THE ECONOMICS OF CLEAN
SUMMARY OF ANALYSIS
ENVIRONMENTAL PROTECTION AGENCY
-------
TABLE OF CONTENTS
PURPOSE AND SCOPE 1
COSTS AND PLANNED INVESTMENT 2
Industrial --Capital Expenditures 2
Industrial--Annual i zed Costs ,.... 5
Municipal —Capital Expenditures 5
Municipal Accomplishrcents 10
TRENDS 11
Ambient , 11
Manuf acturi ng 14
Construction Industry—Municipal 18
Construction Industry—Industrial 19
EVALUATION OF BENEFITS AND COSTS 21
SUMMARY OF METHODOLOGIES AND MOSELS USED IN ANALYSIS 25
PDI Index 25
Industrial Model 26
Municipal Model ; 31
Survey Techniqie 33
LIST OF FIGURES
i. F.ELATIVE WATE:R POLLUTION 15
2. TOTAL CONTROL COSTS AS A FUNCTION OF EFFLUENT
(ONTROL LEVELS 22
m
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LIST OF TABLES
1. INDUSTRIAL WASTE TREATMENT SITUATION SUMMARY, 1968 3
2. PROJECTED CASH OUTLAYS ASSOCIATED WITH ATTAINMENT OF
DISCHARGE STANDARDS BY 1976 (MEDIAN EFFICIENCY) 6
3. SURVEY RESULTS OF ESTIMATED CONSTRUCTION COST OF SEWAGE
TREATMENT FACILITIES PLANNED FOR THE PERIOD FY 1972-1976..,.. 7
4. FIVE-YEAR "BACKLOG" CAPITAL ELIMINATION SCHEDULE 8
5. MODEL INVESTMENT SCHEDULE INVESTMENT NEEDED TO REDUCE
BACKLOG BY 1976 9
fi. PROGRAM ACCOMPLISHMENTS 12
7. RELATIVE INCIDENCE OF WATER POLLUTION 13
3. WATER POLLUTION INDEX SUMMARIZED FOR MAJOR DRAINAGE AREAS,
1970 AND 1971 16
9. ANNUAL EXPENDITURES CONSISTENT WITH STANDARDS COMPLIANCE BY
1976 (PROBABLE COST: MEDIAN EFFICIENCY) 20
in. INDEX OF POLLUTION CONTROL INVESTMENT COSTS RELATED TO LEVEL
, OF ABATEMENT 23
11. COMPARISON OF .CENSUS REPORTED ESTABLISHMENT AND WATER DATA
FOR FACTORIES WITH INTAKE ft 20,000,000 G/YR. WITH MODELLED
FACTORIES 27
1.?. BASIC ELEMENTS OF THE INDUSTRIAL WASTE TREATMENT MODEL 28
13. EVALUATION OF CAPITAL IN PLACE AND OF DEFINED NEEDS 32
iv
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SUMMARY OF ANALYSIS
Purpose and Scope
This report represents the fifth in the series of clean water reports to
the Congress prepared in accordance with the Section 26(a) of the Federal
Water Pollution Control Act, as amended. It studies the problem of water
pollution and its control by giving an assessment of the prevalence and
degree of water pollution occurring nationally and by giving estimates of
the capital investment and annual operating requirements through 1976 in
both the industrial and municipal waste treatment sectors. This analysis
is based on assumptions of current federal-State water quality standards.
An assessment of the economic costs of the various treatment levels neces-
sary to insure water quality standards up to zero discharge is also included
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Costs and Planned Investment
Indus trial--Capit.il Expenditures
The costs (in billions of 1971 dollars) of the components of the level
of industrial waste treatment as of 1968 are:
,i Total capital required to meet
water quality standards $8.1
Available capital stock as of 1968 $3.9
Industrial treatment $2.4
Public waste treatment
serving industry $1.5
Unmet capital demands as of 1968 $4.1
Unmet capital demands as of 1971 $3.0
These figures are presented in Table 1 broken down by industrial category.
Capital requirements are distributed through the various manufacturing
sectors ;n a manner that strongly reflects their water use characteristics
and has only a slight correlation with output values. Chemical manufac-
turers, primary metals production, pulp and paper production, petroleum
refining,, and food processing account, respectively, for 27 percent, 18
percent, 17 percent, 12 percent and 11 percent of the indicated investment,
and 29 percent, 32 percent, 15 percent, 9 percent, and 5 percent of re-
ported water intake. That there is a concentration of water use within
industries is shown by the fact that 85 percent of the capital requirement
associated with water pollution abatement comes from only a little more
than a third of values added by manufacturers.
These figures are current as of 1968 and are only an approximation because
data are reported on industrial investment in a manner that will not per-
mit direct correlation with the calculations made in this report. The
$3.9 billion of works-in-place as of 1968 appears to represent about 50
percent of the waste treatment required by water quality standards with,
however, enormous variation in degree of compliance to be found between
one industry and another.
The abovu figure (cf. Table 1} of $8.1 billion to cover capital require-
ments dictated by current interpretations of water quality standards was
obtained by use of an industrial cost model. Industrial waste treatment
costs ans dependent on flow volumes, residuals characteristics, waste
segregation opportunities, and available technology. Such considerations
are generalized for industrial categories and then evaluated on the basis
of reported flows and flow to cost relationships, in order to calculate
treatment costs for such treatable discharge. Such treatment costs may
-------
SIC
20
22
24
26
/>«
£.&
29
30
31
32
33
34
35
36
37
TABLE 1
INDUSTRIAL WASTE TREATMENT SITUATION SUMMARY, 1963
MILLIONS OF 1967 DOLLARS
INDUSTRY
Food & Kindred Products
Textiles
Lumber X Wood Products
Paper ft Allied Products
Chemicals & Allied Products
Petroleum & Coal
Rubber & Plastics
Leather
Stone, Clay & Glass
Primary Metals
Fabricated Metal Products
Machinery
Electrical Equipment
Transportation Equipment
Manufacturing
(1971 dollars)
Capital
By Industry
193.8
48.8
9.7
529.5
343.2
342.1
3.0
17.0
20.0
216.3
6.7
14.8
23.8
17.4
1787.0
(2425.0)
Supplied
Publicly
315.3
63.6
2.3
79.3
191.5
7.1
22.7
17.3
22.0
125.9
51.4
48.8
92.2
92.3
1131.7
(1535.7)
Median
Requirement
913.3
234.8
115.8
1235.6
867.6
817.4
82.9
86.5
156.5
1089.8
99.9
80.7
113.5
79.8
5964.2
(8093.4)
Deficiency
404.2
122.4
103.8
626.8
332.9
468,2
57.2
52.2
114.5
747.6
41.8
17.1
(2.5)
(12.5)
3045.5
(4132.7)
Maximum
Requirement
997.5
251.4
186.1
1550.5
2436.8
1096.1
96.0
86.8
182.3
1620.5
124.1
100.1
129.5
122.7
8965.7
(12166.4)
Deficient
488.4
139.0
1/4.1
941.7
1902.1
746.9
70.3
52.5
140.3
1278.3
66.0
36.5
13.5
13.0
6047.0
(8205.8)
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vary greatly depending on the efficiency with which abatement procedure's
arc applied in any given plant, even within an industry. Although the
most likely level of capitalization is about $8.1 billion, it could be
as high as $12.2 billion.
In the eventual resolution of the industrial waste handling situation, it
is not likely that the maximum investment of $12.2 billion will occur
under existing abatement requirements. The association of capital require-
ments with water use practices has enormous implications for the dimensions
of ultimate costs. Higher treatment costs, other things being equal, are
a direct consequence of wasteful use of water. And water is wasted largely
because it has had many of the characteristics of a free good. Imposition
of a wastewater treatment requirements—or other cost-incurring constraints
on water utilization—will, it has been demonstrated both in theory and
in practice, lead to production practices that are less water-intensive,
and thus have lower associated waste treatment values.
Several -nodifications of the evaluation model were attempted in order to
arrive at a realistic assessment of capital requirements. One took into
account the modification of water utilization practices that accompanies
installation of waste treatment as well as hardware and construction costs.
Without altering the relationships among treatment process components.
water use coefficients were substituted for the observed ones—though all
substitutions were made by recourse to observed conditions—and investment
and annual cost calculations were produced to reflect the altered variables.
The most likely investment level ($8.1 billion) is thought to be the one
associated with "median" efficiency.
The breadth of the range of values contains some significant policy impli-
cations. These should be taken into account in any resolution of the
waste handling problem:
1. Alternative approaches to waste reduction can produce similar
efficiencies within a wide range of costs. Flexibility in approach to the
issue should reduce the burden of water pollution abatement on the economy,
freeing resources for other uses.
2. Accepting the general rule that management will not act to reduce
its discharge of pollutants in the absence of external pressures, very
direct incentives that embody water quality goals without specifying the
means to reach them should provide an approach to a least-cost solution of
the waste treatment question. Suitably scaled taxes on amount of waste
discharge constituents or limits on allowable pollutant concentrations in
the effluent, for example, should prove to be more effective than regula-
tory specification of treatment procedures.
3. Because the very wasteful users of water in any industry/region
component strongly influence the mean, a relatively few factories—the
most inefficient plants in the least efficient regions—account for a very
considerable portion of the total cost of water pollution control. That
concentiv, fior o' • voi'iaMe costs in a "PW establishments suggests that
-------
factory replacement may in more than a few instances be the most rational
solution to waste treatment requirements. The fact that waste treatment
•id's not represent a significant capital burden in the aggregate should
not b.? allowed to obscure the subordinate fact, that a number of pUnts
may be scheduled for closure and replacement as a consequence of the very
uneven distribution of such costs.
Industrial--Annualized Costs
The initial capital cost of facilities represents less than a fourth of
the total cost of industrial waste treatment. Once installed, facilities
must be operated and maintained. Given the composition of the set of treat-
ment requirements evaluated here, operation and maintenance accounts for
35 percent of the annual cost. Interest, at current rates, accounts for a
large share of annual charges for waste treatment. Some 40 percent of the
annual costs of the modelled treatment system, and 27 percent of the annual
costs of the system of works that industry reported to be in operation in
1968, can be attributed to interest payments implicit in the value of the
capital stock. And to make the sequence of major and minor replacement x-
penditures required to sustain the stock of physical capital, the f-i • >•• faces
a continuing capital demand, one that is estimated to equal the rapital cost
within a 20-year period, and to account for 25 percent of the annual costs
of the modelled system of waste treatment works. The annual costs (opera-
tion, maintenance, debt service, and replacement) associated with the
$8.1 billion capital investment requirement is $1.6 billion. The annual
cost associated with the higher $12.2 billion figure is $2.4 billion.
The projected cash outlays associated with attainment of effluent stan-
dards over the years 1968-1976 that manufacturers must anticipate is $20
billion (1971 dollars) (cf. Table 2). While incremental annual costs will
probably amount to only about 0.2 percent of aggregate values added by
manufacturers, up to 4 percent of total capital spending of some industries
will be required to comply with standards8 and as much as 1 percent of value-
added in some industries (pulp and paper, steel) will be added by waste
treatment costs. If such costs were absorbed, the incremental costs in 1968
would have reduced the pre-tax profits of manufacturers by 0-9 percent.
However, as seems more likely, if additional costs are passed on to consu-
mers, with full maintenance of margins, prices of manufactured goods may
increase by 0.1 percent.
Municipal--Capital Expenditures
The estimated total cost of constructing waste treatment facilitie-- planned
through FY 1976 and needed to meet current water quality standards or en-
forcement requirements, is $18.1 billion, (cf. Table 3) according to a
survey conducted by EPA. However, a lower estimate of $'l/L" billion of
required investment to achieve water quality standards by 1976 resulted
fronr. the Waste "treatment Fac.. ,tias " ».Uion model ( cf. Tables 4 and
5).
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TABLE Z
PROJECTED CASH OUTLAYS ASSOCIATED WITH ATTAINMENT
OF DISCHARGE STANDARDS BY 1976
(MEDIAN EFFICIENCY)
MILLIONS OF 196? DOLLARS
OUTLAYS, 1968-1976
SIC
20
22
24
26
28
29
30
31
32
33
34
35
36
37
Industry
Food ft Kindred Products
Textiles
Lumber ft Wood Products
Paper ft Allied Products
Chemical & Allied Products
Petroleum & Coal
Rubber & Plastics
Leather
Stone, Clay, Glass
Primary Metals
Fabricated Metal Products
Machinery
Electrical Equipment
Transportation Equipment
Manufacturing Total
(1971 Dollars).
Maximum Cost Total
(1971 Dollars)
Minimum Cost Total
(1971 Dollars)
Net
Investment
4
(5
5
(7
1
(1
722
186
99
856
324
475
80
70
138
873
93
66
90
62
,134**
,610}
,430
,369)
,416
,922)
Growth
189
82
_*
145
572
55
38
18
27
560
48
5
34
13
1,786
(2,424)
1,845
(2,504)
880
(U94)
Replacement
2
(2
2
(3
1
{1
302
84
28
410
432
282
29
29
48
421
36
24
40
26
,191
,973)
,520
,420)
,267
,719)
'V _ « i.
Interest
3
(4
3
(5
1
(2
474
13!
44
641
671
439
45
45
75
659
56
37
62
40
,419
,639)
,939
,345)
,976
,669)
_ *. _ _ f
Operations
413
77
26
591
729
265
36
29
108
917
70
48
83
59
3,451
(4,683)
4,637
Total
2,*00
*560
197
2,643
2,728
1,516
228
191
396
3,430
303
180
309
200
14,981
(20,329)
18,609
Total
1971 Dollars
2,850
760
267
3.587
3,702
2,057
309
259
537
4,655
411
244
419
271
20,329
(6,292) (25,252)
1,792
(2,432)
7,322
( 9,936)
t\a UC U I 11il(JI U VCMICII V. Ill no l-CI pi vvjui. v, i » i vjr i j gi ».i* vv-i *.>»
**Does not account for publicly supplied waste treatment.
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TABLE 3
SURVEY RESULTS OF EiTIMATFt CONSTRUCT'.?:; COST OF SEWAGE TREATMENT FACILITIES
PLANNED FOR TML K.-ilOO FY 1972-1976
(Millions of 1971 Dollars}
TC7/-..V
A lal/inr:
Aln.-.Xa
Arl:-r>r.'i
Arka' :n:
California
Colora Ki
Cont.= 'C\i r.-
DcLv.ar.
Dlst .of Ci-l-j.i ia
Flo:-i ia
GPii[.M
I'.outh lakitti
Ti-rno :::;•-••.•
T':x:ic
UJ,Ji'-i
V";inonL
Vlrriniu
Wa-jhirvtMti
West Virginia
V.lr.cor::i,-i
Vyonuin:
C.lKU.1:
"!M(-:-'..O 1 j.r.->
Virgin l^iai.';.;
FY-1972
5,278.2
33.5
4.1
10.7
12.5
280.4
23^3
96.2
7L8
62.7
313.0
36.3
15.0
15.7
336.7
161.3
16.8
19.8
46.8
68.5
25.4
201.5
206.5
331.fi
142.3
32,5
5.2
13.7
Kfl
J
n.i
4si^q
17.fi
I,fi47.i
3fi.fi
1.4
277 2
Id 4
41. f.
187.?
9^'»
31. 2
9rl
120.5
127. S
14.5
5.3
100.0
38.1
38.2
135 1
1.5
2.2
4.2
0 ^
fY-1973l
6,080.0
9.6
26.4
8.9
27.7
930.9
14.4
95.1
8,8
40.9
125.7
89.6
28.5
8.6
332.5
207.2
78.8
28.8
35.0
40.6
100.5
204.0
190.8
523.2
112.1
17.4
160.0
2.7
28.7
3D. 7
3fi.9
554.4
12. S
4??, A
66 .5
37
2^0 3
?& ?
72.3
343.3
35.6
29.5
1-7
31.0
165.5
3.5
13.5
243.3
67.8
32.5
97.2
ZA
',0.5
46.6
2.5
FY-19741
3,198.2
9.5
Z.3
-.
11.3
218.4
8.4
53.5
79.0 .
39.4
15.8
4.6
7.4
240.8
121.7
72.7
5.9
14.3
28.2
15.0
214.6
149.9
307 , 3
41.5
7.4
71.9
7.8
23.5
10.8
62. S
105^6
^1
140. fl
31.3
1.7
1] 1 1
?fi S
9.9
259. n
25,7
33.3
2A8
17.4
110.3
2.5
13.5
81,1
23.8
2.1
21,3
_.
-.
76,0 .
W
FY-1975
2,236.5
7.9
X.b
6.2
10.0
369.0
3fl.O
--
2.5
..
106.3
..
24.1
.3
382.9
" ' 22.1
21.8
3.2
39.5
17.7
35.4
15.7
80.0
100.4
30.8
14.5
38.1
24.1
1.3
58.5
299.6
10?. fl
18.2
6? 7
fl 1
13,0
IDS. ft
--
18.8
3.3
1U9
34.4
1.4
6.3
11.0
52.6
23.0
6.6
...
4.1
.8
3,1
FY-1976
1,289.3
5.1
--
1.4
--
340.8
6.1
—
fc.6
.,-
1?.0
12.6
--
.4
38.7
27.6
7.2
11.6
27.1
.1
25.0
36.6
..
130,0
12.9
18.2
27.4
3.0
15.7
10.5
6.3
..„
Ifi7.?
1.1
.3
1« fl
3Q.ft
1?.6
K2.
.•
, 17^8
.9
J-8
11.5 .
5.5
3.7
61.5
5.8
»-
3.9
...
.7
.5
3.8
Total
18,082.2
65.6
4U. J
27.2
61.5
2.139.5
82.2
244.8
103.7
103.6
651.4
154.3
72.2
32.4
1,331.6
539.9
197.3
69.3
162.7
155.1
201.3
672.4
627.2
_LJ92 . 7
339.6
90.0
306.6
27.2
93.8
43.2
190.0
1.427.8
30.7
1,879.5
153.7
7.1
l unfin 1
1I5.D
149 3
H96.5
71.2
130.6
J&.O
188.7
449.2
27.4
42.3
496.9
188.1
95.8
264.1
3.9
17.5
130.1
19.9
Separate :osts for FY 197^ id rV 1974 estimated from FY 1972/1974 total.
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TABLE 4
FIVE-YEAR "BACKLOG" CAPITAL ELIMINATION SCHEDULE
(Millions of 1971 Dollars)
"Backlog" at
Year
'971
1972
1973
1974
1975
1976
Year End
5081 .0
3871.2
2740.9
1706.1
784.9
0.0
Total Investment,
"Backlog"
Growth
Recapitalization
Growth
691.7
768.1
853.0
947.2
1051.8
1972-1976
Recapitalization
588.4
682.2
777.6
874.6
972.9
14,354.5
6,147.0
4,311.8
3,895.7
Investment
2870.9
2870.9
2870.9
2870.9
2870.9
^Includes 7.5 percent cost increase factor for each year.
8
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TABLE 5
MODEL INVLSTNI'NT SCHEDULE
IUVESTMEM NEEDED TO REDUCE BACKLOG
BY 1976
(Mill.ons-of 1971 Dollars)
14,354.5
AUUu.ir;
A i u ;-.ka
Arl;:o',:<
Ar'na:-. i.:.
Cul1lV>:-nis
Color:»i:o
Connro* \f'\t
Dela-war-.-
Dist.er Cclia.:lia
Florida
201.0
28.7
86.1
100.5
1.550.3
258. 4
71.8
14.4
215.3
502.4
Georgia 387.6
H««all <3.1
Idaho
Illir.oir,
Indlniio
luua
Kunr.a:;
KtMi1.ui:ky
Loul:: liKio
Hainr
Marylai..!
86.1
488.1
617.2
172.3
215.3
143.5
129.2
43.1
272.7
HauuuchusctL^ 143.5
Mlchl.-uti
Mlnni-scta
Mlsr.isriTipl
His sou; I
Montdr.F.
760.8
373.?
114.8
258.4
57.4
Nebrdsc.a 100. S
Nevu to
?!f-v Hui:n.;liir«.
r.'ev J«.-scv
Nev Mexico
Nbv Yo.-V;
43.1
?ft 7
??7 4
ROD n
IRA A
Ore^oi; Iflfi K
Penn/.y lvni.lt.
fill fi
Khod'1 I.'il.Triii dq T
South Carol! ii:i
lai <;
Sou1.ii I'KII'. ->tu ?RJ7
Tcnn'.-E^o>? ^44 0
Texau
1 .?nei ft
Utah 1?Q ?
Vemwr.t,
Vlrci(.ia
Wash ir.j- ton
West \'Jj'i;inlu
2ft. 7
no.i
.11 «; R
114. fl
Wisconsin i;09 4
l^orrnrif' ^p 7
Guar.
J-ucrUi I-j-o_. . 201.0
Vlr^bi Inlands
-------
A<, well as differing from the model estimate, the 1971 survey estimate
differs from the 1970 survey estimate of $12.6 billion. Among the reasons
for this variance are:
- a different time period for each survey,
- a 15 percent inflation rate in the cost of construction in the
period between the two surveys,
- a tightening of water quality standards or implementation schedules
in certain situations,
- more comprehensive assessing and reporting.
The evaluation nodel results in an estimate of $14.3 billion needed to be
invested during the period FY 1972-1976 in order to overcome deficiencies
in present facilities and to keep pace with growth, capital replacement,
and inflation. On the other hand, the survey result of $18.1 billion is
an aggregation of State and local estimates of their construction activi-
ty during this same period. There are several basic methodological dif-
ferences between the survey and the model:
1. The model uses statistically derived cost functions, whereas the
survey relies on community-generated cost data.
2. The model uses statistically estimated growth and replacement
factors and calculates the construction required to maintain the
capital stock of treatment plants and to provide for additional
population and industrial wastes.
3. The model also includes a specific factor which adjusts for price
increases in construction activities. As noted in the survey dis-
cussion, State and local intentions are expressed in 1971 dollars.
A primary purpose of the survey is to give an indication of each local
ijovarnment's construction plans in the municipal waste treatment sector.
The survey reflects the summation of local activities which, when viewed
in the aggregate, presents an estimate of desired construction activity
which may or may not commence during the period FY 1972-1976, e.g. com-
pressing of the twenty-year California program into five years. The
purpose of the model is slightly different in that it provides an estimate
of the investment activity between 1972 and 1976 that local governments
will be required to undertake in order to maintain their current growth
and replacement needs and make progress toward constructing those facili-
ties required to meet water quality standards.
Municipal Accomplishments
In evaluating the progress being made in the nation's water pollution
abatement effort, it. is important to report trends and current levels
in waste production and treatment. The report presents accomplishment
data for the years "968-1972. The emphasis of this report will be upon
the municipal sec>ior ^inca this is the area in which the greatest amount
-------
of federal activity has been concentrated over the past years.
The data for 1968-1970 was obtained from the General Discharge File main-
tained by the Office of Water Programs. The records for 1971 and 1972
are based partially on data from the file and projections based on a
trend analysis of existing data. The results of this analysis are in-
cluded in Table 6. The table presents accomplishments in terms of popu-
lation sewered and increases in wastes treated. The table also indicates
the level of treatment and the decrease in population receiving primary
treatment. The percentage of population receiving advanced treatment has
not significantly increased.
The discussion of program accomplishments will be more extensively ana-
lyzed in the next year's cost study. The extent to which the projected
expenditures through 1976 will effect these accomplishment measures will
be analyzed and presented along with action accomplishments for the period.
Trends
Ambient
EPA is developing an indexing procedure to evaluate water pollution. The
water pollution index allows any water body or set of water bodies to be
described with respect to prevalence, duration, and intensity of water
pollution. This index has as a basis data which measures deviations from
established standards of water quality.
In 1970 an assessment of the prevalance of pollution was first made.
It indicated that 27 percent of America's stream miles were polluted.
Measuring the prevalence of pollution alone, the assessment in 1971
states that 29 percent of the nation's waters were polluted during the
year. In point of fact, the assessed prevalence of water pollution in
1971 may understate the amount of the increase, but there are also dif-
ferences in the method and data used in calculating the estimated preva-
lence of pollution.
Every part of the nation has some water pollution, but the shares are
very unevenly distributed. In 1971, there were almost twice as many pol-
luted stream miles» in a relative sense, east of the Mississippi River
as west of it (cf. Table 7).
The 1971 pollution index takes into account the duration and intensity
of pollution as we'll as the prevalence. The relative water pollution
standing of federal administrative regions is not significantly changed
when the frame of reference shifts from simple prevalence of pollution to
an index of prevalence weighted by relative duration and severity.
"he distributional features become more apparent when the categorical
focus is shitted from political to natural boundaries. The nine areas
11
-------
I HOLE. O
PROGRAM ACCOMPLISHMENTS
1968
Sewered Population
(millions, persons)
Waste Strength
gross wastes treated by
municipal plants
(mi 11 ion/pounds/year BOD's)
Level of Treatment (Percent)
Sewered Population Untreated
Sewered Population Primary
Sewered Population Secondary
Sewered Population Advanced
140
14,137
7
31
62
upon Historical Growth Trends 1962-1970.
1969
144
14,773
7
30
63
1970
143
15,438
6
28
66
1971
152
16,133
6
25
68
1972'
156
16,859
5
24
70
-------
TABLE 7
RELATIVE INCIDENCE OF WATER POLLUTION
EPA Region
I Boston
II New York
III Philadelphia
IV Atlanta
V Chicago
VI Dallas
VII Kansas City
VIII Denver
IX San Francisco
X Seattle
Contiguous U. S.
East of Mississippi River
West of Mississippi River
Percent Of U.S.
Miles Polluted
16.4
42.4
34.7
37.9
64.5
21.5
12.5
25.0
23.5
19.4
29.3
38.5
20,6
Duration
Intensity
Factor
.62
.45
.58
.45
.43
.37
.33
.23
.20
.11
.41
.48
.28
Duration-Intensity
As a Percent of
U.S. Mean
153
111
142
112
105
90
81
58
72
26
100
118
67
Percent
Polluted
U.S. Miles
6.4
2.7
11.7
19.4
24.3
13.1
3.1
7.4
5.2
7.2
100.0
63.9
36.1
-------
chosen are siown in Figure '!. The degree to which water pollution is con-
centrated nan becomes evident. Three areas (Ohio, Southeast, and Great
Lakes) contain 23.9 percent of the nation's stream miles, but 48.9 per-
cent of the polluted stream miles (cf. Table 8). Extensive pollution is
very nearly limited to the Ohio, Great Lakes, and Southeastern drainage
systems, and though the Northeastern watersheds are In a class with the
other three, with respect to duration and intensity of pollution, they
tend to dominate that measure as well.
On the basis of the available data, of the four apparently significant
shifts in reported pollution that took place (cf. Table 8)—in the Ohio,
Gulf, Missouri, and Northeastern Basins—three are so obscured by varia-
tions in procedure that it is difficult to evaluate the degree of real
change. Both the Gu'if and the Missouri Basins reported an enormous
improvement in compliance with water quality standards. But in each case,
the 1970 assessment failed to make allowance for legally sanctioned breaches
of water quality criteria that resulted from precipitation; and in both
cases, that exception is significant. In the case of the Ohio River Basin,
the 1970 assessment concentrated on the quality of major waterbodies, over-
looking smaller tributaries. But in Ohio many streams are polluted at the
source as a result of acid drainage of mountain coal mines. Failure to
account for this total prevalence of pollution in 1970 is at least partly
responsible for the increase in reported pollution in 1971. Thus the
conclusion is that substantially the same number of river miles were pol-
luted in 1971 as in 1970.
It should be noted, however, that the line of water pollution does seem
to be holding in the face of rising population and industrial production.
Also, while national statistics do not indicate a marked change in water
quality, some individual waterbodies have been notably Improved, e.g.
Lake Washington.
In coming years, as comparable data is developed, the water pollution index
will be ab'ie to better identify trends in water pollution for the nation.
Manufacturing
Trends in the manufacturing use of water are varied. A number of economic
and institutional changes in the last decade lead to the expectation that
incentives have been provided for industry to curtail and treat liquid-
borne wastes. In 1966, the States were required by law to set standards
for interstate waterways. This led to an increase in water pollution
control activity. Laws have also increased federal share and funding
levels of grants for municipal treatment works' construction, which repre-
sents an increase in subsidies to connected industrial firms. Pressure
on existing supplies of freshwater provide an incentive to economize on
water inteke, which in turn produces process changes, including recycling.
Offsetting these incentives, however, are growth of production and conse-
quent res-duals p-'o^uction. Over the period 1959-1968, the Federal Reserve
Board Indox of Industrial Production for Manufacturing increased 59 percent.
14
-------
RELATIVE WATER POLLUTION
-------
TABLE 8
WATER POLLUTION INDEX SUMMARIZED FOR MAJOR DRAINAGE AREAS, 1970 AND 1971
Major Watershed Stream Miles Polluted Miles 1971 D.I, Factor
19/0 1371 Chano^
Ohio
Southeast
Great Lakes
Northeast
Middle Atlantic
California
Gulf
Missouri
Columbia
U. S.
U. S. Less Ohio
U. S. Less Columbia
28,992
11,726
21 ,374
32,431
31 ,914
28,277
64,719
10,448
30,443
260,324
231,332
229,881
9,869
3,109
6,580
11,895
4,620
5,359
16,605
4,259
7,443
69,739
59,870
62,296
24,031
4,490
8,771
5,823
5.627
8,429
11,604
1,839
5,685
76,299
52,268
70,614
+13 ,746
4 1,381
4 2,191
- 6,072
4 869
+ 2,499
- 5,001
- 2,420
- 1,758
4 5,435
- 8,311
4 7,193
.42
.74
.45
.61
.47
.27
.35
.31
.12
.41
.40
.43
-------
Industrial water intake and discharge is increasing at a less pronounced
rate than industrial output. The proportion of industrial wastewater
discharge that is treated continues to grow, and amounted to 37 percent
of discharge in 1968. Waste treatment growth was less between 1964 and
1968 (3.1 percent annual rate of increase), however, than between 1959
and 1964 (10.5 percent, annual rate of increase). Most of the increase
in industrial waste treatment occurred at the factory. For, although use
of public sewers and waste treatment plants is the main method of waste
disposal for a number of manufacturing sectors, the portion of industrial
effluent discharged to public facilities dropped from almost 9 percent
in '959 to a little more than 7 percent in 1968.
Discharge of industrial wastewater to public sewers places the require-
ment for adequate waste treatment upon local public agencies responsible
for municipal waste treatment. As wastewater treatment at the secondary
level (i.e., about 80 to 90 percent BOD reduction) or above becomes more
prevalent among municipalities, the degree of treatment of sewered indus-
trial wastewater should generally increase. However, as municipalities
raise their target rates of waste removal, they must become more discrimi-
nating about the types and timing of industrial discharges that they will
accept in order to prevent adverse consequences on the operation of their
treatment works. For the sewered manufacturing plant, greater selectivity
can translate into separation of waste streams and/or treatment of dis-
charges bound for the sewer, both of which entail an increase in costs.
All of the decline of industrial wastewater to sewers took place in the
1959-1964 period. Over the 1964-1968 span relative discharge to sewers "
remained virtually constant, with the absolute amount of sewered discharge
increasing slightly. Although the relative amount of industrial discharge
going to sewers is rather small, municipal waste treatment is the primary
method of curtailing industrial liquid-borne pollutants from the food pro-
cessing, textiles, rubber, leather, and the various metal manufacturing
industries.
Four broad methods of curtailing the polluting effects of industrial
liquid-borne wastes can be distinguished: (1) Waste treatment facilities
can be added prior to discharge; (2) A plant can discharge its wastes to a
sewer; (3) Application to land, either through surface irrigation or well
injection, can be a very thorough treatment technique, provided that
precautions to prevent ground water contamination or runoff of pollu-
tants are exercised; (4) Process change is, from both an environmental and
administrative standpoint, perhaps the most attractive technique because
of its reliability, predictability, and potential for recycling of waste
materials.
One piece of evidence suggests that firms are directing investments toward
process change in order to reduce waste loadings. The survey on water
pollution abatement costs conducted by the Conference Board indicates
that 27.9 percent of capital expenditures for water pollution control
by the sampled plants were for manufacturing changes to reduce water
pollution. This percentage varied from 35.6 percent in paper and allied
products to 2.5 p?-c?r/c in textile mill T-cdi'cts. However, lack of data
17
-------
prevents an analysis and evaluation of the extent and changes over time
in alterations of production process that reduce the amount of residuals
generated.
The real price of water- -measured by its scarcity and the cost of its
application—is increasing for industry. In consequence, manufacturers
are using it with growing intensity. Economizing on water intake, and
thus discharge, is often accompanied by increased attention to the pro-
duction and handling of water-borne residuals, and materials control
generally, which tend to decrease the amount of pollutants discharged.
Recycling and reuse of water is a common method of economizing on water
intake per unit of product. Recycling of water can cause an increase
in the concentration of pollutants in industrial wastewater which
generally lowers the cost of treatment per unit of waste and cheapens
the cost of by-product recovery. The trends in industrial water use
indicate th
-------
wastewater facilities to construct the planned investment activity must
be considered in projecting the level of activity in this sector. Under
present conditions it takes close to five years, on the average, to
complete a municipal sewerage project, while in 1957, when Federal
financial assistance for sewage construction was initiated, 55 percent
of the value of new starts had been put in place in the same year.
A limiting factor on the supply capability is the phased expansion of
the wastewater facilities construction sector. This sector, like many
economic sectors, contains numerous institutional constraints which may
inhibit the ability to expand to meet the indicated demand. The recent
trend in the expansion of construction activity in the municipal waste-
water sector is slightly over a 28 percent six-year growth rate.
If the historical trend in new construction activity in this sector main-
tains this 28 percent annual growth pattern, then the projected activity
in the next five years is $18.9 billion. This includes a 15 percent
price level change for 1971. However, if the cost increase rate is held
down and the trend is more nearly like the years 1965 to 1970 which had
an average price level change of 7.5 percent, then the rate of growth in
construction activity would be 25 percent and projected starts would
amount to $17.4 billion.
The 1971 survey of municipalities' planned construction activity states
that $18.1 billion in 1971 dollars is planned in the next five years.
Add to this the value of projects pending construction of $3.4 billion
and the survey estimates that total new starts in construction will be
$21.5 billion through 1976. Such activity is highly unlikely given the
trend in recent construction works. On the other hand, the evaluation
model estimate of $14.3 billion plus the $3.4 billion in pending projects
adds to $17.7 billion of planned construction activity for the next five
years. This estimate assumes 7.5 percent average cost increase during
that period and compares favorably with the historical trend assuming a
25 percent growth rate.
Construction Industry—Industrial
The most likely water pollution abatement investment schedule must be
one that eliminates deficiencies at a fairly even rate, while the pro-
cesses of growth and replacement assert their effects as functions of
the capital structure and the rate of economic activity. Such a sched-
ule, assuming the probable set of costs associated with median hydraulic
efficiency and a rate and distribution of output growth for the period
1968-1976 similar to that of 1959 to 1968, dictates the investment of
$11.0 billion ($8.1 billion 1n 1967 dollars) between 1968 and 1976 for
treatment of manufacturers' wastes (cf. Table 9).
There is no question that the indicated schedule will be difficult to
achieve. Manuf-'Ct.urors -".r^ responding to waste treatment requirements
at the same time that the public sector is increasing its capitalization
19
-------
TABLE 9
ANNUAL EXPENDITURES CONSISTENT WITH
STANDARDS COMPLIANCE BY 1976
(PROBABLE COST: MEDIAN EFFICIENCY)
CAPITAL EXPENDITURE.1 MILLION OF 1967 DOLLARS
SIC
20
22
24
26
28
29
30
31
32
33
34
35
36
37
INDUSTRY
Food and Kindred Products
Textiles
Lumber ft Vocd Products
Paper & Allied Products
Chemical & Allied Products
Petrol eum 8 Coal
Rubber * Plastics
Leather
Stone, Clay I Glass
Primary Metals
Fabricated Metal Products
Machinery
Electrical Equipment
Transportation Equipment
Manufacturing
For Comparison:
Reported Investment
1963
93.8
24.1
12.4
113.3
65.0
72.6
9.5
9.0
17.1
112.7
11.2
3.4
11.7
8.2
574.5
416
1969
114.7
31.9
12.4
134.4
110.3
79.2
13.5
11.1
19.9
162.9
16.2
9.1
15.4
9.6
740.6
579
1970
125.5
35.4
13.3
146.2
123.6
85.2
15.0
12.1
21.9
182.0
18.0
9.9
16.9
10.5
815.5
723
187!
131.4
37.6
13.7
152.5
134.2
88.3
15.9
12.7
23.0
194.6
19.0
10.3
17.8
10.9
861.9
828
1972
137.4
39.8
14.2
158.9
146.2
91.3
16.8
13.2
24.0
208.2
20.1
10.7
18.6
11.4
910.8
1973
143.4
42.1
14.6
165.3
160.0
94.1
17.7
13.8
25.1
222.9
21.2
11.1
19.5
11.8
962.6
1974
149.5
44.6
15.1
171.8
176.1
97.4
18.6
14.3
26.2
238.8
22.4
11.5
20.3
12.3
1018.9
1975
155.6
47.1
15.5
178.4
195.0
100.4
19.6
14.9
27.3
256.2
23.5
11.9
21.2
12.8
1079.4
1976
161.9
49.7
16.0
185.1
217.2
103.5
20.6
15.5
28.5
275.3
24.7
12.3
22.1
13.2
1145.3
TOTAL
1213.2
352.3
127.2
1411,4
1327.6
812.3
147.2
116.6
213.0
1853.6
176.3
95.2
163.5
100.7
8110.1
Capital
Required,
1976
3102.3
317.1
98.9
1380.9
1439.9
«72.3
121.3
104.9
183.5
1649.3
147.4
85.9
147.4
92.3
7743.4
Net investment (difference between median requirement and industry-supplied capital at 1968} plus annual growth and replacement.
-------
of waste treatment works as explained above.
In spite of increasing evidence in the form of delayed deliveries, leng-
thening construction times, and soaring construction costs, the ability
of the sewerage construction industry to supply a ballooning demand has
never been investigated, and scarcely questioned. There is reason to
believe, however, that the supply of suitable construction services will
prove far more critical to meeting waste discharge standards by 1976 than
will financial commitment. EPA is conducting a study of the construction
industry's supply capabilities to meet the anticipated demand.
It should be noted that secular expansion of the level of Investment is
necessary, even with a constant increment abatement strategy. Growth
and replacement demands account for over half of the indicated capital
requirement to 1976, and their level is in large measure determined by
the dimensions of the capital base. The schedule illustrated in Table
9 may be slightly over-ambitious in that it embodies rates of output
growth that applied in one of the most expansionary periods in our
history. A slower rate of economic growth would, of course, permit
attainment of the target with a lower rate of increase than the 8.9
percent per year dictated by the projection. But internal growth of
the system—that is, installation of the treatment capital associated
with 1968 output levels—is a more significant influence on the indi-
cated annual level of investment than the treatment requirements that
arise out of projected production growth.
F:valuation of Benefits and Costs1
Aside from the specific municipal and industrial sectors, attention to
the marginal benefits and costs of various treatment levels from a
national point of view is necessary to insure that the water pollution
goals sought are defensible in terms of their net benefit to society.
An analysis of the marginal costs and benefits to levels of treatment
suggests:
1. Because costs accelerate rapidly as higher levels of treatment
are achieved (cf. Figure 2 and Table 10) the total cost of
meeting very high levels of treatment approaching zero discharge
could be many times those required to meet current water quality
standards.
2. The improvement in beneficial uses of water from a no discharge
policy is likely to be modest compared to the costs. The ultimate
goal of any pollution control program is to achieve certain envi-
ronmental quality objectives. These goals have traditionally
A summary of "Environnantc and Economic Benefits and Costs Related
to Various Water Pollution Abatement Strategies", paper prepared by EPA
and CEQ.
21
-------
FIGURE 2
TOTAL CONTROL COSTS AS A FUNCTION OF EFFLUENT CONTROL LEVELS
Index of
Control Costs
(1n$)
100
50
40
30
20
Percent
Reduction
100
99
98
95
85
Source: Interior 1965 Saline Water Conversion Study
Young and Pisano: "Nonlinear Programming Applied to Regional
Water Resource Planning".
FWPCA: Cost of Clean Water. 1968, Volume I.
FWQA: Cost of Clean Water. 1970, Volume IV.
22
-------
TABLE 10
INDEX OF POLLUTION CONTROL INVESTMENT COSTS
RELATED TO LEVEL OF ABATEMENT
Level of Removal
(Percent)
ro
CO
Increased Percent of Removal
Cost Index
Cost Per Increased Percent
of Removal
100
99
98
95
85
1
1
3
10
„
500
250
200
150
100
250
50
17
5
^ —
-------
been set forth in standards of quality that deal with preventing
adverse effects or achieving certain beneficial uses. For
example, higher water quality provides such beneficial uses as
water supply, recreation, and fish and wildlife. The least
costly method of meeting these objectives is to tailor effluent
reductions to meet those ambient objectives. To the extent that
the effluent reductions are more stringent than those which are
required, excessive costs are incurred needlessly. This is
particularly true at high control levels where control costs
escalate very rapidly, A study of cost and benefits in the
Delaware Estuary performed by the Federal Water Pollution Control
Administration illustrates the relationship of benefits to costs
in the following table:
Dissolved Index of Costs Index of Recreational
Oxygen (mg/1)' of Control Benefits
6.5
5.5
5.0
4.0
575
320
150
100
128
115
105
100
1Approximate values, although this factor and others varied by areas with-
in the estuary.
The Delaware study is now nearly a decade old. EPA recognizes the
paucity of information concerning economic measures of benefits
and is making a concerted effort to refine costs and develop
methodologies for quantifying benefits.
3. A number of adverse environmental impacts would occur such as
higher energy consumption and solid waste problems. Disposal
on land will increase dramatically, resulting in potential soil
and water contamination. High effluent limitations would also
encourage deep-well disposal with great potential for long-term
damage to underground water supplies.
4. Large resources devoted to achieving small increases in water
quality benefits have the effect of withdrawing resources from
other environmental efforts or other national priorities.
24
-------
SUMMARY OF METHODOLOGIES AND MODELS USED IN ANALYSIS
PDI Index
The basic element of the index is a simple measurement or judgement. Once
standards have been determined for a set of water quality parameters, the
procedure calls for a comparison of those standards with measured quality.
Where any variable or combination of variables does not meet or exceed the
standard, then a state of pollution exists—by definition.
This rather rudimentary test was first applied in 1970, when a ratio of
polluted waters to total waters was established for the nation, using the
simple formula:
P
M
prevalence of pollution
Where P = number of stream and shoreline miles in which one or
more of the established chemical and biological criteria
had not been met one or more times,
M = total stream and shoreline miles, to and including third-
order tributaries.
An assessment of pollution in terms of mere prevalence is essentially
unsatisfactory. Degree of pollution and its persistence. are significant
dimensions of the phenomenon—perhaps the more significant, given the range
of uncertainties that attach to the water quality criteria. The water pol-
lution index takes these factors into account by establishing separate
weighting values to a circumstance of pollution, according to its seasonal
characteristics and its interference with uses sanctioned by the water
quality standards. The simple formula for determining the prevalence of
pollution becomes only slightly more complex, but the level of effort and
judgement required to apply the formula is increased enormously when it
becomes :
I
Water Pollution Index
M
Where D = a factor ranging from 0.4 to 1.0 to express the inter-
seasonal duration of pollution,
I = a factor ranging from 0.1 to 1.0 to express the intensity
of water pollution in terms of damage.
An expiaridt.^r. L.
Appendix (Voh-m '! o*
-T.
in the Technical
25
-------
When reach-by-reach pollution conditions are weighted to give expression
to duration and intensity, an index is formed which provides a consistent
measurement of unequal variables against a common base—in this case,
the water quality standards.
Industrial Model
The data and interpretations of the industrial sector of this report
are based largely upon a modelled restructuring of Water Use in Manufac-
turing. This portion of the Census of Manufacturers, 1967 provides a dlTta
catalog on the water use characteristics of 9402 manufacturing establish-
ments that reported the intake of 20 million gallons or more of water in
1967.
The 9402 establishments that were reported upon in Mater Use in Manufac-
turing are too small a number to adequately reflect manufacturers ' costs .
The Census of Manufacturers, 1967 does not provide any indication of total
manufacturers ' use of water, ffowever, Water Use in Manufacturing, 1963 did
present such data. The sample of 9402 es tabl i shmen ts was ~then , expa nd"ed on
the basis of the 1963 census to include over 14,000 establishments, that
being the greater part of those reported to have an Intake of 10 million
gallons or more in 1964 (cf. Table 11).
The premise that waste characteristics have a significant relationship to
waste treatment _CQS.ts_ leads to a regrouping of the industrial categories
reported in Water Use in Manufacturing, 1967. They were grouped according
to the k i :ids_ and "coricentrat i ons of wa s te j^QdjicJisJJLbaJLJ>ffijie-C,on s i dered_to_
bej:hlHc"teriLtl£j.3fl^ _proces.ses on the basis of an
extensive 1 Tterature _searcjK.
Having established a study population, it was necessary to define the
population in terms of size distribution and locational characteristics.
The census data do not include such information, so they were disaggre-
gated on the premise that the_laraest water-usingestablishments in^each
ofjthe_ 3j?g SIC_ca.tP9oy"ip^ aro -^«>"tical witJijthe7Tar^e^Trirs;ers_of labor
i n_eachj:a tegory . Since employment data is as protected by federal sources
as water use data, Oun and Bradstreet files were used to establish distri-
butional characteristics.
With location and size distributions of the model components approximated
on the basis of the employment surrogate, empjoyjnent data were translated
i nto hydraulic terms wjth the u^e_af__ar^aJ^wateF vntaKe_per "enipToyee^fa c -
tors aerTved__fr^ni, Water Use in Manufacturing, 1967.
To accommodate locational factors, a, multiplier was appjjed to the jjvtajse
'
national water use per employee. Annual was tef low and
wastewater requiring tr eajtmen t ,were_con s t rue ted from tfiese factors ~*
"™" ~ ~~
26
-------
TABLE 11
COMPARISON OF CENSUS
REPORTED ESTABLISHMENT AND
WATER DATA FOR
FACTORIES WITH INTAKEfc20,000,OOOG/YR.
WITH MODELLED FACTORIES
f\i
SIC
20
2'
2^
2j
?R
" 1
31
32
33
34
35
36
37
Percent of
Reported
Industry Intake
Food & Kindred Products 5.2
Textiles 0.9
Lumber & Wood Products 0.8
Paper & Allied Products 14.6
Chemical & Allied 29.0
Rubber & Plastics 0.9
Leather 0.1
Stone, Clay, Glass 1 .6
Primary Metals 32.6
Fabricated Metals 0.4
Machinery 1.2
Electrical Equipment 0.8
Transportation Equipment 2.0
Manufacturing 100.0
Percent of
Calculated
Treatabl e
Discharge
8.3
2.1
1.9
29.5
27.8
0.6
0.5
2.3
17.8
1.1
1.0
1.4
1.6
100.0
Establishments
Reported
2345
684
188
619
1125
301
92
586
841
569
471
562
392
9402
Modelled Differenc
4494 C33I£>
1021 +"49%
405
862 +39%
1421 +2B
459 +52;=
215 <£m&>
945 +61%
1137 +35% .,
1037 +82%
790 +68%
81 7 +45";
562 +44%
14,499 +54fc
-------
TABLE Li
tlt'OIS W
ni MWHSS nuniMTfR VWUM nt»ntll
too
mi
w
70)
7041-4
M4f
70S
70*W
2K.J
2T>7
208
?*t
nti
7211
2/71
2211
at
2211
74
HI
7*21
2»3I
2fc4
Hi
2t6
7611
2812
2811
7BI1-
JB*
7»I8
7811
287
281
78 <
,-SSI
2BM
?8f
280
2BU
2911
mi
3D
1111
mi
111* It.ll HMi J
.Mini (••••.« i- 4V.
I'-HC, I'll/' 1 f |'.|"VI ' "'!*• IM
II.1B Htl "TMf ','AW "III MPn- 11 H
•*r C
.•::miMt«i«. ITOBS «ir> MW i-?i»- "i 220
nim« rooo wxtssint
KiMim; -ins, (fiitnn ">i
MMNC Mitt. '.nmntr .'?
«i Mine MD iHiiHh1'. Niu'j, iinni m
Tiniu nmsMiDS, fain «a» 24
one* ttrriai 176
nwri MO m*> raoncTS in
MW MUS <
»««ii "lus, rrorPT gMiim-rc ««» e
w»rnrn«D«ni$ M
msaiuvoui rtmunn fwti Moarn «
f IKWOMO oanruvis MO 8oas «
8IIIIDIW MMC 5
msanwrwA, HHI PwtMn
MtMIFS MP r il or I'll 1
IKUTRItt l^yl *
(tcitc awms no innmoun^ ;
I>(OPC«IC P|r-vf«15 4
noiiST«iM. 'flowic CHIKIWIS 20
INOI^T'HL mWMIIr (vf«u»l S W
U8WS, Pl/JUlrS ftvl« 11
WABTWailTlWlS 77
lOiLiimis »'ir. mi'i'cr^Ti 41
"<«ri 'wouns s
"lidlLVKOU!. OICH1CA1.S
ctTiauir wr I»IIIG ?ij
rcTRnuirt MB avu.-- omit IH» TH-IIT K
Ri6«B wo prunes [/?
ir«THt" iMlliil MC MHlsMlnr, 22
IfAIHfB ;;
, !^ ,
'.41 .-,'.
rw
VC .~K».
m ?sa,
); Mn.
?«> ".i.
fc7 >5l.
M W..
2H» 741.
417 TV).
JM 2nrt.
nn.
iw 7sn.
» 7SO.
K2 2bO.
IW 2U.
Ml 2U.
231 250.
tt MO.
tM BO.
Iff BO.
ino BO.
41 7M.
4) &•>.
BO
11 3bO.
82 BO.
M JM.
27 240.
147 BO.
118 «1.
177 BO.
7S 250.
64 2SO.
i3 2W.
19 BO.
« BO.
lit TO.
BO.
206 BO.
«9 m.
117 JM.
88 ?W.
n 7».
..-.
.*. *•
i. '•
-. ' -
i.on
1.3.)
.r.
.. .•
i.'i -
i.i,"
r.tn
l.*i
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?.-n
7.M
J.*)
1.00
i .on
2.0A
4.00
2.00
7.W
1.40
1.71
2.00
2.00
1.00
i.in
1.10
1.00
1.00
1.10
4.00
2. on
i.n
i .on
2.«l
i.m
i.»
i.ofl
2.00
i.on
i. an
4.00
1.00
•
,-.V.; :V :., ./•
1 ./ \ »
1
t
1
1
1
1
1
i
1
1
1
I
1
1
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.7 / V>
J \
.) / m
,t\ il
. Kl 111) I'M
.r in in
•'1 ?n
i
t
.,]
.«; » 2«,
.2 M
.1 M 44
.2 K
.2 2!)
u n 11 w
i
i
i
i
i
,
i
i
i
i
i
i
)
i
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i
i
i
i
i
i
i
i
i
i
.B U
1
.B\ 4f)
.B
.B | r,o
.2 1
1
.J
.3 4*
.* 20 MO «
.B » 100 U
.IS 20 2* 20 33
.B 70 104 60
.B ri K TC 33
.« 70 IT) 60
.B SO li SO
.2 20 80
.25 13
.» 20 190 M
.B 2S 70 13
.» » n
.} U 20 fO 4S
.3 10 20 60 44
.B WO 20 40 20
.3 40 2"! 40 M
.3 M li U
1.2 100 100 10ft
1
J
... :«, :IO: :,„ :)2/ :n. :H: :U:
*D 11* •T n
ino
inn 1*1
110 ino
1(10 IV)
lid TOO
7m) ton
l*\ I(W
ino 100
17> (T*^
104 100
W *0
m IDO
M.
too mo
f A0 100
64 »1
n 100
43 «
too 100
ino 100
140
tOA 100
NO 100
90 100
U )00
M 100
100 100
-------
I'I'JU,
i in
TABLE 12 (Oont'd.)
ll<1MO-i> :i«l I' '. if. .' t: •«»—;•(•••• M
>:>"MI!I>II '
•||'«n,;fiinii\.. '11. , •»,
M
i'i.'
i;a.fit.. i '
I4H V.O. '.II «.J
no Hi
H vtqtlKiltc
SO
us:
.uti STK;. HUIIG **• nit'ti'i't-.
3t'l Cl.'-' IKX I'UflS''.! j
jvi is* ««>is:iii .'.' fii'.
33JI Kl"»«rWP..
J3V<3 priMuv inn m: «lNt
Ji)4 PVIP'AIIT KLfll'l"
JIM MII.I p Pn.Ap, -ir«r
M I*H>]C*TIU wui',
lb t'AO'liri-T
36 uincu IA i1, • ', •• . j • - . • >'•
41 ,'l I1"! 1. •• ..' '.< S'i
11 1"1 111 l. • ...- 'il 4'l
1 7'. ivi '. "! i. i Vi' I'l" inn
1 ,-j IS' l.i^ .1 '^t rii.
71 IS' '."• '.< '.1 -.••
1«1 l';t iv> i. r l. i ' i /'
«:j in 'S- ; ' '.?S '.' ''I li '
^hl Sll .'S- l.'l! i." 4k 11 in
."* M.J >n i.'. \.'v » n in
114 447 .'f I.i" 1,7^ V 1> ll'l
TI 117 :*>i '.ir> •..•, ?s *i ss
1W
inn
m
22
22
a
22
47 12 U S
Tjipltniticin of **ftirr*,t tnr^n%
Ittr li»nl
.?: Hli)1' Itotl* I'onr.ffitrjUio'i '^tl
:J: IntUlllXin HiUlrlt Xi.lor
4 thm
:4: nil
•.11; «lil<>g((Ai SIO ",
29
-------
The values for da ily^wastef Vow requiring treatment were then multiplied
by f aclorl" nTended To" give ef f ec t to: (a)
^
wastewater requiring agiven method of^ treatment; (b) costs based on
^lAjJBfira t f gnutf- the-g-i ven
and (c) a factor ; jntended _t(LJ3rjiYid.e an
^
nojvrew^«^g_ijistanatiojijco3j;s^posed by Jand purchase.
repipinq, and production losses. The sums of individual factory com-
ponents are available in a number of fashions for reporting purposes,
being retrievable according to SIC grouping (one to four digit), loca-
tion (county, State, water use region, nation), or waste treatment
process. Substitution of alternative flow, treatment, and cost variables
allows assessment. of impact of policy or technological changes at any
level from a single factory to all manufacturing.
water Use in Manufacturing, 1967 also provided the information upon which
current capitalization estimates were based. The document reports
of plants and volume of flow in a variety of treatment categories for
industrial sectors. On the basis of previously established operating
riites and the same set of cost functions used to determine requirements,
existing facilities were evaluated in terms of average daily flows
through facilities of specified types.
It should be noted that--quite apart from distortions involved in
assessments at the mean— the procedure significantly understates the
degree of required capital that is currently available in many indus-
tries. in addition to facilities operated by plants using less than
20 million gallons, wastes discharged to public sewers and treated by
public sewage treatment facilities are not accounted for; and in a num-
ber of cases, governmental bodies, through the normal sewage handling
systems, accepted a major part of an industry's discharge. Nor can
wastes discharged to land (septic tanks, irrigation, deep well disposal)
be accounted for in financial terms. In either case, the Bureau of
Census simply does not provide sufficient information to permit an
evaluation.
The method of calculation was dependent on the treatment of all process
wtste streams for each pollutant identified with the process by tne
nicst effective (as opposed to most efficient) conventional treatment
method now available. And wherever options might be discerned, the
higher (or highest) cost solution to the problem was assumed. Consonant
with a procedural requirement that all wastes be treated to the highest
degree possible with conventional technology, it was assumed that all
was te ...cons t i tueri its , except d i s s o 1 ved_ mi nera 1 spjjds ,_ '
^° "
... _ _
reduced, or eme1^>Tr^rn°effecT. it "waV assumed tha t Tloa ti ngt~ana
settlefible materials be removed — with chemical assistance in many cases—
tneit dissolved organics be stablized, that caustics and acids be neu-
tralized, that potential pathogens be subject to disinfection, that
uneven waste streams be equalized, and even— in some particularly diffi-
cult situations—that concentrated waste streams be evaporated or
i nc i nera ted .
30
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Municipal Model
This model is a mathematical simulation of Investment in public waste
handling systems. The model calculates the value of recognized
improvements needed in the treatment or operation of waste treatment
systems as stated in the (1971) Municipal Viaste Inventory. It corre-
lates a series of equations that define size to cost relationships for
basic waste-handling procedures and equipment.
The model calculates the average cost of installing or constructing
the particular facilities—sized according to a normal statistical
distribution of capacity to indicated load for existing plants in the
same State. The costs are stated in terms of constant dollars. (Sewer
and Sewage Treatment Plant construction Cost indices, supplied by EPA,
may be applied to modify price levels.) This procedure supplied the
value of recognized improvements needed in waste treatment or operation
of waste treatment: systems.
The second part of" this modeling technique is a calculation of the
current replacement value of facilities in place. The current replace-
ment value was calculated on the basis of costs experienced in building
facilities with similar design flow and removal efficiencies (cf. Table
13).
For the immediate future the evaluation model can determine the level
of investment required nationally to obtain the level of public waste
treatment which is needed to meet general water quality objectives.
The approximate rate at which investment requirements are accumulating
and the amount of the current accumulation of need are known. Thus a
projection procedure is utilized to find the annual rate of investment
that will sustain existing physical capital, meet expansion requirements,
offset inflation, and eliminate the accumulation of investment require-
ments that currently exists (backlog).
The procedure used takes into account both the existing capital stock
and the following variables which constitute elements of the investment
activity: growth, recapitalization, and the backlog of accumulated
demands. The procedure also assumes a constant rate of inflation and a
constant rate of growth.
Recapitalization, capital in place, and backlog are derivatives of invest-
ment. Recapitalization is calculated as 2.9 percent of capital in place
in any year. Growth needs are calculated to amount in any year to 3.3
percent of capital in place. To the extent that the investment covered
growth requirements, the value is transferred to capital in place.
Values exceeding available investment are added to the backlog of unmet
needs. The backlog itself is reduced by any amount that available
investments exceed recapitalization and growth elements, or increased
as prior demands on a hypothesized investment exceed the amount of
available investme-yc.
31
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TABLE 13
EVALUATION OF CAPITAL IN PLACE AND OF DEFINED NEEDS
Value of Works 1n Place ($000,000)
Value of Needed Works
A laliatnh
Alauka
Ari/.onu
/'•I'ktttiGa::
California
Colorado
Connect i'Vit.
Delaware
Dist .o/' Co hunt i a.
Florida
Georgia
Hawaii
Idaho
Illinois
Indlami
Iowa
Kansas
Kentucky
louini.uiia
Mo it 10
Maryl&ml
MaaisaclnuvlU:
Michigan
Minni-uota
Mississippi
Missouri
Montana
Nebraska
Nuviula
Ui:vi liampiiMrr
HcV J*'IT.(£'
Nirw Mc'X I' 'ii
N...--W York
Nor l.li Carolina
NurV.li l>uK.iUi
Ohio
Dklahnnia
Oregon
Pennsylvania
Rhode Island
.'outh Carolina
I'.outh liakotu.
Tcnnecac1.-
Texas
Utah
V'.'rmorit
Vtrglniu
Washington
WPS! Virgin iu
Wisconsin
Wyoming
Guam
rue r to Kic-o
Virgin I:;J.an'l :
TOTAL
TOTAL
1968
191.8
1.5
62.9
147.7
1061 .'4
Z?8.9
128. S
34.5
46.4
43].]
Zt*].B
di,7.
80.0
686.1
431.9
285.9
254.6
193.9
193,3
, 24.7
121.9
141.0
348.2
283.2
151.7
316.0
75.5
171.1
4Q.R
??.*
420.1
98.8
801.0
342.7
77.8
668.9
236,9
171.7
585.4
52.6
156.1
81.0
232.5
882.0
120.8
28.7
229.4
197.6
102.0
350.9
52.7
0.
47.1
0.
12392.0
153U..51
1971
224.1
5.0
$9.9
183.7
2060.7
4Zd.9
181.3
19.0
525. 1
456.3
303.9
Z6.1
159.4
921.3
999.9
305.5
318.3
267.2
166.6
26.6
478.2
195.4
626.5
415.9
U9.9
335.0
76.4
194.3
76.4
73 7
379.7
119.9
1015.2
401.7
76.4
1205.2
332.1
328.9
789.5
82.8
161.7
72.9
328.6
1440.7
191.5
. 32.3
309.6
448.4
157.2
628.2
53.2
0.
68.5
0.
18874.5
18874.5
1968
122.8
8.3
20.4
44.6
377.2
43.2
73.4
3.5
28.2
48.4
123.3
25.9
33.5
194.9
139.2
44.3
82.5
16.3
79.2
91.8
28.3
209. 2
135.7
54.4
50.0
148.8
22.6
3ft ?
17. n
fil.fi
162.0
10.2
276.0
101.7
6.6
229.9
31.7
64.2
362.3
22.9
66.9
13.8
71.8
161.5
28.0
40. B
65.6
90.1
74.9
124.5
8.8
0.
32.6
3.7
4417.5
5460. O1
1971
77.3
22.0
31.0
17.0
530.3
58.6
2.7
3.5
4.0
238.8
201.4
25.0
14.5
78.5
151.4
34.4
64.7
28.1
41.3
30.2
57.8
50.6
371.5
155.8
44.6
87.5
18.6
15.2
«i 1
10.8
54.3
24.4
578.6
73.5
14.8
296.. 2
33.5
36.2
231.3
9.8
59.4
.4
79.6
459.2
41.5
13.0
147.7
98.7
31.5
187.5
4.4
0.
132.8
0.
5080.5
5080.5
]1971 Dollars.
32
-------
The evaluation model is seen to be a more accurate indicator than a
survey approach of investment needed in the municipal waste treatment
area because it corresponds to both what has happened in the past and
what might reasonably be expected to occur in the future. However, the
weaknesses of demand modeling should be noted. It fails to reflect some
components of demand which are not known precisely enough to distinguish
qualitative shifts readily. Such shifts are the ratio, of plant costs to
ancillary costs; depreciation rates for interceptors, outfalls, pumping
stations; and the loss of sunk capital through accelerated replacement
and inadaptability of existing plants to higher degrees of treatment.
Also, the composition of the backlog requirements, if not fully reported
in the Municipal Waste Inventory, would bias the backlog calculation.
Survey Technique
The 1971 survey of municipalities was conducted to update EPA estimates
of the scope and cost of construction of municipal waste treatment facili-
ties, planned through 1976, which are needed to meet current water quality
standards implementation schedules or other current standards or enforce-
ment requirements.
The survey was directed to 2294 municipalities whose population was greater
than 10,000 persons or whose facilities were serving more than 10,000 per-
sons. The response rate was 95.5 percent.
In addition to providing the cost estimate of planned construction activi-
ty, the responding municipalities were requested to provide such informa-
tion as:
- the reason for planning the reported construction,
- the type of facilities to be constructed,
- the level of treatment to be achieved,
- the percentage of the effluent attributable to industrial waste,
- expected dates for operation to begin,
- the method upon which user charges are based,
- additional employee requirements resulting from the
planned construction.
The survey approach is a potentially useful guide to short-term (1-2
year) investment intentions. However, community cost estimates become
unreliable in the long-term situation and fail to indicate probable
construction activity.
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