the leader has as little time for the project as his colleagues, the
process will move purposelessly and fitfully, if it moves at all.

                            Areas for Study

     Probably the most important steps city officials take in preparing
for resource recovery are the first ones, for a successful system hinges
on the quality of the initial planning and analysis.  There are many
areas that require study at this stage, and the main ones are discussed
below.

     Local Solid Waste Situation.  Obvious items for study include the
dimensions of the local solid waste problem.  To determine the necessary
plant capacity, approximate disposal tonnages must be learned, both on
the average and under seasonal fluctuations.  Additionally, the increase
in local solid waste generation must be projected over the life of the
recovery system.

     Waste composition, both seasonal and yearly average, is another
important factor, especially if the averages differ significantly from
national averages.  Knowledge of the composition is necessary to determine
the marketability and quantities of possible recovered products.  For
instance, a low aluminum can content would indicate that the economics
were not right for add-on aluminum recovery equipment.  Effects that

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must be anticipated and taken into consideration include changes that
may occur from the introduction of other solid waste management strategies,
such as a change in collection practices (e.g.  separate collection of
newspapers) or source reduction (e.g. mandatory beverage container
deposits).

     Other solid waste system factors that must be surveyed include:
current and anticipated disposal costs (to get a baseline for comparison
with recovery system economics), the presence of special wastes, and
prospective locations for a plant and a residual landfill.

     Available Technologies.  The Task Force must next consider the
range of technologies available for processing and recovering solid
waste, and the characteristics of each.  Factors for study include the
concept itself, its feasibility, its reliability, its projected economics,
and the form and quality of the products it generates.

     The analysis of technology is a two-step process.  First, general
information on various technologies can be obtained through seminars and
publications prepared by various groups including EPA's Office of Solid
Waste Management Programs, the International City Managers Association,
the National Association of Counties, and the National League of Cities -
U.S. Conference of Mayors.  OSWMP, in particular, is demonstrating
technologies, evaluating their economics, and is generally serving as an
information clearing house for resource recovery information.

     Later,  with the  assistance  of technical  consultants,  the  Task  Force
should select from the general  gamut  of technologies  a few that  appear
most applicable to its city's needs and circumstances, and concentrate
on them in depth.   The Task Force, or its representatives, can accomplish
this focused study by visiting pilot  plants  and  discussing options  with
firms that are familiar with the most interesting resource recovery
concepts.

     Local Markets.  Once the Task Force has a feeling for the available
technologies and their products, it can analyze the local market situation
to determine which of these products can be sold locally, and at what
prices.  This analysis is crucial, for a suitable agreeable market is
essential if the recovery circle is to be closed.

     Success hinges on two factors:  local industries and economics.
First, an industry must be present that can use the recovered product,
otherwise it will be nothing more than a residual that must still be
disposed.  Second, the product must be able to command a sufficiently
high price on the market to reasonably offset recovery costs, otherwise
it might be cheaper to shut down the plant and haul the incoming wastes
to a low cost landfill.

     Superficial market studies are insufficient since only a detailed
look at local industries can determine if they can use and will  buy
waste-based products.  Nothing can be assumed.  For instance, some

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cities assume any electric utility can take shredded solid waste as  a
fuel.  But if the utility's boilers burn oil,  they may not have the  ash-
handling capability necessary for utilizing shredded waste.  Or, even  if
a utility does have coal-burning, ash-handling boilers, the boilers  may
only be fully fired during peak-loading periods (a few hours a day), in
which case they may not constitute a viable market for a waste fuel.
Specific details are important for ascertaining materials recovery
markets also; a scrap dealer may not be willing to pay premium prices
(or anything) for a low-quality ferrous material,  or a detinner may  not
want can stock that has been balled up by a shredder and has little
exposed surface area.

     An adequate market study should identify  a number of potential
markets and determine the specifications, quantities, and price each
would set for recovered products.  It should also  recognize the possibility
of market displacement, where new recovered products may displace old
ones from their traditional markets and thus create a new solid waste
problem.

     Institutional Factors.  The final subject for study concerns institutional
factors, as distinguished from technical and market factors.  These
include the legal, organizational, and financial factors that impact on
the city's ability to plan a system, procure it, finance it, and operate
it.  Questions to be raised here include:  what are the laws affecting
the process by which the city can procure a recovery system; can the
city efficiently operate a recovery plant and  market the product itself;
can the city assure that wastes will be delivered  to the plant; what
financing options are available to the city; and,  how do the financing
options relate to different ownership/operation arrangements.  The
complexity of such considerations can be seen  by expanding on just one
of these questions, that pertaining to procurement.

     Many States allow their cities little flexibility in procuring
capital improvements.  Often State laws require competitive bidding  and
forbid negotiated procurements and turn-key construction contracts.
Similarly, there may be constraints on the procurement of services,  such
as prohibitions of long-term contracts.  The Task  Force must be aware  of
these constraints so it can determine a workable and legal recovery
plan. (Conversely, it may wish to petition its State legislature for
remedial legislation.)  The interrelation of legal and other institutional
factors will become obvious in later sections  of this paper.

                            Setting Local Goals

     The Task Force must do more than gather factual information during
the study stage; it must also begin to consider the city's various
resource recovery goals and their relative importance.  Possible goals
include low cost, dependability, minimum environmental impact, maximum
resource recovery, and minimum land requirements (to forestall a controversial
search for a new landfill).

     Consideration of goals is important because different goals dictate
different approaches to the disposal problem,  as is suggested in

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Table 1.  If cost is the only concern, for instance, then close-in
landfill should be considered even in the face of possible citizen
dissatifaction.  Conversely, if maximum resource recovery is the goal, a
sophisticated "total" materials recovery technology may be called for,
even in the face of technological and economic uncertainties.  Clearly,
it is a fallacy to think that any one approach will satisfy all goals
equally.

     The earlier the Task Force can ascertain its primary goals, the
sooner it can eliminate unacceptable systems from consideration.  This
will speed the decision process and give the Task Force time to concentrate
on a few options in depth.  It also will benefit any system vendor who
might otherwise have gone to a great deal of expense to prepare a
proposal for the city only to learn that his system was in conflict with
hitherto unstated goals of the Task Force.

     Finally, a Task Force that specifies its key goals early is less
likely to find itself in the position of merely responding to the proposals
of outsiders, and running the risk of failing to acquire an important
system feature such as hazardous waste-handling equipment or built-in
redundancy because no proposal included such a feature.  This would be
like a shopper given to impulsive buying who defines grocery needs while
pushing the supermarket cart down the aisles, and who forgets to buy the
butter because it is not plainly in view.  A comprehensive system selection
shopping list is needed, and such a list is more easily prepared if the
Task Force tries to lay out its goals explicitly beforehand.

                Outside Planning/Implementation Assistance

     Few cities have all the information and expertise necessary for
resource recovery implementation; rather, success will depend on help
from the outside.  It is important that the Task Force knows what kind
of help it needs, where to get it, and how to use it.

      Different  types of assistance are required at different times in the
implementation  process.   It is useful to make a distinction between the
general  technical and managerial services required by the Task Force lead-
ing  up  to the choice of a specific technical concept, and the specific
engineering  design services required once the specific technical concept
has  been chosen.  (In this paper, the term "consultant" is used to
designate the provider of the former type of assistance and "system
designer" is used to designate the provider of the latter type.)  It
should  be noted  that only consulting engineers can be considered as
potential providers of both types of services.  Management consultants,
for  instance, would be unable to prepare the engineering drawings
required of  a system designer, and system contractors with proprietary
technologies would be unable to provide the impartial advice required
of  a consultant.

     Consultants.  There are a variety of types of consultants who have
proven helpful  to cities engaged in resource recovery implementation,
including consulting engineers, management consultants, legal consultants
and financial consultants.  They have been called upon to prepare necessary
implementation documents like feasibility studies, market analyses,

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