EPA-R5-73-016
APRIL 1973 Socioeconomic Environmental Studies Series
Economic Feasibility of Minimum
Industrial Waste Load
Discharge Requirements
Office of Research and Monitoring
U.S. Environmental Protection Agency
Washington, O.C 20460
-------
RESEARCH REPORTING SERIES
Research reports of the Office of Research and
Monitoring, Environmental Protection Agency, have
been grouped into five series. These five broad
categories were established to facilitate further
development and application of environmental
technology. Elimination of traditional grouping
was consciously planned to foster technology
transfer and a maximum interface in related
fields. The five series are:
1. Environmental Health Effects Research
2. Environmental Protection Technology
3. Ecological Research
U. Environmental Monitoring
5. Socioeconomic Environmental Studies
This report has been assigned to the SOCIOECONOMIC
ENVIRONMENTAL STUDIES series. This series
describes research on the socioeconomic impact of
environmental problems. This covers recycling and
other recovery operations with emphasis on
monetary incentives. The non-scientific realms of
legal systems, cultural values, and business
systems are also involved. Because of their
interdisciplinary scope, system evaluations and
environmental management reports are included in
this series.
-------
EPA-R5-73-016
April 1973
ECONOMIC FEASIBILITY OF MINIMUM
INDUSTRIAL WASTE LOAD DISCHARGE REQUIREMENTS
By
Henry C. Bramer
Contract No. 68-01-0196
Project No. 2800775
Project Officer
Donald H. Lewis
Implementation Research Division
Environmental Protection Agency
Washington, D. C. 20460
Prepared for
OFFICE OF RESEARCH AND MONITORING
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D. C. 20460
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402
Price $2.10 domestic postpaid or $1.70 OPO Bookstore
-------
EPA Review Notice
This report has been reviewed by the Environmental
Protection Agency and approved for publication.
Approval does not signify that the contents
necessarily reflect the views and policies of the
Environmental Protection Agency, nor does mention
of trade names or commercial products constitute
endorsement or recommendation for use.
-------
ABSTRACT
This study presents order-of-magnitude estimates of the
costs of implementing minimum and zero discharge require-
ments for the manufacturing and electric power industries.
The analysis was made, for the most part, at the 2 digit
S.I.C. level for the manufacturing industries. The assumed
technology was maximum in-plant recirculation and reuse,
concentration of the recirculation blowdown by evaporation,
and final residual disposal by the applicable least-cost
method among incineration, deepwell disposal, solar
evaporation, and ocean disposal.
It is concluded that a strict zero discharge requirement
would have greatly variable and significant economic con-
sequences, but that less stringent definitions of minimum
discharge would be feasible. The limiting factors in
applying a strict zero discharge requirement appear to be
the availability of physical resources, particularly energy,
for purposes of effluent concentration.
111
-------
CONTENTS
Section Paqe
I Conclusions 1
II Recommendations 3
III Introduction 5
IV Industrial Water Utilization 7
V Alternative Definitions of Minimum Discharge 17
VI Definitions of Costs 23
VII Available Technology for Minimum Discharge 35
VIII Residual Effluent Disposal 39
IX Costs of Industry Systems for Zero Discharge 51
X Economic Analysis 77
XI Acknowledgements 97
XII References 99
XIII Appendices 101
v
-------
FIGURES
PAGE
1 SCHEMATIC OF INDUSTRIAL WATER UTILIZATION
(ALL INDUSTRIES - TOTAL) 1968 9
2 SCHEMATIC OF INDUSTRIAL WATER UTILIZATION
(PETROLEUM AND COAL PRODUCTS -S.I.C. 29) 1968 9
3 SCHEMATIC OF INDUSTRIALMTER UTILIZATION
(CHEMICAL AND ALLIED PRODUCTS -S.I.C. 28) 1968 10
4 SCHEMATIC OF INDUSTRIAL WATER UTILIZATION
(PAPER AND ALLIED PRODUCTS - S.I.C. 26) 1968 10
5 SCHEMATIC OF INDUSTRIAL WATER UTILIZATION
(LUMBER AND WOOD PRODUCTS - S.I.C. 24) 1968 11
6 SCHEMATIC OF INDUSTRIAL WATER UTILIZATION
(TEXTILE MILL PRODUCTS - S.I.C. 22) 1968 11
7 SCHEMATIC OF INDUSTRIAL WATER UTILIZATION
(FOOD AND KINDRED PRODUCTS -S.I.C. 20) 1968 12
8 SCHEMATIC OF INDUSTRIALV&TER UTILIZATION
(PRIMARY METAL INDUSTRIES - S.I.C. 33) 1968 12
9 DEFINITION NO- 1 - ZERO LIQUID DISCHARGE WITH
UNDERGROUND STORAGE OF SOLIDS 19
10 DEFINITION NO. 2 - DISCHARGE ONLY HEAT AND d.s.
AT INTAKE CONCENTRATIONS 19
11 DEFINITION NO. 3 - DISCHARGE ONLY HEAT AND INTAKE
DISSOLVED SOLIDS 20
12 DEFINITION NO. 4 - DISCHARGE ONLY HEAT AND
DISSOLVED SOLIDS " 20
13 AVERAGE ANNUAL PRECIPITATION FOR THE UNITED STATES 44
14 AREAS OF POTENTIAL INJECTION SITES (SEDIMENTARY
BASINS) 45
15 TOTAL ANNUALIZED RESIDUAL DISPOSAL COSTS 49
16 MARKET EFFECTS OP AN ADDED TAX WITH ELASTIC DEMAND 92
17 MARKET EFFECTS OF AN ADDED TAX WITH INELASTIC
DEMAND 92
VI
-------
Figures (con't.)
PAGE
18 DEMAND AND SUPPLY - STEEL INDUSTRY (1967-72) 93
19 INCREASED DOMESTIC COST AND IMPORTS 94
Vll
-------
TABLES
No. Page
1 Water Use Statistics (All Industries - Total) 1968 8
2 Conventional Fossil-Fueled Electric Power Plants 7
3 Nuclear Electric Power Plants 13
4 Projected Electric Power Plant Capacity and
Generation 13
5 Projected Electric Power Plant Waste Loads 15
6 Definitions of Minimum Discharge 18
7 Initial Cost Estimates 21
8 Asset Guideline Periods as Established by the
Internal Revenue Service 25
9 Estimated Depreciation Rates for Buildings and
Equipment 26
10 Capital Cost Components 31
11 Components of Operating Costs 32
12 Total Costs of Industrial Water Use 33
13 Water Use Cost Components 33
14 Water Use Costs Less Depreciation 34
15 Average Operating Cost Components 34
16 Steel Industry Water Use Data 35
17 Total Costs of Ocean Disposal 39
18 Capital and Operating Costs of Ocean Disposal 40
19 Deepwell Disposal Costs 41
20 Costs of Solar Evaporation Ponds and Conveyance 41
21 Solar Evaporation Costs 42
22 Mean Monthly Computed Reservoir Evaporation at
Selected Stations, in Inches Depth 43
Vlll
-------
Tables (con't.)
Page
23 Gross Water Uses and Water Intakes of Brackish
and Fresh Tidewaters by State 46
24 Summary of Water Uses and Residual Disposal Means 47
25 Summary of Costs of Residual Disposal Means 48
26 Numbers of Large Water-Using Establishments 52
27 Projected Primary Metal Industries Shipments 52
28 Brine Disposal Means - S.I.C. 33 55
29 Summary of Costs - Primary Metals Industries -
S.I.C. 33 59
30 Existing Practice Waste Loads 60
31 Stream Standards Waste Loads 60
32 Minimum Discharge Waste Loads 60
33 Intake Dissolved Solids Discharged in Brine 60
34 Zero Discharge Residuals 61
35 Electric Power Industry Waste Water Parameters 62
36 Power Plant Cooling Water Use 63
37 Power Plant Distillation Costs 63
38 Power Plant Brine Production 63
39 Percentage Distribution of Disposal Means -
Electric Power Industry 66
40 Electric Power Industry - Cost and Discharge
Summary 67
41 Summary of Costs and Residual Waste Loads, Primary
Metals 68
42 Summary of Costs and Residual Waste Loads, Paper
and Allied Products 69
43 Summary of Costs and Residual Waste Loads,
Chemicals and Allied Products 70
-------
Tables (con1 t. )
No.
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Summary of Costs and Residual Waste Loads,
Petroleum and Coal Products
Summary of Costs and Residu-al Waste Loads,
Food and Kindred Products
Summary of Costs and Residual Waste Loads,
Textile Mills
Summary of Costs and Residual Waste Loads, Totals
of Manufacturing Industries Studied
Summary of Costs and Residual Waste Loads,
Electric Power Industry
Summary of Costs and Residual Waste Loads, Total
Manufacturing Industries
Values of Shipments in Large Water-Using Plants
Costs, Production and Water Use Data - 1968
Pollution Control Cost Comparisons
Industry Costs and Profit Effects - 1968
Allocations of Control Costs
1968 After-Tax Profit Effects
After-Tax Profit Effects - Large Water-Using
Plants
After-Tax Profit Effects - Entire Industries
Profit Reductions due to Zero Discharge
Expenditures for Control vs Total Capital
Expenditures
Pollution Control Costs as Percentages of Capital
Expenditures
Cost Increases due to Wage Increases
Added Control Costs vs Wage Increase Costs
Added Control Costs as Percentage Wage Increases
Pag
71
72
73
74
75
78
77
80
79
81
79
82
83
84
84
85
85
86
87
87
-------
Tables (con't.)
No. Page
64 Profit Positions of Various Industries 88
65 Price Increases due to Zero Discharge 89
66 Comparative Invested Capital and Profitability
Selected Industry Leaders - Year 1971 118
XI
-------
SECTION I
CONCLUSIONS
This study has indicated that the costs of implementing
a strict definition of zero discharge of liquid effluents
from industrial and electric power plants would be
approximately 3.3 times as much as the present costs of
attaining ambient water quality standards (stream stan-
dards) and would have cost an additional $4.9 billion
annually in 1972. The added capital investment in 1972
would have totaled about $17.6 billion. The additional
capital investment required would have been about 50
percent of the annual expenditures for new plant and equip-
ment by the manufacturing and electric power industries.
The added cost of implementing zero discharge would have
been equivalent to a 3 percent rise in wage rates and would
probably have reduced after-tax profits by 15 percent in
the short run. By 1980 the added costs would increase to
approximately $6.8 billion annually in terms of 1972
dollars.
The costs involved vary widely among the various industries.
The burden of the paper industry would be the greatest by
almost any measure employed. Overall price increases of
the order of 3 percent would probably be involved in pro-
ducts and power at the manufacturing level if costs were
to be recovered by means of price increases. The steel
industry, in particular, would have difficulty passing along
such added costs in the face of the availability of lower-
cost imports.
A minimum discharge requirement which would minimize
effluent volumes and permit the discharge of the residual
effluent if treated to meet existing water quality standards
would cost only about one-fifth as much as would zero dis-
charge requirements. Such a requirement would have a sig-
nificant economic impact only on the paper industry.
The limiting factors in implementing zero discharge appear
to be the physical resources required, particularly for
means to effect effluent volume reductions beyond those
attainable by maximum recirculation and reuse of water within
a plant. The energy requirements of evaporation, as well as
the capacity to produce such equipment, appear to be unreal-
istically high.
Residual disposal site availability does not appear to
offer constraints of a similar magnitude.
-------
It is concluded, at this level of analysis, that imple-
mentation of a strict definition of zero discharge of
liquid effluents from industrial plants is not feasible
in the near future, i.e., utilizing technology that is
clearly available.
-------
SECTION II
RECOMMENDATIONS
The present study has defined the order-of-magnitude costs
of minimum and zero discharge within several constraints
which affect the accuracy of the estimates. The more sig-
nificant of these are analysis of the manufacturing
industries at only the 2-digit S.I.C. level, the assump-
tion of uniform unit costs of recirculation, the assumption
of the sole use of evaporation as a concentration method,
the assumed need of uniform discharge requirements among
all industries, and the assumptions of uniform costs of
capital and depreciation periods.
It is recommended that the following additional studies be
accomplished utilizing computer methods so that the costs
can be developed and segregated at a more disaggregated
level and so that the effects of new data and information
can be quickly evaluated in the future.
1. Determine the costs of implementing a definition of
minimum discharge that would allow the discharge of heat
and dissolved solids in recirculated cooling water blowdowns
but prohibit process water discharge.
2. Determine the applicability and availability of alter-
native concentration technologies in various specific
industry groups, including the availability of waste heat
and the heating values of waste materials for evaporation
and incineration, and energy requirements for the optimum
methods.
3. Determine in detail the likelihood of changes in pro-
duction and waste treatment technology due to minimum dis-
charge requirements, including effects on the total
environment.
4. Determine the extent to which discharges as in (1) can
be minimized in the various industries without the con-
straint of uniform requirements between industry groups.
5. Determine the extent to which the costs incurred as
above would affect each industry, including the probable
ability to pass on these costs.
-------
SECTION III
INTRODUCTION
It has been the purpose of this study to determine the
economic feasibility of requirements that industrial
water effluents be minimized or eliminated. The analysis
has, for the most part, been at the 2-digit S.I.C. level
in the manufacturing industries and has included the
electric power industry.
Various levels of discharge restrictions have been con-
sidered as being the basis for definition of minimum
discharge. Zero discharge is considered in the strictest
sense, i.e., no liquid effluent to a surface body of water.
Ultimate disposal of final residuals to the land, air,
underground aquifer, and ocean environments have been
assumed.
The analysis has been predicated on the use of maximum
in-plant recirculation and reuse, concentration of the
recirculation system blowdown by evaporation, and final
residual disposal by deepwell injection, solar evaporation,
incineration, ocean disposal, landfill; the final residual
disposal method being the applicable least-cost means.
Evaporation for concentration has been considered because
it is the only clearly applicable present technology for
which reliable cost data are readily available. Treatment
for in-plant recirculation and reuse has been assumed equal
to the effluent quality requirements for discharge.
All cost data within the body of the report are in 1968
dollars. All necessary reductions of costs to the 1968
basis have been made on the basis of an annual cost infla-
tion of 3.5 percent. The base year was chosen because it
is the year of the most recent Census of Manufactures data
and the base year for the Cost of Clean Water industry
profiles which were used as defining terminal treatment
costs. Only in the Conclusions have costs been expressed in
current dollars (1972).
Costs are generally expressed in annualized terms. Operating
costs are used throughout as excluding capital charges.
Annualized capital costs are based upon a 10-year life and
an interest rate of 8 percent.
Where references are made to the large water-using industrial
plants, this means those plants taking in more than 20
million gallons of water annually and is in accordance with
the Census of Manufactures usage. Values added and value of
shipments in those plants are as defined in Water Use in
Manufacturing, Census of Manufactures and refer only to those
plants within an industry.
-------
SECTION IV
INDUSTRIAL WATER UTILIZATION
Any study of minimum industrial water discharges must
take into account not only the volumes of water involved,
but also the particular uses to which portions of the
water used are put. The uses largely determine the
maximum degree of re-use and thus the final volumes which
must be considered for treatment and/or ultimate disposal
beyond effluent quality requirements, i.e., requirements
to meet water quality standards.
The data of Table 1 show overall water use practices in
the manufacturing industries in plants taking in more
than 20 million gallons annually according to the 1967
Census of Manufactures. The numbers in parentheses were
calculated by difference for the most part. The quanti-
ties of water discharged by use were calculated by the
ratios of total discharge to total use times the water
intake by purpose. These data are shown graphically in
Figure 1. The schematics of Figure 2 through 8 show
similar data for each of the 7 major water-using industries,
derived in the same way as for Figure 1.
No such data were available for the electric power industry.
Water use data for the electric power industry were deve-
loped as shown below on the basis of known water uses and
projected numbers of plants, capacities, and efficiencies
through 1980.
Table 2. Conventional Fossil-Fueled Electric Power Plants
1957
1967
1968
1969
1,039
99,500
497.2
57
971
210,237
974.1
53
979
226,020
1,072.9
54
981
241,355
1,159.8
55
No- of Plants
Installed Capacity, mw
Net Generation, 10 kwh
Plant Factor, %
Scheduled new plants and additions, 1970-1977
No. of plants 67
Capacity, mw 134,300
Federal Power Commission, January, 1971, Steam -
Electric Plant Construction Cost and Annual
Production Expenses.
-------
Table 1. Water Use Statistics (All Industries - Total) 19C«
Parameter
Water Intake, Total
Fresh Water Co. Systems
Fresh Water Public Systems
Brackish Water
Treated Prior to Use
Water Discharged, Total
Treated Prior to Discharge
Water Used, Total
Process Uses
Air Conditioning
Steam Electric Power
Cooling and Condensing
Boiler Fead and Sanitary
All
Establishments
15,. 167
10,862
1,592
3,013
3,506
14,276
4,353
35,701
(10,245)
( 1,108)
( 4,361)
(18,312)
( 1,675)
Establishments
Recirculating
Water
13,171.
9,403
1,317
2,451
3,249
12,063
3,960
33,405
9,460
1,069
4,050
17,233
1,534
Onco-through
Water Users
( 2,296)
( 1,459)
( 275)
( 562)
( 257)
( 2,213)
( 393)
( 2,296)
( 785)
( 39)
( 311)
( 1,019)
( 141)
Water Discharged:
Public Utility Sewers
Surface Water Body
Tidewater Body
Ground Water
To Other Users
Water Intake by Purpose:
Process Uses
Air Conditioning
Steam Electric Power
Cooling and Condensing
Boiler Feed and Sanitary
Water Discharged by Use:
Process Water
Air Conditioning
Steam Electric Power
Cooling and Condensing
Boiler Feed and Sanitary
1,022
9,545
3,316
190
203
4,295
249
3,009
6,877
1,036
C 3,972)
(. 230)
( 2,771)
( 6,347)
( 956)
769
8,163
2,825
144
164
3,510
210
2,698
5,658
895
(3,215)
( 192)
(2,471)
(5,365)
( 820)
253)
1,382)
491)
46)
39)
785)
39)
311)
1,019)
141)
757)
38)
300)
982)
136)
-------
| FRESH WATER CO. SYSTEMS | | praSc^YSTEMS
BRACKISH WATER |
s s "
LOSSES S H °
M
00
Once-thtough
users
7571 -1 785
1 PROCESsU*.
38l MR | , 39
ICOND. _J*^
^ ^nni STEAM 1 f-m
~* ISANIT'Y]
[LOS
393
1820
FIGURE 1.
LOSSES
H
Once- through.
users
0 { STEAM I _ fl
I ELECT.!
-^Hpaafr"^
~* IsAHIT' j *
[LOS
19
103
er»
n
o
cs
« 257
0
i-H
in
m'
CTi
ro
WASTE
*""" TREA
m
IT)
fO
*
9460
M
CTi
H
CTi
10
f^
1069 1 '
H
r*
v
(N
4050
tn
\D
ro
m
17293 - ^^34 1
cs
GO
n in * «r
U> CN] VO <<4>
H O3 H H
00, (S], ,
WATER P UBLI C S URF ACE
njg^. UTILITY WATER BODY
SEWERS
m
in
tN
TIDEWATER
BODY
TO OTHER GROUND
USERS WATER
(N r-( Of 10
00' CT1 ' (*)' ^
n T*
i-H
SCHET1ATIC OF INDUSTRIAL WATER UTILIZATION CALL INDUSTRIES, TOTAL) - 1968
IPRESH WATER co. SYSTEMS | | p,*,
BRACKISH WATER
9> H in
ro CO rH
U> H U>
o
o\
o
o
rsi
in
^"
H
H
a 33 TNTaifR WATKB TPWaTMWMT 167 ^
CO
00
Recirculating Users
ro
PROCESS A
WATER "^ CONDIT
m
r-
QPq| 217
I ^
^^^ OT
CO
WASTE
00
H
CTl ,
339
ro
U9
(TV
V0
i (
[R ST
LON1NG "*" ELEC
POT
26
H
"S1
i-H
Of
^H
n
H
IT
U
O
t^
o
r-f
EAM COOLING AND BOILER PEED
FRIG -*| CONDENSING -. AND SANITARY *
«ER
270
-------
FIGURE 3. SCHEMATIC OF INDUSTRIAL WATER UTILIZATION (CHEMICAL & ALLIED PRODUCTS - 28) 1968
FIGURE H. SCHB-1ATIC OF INDUSTRIAL WATER UTILIZATION (PAPER 8 ALLIED PRODUCTS - 26) 1958
10
-------
FIGURE 5, SCHEMATIC OF INDUSTRIAL WATER UTILIZATION CLUMBER & WOOD PRODUCTS 21) 1968
LOSSES
I FRESH WATER CO. SYSTEMS
Once-through
users
' 1 IrnnT.THnl -, i
Is COND.r
FRESH WATER
PUBLIC SYSTEMS
22
J L
BRACKISH WATER
INTAKE .WATER TREATMENT
67
Recirculating Users
PROCESS
WATER
16
14
60
AIR
CONDITIONING
WASTE WATER
TREATMENT
31
141
n
STEAM
ELECTRIC
POWER
PUBLIC
UTILITY
SEWERS
COOLING AND
CONDENSING
SURFACE
WATER BODY
TIDEWATER
BODY
TO OTHER
' USERS
BOILER FEED
AND SANITARY
h
GROUND
' WATER
FIGURE 6. SCHEMATIC OF INDUSTRIAL WATER UTILIZATION (TEXTILE MILL PRODUCTS - 22) 1968
11
-------
FIGURE 7, SCHEMATIC OF INDUSTRIAL WATER UTILIZATION (FOOD & KINDRED PRODUCTS 20) 1968
RIAL HATEBjTiLizATioN
12
-------
Table 3. Nuclear Electric Power Plants
1968 1970 1972 1975 1980
No. of units 10 17 38 83 134
Installed Capacity, mw 2,759(1) 7,532(1) 20,667 61,518 112,662
Generation, 109 kwh 14.0(1) 23.8(1) - -
Plant Factor, % 58 36
AEC News Release July 26, 1972 unless noted
(1) 1971 Statistical Abstract of U. S.
Plant capacities and power generation are projected in
Table 4 on the basis of the above data, assuming plant
factors for nuclear plants of 50% in 1972, in 1975, and
60% in 1980 and for fossil-fueled plants of 55% in 1972,
56% in 1975, and 58% in 1980.
Table 4. Projected Electric Power Plant Capacity and
Generation
1968 1972 1975 1980
Fossil-Fueled Plants:
Installed Capacity, mw 226,020 291,718 342,080 426,018
Generation, 109 kwh 1,072.9 1,405.5 1,678.1 2,164.5
Plant Factor, % 54 55 56 58
Nuclear Plants:
Installed Capacity, mw 2,759 20,667 61,518 112,662
Generation, 109 kwh 14.0 90.5 296.4 592.2
Plant Factor, % 58 50 55 60
Total Thermal Plants:
Installed Capacity, mw 228,779 312,385 403,598 538,680
Generation, 109 kwh 1,086.9 1,496.0 1,974.5 2,756.7
Plant Factor, % 54 55 56 58
Water use and production data are not available for com-
parable years so that these data had to be estimated.
In 1964, the electric power industry took in 40,680 billion
gallons of water for cooling (FWPCA, Industrial Waste Guide
on Thermal Pollution, September, 1968). Of the 1,158
billion kwh produced in 1965, 1,055 billion kwh was pro-
duced by electric utilities, of which 81.6% or 861 billion
13
-------
kwh was produced in thermal-electric plants. The installed
capacity in these thermal-electric plants was 192,000 mw.
On the basis of the 1960 installed thermal-electric capa-
city of 136,000 mw, and generation of 608 billion kwh, the
following is estimated for 1964, when about 13 percent of
cooling water was recirculated.
Cooling water intake
Cooling water use
Installed capacity, mw
Generation, billion kwh
40,680 billion gallons
45,968 billion gallons
181,000 mw
810 billion kwh
Water use in 1964 was thus 56.75 gallon per kwh, of which
50.2 gallon per kwh was discharged. In 1964 the average
rejection to cooling water was 5,480 BTU per kwh (FWPCA,
ibid), so that the average heat rise was 11.6°F. These
data may be taken as representative of 1968 practice.
A typical nuclear plant such as the Quad Cities plant of
Commonwealth Edison, discharges 1.44 billion gallons of
water per day during on-line generation with an average heat
rise of 23°F; this plant has an installed capacity of
1,600 mw. The water use is thus 37.5 gallon per kwh with
a heat rejection of 7,185 BTU/kwh.
These data represent thermal efficiencies of 32.6 percent
and 30.6 percent for fossil-fueled and nuclear plants,
respectively.
Fossil fuel plants have an upper limit of thermal efficiency
of 40 percent while that of presently planned nuclear plants
is 33 percent. The following projections assume efficiencies
with corresponding heat rejections:
Nuclear Plants
Fossil-Fueled Plants
Efficiency BTU/kwh Efficiency BTU/kwh
1968
1972
1975
1980
30.0
30.6
31.8
33.0
7,395
7,185
6,783
6,400
33. 0
35.3
37.1
40-0
5,378
4,806
4,406
3,800
Cooling water uses are assumed at 56.75 gallon per kwh for
fossil-fueled plants as in 1968 with 13 percent recircula-
tion and at 37.5 gallon per kwh for nuclear plants, used
once-through. These would presumably be the water use
practices in the absence of pollution abatement require-
ments. The electric power industry data developed are
summarized in Table 5.
14
-------
Table 5. Projected Electric Power Industry Waste Loads
Nuclear Fossil Total
Plants Plants Thermal
1968:
Installed Capacity, mw 2,759 226,020 228,770
Generation, 109 kwh 14.0 1,072.9 1,086.9
Cooling Water Use, 10 gallon 525 60,887 61,412
Cooling Water Discharge, 10 gallon 525 53,860 54,385
BTU Discharge, 1012 BTU 104 5,104 5,208
1972:
Installed Capacity, mw 20,667 291,718 312,385
Generation, 109 kwh 90.5 1,405.5 1,496.0
Cooling Water Use, 109 gallon 3,394 79,762 83,156
Cooling water Discharge, 109 gallon 3,394 70,556 73,950
3TU Discharge, 1012 BTU 650 5,975 6,625
1975:
Installed Capacity, mw 61,518 342,080 403,598
Generation, 109 kwh 296.4 1,678.1 1,974.5
Cooling Water Use, 109 gallon 11,115 95,232 106,347
Cooling Water Discharge, 109 gallon 11,115 84,241 95,355
BTU Discharge, 1012 BTU 2,010 6,540 8,550
1980:
Installed Capacity, mw 112,662 426,018 538,680
Generation, 109 kwh Q 592.2 2,154.5 2,756.7
Cooling Water Use, 10 gallon 22,208 122,835 145,043
Cooling Water Discharge, 109 gallon 22,208 108,658 130,866
BTU Discharge, 1012 BTU 3,790 7,276 11,066
15
-------
SECTION V
ALTERNATIVE DEFINITIONS OF MINIMUM DISCHARGE
A definition of minimum discharge is not as simple as it
may first appear. The volumes of water discharged, if any,
will depend primarily upon the technology available and
upon the cost involved. The availability of technology
largely determines the possibility of implementation; the
costs to be incurred as balanced against the benefits to
be derived determine the desirability of implementation
to a large extent. Other determinants are the impacts on
the land and air environments and availability of resources.
First approximations were thus made of the order-of-mag-
nitude costs of implementing "minimum discharge" under
four different definitions.
Zero discharge, in a strictly literal sense, would pro-
bably involve the evaporation of waste water to dryness,
the condensation of evaporated water for recycle to the
plant, and the discharge of the resulting solid wastes
underground. Even in this case, the heat rejected in the
vapor condensation would go to either the air or water
environments.
If an initial qualification is imposed that thermal pollu-
tion from the manufacturing industries will not be consid-
ered, then the volume of process waste water discharged,
assuming segregation of uncontaminated cooling water,
determines the treatment needs.
If a further qualification is made that only the contaminants
in waste water generated by manufacturing operations are to
be considered, the treatment needs are still further reduced.
A further qualification might be considered to the effect
that neutral salts would not be regarded as significant
pollutant materials, i.e., that the criteria applying to
total dissolved solids may be modified.
These definitions may be stated as follows; they are
illustrated schematically in Figures 9 through 12 and
summarized in Table 6.
Definition No. 1 (Figure 9): Zero discharge is defined as
the discharge of no liquid effluent from an industrial
operation and the storage underground of all solid residues.
Definition No. 2 (Figure 10); Minimum practicable discharge
is defined as the discharge of no liquid effluent from an
industrial operation, other than uncontaminated cooling
water from plants with effluent heat loads of less than
17
-------
Table 6. Definitions of Minimum Discharge
Water Use
Allowable
Discharge
Remarks
Definition I (Strict Interpretation)
Cooling
Industrial Plants
<20 x 1012 3TU/Yr
Indu3trial Plants
>20 x 1012 BTU/Yr
Steam Electric
Process
None
Nona
None
Hecirculatior. with all
blowdown distilled and
injected in deep wells
Definition II
Ind. <20 x 10
12
Ind. >20 x 10
Electric
Process
12
Heat and dissolved
salts 0 Intaka -t-62
None
None
None
6% increase in concen-
tration covers
existing recirculation
@ isolated plants
Recirculation with blowdown
distilled and injected
to deep wells
Definition III
Ind. <20 x 10
Ind. >20 x 10
Steam Electric
12
12
Process
Heat and intake
Dissolved Solids
Intake Dissolved
Salts
No:ie
Definition IV (Currently Used - State of Illinois)
Intake solids only - no
concentration limit
Intake solids contained
in cooling tower blow-
down only - no concentra-
tion limit
Recirculation witn
blowdown distilled and
injected to deep wells
Ind. <20 x 10
Ind. >20 x 10
Steam Electric
Process
12
12
Heat and Dissolved Solids
Dissolved Solids
Dissolved Solids
Dissolved Solids
Treatment to allow
discharge to (i) sur-
face waters (ii)
municipal plants (iii)
deep wells
18
-------
I
SURFACE WATER SUPPLY
PROCESS WATER
OSES
TERMINAL
TREATMENT
COOLING
TOWERS
SOLIDS
DISPOSAL
COOLING WATER
USES
COOLING
TOWERS
DISSOLVED
SOLIDS
CONCENTRATION
BOILER FEED
AND OTHER.
FIGURE 9. DEFINITION NO. 1- ZERO LIQUID DISCHARGE WITH UNDERGROUND STORAGE OF SOLIDS
SURFACE WATER SUPPLY
PROCESS WATER
USES
1
TERMINAL
TREATMENT
COOLING
TOWERS
TS O
rt oi
a 01
-p *&
a
ID ID
ta A:
ra
a
H
COOLING WATER
USES
<20xl012BTU/yr,
BOILER FEED
AND OTHER
DISSOLVED
SOLIDS
CONCENTRATION
COOLING WATER
USES
COOLING
TOWERS
SOLIDS
DISPOSAL
FIGURE 10. DEFINITION NO. 2- DISCHARGE DULY HEAT AND DISSOLVED SOLIDS AT INTAKE CONCENTRATIONS (+6%)
19
-------
SURFACE WATER SUPPLY
PROCESS WATER
USES
TERMINAL
TREATMENT
COOLING WATER
USES-HEAT LOADS
<20 X 1012 BTU/yi
COOLING WATER
USES-HEAT LOADS
>20 x 1012 BTU/yr
COOLING TOWERS
COOLING
TOWERS
COOLING
TOWERS
BOILER FEED
AND OTHER
DISSOLVED
SOLIDS
CONCENTRATION
SOLIDS
DISPOSAL
( ) Alternative Uses
FIGURE 11. DEFINITION NO. 3- DISCHARGE ONLY HEAT AND INTAKE DISSOLVED SOLIDS
SURFACE WATER SUPPLY
| Intake and Process Dissolved Solids; others at Stream stdl
PROCESS WATER
*" USES
i
'*
TERMINAL
TREATMENT
I
COOLING
.....
| CONTRO
1
__ Heat and intake^ I
»-
T3 01
0)13
S> -H II
H H
COOLING WAt
0 USES -HEAT L(
<20X10J''! BTl
» | COOLING TO!
1
BOILER FEED
AND OTHER
\
LLED | I
RGB | I
J I
1 I
SOLIDS i
DISPOSAL J (
i
CER -H
3ADS 0
VI
J/yr |
U LJLI
2 1
2 S Intake and Process DLSSO
" | TR1
1 I
L _.
) Alterr
0}
*)
c
-H
i i "O
C
^ BB^ ffl
COOLING WATER -g
T3 USES -HEAT LOADS d)
^ ^a S
fl >20 x 10^ BTU/yr ^ (
ID
01
^ ' '
4J
rt COOLING
TOWERS ~ ^
M
(II
JJ
O
IICIPAL |
MAGE ' MUNICIPAL
ATMENT *"* SEWAGE
>LANT 1
« J ~-
Dissolved Solids 1
lative Uses/Treatment/Disposal
FIGURE 12, DEFINITION NO. 1- DISCHARGE ONLY HEAT AND DISSOLVED SOLIDS
20
-------
12 '
20 x 10 BTU per year which differs from intake water
quality only in temperature and dissolved solids, and
the storage underground of all solid residues.
Definition No. 3 (Figure 11): Minimum practicable dis-
charge = is defined as the discharge of no liquid effluent
from an industrial operation other than water used for
indirect cooling in plants where the effluent heat load
is less than 20 x 1012 BTU per year and blowdown from
indirect cooling uses containing no contaminants generated
by the industrial operation other than heat and the
storage underground of all solid residues.
Definition No. 4 (Figure12); Minimum practicable
discharge is defined as the discharge of no liquid effluent
from an industrial operation other than water used for
indirect cooling in plants where the effluent heat load
is less than 20 x lO12 BTU per year, and blowdown from
indirect cooling uses containing no contaminants genera-
ted by the industrial operation other than heat, and the
disposal of minimum waste water volumes containing mini-
mum concentrations of contaminants other than dissolved
solids, by means including co-treatment in municipal
sewage treatment plants.
The order-of-magnitude costs of implementing regulations
based upon these various definitions were initially
estimated from gross water use data in the manufacturing
and electric power industries for the year 1968. The basic
assumptions were that water vould be internally recircu-
lated to the greatest possible extent and that the blow-
down from the recirculation systems would be evaporated
to produce a lower volume brine. The brine would then be
disposed of by deepwell injection where the definition
so required. These initially estimated costs are shown
in Table 7.
Table 7. Iiitial Cost Estimated
Costs in Billions of 1968 Dollars
Definition Capital Costs Annual Operating Costs
Terminal Treatment 4.000 0.708
No. 4 7.254 1.198
No. 3 12.286 1.886
No. 2 13.746 2.102
No. 1 19.500 3.192
21
-------
SECTION VI
DEFINITIONS OF COSTS
Definitions of costs vary considerably when evaluated by
economists, accountants, cost accountants, or engineers.
The background and training, to say nothing of the
motivations of the people in these disciplines, are
different. Profits to accountants, cost accountants,
and engineers are synonymous with net income, i.e., the
residual after subtracting outgo from income. Profits
in the lay definition,include tfie return to all factors
of production without differentiation. To the economist,
profit is specifically the return to entrepreneurial
ability and, by definition, accrues only to the super-
marginal enterprise. Rent, similarly, is the return to
land, again by definition accruing only to super-marginal
land. Interest is the return to capital (only super-
ficially the charge made for loaned funds) and wages are
the return to labor (including management).
Much more insight into the factors affecting costs could
be gained from at least considering the economist's
definitions rather than the accountant's or financier's
simplistic conceptions. Taking, for example, two steel
mills, one might compare the costs of implementing'zero
waste water discharge. The first is an integrated steel
mill with a capacity of about 1.5 million ingot tons per
year. The other operates an electric furnace shop some
distance away which has about the same capacity. The former
has agreed to install terminal treatment facilities which
will discharge water of better quality than required for
in-plant use and is resisting to the point of litigation
the reuse of this water with blowdown to a sanitary sewer.
The latter began the installation of a zero discharge
system 10 years ago and has recently completed it. The
second is a closely-held corporation and the rate of return
is not known, but is reportedly high for the industry.
Overhead, as reflected in office buildings, furnishings,
etc., is obviously low; there are none of the usual executive
trappings in offices and the plant engineer designed the
water reuse system in-house. This mill has two electric
furnaces, both of which have air pollution control levels
which exceed emission standards and incorporate closed-cycle
use of water in venturi scrubbers. Building evacuation hoods
were built voluntarily when the State suggested it; there
is no specific legal requirement for such installations.
The former company is one of the large integrated steel
producers and the example plant is only one of its smaller
plants. While this mill is an integrated facility, i.e.,
23
-------
has a coke plant and blast furnace, it is, however, fair
to compare the steelmaking and rolling mill facilities
alone with the second. The conclusion is inescapable that
there are differences in the philosophy and attitudes
toward pollution control which are interestingly related
to differences in production philosophies and methods.
It is suggested that the differences may well lie in the
realm of entrepreneurial ability, i.e., in innovation and
foresight, and in the factor of rent, i.e., the return to
the use of land. Costs, as reflected in interest and wages
might be presumed to be about equal for similar size steel
plants in the same general area; there is at least the
suspicion, however, that wages in the form of more manage-
ment and other overhead labor may well be greater in the
case of the multi-plant firm as allocated to this facility.
While it is probably not practical to attempt to quantify
such factors, and is certainly not possible without data
that would not be readily available to outsiders, these
factors should at least be born in mind when considering
relative costs. Costs which were reportedly about equal in
terms of capital investment in these two similar instances
certainly produced different results. More per dollar spent
was realized in one case than in the other and the explana-
tion requires more than a superficial look at dollar amounts.
Leaving philosophy aside, at least for a time, costs must,
in practice, be based upon data which can be obtained or
reasonably estimated. There are many factors which must be
defined in formulating costs, particularly when costs are
to be annualized. Compromises must be made between strict
economic definitions and those which are, in practice,
affected by accounting conventions, tax laws, etc. These
factors are discussed below.
Economic; Life
The economic life of a facility installed for pollution
abatement purposes can hardly exceed that of the production
facilities which it serves. A reasonable working definition
would appear to be the useful life of the pollution abatement
equipment alone or the useful life of the related production
facilities, whichever is shorter. Annualized capital costs
would thus be the initial capital cost plus capitalized
repairs over the useful economic life, less the salvage value.
The useful economic life of a production facility may be taken
to be tne asset guideline period as established by the
Internal Revenue Service, examples of which are shown in
Table 8. The useful economic lives of some specific pieces
of equipment which might together constitute a pollution
control facility are illustrated in Table 9.
24
-------
Table 8. Asset Guideline Periods as Established by the Internal Revenue Service
Asset Depreciation
Range (in years)
Asset
Guide-
line
Class
13.3
20.4
21.0
22.2
24.4
Description of Assets
Petroleum refining
All other food and kindred products
Manufacture of tobacco and tobacco
products
Textile mill products, except knitwear
Manufacture of lumber and wood products
Lower
Limit
13
9.5
12
11
Asset
Guide-
line
Period
16
12
15
14
Upper
Limit
19
14.5
18
17
Annual Asset
Guideline
Repair
Allowance
Percentage
7.0
5.5
5.0
4.5
and furniture
26.1 Manufacture of pulps from wood and other
cellulose fibers and rags
28.0 Manufacture of chemicals and allied
products
30.1 Manufacture of rubber products
32.1 Manufacture of glass products
33.1 Ferrous metals
33.2 Konferrous metals
39.0 Manufacture of products not elsewhere
classified
49.11 Hydraulic production plant
49.12 Nuclear production plant
49.13 Stean Production plant
49-3 Water utilities
13
9.5
40
16
22.5
40
10
16
9 11
11 14
11 14
14.5 18
11 14
12
50
20
28
50
12
19
13
17
17
21.5
17
14.5
60
24
33.5
60
6.5
4.5
5.5
5.0
6.0
8.0
4.5
5.5
1.5
3.0
2.0
1.5
25
-------
Table 9. Estimated Depreciation Rates for Buildings
and Equipment
Equipment or Building Annual Percent
Blowers 7
Buildings
Mill Construction 4
Corrugated Iron 10
Plumbing
Sewer and drainage pipe 6
Drainage tile 2
Compressors 5
Condensers
Steam (atmosphere) 4
Steam (surface) 5
Dust Collector Equipment 5
Filters
Vacuum continuous 10
Furniture and fixtures 10
Laboratory equipment 7
Motors 5-10
Piping
Wrought iron 3
Cast iron, 8 in. and larger 1 1/2
Steam 5
Pumps
Centrifugal 5
Rotary 5
Direct acting 4
Tanks
Concrete 2
Steel 5
26
-------
A factor of potential importance in evaluating and comparing
capital costs is the choice of materials of construction,
i.e., the choice between long-lived, corrosion resistant
materials and short-lived materials which are less expen-
sive and may or may not entail increased maintenance costs.
Kaiser Steel Corporation, for example, has long adopted
the practice of using carbon steel piping, etc. almost
exclusively and expecting short-lived performance as opposed
to using initially more expensive materials. Ceramic
cooling towers, for another example, last longer than wooden
towers and are virtually maintenance-free, but cost about
twice as much as wooden towers.
According to an Internal Revenue Service engineer, three
alternatives are open to industry in depreciating pollution
control facilities :
1. A five-year write-off if the facilities qualify
under state and federal law relating specifically to
pollution control facilities.
2. Write-off at the rate of production facilities.
3. Write-off at a slower rate if it can be shown
that the specific equipment will have some other use-
ful life.
According to this engineer, most industries write off pollution
control facilities at the same rate as production facilities.
An interesting comment was that many industries, particularly
electric utilities, attempt to classify as much equipment as
possible as pollution abatement facilities for the public
relations effects.
Cost of Capital (Money)
Insofar as debt capital is concerned, the cost is at least
the interest rate on borrowed funds. This rate will generally
be the prime rate for large, financially sound corporations.
For smaller corporations or sole proprietors, the interest
rate will be higher, particularly if the operation is finan-
cially marginal. In some cases of very small, marginal enter-
prices, the interest rate may be the personal loan rate to
the owner.
The cost of equity capital will generally be the opportunity
cost, i.e., the rate of return that would be realized^if an
investment had been made in alternative income-producing.
This, on the average, would be equal to the rate of return in
the industry considered, but opportunities in diversification
should probably be considered.
27
-------
When borrowing capacity is limited, the cost of debt capital
is the opportunity cost, assuming that funds borrowed for
pollution control facilities would have been invested in
income production and are unavailable for such purposes.
Industrial revenue bonds offer a means by which financing
can be obtained which presumably does not affect borrowing
capacity for other purposes. Such bonds have been authorized
in all states except California, Idaho, New Jersey and Texas
and must bear a minimum interest rate of 6 percent, which
is tax free since the issuing agency is usually a municipal
or county government. Since such bonds sell at about 2
percent less than the rate for corporate debentures, the
difference is still an overall cost in the sense of taxes
foregone. A fifteen-year term is about average. An under-
writing fee of 1 percent of the value of the issue is
generally charged.
The costs of capital thus seem logically to be the opportunity
costs in each industry, or the interest rate on borrowed
funds, including bonds, if financing is such that borrowing
for income-production is not impaired.
Definitions of Pollution Abatement Facilities
Accelerated depreciation of pollution control facilities or
qualifications for industrial revenue bond financing requires
certification of state and federal agencies, including the
Internal Revenue Service. Such definitions are not clear
cut when pollution control equipment serves a production func-
tion, but are straightforward for such items as gas scrubbers
and waste water treatment equipment.
Problems in definition can arise in separating the costs of
water-use facilities necessary for production even with once-
through use and no effluent restrictions in a given locality
from the costs of changes in water-use practices, production
modifications, and reuse facilities installed solely for
pollution abatement. Additionally, there must be some
definition of increased production costs attributable to
pollution abatement methods.
In the cases of mill scale pits and flue dust clarifiers in
steel mills and ammonia stills and saturators in coke plants/
the annualized costs less credits for by-products probably
incorporate these distinctions, since the residual costs can
be fairly attributed to pollution abatement.
28
-------
In the case -of a mechanical debarker installed in a pulp
mill, it is not so clear as to the cost attributable to
pollution abatement. If shell and tube condensers are
substituted for barometric condensers in an oil refinery,
the cost attributed to pollution abatement is also not
clear. In both cases, waste water is eliminated.
When one steel mill has recirculated water because it had
no adequate supply and another recirculated water for
pollution abatement in the face of an unlimited supply,
and both achieve the same degree of pollution abatement,
determining the costs of pollution abatement is not clear
cut.
Perhaps a general solution would be to base all costs on
the once-through use of water of average industry rates
per unit of production and attribute all costs which reduce
effluent contaminant loads and/or volumes to pollution
abatement irrespective of the motivation. To the extent,
then that some costs are clearly overstated, suitable adjust-
ments could be made. Errors would, at least, be consis-
tently on the high side. Internal Revenue Service opinions
will probably provide a basis eventually, but they are
currently few in number and appear very slowly.
Bases oi: Cost Comparisons
To be meaningful, costs must be related to some measures
of business volume, profitability, etc. such as sales, net
income, equity, or other parameters. The capital costs of
pollution abatement facilities as related to the value of
production facilities is probably the most realistic basis
upon which to compare the former. Expressing the cost of
pollution abatement facilities as a fraction of the original
cost of the production facilities, both in constant or cur-
rent dollars, is the only consistent way to make such a
comparison. The use of depreciated values leads to highly
variable and fallacious expressions of costs, making compari-
sons meaningless unless the bases of calculations are
precisely defined.
If the capital costs'of a new treatment facility are, for
example, expressed as a ratio of the costs of depreciated
production facilities in terms of original price, a very
high ratio results. If such cost comparisons are made in new
installations when depreciation rates of treatment and pro-
duction facilities are taken to be different, such ratios
will again vary from case to case. At the limit, the ratio
of the value of new treatment facilities to fully depreciated
production facilities would be infinite. At least passing
consideration must be given to such expressions of investment;
29
-------
it seems probable that some of the variations in reported
ratios of investment in pollution abatement are due to the
use of various of these methods of calculation.
*
The annualized capital costs of pollution abatement
facilities as related to the annualized capital costs of
the production facilities served, both expressed in con-
stant dollars, seems to be clearly the most logical basis
for comparative purposes, assuming that the economic lives
and costs of capital can be satisfactorily expressed. The
definition of a comparative base for operating costs pre-
sents, at least initially, several alternatives.
Since operating costs are, by definition, annualized costs,
they are directly relatable to income, expenditures,,etc.
per unit period of time. Possible comparative bases are
thus :
1. Annual sales
2. Annual net income
3. Annual return on sales
4. Annual return on equity
5. Annual value added
r
The base upon which the costs of pollution abatement
facilities are compared should be selected so as to impart
some item of information relative to economic effects. The
extent to which such costs will cause economic dislocations
by reducing production, resulting in unemployment, or
reducing income to the factors of production would seem to
be those of interest insofar as the cost side of the economic
ledger is concerned. At least for the present, the economic
benefits of more stringent pollution abatement requirements
will not be considered. The former, however, should be
measured so as to be comparable with the latter.
Given that potentially adverse economic effects are to be
measured and that a consistent basis should be used for future
comparisons with beneficial effects, the National Income and
Gross National Product data seem to provide the best bases.
Macroeconomic statistics can thus be used for the assessment
of general effects and used as comparative bases for studies
of regional and single plant effects. Such data are appli-
cable and separable for comparing capital and operating costs.
Their use in business cycle analysis would also seem to indi-
cate a specific utility here. The ready availability of
such data from a government agency and general acceptability
are, of course, important considerations.
30
-------
The expression of the capital costs of pollution abatement
as related to Gross Private Domestic Investment is consis-
tent with the previously given measure as a fraction of
investment in production facilities. Operating costs as
related to annual net income and to value added in the
aggregate can be readily determined from these data.
Relationships of operating costs to sales, return on sales,
and return on equity can be determined for industry groups
from ancillary data published by the Department of Com-
merce. The latter comparative data can also be reduced to
at least the corporation unit through annual report data.
Reduction of comparative data to the individual plant or
other production unit basis cannot generally be done out-
side of the firm, except by estimation.
Capital Costs
Waste water treatment facilities are generally similar to
chemical process equipment and it is thus logical to use
chemical engineering estimating techniques in evaluating
the cost of such facilities. Guthrie's module cost techni-
que (18) seems particularly appropriate, since it provides
some insight into the various cost components and data in
this form are available on the basis of considerable
experience.
On the basis of a typical chemical process project on a
Gulf Coast job site in mid 1968, the cost components shown
in Table 10 are regarded as typical:
Table 10. Capital Cost Components
Relative Cost Percent of Cost
F.O.B. cost of equipment 100.0 28.72
Direct field materials: 62.2 17.86
Piping (32.0) (9.19)
Other (30.2) (8.67)
Direct field labor 58.0 16.66
Indirect costs: 128.0 36.76
Freight, insurance, taxes (13.7) (3.93)
Construction overhead (39.2) (11.26)
Engineering (22.0) (6.32
Contingency (8.9) (2.56)
Contractor fee (44.2) (12.69)
348.2 100.00
31
-------
Operating; Costs
Operating costs may be formulated from consideration of the
typical items of cost in the case of a good manufactured
for sale. Considering the nature of pollution abatement
facilities, the internal cost to the firm may be expressed
as shown in Table 11, eliminating packaging and shipping,
sales, etc., and depreciation, since the latter is
included in annualized capital costs in the present
analysis:
Table 11. Components of Operating Costs
I. Manufacturing Cos,ts
A. Chemicals
B. Labor and Supervision
C. Maintenance and Supplies
D. Power and Utilities
E. Royalties and Patents
F. Payroll and Plant Overhead
G. Laboratory
H. Property Taxes and Insurance
II. General Expense
A. Administration
B. Research
C. Interest on Working Capital
D. Total
III. Total Cost
A. Manufacturing Cost
B. General Expense
C. Subtotal
D. By-product Credits
E. Income Tax Credits
F. Total Credits
G. Net Cost
These items, of course, refer to the allocations to waste
water treatment facilities, including reuse systems to the
extent installed for purposes of pollution abatement.
32
-------
Insofar as the concept of maximum water reuse prior,to dis-
posal of a residual is involved in implementing "zero dis-
charge", the costs of pollution abatement become analagous
to the costs of water utilization. The components of the
latter costs, at any rate, would be expected to be propor-
tionately the same, eliminating purchased water as a cost
item.
Table 12. Total Costs of Industrial Water Use
Daily Costs in Dollars (1969)
Cost Item Steel Paper Petroleum Chemical Total
Raw Materials 8,794 3,932 12,377 4,484 29,587
Labor 7,280 11,039 8,818 3,799 30,936
Maintenance & Power 7,984 7,650 67,721 3,134 86,489
Payroll Overhead 1,820 2,760- 2,205 953 7,738
Plant Overhead 3,650 5,519 4,409 1,907 15,485
Depreciation 30,241 12,073 505,276 12,327 559,917
Property taxes &
insurance 606 241 10,106 246 11,199
Total 60,375 43,214 610,912 26,850 741,351
"Raw materials" in the above items includes purchased water;
chemicals for treatment account for the relative portions of
this cost item shown in Table 13. (CEP, Symposium Series,
65, No. 97, 1969) :
Table 13. Water Use Cost Components
Relative Costs
Industry Purchased Water Chemicals % for Chemicals
% of Daily Cost % of Daily Cost
Steel 16.3 5.6 25.6
Paper 0.0 6.7 100.0
Petroleum 0.3 0.7 70.0
Power 1.0 1.0 ,50.0
Using the above percentages to estimate the chemical costs,
assuming that the chemical .industry percentage is about^the
average.in the steel and petroleum industries, and elimina-
ting depreciation, the manufacturing cost components are as
shown in Table 14.
33
-------
Table 14. Water Use Costs Less Depreciation
Cost^Item
Chemicals
Labor
Maintenance and Power
Payroll Overhead
Plant Overhead
Property Taxes and
insurance
Total
Water used, mgd
Steel
Daily Costs in Dollars (1969)
Paper Petroleum Chemical Total
2,251
7,280
7,984
1,820
3,650
3,932
11,039
7,650
2,760
5,519
8,664
8,818
67,721
2,205
4,409
2,242
3,799
3,134
953
1,907
17,089
30,936
86,489
7,738
15,485
606 241 10,106 246 11,199
23,591 31,141 101,923 12,281 168,936
1509.6 835.8 5507.5 664.8 8517.7
The above data were used to determine average weighted
percentage contributions of these cost components and,
together with average relative costs in the chemical process
industries for other items as taken from Aries and Newton,
yielded the operating cost formulation as in Table 15.
Table 15. Average Operating Cost Components
I. Manufacturing Costs: '
A. Chemicals
B. Labor and Supervision
C. Maintenance and Power
D. Royalties and Patents (0.01 x III.C) =
E. Payroll and Plant Overhead
F. Laboratory (0.20 x I.E. ) =
G. Property Taxes and Insurance
H. Total
II. General Expense:
A. Administration (0.06 x I.H) =
B. Research (0.10 x I.H) =
C. Interest on Working Capital (0.08 x III.C)
D. Total
III. Total Cost:
A. Manufacturing
B. General Expense
C. Subtotal
D. By-product Credits
E. Income Tax Credits
F. Total Credits
G. Net Cost
.098
.170
.533
0.013
.128
.034
.071
1.047
0.063
0.105
0.106
0.274
1.047
0.274
1.321
34
-------
SECTION VII
AVAILABLE TECHNOLOGY FOR MINIMUM DISCHARGE
The technology required for minimum discharge may be
grouped as follows:
1. Methods to reduce water use
2. Methods to treat water for reuse
3. Methods to recirculate water
4. Methods to reduce residual waste water volumes
5. Methods for ultimate disposal of minimum residuals
The distinction between water use and water discharge
or intake must be borne in mind. It has been a quite general
assumption that water use in the steel industry, for example,
averages about 40,000 gallons per ton of finished steel and
about 30,000 gallons per ton of raw steel. The data on
Table 16 demonstrate the fact that the terms are used loosely
and incorrectly. The above figures should have been stated
as water discharged or taken in per ton, not as the quantity
used. Although the volume of water discharged per ton
dropped in the 9-year period, the volume of water used increased.
Table 16. Steel Industry Water Use Data
1959
1964
1968
Steel Production, 1,000 tons:
Raw Steel , 93.446 127.076 131.462
Finished Steel 69.377 84.945 91.856
9
Water Volumes, 10 gallons:
Intake 2994 3815 4071
Discharge 2876 3569 3811
Used 4571 5427 6154
Water Volumes, gal. per ton:
Discharged: nnnnn
Raw Steel Basis 30800 28100 29000
Finished Steel Basis 41500 42000 41500
Used:
Raw Steel Basis 48900 42700 46800
Finished Steel Basis 65900 63900 67000
35
-------
Methods to reduce water use, therefore/ do not include
cooling towers/ for example/ as many writers have at least
tacitly assumed. Neither are such processes as electro-
dialysis, reverse osmosis/ ion exchange, etc. properly
considered effluent treatments for the purposes of this
study, since they produce a clean stream and a concen-
trated stream, which, taken together, still contain the
original (or even greater) amounts of contaminants; they
are classified here as waste water volume reduction methods.
Examples of technology for particular purposes are as
follows:
1. Methods to reduce water use:
a. Electrostatic precipitators (vs. wet scrubbers)
for air pollution control
b. Bag houses (vs. wet scrubbers) for air pollution
control
c. Evaporation chambers (vs. spray towers) in
air control
d. Dry scale removal (vs. flume flushing) in
rolling mills
e. Savealls on paper machines
f. Long-log debarking in pulp mills
g. Water flows geared to production rates
h. Dry floor cleaning (vs. hosing)
i. Air coolers (vs. water coolers) in petroleum
refineries
j. Surface condensers (vs. barometric condensers)
in chemical plants
k. Process water sewers (vs. combined sewers)
2. Methods to treat water for reuse:
a. Cooling towers
b. Spray ponds or canals
c. Cooling ponds
d. Sedimentation
e. Sedimentation-flocculation
f. Chemical precipitation
g. Filtration
h. Oil separation
i. Chemical treatment
3. Methods to recirculate water:
a. Recirculation on paper machines
b. Sequential uses of water for progressively
lower uses
c. Recirculation of flume water in rolling mills
d. At process recirculation systems
e. Diversion of treated effluents to present
intake pumps
f. Diversion of treated effluents to new intake pumps
36
-------
4. Methods to reduce residual waste water volumes:
a. Evaporation or -distillation
b. Reverse osmosis
c. Electrodialysis
d. Ion exchange
5. Methods for ultimate disposal of minimum residuals:
a. Ocean disposal
b. So^.ar evaporation
c. Deep well disposal
d. Incineration
e. Landfill
f. Burial
g. Discharge to brackish water
For the purposes of this study, it has been assumed that
water use reductions beyond those currently in practice would
not be utilized and that water treatment for reuse would be
the same as that required currently for discharge with the
addition of cooling towers. The method assumed for water
recirculation is the diversion of treated effluents to new
intake pumps and the provision of new distribution piping.
The method assumed for reducing residual waste water volumes
is evaporation. The methods assumed for ultimate disposal
of minimum residuals are deepwell disposal, solar evaporation,
incineration, and ocean disposal to the extent each is
geographically possible.
These methods have been used in the study because they are
proven technology. They are, together with the assumption
of no significant water use reductions, the high-cost alter-
natives in most cases. On the basis of these assumptions,
the cost estimates should be on the high side, i.e., con-
servative in the sense of not understating costs.
37
-------
SECTION VIII
RESIDUAL EFFLUENT DISPOSAL
The ultimate disposal of residual waste water, i.e., water
containing essentially only dissolved inorganic solids in
the minimum practicable volume from an industrial operation
could be accomplished by several methods with minimum
environmental impact.
Possible methods include:
1. Underground injection (deepwells)
2. Underground cavities
3. Spreading/landfill
4. Solar evaporation
5. Discharge to brackish water
6. Ocean discharge
Ocean Disposal
The applicability of the various methods is a function
largely of geographical location. Based upon Koenig's
data for the costs of ultimate disposal of waste water
from Advanced Waste Treatment processes (WP-20-AWTR-19,
1968) , typical costs for disposal to the ocean are as shown
in Table 17, based upon a 30-mile ocean outfall and con-
veyed distances of 100 or 1,000 miles. The costs for con-
veying 1,000 miles are based upon preconcentration by
evaporation.
Table 17. Total Costs for Ocean Disposal
Waste Water Volume, gpd
500,000
1,000,000
5,000,000
10,000,000
Costs per 1,000 gallons
100 miles 1,000 miles
$ 1.84
1.31
0.72
0.53
$ 2.76
1.88
1.84
1.02
39
-------
Koenig's data were optimized on the basis of the most
advantageous conveyance (pipe or rail). The operating
costs for conveyance were segregated and the operating costs
for distillation in the case of the 1,000-mile distance
were taken from the inorganic Chemical Industry Profile data,
Considering the costs of conveyance plus the costs of dis-
tillation for the 1,000 miles distance as operating costs
with the remainder as annualized capital costs, costs were
calculated as in Table 18.
Table 18. Capital and Operating Costs of Ocean Disposal
100 miles ($/1000 gal.) 1000 miles ($/10QQ gal)
Operating Annual Cap. OperatingAnnual Cap.
Volume, gpd Costs Costs Costs Costs
500,000 1.00 0.84 1-52 1.24
1,000,000 0.75 0.56 1.08 0.80
5,000,000 0.44 0.28 1.1.2 0.72
10,000,000 0.29 0.24 0.75 0.27
Deepwell Disposal
For the case of a 100 mgd AWT plant operating at 95 percent
product water recovery, Koenig calculated the cost of deep-
well disposal at 0.9 cents per 1,000 gallon of product water.
Such a plant would produce 95,000 x 10^ gpd of product water;
daily costs would thus be $855 for the disposal of 5 mgd
of waste water, or $0.171 per 1,000 gallons. This is
essentially the same cost as calculated by Rapier (Burns
and Roe, Inc. FWQA Contract No. ,14-12-495 [17070 DJW] ) at a
fixed charge rate of 10 percent; Rapier shows no difference
in costs as a function of volume from 10 mgd to 1.0 mgd, but
indicates a cost of $0.28 per 1,000 gallon at a daily volume
of 100,000 gallons.
Rapier's costs are based upon disposal wells 3,500 feet deep,
30-year project life, electrical power at 12 mils per kwhr,
and relatively low injection pressures. A more likely basis
for the present purpose are the data in Inorganic Chemicals
Indus try P r of ile based upon the work of Moseley and Malina
relating specifically to industrial waste disposal. These
data are based upon depths generally necessary to prevent
groundwater contamination, 20-year project life, electrical
power at $0.005 per kwhr, and up to 1,400 psi injection
pressure, interest rates are taken at 5 percent. Taking the
interest rate at 10 percent, the injection pressure at
40
-------
1,000 psi, arid eliminating depreciation, operating costs
were calculated as shown in Table 19.
Table 19. Deepwell Disposal Costs
Costs per 1,000 gal, injected
Daily J_Vol_ume Ope rating Cos ts"AnnualizedCapital~"c6s"t
100,000 gal. $ 0.4644 $ 0.6436
500,000 gal. 0.2528 0.1512
1,000,000 gal. 0.2020 0.0853
Solar Evaporation
For solar evaporation plus disposal of brine at 100 mile
distance, Rapier's data for ponds and Koenig's data for
100 mile conveyance after concentration yield the following
data shown in Table 20.
Table 20. Costs of Solar Evaporation Ponds and Conveyance
Volume Conveyance Costs,71,000 gal, waste
Waste Volume Conveyed Cost Conveyance Ponds Tucson
100,000 gpd $ 0.455
500,000 gpd 10,000 $ 310/day $ 0.62
1 mgd 10,000 310/day 0.31 0.378
5 mgd 100,000 3000/day 0.60
10 mgd 100,000 3000/day 0.30 0.354
Koenig's data assumed concentration by distillation and the
degree of concentration was optimized. There would be no
such economies in solar evaporation ponds and the maximum
concentration can be assumed. Assuming that the pond cost
is the capital cost and conveyance cost is the operating cost,
costs are shown in Table 21.
41
-------
Table 21. Solar Evaporation Costs
Cost per 1,000 gal. Waste WaterDisposed
Daily Volume Operating CostAnnualized Capital Cos't
100,000 $ 0.300 $ 0.455
500,000 0.300 0.417
1 mgd 0.300 0.378
5 mgd 0.300 0.366
10 mgd 0.300 0.354
Incineration
Koenig estimates the cost of incineration at 4.8* per 1,000
gallon of product water in a 100 mgd AWT plant at 95 percent
product water production. Daily costs here would thus be
$4,560 for the disposal of 5 mgd of waste water, or $0.912
per 1,000 gallons. The ash produced might be disposed of
in a landfill. Assuming 1,500 ppm of dissolved solids in
5 mgd, the ash would be about 62,475 Ibs or 31.2 tons per
day in such a plant. For a 100 mgd AWT plant at a 99.5
percent product water rate the cost of spreading is 0.1*
per 1,000 gallon of product water, $99.50 per day, or about
20* per 1,000 gallon of waste water. These figures seem
to confirm the conclusion in WP-20-AWTR-19 that such disposal
means cost about the same as ocean disposal.
The limiting factor in the general applicability of incine-
ration would be the availability and cost of fuel. Koenig's
data seem to be based upon a minimum fuel cost probably only
available at the well for natural gas. Assuming the avail-
ability of waste heat and/or by-product fuels in industrial
plants, the cost of incineration may be assumed to be the
highest cost for ocean disposal, i.e., as in Koenig's data
for 500,000 gpd at a distance of 1,000 miles.
Regional Applicability
The states in which solar evaporation probably represents a
viable disposal method are: Arizona, New Mexico, Nevada,
Utah, Colorado and Wyoming on the basis of the evaporation
rates in Table 22 and precipitation rates in the map of
Figure 13.
Deepwell disposal is probably a feasible disposal method in
the following states as indicated on the map on Figure 14.
42
-------
Table 22. Mean Monthly Computed Reservoir Evaporation
At Selected Stations, in Inches Depth
u>
Station
Sacramento. Calif
Seattle, Wash. ......
Baker, Oregon
Salt Lake City, Utah...
Yuma, Arizona
Havre, Montana
Bismark, N. Dakota
Denver, Colorado
North Platte, Nebr. . .
Roswell, N. Mexico
Oklahoma City, Okla. . . .
San Antonio, Texas.....
Calves ton, Texas
Minneapolis , Minn
Vicksburg, Miss
Nashville , Tenn.. .......
Columbus, Ohio
Macon , Georgia
Miami, Florida.-. .......
Columbia, S. C . ...
Albany , N . Y . . . .
Eastport, Me
Gulf off Texas Coast. . .
Gulf Stream off Cape...
Hat terns , N.C
Ocean off Mass
Month :
Jan
0.8
0.8
0.5
0.8
3.9
0.5
0.4
1.6
0.8
2.1
1.5
2.2
0.9
0.3
0.6
0.9
1.3
0.9
0.6
1.7
3.0
1.6
1.3
0.6
0.8
4.0
9.0
3.0
Feb
1.4
0,8
0.7
1.0
4.6
0.5
0.5
1.8
1.1
3.2
1.9
3.1
1.3
0.4
0.7
1.1
1.9
1.3
0.8
2.2
3.4
2.4
1.7
0.7
0.7
4.0
9.5
2.5
Mar
2.5
1.4
1.4
2.0
6.5
1.1
1.0
2.5
2.2
4.9
3.1
4.5
1.6
0.9
0.9
1.7
2.9
1.9
1.1
3.1
4.1
3.2
2.2
1.1
0.9
3.5
8.5
2.0
Apr
3.6
2.1
2.5
3.5
8.0
2.5
2.3
3.7
3.7
6.8
4.7
5.6
2.6
1.7
1.3
3.1
4.2
3.3
2.3
4". 3
4.9
4.5
3.5
2.0
1.1
3.5
7.0
1.5
May
5.0
2.7
3.4
5.1
9.8
4.5
4.0
5.0
5.0.
8.3
5.5
6.5
4.1
3.2
2.1
4.4
5.0
4.1
3.5
5.1
5.0
5.4
4.1
3.2
1.4
4.0
5.5
1.0
June
7.1
3.4
4.4
7.9
11.5
6.1
5.3
7.4
6.5
9.8
7.8
8.4
5.6
4.4
3.2
6.1
5.7
5.1
4.6
6.2
4.8
6.3
5.0
4.3
1.7
4.5
3.5
1.5
July
8.9
3.9
6.9
10.6
13.4
8.2
7.3
8.8
8.6
9.4
10.2
9.4
6.2
6.0
5.0
8.0
5.8
5.8
5.6
6.3
5.3
6,6
5.6
5.2
2.0
5.0
3.5
1.5
Aug
8.6
3.4
7.3
L0.4
L2.9
8.3
7.7
8.4
8.4
8.3
L0.7
9.4
6.1
5.8
5.4
7.8
5.5
5.4
5.1
5.8
5.1
6.0
4.9
4.7
2.1
5.5
3.5
2.0
Sept
7.1
2.6
4.9
7.3
10.7
5.6
5.8
6.7
6.9
6.9
8.8
7.6
5.7
4.6
4.7
6.0
5.2
4.9
4.1
5.2
4.3
5.5
4.1
3.4
2.0
6.5
5.5
2.5
Oct
4.8
1.6
2.9
3.9
8.0
3.3
3.3
4.6
4.6
5.5
6.3
5.8
4.6
3.0
3.2
4.5
4.4
3.7
3.0
4.2
4.1
4.4
3.2
2.4
1.6
6.5
9.0
3.0
NOV
2.6
1.1
1.5
2.0
6.1
1.5
1.3
3.0
2.6
3.5
3.5
3.7
2.7
1.3
1.6
2.5
2.9
2.1
1.6
2.8
4.3
3.0
2.4
1.4
1.1
6.0
9.5
3.5
Dec
1.2
0.7
0.6
1.0
4.5
0.7
0.5
1.9
1.1
2.5
2.0
2.4
1.3
0.4
0.6
1.0
1.6
1.1
0.6
1.8
2.7
1.9
1.5
0.8
0.7
5.0
10.0
4.0
Annual
54
24
37
55
100
43
39
55
51
71
66
69
43
32
29
47
46
39
33
49
51
51
39
30
16
58
84
28
-------
75 to 100
and over
FIGURE 13. AVERAGE AilHUAL PRECIPITATION FOR THE UNITED STATES
-------
FIGURE 14, AREAS OF POTENTIAL INJECTION SITES (SEDIMENTARY BASINS)
-------
Table 23. Gross Water Uses and Water Intakes of Brackish and Fresh Tidewaters by State
Billion Gallons Pec Year
State
New England
Maine
New Hampshire
Vermont
Massachusetts
Rhode Island
Connecticut
Middle Atlantic
New York
New Jersey
Pennsylvania
East North Central
Ohio
Indiana
Illinois
Michigan
Wisconsin
West North Central
Minnesota
Iowa
Missouri
ilorth Dakota
South Dakota
Nebraska
Kansas
South Atlantic
Delaware
Maryland
D. C.
Virginia
West Virginia
North Carolina
South Carolina
Georgia
Florida
East South Central
Kentucky
Tennessee
Alabama
Mississippi
West South Central
Arkansas
Louisiana
Oklahoma
Texas
Mountain
Montana
Idaho
Wyoming
Colorado
New Mexico
Arizona
Utah
Nevada
Pacific
Washington
Oregon
California
Alaska
Hawa i i
Total
(1) Disposal Means:
(1)
Establishments
65
57
22
275
73
214
540
418
678
717
347
626
475
375
191
137
185
7
12
63
86
53
135
4
156
77
302
188
229
142
140
210
184
95
107
182
62
389
24
63
11
63
12
30
34
11
167
129
585
12
28
9,402
Gross
Water Use
317.3
108.1
17.7
264.3
30.1
239.1
995.9
797.9
2559.9
2157.1
1621.6
1666.6
1533.0
523.0
231.2
132.1
339.6
17.5
9.1
72.7
348.6
259.1
581.0
0.2
741.4
824.1
487.1
476.7
721.9
948.7
435.7
843.9
97-1.3
376.0
456.8
2279.1
309.5
6903.3
109.1
162.3
40.5
160.5
5.3
111.3
181.4
29.4
1105.7
368.0
1506.4
116.0
156.7
,700.6
Brackish
Intake
7.4
0.3
Z
44.3
2.5
34.6
18.0
195.2
8.5
17.2
0.5
10.3
147.0
3.7
0.7
0.1
4.1
-
Z
-
1.7
136.5
280.2
-
63.0
3.6
0.8
12.2
41.7
81.4
0.1
Z
82.6
5.1
0.8
244.0
0.6
1368.8
0.3
0.4
-
0.2
-
1.9
7.6
-
185.0
12.5
132.1
1.9
19.3
3,013.0
Fresh
Tidewater Intake
1.3
-
-
0.2
-
85.0
7.0 '
67.3
123.5
.
-
-
-
~
-_
, -
-
r ~
-
-
-
27.6
0.2
-
92.2
-
-
0.9
-
0.1
-
-
-
_
5.4
-
0.5
_
-
-
-
-
-
-
-
33.2
15.4
11.7
-
0.7
444.1
x Deepwell
0 Solar Evaporation - Ocean/Incineration
46
-------
North Dakota
South Dakota
Nebraska
Kansas
Oklahoma
Texas
West Virginia
Michigan
Louisiana
Mississippi
Florida
Kentucky
Illinois
Indiana
Ohio
Tennessee
In the other states, the most likely disposal means are to
the ocean in coastal areas and by incineration/landfill in
the inland states or inland portions of coastal states.
The costs of such methods will be taken as equal to ocean
disposal at 100 miles distance.
Gross water uses and water intakes of brackish and fresh
tidewater by state are shown in Table 23. These data are
summarized below in Table 24 for the states previously
listed in which the three groups of disposal means are
applicable.
Table 24. Summary of Water Uses and Residual Disposal Means
Billion Gallons Per Year
Disposal Gross Brackish
Means Establish. Water Use Intake
Deep Well
Solar
Evaporation
Ocean/Incinera-
tion
3,558
n 166
ra
5,678
19,522.4
528.4
15,649.8
1,876.7
9.7
1,126.6
Fresh Tidewater
Intake
6.0
438.1
The costs for residual waste water disposal will be assumed
herein as summarized in Table 25.
47
-------
Table 25. Summary of Residual Disposal Costs
Costs per 1,000 gal, disposed^
Disposal Means
Ocean Disposal
@ 100 miles:
500,000 gpd
1,000,000 gpd
5,000,000 gpd
10,000,000 gpd
Incineration/
Landfill
Deepwell Disposal
100,000 gpd
500,000 gpd
1,000,000 gpd
Solar Evaporation
100,000 gpd
500,000 gpd
1,000,000 gpd
5,000,000 gpd
10,000,000 gpd
Operating
Costs
$ 1.00
$ 0.75
$ 0.44
$ 0.29
$ 1.52
$ 0.46
$ 0.25
$ 0.20
$ 0.30
$ 0.30
$ 0.30
$ 0.30
$ 0.30
Annualized Cap.
Cost Total
$ 0.84 $ 1.84
$ 0.56 $ 1.31
$ 0.28 $ 0.72
$ 0.24 $ 0.53
$ 1.24 $ 2.76
$ 0.64 $ 1.10
$ 0.15 $ 0.40
$ 0.085 $ 0.29
$ 0.46 $ 0.76
$ 0.42 $ 0.72
$ 0.38 $ 0.67
$ 0.37 $ 0.67
$ 0.35 $ 0.65
Total annualized disposal costs, as above, are shown in
Figure 15.
48
-------
o
o
o
C
C
H
m
P
o
EH
3.00
2.50
2.00
-p
CO
o
u
H
(0
05
0
.» 1.50
Q
t)
Q)
N
H
H
(C
1.00
50
Incineration
Ocean Disposal @ 100 miles
\
Solar Evaporation
»
Deepwell Disposal
01234
FIGURE 15, TOTAL ANNUALIZED RESIDUAL DISPOSAL COSTS
49
-------
SECTION IX
COSTS OF INDUSTRY SYSTEMS FOR ZERO DISCHARGE
On the basis of the data developed, the costs of water
pollution abatement are estimated for each of the major
water-using industries at five levels as follow:
1. Once-through systems
In such a system, water is used once-through for all
uses and process water is treated to the extent required
to meet existing water quality standards in a terminal
treatment facility.
2. Existing Practice
Water use is as indicated by the 1968 Census of
Manufacturers data and treatment is generally of process
water in terminal treatment facilities prior to discharge.
3. Meeting Stream Quality Standards
Water use is as indicated by the 1968 Census of Manu-
facturers and treatment is of process water in terminal
treatment facilities to meet existing water quality
standards.
4. Implement Minimum Discharge (Best Available Treatment)
Water use is with maximum re-use and treatment is of
process water in terminal treatment facilities to meet
existing water quality standards.
5. Implement Zero Discharge
Water use is with maximum re-use, concentration of
residual streams from all uses, and non-discharge disposal
of brines.
The methods by which these costs were calculated are illustrated
below for the Primary Metal Industries, (S.I.C. No. 33).
Costs for the other industry groups at the 2-digit S.I-C.
level were calculated in an analogous manner.
Projections of physical output were used as data were avail-
able; otherwise projections were based on values of shipments.
Numbers of establishments in each industry group were used
as shown in Table 26.
Primary Metal Industries Calculations
The cost of waste water treatment facilities installed in
1968 was estimated at $1,324.3 million with $1,473.8 million
needed to meet current needs. The estimated additional
investment needed to meet growth needs through 1972 was
51
-------
Table 26. Numbers of Large Water-using Establishments
S.I.C. No.
No. of
Establishments
Total 9402
20 Food and kindred products 2345
21 Tobacco manufactures 24
22 Textile mill products 684
24 Lumber and wood products, except furniture 188
25 Furniture and fixtures 55
26 Paper and allied products 619
28 Chemicals and allied products 1125
29 Petroleum refining and related industries 260
30 Rubber and miscellaneous plastics products 301
31 Leather and leather products 92
32 Stone, clay, glass and concrete products 586
33 Primary metal industries 841
34 Fabricated metal products, except machinery
and transportation equipment 569
35 Machinery, except electrical 471
36 Electrical and electronic machinery,
equipment, and supplies 562
37 Transportation equipment 392
38 Measuring, analyzing, and controlling
instruments; photographic, medical, and
optical goods; watches and clocks 107
39 Miscellaneous manufacturing industries 97
$244.8 million. Bureau of Domestic Commerce estimates of
the quantities shipped in these industries through 1980 are
as shown in Table 27.
Table 27. Projected Primary Metal Industries Shipments
Aluminum, 10 Ibs
Brass Mill,
Copper Wire
106
Mill
Ferrous Castings
Steel Mill
6
Total, 10
Ibs
p.
, 10° Ibs
, 10 tons
Products, 106 tons
tons
1968
9.98
2756
2214
17.867
131.5
151.857
1972
11.6
2900
2525
17.552
139
159.27
1975
14
6600
19.1
147
169.4
1980
20
8700
22.1
166
192.5
52
-------
Capital Costs
Utilizing the 1968 water use data and the above estimates of
costs and industry growth, capital costs are projected on the
following bases:
1. Meeting water quality standards: projected proportionately
from 1968-1972 costs and growth:
= $ 33.0 million/million annual tons
2. Existing practice: projected on the basis of 1968 costs
per ton:
= $8.72 million/million annual tons
3. Minimum Discharge
Process water discharge = 5% of recirculation rate = 114
Other discharges = 1% of recirculation rate less boiler
feed and sanitary plus boiler feed and sanitary discharges:
= 0.01 (5495-236) + 155 = 208 x 109 gal.
Costs for 1968:
Costs of treating discharges to level acceptable for
discharge/reuse $ 1,473.8 million
Costs for recirculating:
9 c
(1134 + 3562) = 4696 x 10 gal. = 8.935 x 10° gpm
Intake system = 8.935 x 106 x $16.25 = $145 million
Distribution system = 8.935 x 106 x $36.50 = $326 million
Costs of cooling towers:
Recirculation rate = 8.935 x 10 gpm
No. establishments = 841
Average per plant recirculation rate = 10,624 gpm
Cooling tower cost = $17/gpm $180,000 ( 13)
Cooling tower cost = $152 million
53
-------
Total 1968 costs for the industry = $2,096.8 million
Projected proportionately on basis of costs of implementing
existing legislation.
for 1972: 1718.6 x $2096.8 = $2445.0 million
1473.8
4. Implement zero discharge:
Costs for 1968:
Blowdown = 114 + 208 = 322 x 109 gal. = 882.2 x 106 gal/day
No. of establishments - 841
Average blowdown - 1.049 mgd
Distillation cost = $1.60/gpd ($1.679 million) (3)
Disillation cost total = $1412 million
9
Brine production = 0.10 x 322 x 10 gal./year =
88.2 x 106 gal./day
No. of establishments = 841
Average brine = 104,900 gpd
The quantities of brine to be disposed of by the various
residual disposal means are calculated below from Table 28,
which was constructed from the Census of Manufactures data
for S.I.C. No. 33 and the regional applicability of each
method as shown in Table 23. The calculation of (D) assumes
equal volumes in each state.
Ocean 437.1 + 2D
Incineration 3068.6 + 4D
Deepwell 3748.6 + 5D
Sol. Evap. 69.6 + 3D
Total 7323.9 + 14D
14D = (2285 + 5495) - 7323.9 = 456.1; D=32.6
Ocean 502.3 = 6.46%
Incineration 3199.0 = 41.12%
Deepwell 3911.6 = 50.27%
Sol. Evap. 167.4 = 2.15%
54
-------
Table 28. Brine Disposal Means - S.I.C. 33
Gross Water Used, 109 gallon
Incineration peepwell Solar Evaporation
Maine -
New Hampshire D
Vermont -
Massachusetts 4.5
Rhode Island 7.4
Connecticut - 33.9
New York - 331.1
New Jersey 36.7 -i
Pennsylvania - 1508.2
Ohio - - 1152.7
Indiana - - 1118.8
Illinois - - 531.3
Michigan - - 626.4
Wisconsin - 13.8
Minnesota - 19.1
Iowa - 25.7
Missouri - 31.7
North Dakota -r
South Dakota -
Nebraska D
Kansas D
Delaware D
Maryland - 372.6
D.C. -
Virginia 11.2
West Virginia - 221.4
North Carolina - 4.5
South Carolina - D -
Georgia - 28.2
Florida - - D
Kentucky - - 72,8
Tennessee - - 33.4 ,.
Alabama - 335.5
Mississippi - - D
Arkansas - D -
Louisiana - - D .
Oklahoma - ~ 35
Texas 210.7 - 210.7
Montana - D -
Idaho _ D -
Wyoming _ - - -
Colorado - D
N. Mexico - - -
Arizona - ~> 69-
Utah - °
Nevada - ~
Washington - 128.1
Oregon * 14-8
California 166.6 - ~
Alaska ~ ~
Hawaii _ - -
(D) Withheld to avoid disclosing data for individual firms.
-------
Deepwell cost = [0.502 (88.2 x 106 gpd) T 100,0003 x $200,000
= $88.55 million
Solar evaporation cost:
$0.455 x 104.9 x 365 x 841 x 0.0215 x 8.5136 = $2.68 million
Incineration cost:
$1.24 x 104.9 x 841 x 0.4112 x 8.5136 = $139.8 million
Ocean disposal cost:
$0.84 x 104.9 x 365 x 841 x 0.0646 x 8.5136 = $14.9 million
Added cost for zero discharge = $1657.9 million
1968 costs for best available technology + zero discharge =
$3754.7 million
Projected proportionately as for minimum discharge
Operating Costs
Operating costs for- the industry in 1968 were estimated to be
$137.8 million per year. Since the treatment facilities are
of the same type, the ratio of $137-8/$1324.3, or $0.104 per
year per dollar of capital investment can. be used to estimate
and project operating costs for 1968 practice and of meeting
water quality standards.
The operating costs for implementation of minimum discharge
are the costs of recirculation of the treated effluents.
Referring to the previously given steel industry water use
costs (p. 32 ) 'in 20 plants for 1509.6 mgd:
Manufacturing Costs:
Chemicals 2251
Labor 7280
Maintenance and Power 7984
Payroll and Plant Overhead 5470
Laboratory 0.20 x 7280
Property taxes and insurance 606
Royalties and patents 0.01 x total cost
56
-------
General Expense:
Administration 0.06 x mfg cost
Research 0.10 x mfg cost
Interest on working capital 0.08 x total cost
Total Cost = General Expense + Mfg Cost = T
Total Cost then is:
($25047 + 0.01 T) + 0.16 ($25047 + 0.01T) + 0.08T
T = $29055 + 0.0916T = $31985/1509.6 mgd = $21.19 per mgd
The additional operating costs then are for recirculating
1134 + 3562, or 4696 x 109 gallon per year, i.e., $21.19
x 4696 x 10-3, or $99.5 million per year. These costs may be
projected proportionately with the capital costs for imple-
menting minimum discharge.
The operating costs for zero discharge in 1968 are:
Distillation @ 1.049 mgd = $0.80 per 1,000 gallon (3)
Distillation cost total = (322 x 109) x ($0.80 x 10~3^ =
$ 257.6 million
Deepwell cost = 0.5027 x 32.2 x 109 x $0.46 x 10~3 = $7.4 million
9 7
Solar Evaporation Cost = 0.0215 x 32.2 x 10 x $0-30 x 10~J =
$0.2 million
Incineration Cost = 0.4112 x 32,2 x 109 x $1.52 x 10~3 = $20.1 mil
Ocean Disposal Cost = 0-0646 x 32.2 x 109 x $1.00 x 10~3 = $2.1 mil
Total added operating costs then are $287.4 million in 1968
and may be projected in proportion to capital costs.
If all water were used on a once-through"basis and treated to
meet existing legislative requirements, the costs would pre-
sumably be less by the cost of existing recirculation and more
by the proportionate residual costs of meeting such requirements
by current treatment methods.
g
For the primary metals industries, 1185-1134, or 51 x 10
gallons per year of process water were recirculated in 1968,
i.e., 2.190 x 106 gpm. The capital costs of such recirculation,
as shown previously would be:
57
-------
Intake system: 2.190 x 10^ x $16.25 = $35.6 million
Distribution: 2.190 x 106 x $36.50 = $79.9 million
Cooling towers: 2.190 x 106 x $17.00 = $37.2 million
Total $152.7 million
The residual capital cost in 1968 would have been $1473.8 -
$152.7 = $1321.1 million for the treatment of 1431 x 10 9gallons
of effluent water. The cost of treating the process water flow
of 2285 x 10 gallons would have been:
2285 °*6 x $1321.1 million = $1749.1 million
1431
The operating costs, on the basis of the previously shown ratio
of $0.104 per year per dollar of capital investment, would be
estimated at:
$1749.1 million x $0.104/$ = $181.9 million
These costs were projected proportionately by year as with the
costs of meeting water quality standards.
The costs then for the primary metals industries as calculated
above are summarized in Table 29.
Residual Waste Loads
Net waste loads under existing practice are estimated as shown
in Table 30 through 1977.
The dissolved solids listed in Table 30 are from coke plant wastes
in 1968, projected by estimated steel production. The apparent
anomally in acid wastes loads is due to the lag in treatment
installation through 1972, followed by treatment of increasing
quantitites due to rising production later.
Net waste loads discharged to meet stream quality standards are
estimated in Table 31, assuming the indicated concentration limits,
and under minimum discharge requirements in Table 32 with treat-
ment of recirculation blowdowns.
Most water quality standards specify a maximum monthly average of
500 mg/1 for dissolved solids and this is assumed as the average
concentration in fresh water. The Census data specifies brackish
water as containing more than 1,000 mg/1 dissolved solids, but
a more usual definition is about 5,000 mg/1. Assuming brackish
water intake proportionately as in 1968, the dissolved solids con-
centrated in zero discharge residuals from intake water would be
as shown in Table 33.
58
-------
Table 29. Summary of Costs - Primary Metal Industries S.I.C. 33
Ul
Once- Existing Implement Best Implement
Through Practice Existing Available Zero
Water Use (1968) Legislation Technology Discharge
Water Volumes (109 gal.)
Process Uses
Other Uses
Process Discharges
Other Discharges
Treated Discharges
Capital Costs, $106
1968
1972
1975
1980
Operating Costs, $10
1968
1972
1975
1980
2285
5495
2285
5495
2285
1749.1
2039.6
2436.4
3341.1
181.9
212.2
253.4
347.5
2285
5495
1134
3562
1431
1324.3
1388.9
1477.2
1678.6
137.8
144.5
153.7
174.7
2285
5495
1134
3562
1431
1473.8
1718.6
2052.9
2815.2
153.3
178.8
213.6
292.9
2285
5495
114
208
114
2096.8
2445.0
2920.7
4005.2
252.8
294.8
352.1
482.9
2285
5495
0
0
0
3754.7
4378.2
5230.0
7172.0
540.2
629.9
752.5
1031.9
-------
Table 30. Existing Practice Waste Loads
Loads, 10 pounds per year
1968 1972 1977
Suspended Solids 1187 1260 1317
Lubricating Oils 236.1 239.6 233.2
Acids and Salts 614 484.6 560.2
Soluble Metals 6.84 7.47 7.42
Emulsified Oils 23.8 28.1 2.75
Organics (91.5% removal) 2.12 2.30 2.75
Fluorides 4.37 4.95 5.80
Dissolved Solids 277.7 293.5 326.5
Table 31. Stream Standards Waste Loads
Loads, 10 pounds per year
1968 1972 1975 1980
Suspended Solids (lOppm) 94.5 99.9 105.7 119.3
Oils (5ppm) 47.2 49.9 52.8 59.6
Dissolved Solids 277.7 293.5 310.4 350.6
Iron (7ppm) 66.2 70.0 74.0 83.6
Organics (99% removal) 0.24 0.25 0.27 0.30
Table 32. Minimum Discharge Waste Loads
Loads, 10 pounds per year
1S>68 1972 I9T5 1980
Suspended Solids 9.45 9.99 10.75 11.93
Oils 4.72 4.99 5.28 5.96
Dissolved Solids 277.7 293.5 310.4 350.6
Iron 6.62 7.00 7.40 8.36
Organics 0.24 0.25 0.27 0.30
Table 33. Intake Dissolved Solids Discharged in Brine
Year Dissolved Solids, 10 pounds per year
1968 6,957
1972 7,353
1975 7,777
1980 8,782
60
-------
The residual loads then to underground aquifers (deepwell
disposal), the oceans (ocean disposal), the air (incineration),
and land (solar evaporation) are projected through 1980 in
Table 34. The disposition of inorganics from incineration
is assumed to be to the land.
Electric Power Industry Calculations
The nature of the electric power industry is such that the
calculations are somewhat different than for the manu-
facturing industries. These calculations are, therefore,
separately detailed below. Water uses, and discharges, and
waste heat loads are tabulated in Table 35 from the data
developed earlier herein.
Table 34. Zero Discharge Residuals
(Million Ibs per year)
Substance
Suspended
Solids
Oils
Dissolved
Solids
Iron
Organics
Underground
'68
72
75
80
4.75 5.01 5.30 5.98
2.37 2.50 2.64 2.97
3636 3843 4064 4589
3.33 3.53 3.73 4.21
0.12 0.13 0.03 0.14
'68
Ocean
'72
'75
468 495
0.43 0.45
0.02 0.02
80
0.61 0.65 0.69 0.78
0.31 0.33 0-35 0.40
524 592
0.48 0.54
0.03 0.03
Air
Land
Substance
Suspended
Solids
Oils
Dissolved
Solids
Iron
Organics
68 '72 '75
80
1.94 2.05 2.17 2.45
0.09 0.09 0.10 0.11
'68
4.09
0.10
3131
2.86
0.01
'72
4.33
0.11
3309
3.02
0.01
'75
4.58
0.12
3499
3.19
0.01
'80
5.17
0.14
3952
3.61
0.02
61
-------
Tablo 35. Electric Power Industry Waste w'atsr Parameters
Q 1 O
(water volumes, 10 gallons, hdat discharges, 10 BTU)
1968:
Cooling Water Use
Cooling Water Discharge
Heat Discharge
Once-through
Water
Us ?
61,412
61,412
5,874
Existing
Practice
(1963)
61,412
54,385
5,203
Implement
Existing
Legislation
61,412
614
58.7
Implement
Zero
Discharge
61,412
0
0
1972:
Cooling Water Use
Cooling Water Discharge
Heat Discharge
83,156
83,156
7,405
83,156
73,950
6,625
83,156
832
74.1
83,156
0
0
1975:
Cooling Water Use
Cooling Water Discharge
Heat Discharge
106,347
106,347
9,404
106,347
95,356
8,550
106,347
1,063
94.0
106,347
0
0
1980:
Cooling Water Use
Cooling Water Discharge
Heat Discharge
145,043
145,043
12,015
145,043
130,043
11,066
145,043
1,450
120.2
145,043
0
0
62
-------
Table 36. Power Plant Cooling Water Use
Cooling Water Use 1(T gal. No. of Plants mgd per plant
1968
1972
1975
1980
61,412
83,156
106,347
145,043
984
1,025
1,073
1,140
171
222
272
349
With blowdown at 1% of the recirculation rate, the discharge
per plant would be as follows, and multiple-effect evapo-
ration units at the indicated unit costs would result in
total industry costs as indicated in Table 37.
1968
1972
1975
1980
Table 37. Power Plant Distillation Costs
i
Year Blowdown, mgd per pldnt
1.71
2.22
2.72
3.49
Unit Cost Total Cost
No. of plants $/gpd $ Billion
984
1,025
1,073
1,140
1.30
1.25
1.20
1.10
2.187
2.844
3.502
4.376
Brine production then would be as shown in Table 38, at 10%
of the distillation throughout:
Table 38. Power Plant Brine Production
Brine, gpd
Year per plant
1968 171,000
1971 222,000
1975 272,000
1980 349,000
No. of Plants
984
1,025
1,073
1,140
Total Brine
per year, 109 gal,
61.412
83.156
106.347
145.043
The percentages of brine disposal means were assumed to be
the same as the distribution of population in the states in
which each of the several methods were previously shown to
be applicable and as detailed in Table 39.
63
-------
The 1968 annualized capital costs for brine disposal then
are calculated as follows:
Deepwell = $0.64 - $(0.64-0.15) x 71 61,412,000 x 0.3677
400
x 8.5136 = $106.3 million
Solar Evaporation = $0.45 x 61,412,000 x 0.0299 x 8.5136 =
$7.03 million
Incineration = $1.24 x 61,412,000 x 0.4500 x 8.5136 =
$291.7 million
Ocean Disposal = $0.84 x 61,412,000 x 0.1524 x 8.5136 =
$66.9 million
Total capital costs for brine disposal = $471.9 million
Operating Costs
The operating costs of recirculation in the electric power
industry are estimated at 0.5C per 1,000 gallon (4). Capital
and operating costs are estimated as above for the year 1968
and projected in proportion to the respective water use
volume in the following table.
The recirculation percentage of existing practice is taken
at 13 percent, i.e., the capital costs of 1968 practice is
13 percent of that for complete recirculation.
Operating costs for zero discharge in 1968 then are:
Distillation @ 1.71 mgd = $0.71 per 1,000 gallon (3)
Distillation cost total = (614.12 x 109) (0.71 x 10~3) =
$436.0 million
Deepwell = 61,412,000 x 0.3677 x $0.46 - $(0.46-0.25) x 71
$9.55 million
Solar Evaporation = 61,412,000 x 0.0299 x $0.30 = $0.55 million
Incineration = 61,412,000 x 0.4500 x $1.52 = $42.0 million
Ocean Disposal = 61,412,000 x 0.1524 x $1.00 = $9.36 million
64
-------
The electric power industry water uses, discharges and costs
are summarized through 1980 in Table 40, projected by year
according to estimated production.
Residual Waste Loads Under Zero Discharge
The electric power industry residual waste loads are the heat
rejected in cooling water on a once-through basis, to the
air via evaporative cooling, and the dissolved solids in the
intake water calculated as previously discussed under the
primary metals industries example.
Summaries of Costs and Residual Waste Loads
In Tables 41 through 48, costs and residual waste loads under
zero discharge in 1980 are summarized for the manufacturing
industries studied and the electric power industry.
Capital costs are presented'as annualized costs.
65
-------
Table 39. Percentage Distribution of Disposal Means - Electric Power Industry
State Ocean Inoingration Deepwell Solar Evaporation
Maine 0.24 0.24
New Hampshire 0.35
Vermont 0.21
Massachusetts 1.37 1.37
Rhode Island 0.23 0.23
Connecticut 0.74 0.74
New York 9.05
New Jersey 1.77 1.77
Pennsylvania 5.87
Ohio 5.30
Indiana 2.53
Illinois 5.50
Michigan 4.37
Wisconsin 2.11
Minnesota 1.82
Iowa 1.39'
Missouri 2.31
North Dakota 0.31
South Dakota 0.33
Nebraska 0.72
Kansas 1.15
Delaware 0.13 0.13
Maryland 1.88
D. C. 0.40
Virginia 1.15 1.15
West Virginia 0.90
North Carolina 1.23 1.28
South Carolina 0.67 0.67
Georgia 1.14 1.14
Florida 3.08
Kentucky 1.61
Tennessee 1.99
Alabama 1.78
Mississippi 1.17
Arkansas 0.99
Louisiana 1.86
Oklahoma 1.26
Texas 5.49
Montana 0.35
Idaho 0.35
Wyoming 0.16
Colorado 1.02
New Mexico 0.50
Arizona 0.83
Utah 0.22
Nevada 0.22
Washington 0.82 0.82
Oregon 0.50 0.50
California 4.83 4.83
Alaska 0.07 0.07
Hawaii 0.20 0.20
TOTALS 15.24 45.00 36.77 2.99
66
-------
Table 40. Electric Power Industry cost and Discharge Summary
Once-
Through
Water Use
Existing
Practice
(1963)
Implementing
Existing
Legislation
Implementing
Zero
Discharge
Water Volumes (10* gal.):
Cooling Water Use
1963
1972
1975
1980
61,412
83,156
106,347
145,043
61,412
83,156
106,347
145,043
61,412
83,156
106,347
145,043
61,412
83,156
106,347
145,043
Water Discharged
1968
1972
1975
1980
61,412
83,156
106,347
145,043
54,385
73,950
95,356
130,043
614
832
1,063
1,450
Capital Costs, $10e
1968
1972
1975
1980
0
0
0
0
158
214
274
373
1,215
1,645
2,104
2,870
3,874
5,129
6,423
8,361
Operating Costs, $10
1968
1972
1975
1980
0
0
0
0
39.9
54.0
69.1
94.2
307
416
532
725
497
646
791
1,015
67
-------
Table 41. Summary of Costs'and Residual Waste Loads
PRIMARY METALS
Once-through
Water Use
Existing
Practice
U&68)
Implement
Existing
Legislation
Implement Implement
Minimum Zaro
Discharge Discharge
Water Volume (109 gal. per year) : (1968):
Process Uses
Other Uses
Process Discharge
Other Discharge
Treated Discharge
Annualized Capital Costs
1968
1972
1975
1980
Annual Operating Costs ($
1963
1972
1975
1980
2285
5495
2285
5495
2285
(S millibn, 1968,
205.4
239.6
20G.2
392.4
Efillion, 1968) :
131.9
212.1
253.4
347.5
Residual Waste Loads Under Zero Discharge
Underground
Ocean
Air
Land
2285
5495
1134
3562
1431
10 year @ 8%) :
115.6
163.1
173.5
197.2
137.8
144.5
153.7
174.7
(106 #/yr, 1980) :
Organics and Oils
3.1
0.4
2.6
0.2
2285
5495
1134
3562
1431
173.1
201.9
241.1
330.7
153.3
178.8
213.6
292.9
Suspended Solids
10.2
1.3
-
8.8
2235
5495
114
208
114
246.3
287.2
343.1
470.4
252.8
194.8
352.1
482.9
Dissolved Solids
4589
592
-
3952
2285
5495
0
0
0
441.0
514.3
614.3
842.4
540.2
629.9
752.5
1032
68
-------
Table 42. Summary of Costs and Residual Waste Loads
PAPER AND ALLIED PRODUCTS
Process Uses
Other Uses
Process Discharge
Other Discharge
Treated Discharge
Annual Capital Cos
1963
1972
1375
1980
1968
1972
1975
1980
Underground
Ocean
Air
Land
Existing Imolement
Once-through Practice Existing
Water Use (1968) Laaislafcion
sar) : (1968) ;
5166
1356
5166
1356
5166
ion, 1968, 10 yr @ ;
42.5
47.3
50.9
57.0
llion, 1968):
49.2
54.8
59.0
66.0
iero Discharge (10
B.O.D.
3.5
3.3
10.0
0.3
5166
1356
1363
715
915
B%):
23.9
32.2
34.7
38.8
33.3
37.3
40.1
44.9
l/yr, 1980):
Suspended
3.9
3.6
11.1
0.3
5166
1356
1363
1356
1363
37.8
42.1
45.3
50.7
43.8
48.7
52.5
58.7
Solids
Implement
Minimum
Discharge
5166
1356
517
206
517
82.0
91.3
98.3
110.0
182.3
203.0
218.6
244.5
Dissolved Soliu=
4231
3992
-
12488
Implement
Zero
Discharge
5166
1356
0
0
0
431.9
431.0
518.0
579.2
736.3
820.0
883.1
987.4
69
-------
Table 43. Suaraary o;.' Costs and RaJiduiil Waste Loads
CHEMICALS A::D ALLIED PRODUCTS
Once-through
Water r/se
:ar) : (196S);
1270
8146
1270
8146
1270
dllion, 1968,
I
119.1
138.0
156.8
187.1
.lion, 1968):
201.8
236.7
272.3
325.1
tro Discharge
Existing
Pr.-vjti'ce
(1968)
127.0
8146
693
3-181
674
10 yr, .3 8%) :
50.8
55.6
61.6
73.6
76.9
83.3
92.7
110.7
Implement
Existing
Legislation
1270
8146
693
3481
693
92.3
106.9
121.5
144.9
156.6
183.7
211.3
252.3
Iaiple;nent
Xiiiinare
Discharge
1270
8145
63. 5
274.0
63.5
160.6
186.1
211.4
252.3
255.2
299.4
344.3
411.2
Inplv.e
Zero
Dischf.r
'
1270
8146
0
0
0
361.9
419.3
476.5
568.6
559.8
648.6
737.1
879.6
(105 S/yr.- 1930) :
Organics
5.6
2.3
Suspended Solids
34.6
17.0
Dissolved Soli
41,927
20,591
as
Process Uses
Other Uses
Process Discharge
Other Discharge
Treated Discharge
Annualized Capital
1968
1972
1S75
1980
Annual Operating C
1968
1972
1975
1980
Underground
Ocean
Mr 2.3
Land 0.1 14.8
18,006
70
-------
Table 44. Summary of Costs and Residual Waste Loads
PETROLEUM AND COAL PRODUCTS
Once-through
Water Use
-------
Table 45. Summary o? Coits and Residual Waste Loads
FOOD AHQ. "INDRED PRODUCTS
Once-through
Water Use
ear) : (19<>8)
428
918
423
928
428
;illion, 1968,
110.6
124.4
136.3
183.2
lion, 1968):
153.5
172.6
189.0
254.1
ro Discharge
Existing
Practice
(1968)
:
428
918
270
433
185
10 yr 9 81):
61.4
65.4
68.8
82.4
85.4
90.8
95.5
114.4
Implement
Existing
Legislation
428
918
270
483
270
87.3
98.2
107.5
144.5
121.1
136.2
149.1
200.5
Implement
Minimum
Discharge
428
918
21; 4
95.0
21.4
97.9
110.1
120.5
162.1
134.3
151.0
165.4
222.4
Implement
2ero
Discharge
428
918
0
0
0
133.4
206.1
225.8
303.5
250.4
281.5
308.4
414.7
(106 5/yr, 1930) :
B.O.D.
13.3
10.8
Suspende.1 Solids
21.1
16.6
Dissolved Solids
798
626
Water Volumes (10 gal. per year):
Process Uses
Other Uses
Process Discharge
Other Discharge
Treated Discharge
Annualized Capital Costs
1968
1972
1975
1980
Annual Operating Costs ($
1968
1972
1975
1980
Underground
Ocean
Air 14.2
Land 1.2 23.4
888
72
-------
Table 46. Summary of Costs and Residual Waste Loads
TEXTILE MILLS
Once-through
Water Use
Existing
Practice
(1968)
Implement
Existing
Legislation
Water Volumes (10 gal. per year): (1968):
Process Uses 97
Other Uses 230
Process Discharge 97
Other Discharge 230
Treated Discharge 97
Annualized Capital Costs *(? million, 1968, 10 yr @ 8%):
1968 26.8 16.3
1972 27.4 16.7
1975 27.7 15.9
1980 28.5 17.4
Annual Operating Costs (S million, 1968):
1968 64.0
1972 65.4
1975 66.3
1980 68.2
Residual Waste Loads Under Zero Discharge (10 5/yr, 1980):
B.O.3. Suspended Solids
Underground
Ocean
Air 125 38
Land
Implement Implement
Minimum Zero
Discharge Discharge
97
230
95
41
54
97
230
95
41
95
97
230
9.7
21.9
9.7
97
230
0
0
0
19.4
21.9
23.5
26.8
22.6
25.6
27.4
31.2
33.4
37.7
40.3
46.0
39.0
39.8
40.4
41.5
46.4
52.5
56.1
64.0
53.3
60.3
64.4
73.5
67.6
76.5
81.7
93.2
Dissolved Scl ?-?.?
664
73
-------
Table 47. Summary of CO3tj and Residual Waste Loads
TOTALS OF MANUFACTURING INDUSTRIES STUDIED
Once-through
Water Use
Existing Implement
Frfictice Existing
(1553) Legislation
Imolement Implement
Minimum Zero
Discharcre Discharge
Water Volumes (10 gal. per year) : (1958) :
Process Uses
Other Uses
Process Discharge
Other Discharge
Treated Discharge
Annualized Capital Costs
1968
1972
1975
1980
Annual Operating Costs (S
1968
1972
1975
1980
9592
23089
9592
23089
9592
(5 million, 1968
536.2
611.4
69.1.7
888. S
million, 1968) :
711.7
808.6
910.9
1139
Residual Waste Loads Under Zero Discharge
Underground
Ocean
9592
23039
3635
9420
4177
, 10 yr 8 8%) :
348.5
371.7
336.5
454.4
432.9
461.6
492.3
562.8
(106 f/yr. 1980) :
Organics Suspended
43.5 69.8
28.4 38.5
9592
23089
3635
10061
4770
454.5
519.6
590.-1
754.1
597.1
682.6
770.3
964.6
Solids
9592
23089
743
965
743
673.2
769.8
874.4
1107
983.0
1123
1266
1568
Dissolved Solids
55,556
28,311
9592
23089
0
0
0
1602
1788
2049
2530
2398
2722
3044
3715
Air 157.2 49.1
Land 2.3 47.3
36,809
74
-------
Table 48. Summary of Costs and Residual Waste Loads
ELECTRIC POWER INDUSTRY
Water Volume (10 gal. per year):
Water Uses: 1968
1972
1975
1980
Water Discharge:
1968
1972
1975
1980
Annualized Capital Costs ($
1968
1972
1975
1980
Annual Operating Costs ($ million, 1968):
1968
1972
1975
1980
Once-through
Water Use
61412
83156
106347
145043
61412
83156
106347
145043
Lion, 1968, 10 yr
0
0
0
0
an, 1968) :
0
0
0
0
Discharge (1930)
Heat,
Existing
Practice
(1963)
61412
83156
106347
145043
54385
73950
95356
130043
§ 8%) ;
18.6
25.1
32.2
43.8
39.9
54.0
69.1
94.2
:
1012 BTU/yr
Implement
Existing
Legislation
61412
83156
106347
145043
614
832
1063
1450
142.7
193.2
247.1
337.1
307
416
532
725
Dissolved
Implement
Zero
Discharge
61412
83156
106347
145043
0
0
0
0
455.0
602.4
754.4
982.,!
497
646
791
1015
Solids, 109 #/yr
Underground
Ocean
Air
Land
12,015
9.44
3.91
12.32
75
-------
SECTION X
ECONOMIC ANALYSIS
Those industries studied represent 93.3% of the industrial
water use in the United States, and extrapolation to all
of the manufacturing industries thus represents little
potential error. Such an extrapolation is made in Table
49 based upon the ratios of process or total water uses as
appropriate.
Production-related data by industry category must be used
with caution in analyzing the economic impact of pollution
control. The proportions of various industries which include
facilities using significant amounts of water can be seen
in the following tabulation. The 1968 values of shipments
for the respective total industries and those facilities
which take in more than 20 million gallons of water annually
are compared in Table 50.
Table 50.
Values of Shipments in Large Water-Using Plants
,6
Total 20x10
S.I.C. No. Industry Industry gpy Plants
20
208
22
24
26
(1)
28
281
29
2911
33
331
Food and Kindred
Beverages
Textile Mills
Lumber and Wood
Paper and Allied
Paper and Board
Chemical and Allied
Industrial Chemicals
Petroleum and Coal
Petroleum Refining
Primary Metals
Blast Furnace Steel
All Manufacturing
Industries
78,259
10,031
21,969
5,257
22,512
8,708
44,826
14,988
23,240
21,395
44,274
24,733
631,911
38,685
5,304
9,236
1,377
9,996
7,647
27,635
11,756
19,742
19,420
34,803
20,402
278,037
7T] S.I.C. 2621, 2631, 2661, and (2) 3312, 3345, 3316, and
3317
The data of Table 51 summarizes data on water uses, the
annual costs of implementing existing legislation, values
added and values of shipments in the large water-using
facilities, and profits for the year of 1968 for the manu-
facturing and electric power industries. These data provide
some first-order measures of the economic significance of
77
-------
Table 49. SuFi-iarv ,:>: Costs and Residual Waste Loads
TOTAL MA-'CS-Y.CTUl'.IMG .INDUSTRIES
Once-through
Water lisa
yr) (1958):
10245
2S456
10245
25456
10245
Existing
Practice
(196S)
10245
25456
3972
10304
4353
Implement
Existing
Lfig.islition
10245
25456
3972
10304
4770
Implement
Minif.ura
Discharge
10245
25456
794
1064
794
Implement
Zero
Discharge
10245
25456
0
0
0
Process Uses
Other Uses
Process Discharge
Other Discharge
Treated Discharge
Annualized Capital Costs ($ million, 10 yr @ 8J) :
1968 572.7 372.2
1972 653.0 397.0
1975 741.3 -12.J.5
1330 948.9 485.3
Annual Operating Costs (S million, 1963):
1963 7G0.1
1972 863.6
1975 972.8
1980 1216
Residual Waste Loads Under Zero Dii»charc;<» C10tJ i-/yr, 1980):
Orga.iics Suspended Solids
Underground 46.5 74.5
Ocean 30.3 41.1
Air 167.9 52.4
Land 2.5 50.5
485.4
554.9
630.:;
805.4
735.1
840.6
954.3
1209
1749
1952
22M
2763
462.3
493.0
325.8
601.1
637.7
729.0
822.7
1030
1073
1226
1382
1712
2619
2972
3324
4057
Dissolvc-d Solid:;
50567
30916
40195
78
-------
pollution control costs, as shown in Table 52.
Table 52. Pollution Abatement Cost Comparisons
Manufacturing Electric Power
Industries Industry
Total Annual Costs as a percentage of:
Value Added 0.90 2.84
Value of Shipments 0.40 2.32
Before-Tax Profits 4.59 9.39
After-Tax Profits 7.92 14.98
Total Annual Costs per:
1,000 gallons of water used $0.0315 $0.0073
In Table 53, the total annual costs of implementing the
various degrees of discharge reductions are compared with
1968 profits and the effects are estimated under the
assumption that such costs would reduce before-tax profits,
i.e., that there would be no compensating price increases
and that demand would not change. Such effects would, of
course, be the maximum in the short-term; in the long run
these effects would be less. Profits in 1968 were made
with the costs of 1968 pollution abatement practices included
in production costs. From these data, the cost burdens
of all industry and power, as reflected in lower after-tax
profits, and the direct public cost, as reflected in reduced
taxes, would have been as shown in Table 54.
Table 54. Allocations of Costs of Pollution Control
Pollution Abatement Annual Costs, $ million
Practice Total Industry Public
1968 Practice 893.0 524.0 369.0
Existing Legislation 1573 936.0 637.0
Minimum Discharge 2258 1333 925.0
Zero Discharge 5320 3132 2188
79
-------
Table 51. Costs, Production, and Katar Use Data - 1963
Costs to implement Existing Lagisl.-ttio.n
S.I.C.
No.
-
20
203
22
24
26
28
29
2911
33
331
-
-
S.I.C.
No.
-
20
208
22
24
26
23
29
2911
33
331
-
-
Industry Description
All Industries
Food and Kindred
Beverages
Textile Mills
Lumber and Wood
Paper and Allied
Chemical and Allied
Petroleum & Coal
Petroleum Refining
Primary Metals
Blast Furnaces and
Stoal
Electric Power
All Industry- & Power
Value Added (1) Value
$ Million
125,417
12,067
2,835
3,732
643
4,968
16,131
4,612
4,495
14,798
9,206
15,859
141,276
Water Used
Gross Use Pr
35,701
1,346
211
328
205
6,522
9,416
7,290
7,279
7,780
6,504
61,412
97,113
of Shipments
$ Million
278,037
38,685
5,304
9,236
1,377
9,996
27,635
19,742
19,420
34,803
20,814
19,421
297,458
, 10y ,al,
oc&ss Intake
4,295
291
31
109
37
1,478
733
95
92
1,207
1,049
-
-
(1)
% After Tax
(S.I)8
(2.6)10
(3.9)6
(3. I)10
(5.3)10
(4.7)10
(6.8)8
(10. 6)7
(10. 7)10
(5.3)8
(5.3)9
-
-
Caoital, $106 Annual Ooa--atincr $10
485.4 637-7
87.3 121.1
( 9.3)2 (12. 9)2
19.4 46.4
(4.2)3 (5.5)3
37.8 43.8
92.3 156.6
44.6 75.9
(43. 2)4 (73. 5)4
173.1 153.3
(113. 2)S (10G.2)5
142.7 307.0
628.1 944.7
Profit on Sales
$ .Million $ Million
% Before Tax After Tax Before Tax
(8.8)13 14,180 24,467.
(4.2)11 1,006 1,625
(6.2)11 207 329
(5.0)11 286 462
(8.5)11 73.0 117
(7.5)11 470 750
(10. 9)11 1,879 3,012
(17. O)11 2,093 3,356
(17. I)11 2,078 3,321
(9.8)12 1,845 3,411
(9.8)12 1,103 2,040
3,002 4,789
17,182 29,256
Values in plants taking in more than 20 million gallons annually.
Calculated on ratio of process intakes and total costs in S.I.C. 20.
Calculated on ratio of process intakes and total costs for all industry.
Calculated on ratio of process intakes and total costs in S.I.C. 29.
From "Cost of Clean Water" data.
On basis that profit on sales of 8 largest beverage companies was 1.5
times the profit of 35 largest food and beverage companies (Fortune, May 1972)
Other than petroleum refining taken at 5.1%.
(8) 1970 Outlook (.11) Non-Qurable before tax = 1.60 x after
(9) 1972 Outlook tax (.1970 Abstract)
(!0) 1970 Statistical Abstracts (.12) Durable before tax = l.SSx after tax
(If170 Abstract)
C13) All Mfg. before tax, = 1.73x o.ft^r tax
(1970 Abstract)
(1-1) On basis of fu-il at 2.68 miles per kwh.
80
-------
Table 53. Industry Costs and ProfLt Effects - 1958
Total Anrvun 1 Abatement Co.sts - $ Million, 1963
S.I.C.
No.
-
20
208
22
24
26
28
29
2911
33
331
-
"
S.I.C.
N'o.
-
20
203
22
24
26
28
29
2911
33
331
_
_
Industry Description
All Industries
Food and Kindred
Beverages
Textile Mills
Lumber and Wood
Paper and Allied
Chemical and Allied
Petroleum and Coal
Petroleum Refining
Primary Metals
Blast Furnace and Steel
Electric Power
All Industry Power
Profits Before Taxes,
Wos EX= !
Practice Legislation
24,467 24,179
1,625 1,564
329 322
462 _452
117 114
750 731
3,012 2,891
3,356 3,331
3,321 3,297
3,411 3,373
2,040 2,019
4,789 4,398
29,256 28,576
196b "r.ictipa Ex-Legislation
834.5 1,123
146.8 208.4
15.6 22.2
55.3 65. S
6.7 9.7
62.2 81.6
127.7 248.9
96.0 120.5
91.0 116.7
293.4 326.4
191.8 213.4
58.5 449.7
8,930 1,573
Minimum Discharge
1,803
232.2
24.7
75.9
15.6
264.3
'415.8
168.9
163. S
499.1
326.3
449.7
2,258
*'lilli"n ioea Profits After Taxes, SMillion,
Discharge Discharge Practice
23,494 20,934 14,180
1,540 1,338 1,036
320 298 207
441 416 286
108 86.0 73.0
548 (356) 470
2,724 2,218 1,879
3,283 3,053 2,093
3,250 3,032 2,078
3,205 2,723 1,845
1,906 1,590 1,103
4,398 3,396 3,002
27,891 24,829 17,182
Ex- Minimum
Legislation. Pi 3 chare;
14,013 13,616
968 S53
206 201
280 273
71.1 67.4
458 343
1,804 1,699
2,077 2,047
2,063 2,034
1,327 1,734
1,092 1,031
2,757 2,757
16,7-70 16,373
Zero
Discharge
4,368
433.8
46.2
101.0
37.7,
1,168
921.7
393.9
2S1.5
981.2
641.5
952.0
5,320
1968
Zero
u Discharge
12,132
828
187
25S
53.7
(356)
1,384
1,907
1,897
1,473
860
2,442
14,574
81
-------
The costs of 1968 practice were estimated as follows:
Before-tax profit with control costs = $29,256
Cost of pollution controls = 893
Before-tax profit with no control costs -
$30,149
After-tax profit (x 17182/29256)= 17,706
Taxes with no control costs $12,443
After tax profits then on those facilities within each
industry which take in more than 20 million gallons annually
would be reduced as shown in Table 55, assuming 1968 after-
tax profits on sales with no compensating price increases;
Table 55. 1968 After-Tax Profit Effects
After-tax profits as % of 1968 Experience
Existing Minimum Zero
S.I.C,. No. Industry Legislation Discharge Discharge
All Mfg. Industries 98.8 96.0 85.6
20 Food and Kindred 96.2 94.7 82.3
208 Beverages 99.5 97.1 90.3
22 Textile Mills 97.9 95.5 90.2
24 Lumber and Wood 97.4 92.3 73.6
26 Paper and Allied 97.4 73.0 0
28 Chemical and Allied 96.0 90.4 73.7
29 Petroleum and Coal 99.2 97.8 91.1
2911 Petroleum Refining 99.3 97.9 91.3
33 Primary Metals 99.0 94.0 79.8
331 Blast Furnace and
Steel 99.0 93.5 78.0
Electric Power 91.8 91.8 81.3
All Mfg. and Electric
Power 97.6 95.3 84.8
If it is assumed that a reduction of after-tax profits of
10 percent defines a significant cost, it might be concluded
that implementing existing legislation will not be a signi-
ficant burden, that implementing minimum discharge would be
a substantial burden only in the pulp and paper industry,
and that zero discharge would be of greatly variable but
significant cost impact in the other industry group.
82
-------
The economic effects of zero discharge vary widely between
industries. The effects on after-tax profits, assuming no
compensating price increases, indicate the relative impacts
on the various industries in the short run, i.e., in the
time period until costs could be recovered via price
increases, and in the long run if there is relatively less
ability to increase prices. These effects are shown in
Table 56 for the large water-using plants in each industry.
Table 56. After-tax Profit Effects - Large Water Using Plants
1968 After-Tax
S.I.C. No. Industry Profit Reduction (%)
26 Paper and Allied 100.0
24 Lumber and Wood 26.4
28 Chemical and Allied 26.3
331 Blast Furnace and Steel 22.0
33 Primary Metals 20.2
: Electric Power 18.7
20 Food and Kindred 17.7
22 Textile Mills 9.8
208 Beverages 9.7
29 Petroleum and Coal 8.9
2911 Petroleum Refining 8.7
All Mfg. Industries 14.4
All Mfg. and Electric Power 15.2
Looking at the effects on the entire industries, including
those facilities using relatively little water, as, shown
in Table 57.
Ordering the data of Table 57 as to relative impact and
expressing the results as percent of after-tax profit reduc-
tion yields the data of Table 58.
The net value of structures and equipment in the manu-
facturing industries in 1968 was $92.3 billion in 1958.
dollars. This represented about $109.6 billion in,1968
dollars. Capital expenditures in 1968 totaled $20.3 billion;
depreciation on current plant in that year totaled $16.1
billion. The value of electric utility plants in ,1968 was
$64.9 billion, increasing to $71.5 billion in 1969.
The 1968 capital expenditures required, over and above
1968 practice would have been as shown in Table 59.
83
-------
Table 57. After-tax Profit Effects - Entire Industries
1968 After-tax Profits (zero discharge)
(Millions of 1968 Dollars)
S.I.C. No.
20
208
22
24
26
28
29
2911
33
331
Industry
Food and Kindred
Beverages
Textile Mills
Lumber and Wood
Paper and Allied
Chemical and Allied
Petroleum and Coal
Petroleum Refining
Primary Metals
Blast Furnace and
Steel
Electric Power
Large
Water
Users
828
187
258
53.7
(356)
1384
1907
1897
1473
860
2442
Other
Plants
1029
184
395
206
588
1169
371
211
502
208
0
Industry
Total
1857
371
653
260
232
2553
2278
2108
1975
1068
2442
Percent
of
1968
91.3
94.9
95.9
93.2
21.9
83.8
92.5
92.1
84.1
81.5
81.3
Table 58. Profit Reductions due to Zero Discharge
S.I.C. No.
26
331
28
33
20
2911
29
24
208
22
Industry
Paper and Allied
Electric Power
Blast Furnace and Steel
Chemical and Allied
Primary Metals
Food and Kindred
Petroleum Refining
Petroleum and Coal
Lumber and Wood
Beverages
Textile Mills
1968 After-Tax
Profit Reduction (%)
78.1
18.7
18.5
16.2
15.9
8.7
7.9
7.5
6.8
5.1
4.1
84
-------
Table 59. Capital Expenditures for Control in 1968
S.I.C.
NO. Industry
20 Food and Kindred
22 Textile Mills
24 Lumber and Wood
26 Paper and Allied
28 Chemicals and Allied
29 Petroleum and Coal
33 Primary Metals
Electric Power
All Mfg. Industries
(1) 1968-69
Added Capital Cost, $ Million
Capital
Minimum Zero Expenditure
Discharge Discharge 1968,$ million
311
54
27
452
935
241
772
1057
3090
1039
146
101
3431
2649
977
2430
3716
11721
1740
691
484
1238
2789
1065
3102
6561(1)
20613
The above costs as percentages of the total annual capital
expenditures for new plant and equipment are shown in
Table 60.
Table 60. Pollution Control Costs as Percentages of Capital
Expenditures
S.I.C.
NO.
20
22
24
26
28
29
33
Industry
Minimum Discharge Zero Discharge
Food and Kindred
Textile Mills
Lumber and Wood
Paper and Allied
Chemicals and Allied
Petroleum and (bal
Primary Metals
Electric Power
All Mfg. Industries
17.9
7.8
5.6
36.5
33.5
22.6
24.9
16.1
15.0
7
1
9
1
59,
21,
20,
277,
95.0
91,7
78.3
56.6
56.9
By the above measure, there are again great differences in
the impact of additional control costs between the various
industries, with the greatest effect again on the pulp and
paper industries. By 1980, the required additional capital
investment for zero discharge would total $22.2 billion over
and above the cost of implementing existing legislation.
Assuming that these costs would be incurred in a 10-year
85
-------
period, about 8 percent of the annual expenditure for new
plant and equipment would be annually devoted to this
purpose. The consequences of such expenditures would depend
to a large extent on whether or not they would add to
total capital expenditures or use money which would other-
wise be used to increase productive capacity. The later
consequence would be significant. To place this effect in
context, the expenditures forinew plant and equipment in the
manufacturing industries declined about 10.9% in 1949 from
1948, 5.2% in 1954 from 1953, and 5.0% in 1961 from I960,
periods closely related in short rises in unemployment and
to slowing economic growth as measured by'GNP in constant
dollars. This is not to say that there was any direct
causative effects, but only to indicate that this magnitude
of change in capital expenditures is not insignificant.
Another way of looking at the costs involved is to compare
the added costs with a rise in wages. For each industry
group, the 1968 cost increase due to wage increases of 1 to
10 percent are compared with pollution abatement costs in
Tables 61 and 62.
Table 61. Cost Increases Due to Wage Increases
S.I.C.
No. Industry
20 Food and Kindred
208 Beverages
22 Textile Mills
24 Lumber and Wood
26 Paper and Allied
28 Chemical and Allied
29 Petroleum and Coal
2911 Petroleum Refining
33 Primary Metals
331 Blast Furnace and
Steel
Electric Power (1)
All Mfg. Industries
1968 Wages
Total
Cost Increase-Wage % Rise
1% 5% 10%
10607
1626
4770
3016
4794
7014
1292
1027
10620
106
16
48
30
48
70
13
10
106
5411
12935
132902
54
129
1329
530
81
239
151
240
351
65
51
531
271
647
6645
1061
163
477
302
479
701
129
103
1062
541
1294
13290
(1) 229,000 production workers @ $3.72 per hour, 41.6 hours
per week.
86
-------
Table 62. Added Control Costs vs. Wage Increase Costs
S.I.C.
No. Industry
20 Food and Kindred 85
208 Beverages 9.1
22 Textile Mills 20.6
24 Lumber and Wood 8.9
26 Paper and Allied 202
28 Chemical and Allied 288
29 Petroleum and Coal 72.9
2911 Petroleum Refining 70.6
33 Primary Metals 206
331 Blast Furnace and 135
Steel
- Electric Power 391
All Mfg. Industries 973
- All Mfg. Industries
and Power 1364
Annual Costs Over 1968 Practice
5%
Minimum Zero Wage
Discharge Discharge Rise
287
30.6
45.7
31.0
1106
794
298
286
688
450
893
3533
4426
530
81
239
151
240
351
65
51
531
271
647
6645
7292
Minimum and zero discharge total annual costs over 1968
practice, from the above, correspond to the indicated rises
in wages in Table 63.
Table 63. Added Control Costs as Percentage Wage Increases
S.I.C.
No. Industry
20 Food and Kindred
208 Beverages
22 Textile Mills
24 Lumber and Wood
26 Paper and Allied
28 Chemical and Allied
29 Petroleum and Coal
2911 Petroleum Refining
33 Primary Metals
331 Blast Furnace and
Steel
Electric Power
All Mfg. Industries
All Mfg. Industries
and Power
Equivalent % Rise in Wages
Minimum Zero
Discharge Discharge
0.80
0.56
0.43
0.29
4.21
4.10
5.61
6.92
1.94
2.49
3.02
0.73
0.94
2.71
1.89
0.96
1.03
23.0
11.3
22.9
28.0
6.48
8.30
6.90
2.66
3.03
87
-------
The preceeding seem to fall into three distinct groups with
the major effects evident in the paper and petroleum
industries and intermediate effects in the chemical, metals/
and electric power industries.
Short run burdens on industry may be in part reduced from
relative profit positions as shown in the data on Table 64.
Table 64. Profit Positions of Various Industries
S.I.C.
No. Industry
All Mfg. Industries
20 Food and Kindred
22 Textile Mills
24 Lumber and Wood
26 Paper and Allied
28 Chemical and Allied
2911 Petroleum Refining
33 Primary Metals
331 Blast Furnace and
Steel
Profit Profit Profit
on Sales on Equity on Equity
1970- 1970
\ of 1968 % of 1968 1970
9.3
10.8
5.1
5.9
7.0
11.5
11.0
6.9(2)
50.9 50.6 4.0
78.4
96.2
61.3
47.2
72.3
86.8
86.9
72.4(1)
76.9
100.0
58.0
40.4
72.2
86.5
89.4
77.4(2)
(1) Weighted by volume of sales in steel, copper, aluminum
based on large nonferrous companies.
(2) Weighted by volume of sales in steel and nonferrous
metals.
There are clearly current differences in profit positions
with the food, chemical, and petroleum industries in the best
relative positions.
The data of Table 65. indicate to what extent prices would
have to be raised in order that the added costs of zero
discharge be recovered via price increases, i.e., passing
the costs to the customers. All except the last item refer
to the entire industry assuming the cost burden; the last
item shows the cost burden if assumed by the large water-
using plants only.
The consequences of the implementation of zero discharge
requirements may readily be determined from the foregoing,
assuming that implementation would utilize the technology
outlined and that costs would be passed on to the ultimate
88
-------
Table 65. Price Increases due to Zero Discharge
S.I.C.
No.
20
208
22
24
26
23
29
2911
33
331
-
_
1968
Value Added
In Water-Using
Industry Plants
Fopd and Kindred
Beverages
Textile Mills
Lumber and Wood
Paper and Allied
Chemical and Allied
Petroleum and Coal
Petroleum Refining
Primary Metals
Slast Furnace and Steel
Electric Power
All Mfg. Industries
12067
2835
3732
643
4968
16131
4612
4495
14798
9205
15859
125417
1963
Value of Added Cost
Shipnents for Zero
In Ir.civ.3try Ratio Discharge
78259
10031
21959
S257
22512
44326
23240
21395
44274
24733
19421
631911
6.
3.
5.
8.
4.
2.
5.
4.
2.
2.
1.
5.
485
538
887
176
531
779
039
760
992
637
225
038
287
30.6
45.7
31.0
1106
794
298
286
688
450
893
3533
Valuo o£
Value Added Shlpr.ar.tj
Kith Zero Kitn Zero
12354
2866
3778
674
6074
16925
4910
4781
15486
9635
16752
128950
80120
10141
22240
5510
27524
47032
24742
22756
46332
25<.!:
20515
649712
* Price
Increase
Zero
1.
1.
1.
1.
1.
1.
1.
1.
1.
1 .
1.
1.
02
01
01
05
22
05
06
06
05
05
06
03
All Mfg. Ind. and
Power 141276
Water-Using Mfg. and
Power 141276
651332 4.610 4426 1457D2 671737 1.03
297458 2.106 44?6 145702 306843 3.16
89
-------
consumer. In the short run, varying degrees of economic
hardship would be imposed on different industries.
Marginal production facilities would probably be closed
in these industries bearing the highest costs relative to
other production costs and in which profit margins have
been low. Increased costs must, of course, be recovered
in the long run where such costs have a significant effect
on profits.
The ability to pass on increased costs via price increases
without loss in revenue depends upon the aggregate demand
function for a particular good, institutional factors such
as price controls and import restrictions, and the avail-
ability of substitutes and/or imports. Whether or not the
assumed technology would be primarily determined by the
ability to reduce total water use and whether or not effluents
under minimum discharge could be reduced to less than assumed
here.
Whether or not zero discharge should be implemented at all
depends upon whether or not the improvement in the surface
waters are judged to be worth the cost as well as upon
whether or not the physical resources are available; the
effects on other parts of the environment are tolerable, and
the financial resources can be marshalled in such a way that
significant economic dislocations do not result in the long
run.
To some extent the effects of an increase in price due to
increased costs can be deduced from the supply and demand
characteristics of the market for a good. In the classical
case, the analysis would be straightforward and can be illus-
trated by the instance of a tax added per unit of product.
In Figure 16, a relatively elastic demand curve (d-d) and a
supply curve of unitary elasticity (s^ - s±) illustrate the
effect of a price increase, defining a new supply curve
(s2 - s2) In Figure 17, a similar effect is illustrated
with a relatively inelastic demand curve. The more elastic
demand results in a shift of most of the tax backward to the
producer. A more inelastic demand shifts most of the tax
forward to the consumer.
The effect of a nonproductive cost increase such as for poll-
ution control can theoretically be analyzed in the same way
as the tax increase. The principal difficulties lie in that
the theoretical supply curve can hardly ever be constructed,
and that a demand curve constructed upon data over time is
only an approximation to the actual curve at one particular
time.
90
-------
Demand elasticity is defined as the percent increase in the
quantity (Q) divided by the percent decrease in the price
(P). A usual convention is to use the average of the two
quantities which define each change:
E = ~ - x (pi + Pr>)/2
The demands for most products of the manufacturing industries
are inelastic, i.e., the quantities of goods taken are not
relatively responsive to price changes insofar as aggregate
demand is concerned. This is to say that a cut in price
will generally increase the quantity taken so little that
total revenue will fall. By the same token, an increase in
price will generally reduce the quantity taken so little
that total revenue will increase. The quantities taken of
most products of the water-using manufacturing industries
depend primarily on the general level of economic activity
rather than upon the prices at which they are offered. At
the 2-digit S.I.C. level there is little substitution, thus
little opportunity for the consumer to switch to other
products.
The supply of most products of these industries probably
depends more upon the percentage of productive capacity being
utilized and upon the availability of imports than on any
other factors. Supply tends to be relatively elastic as
compared to demand. So long as there is highly efficient,
unused productive capacity, supply is relatively elastic;
marginal capacity used to produce additional quantities
wanted will tend to make supply more inelastic. The avail-
ability of imports will tend to increase supply in total,
i.e., shift the entire supply curve to the right, as these
industries attempt to meet foreign competition.
Statistical studies of demand for food products indicates an
elasticity of about 0.3 and for steel industry products as
"inelastic" demand (8,9), tending to substitute the above
qualitative conclusions on demand elasticity. If it is
assumed that production is in the most efficient plants, most
of the added burden is passed on to the consumer. As increased
quantities are taken and supply becomes more inelastic, the
costs are shifted more to the producer.
As the domestic supplier offers larger quantities at higher
prices, the availability of lower price substitutes or im-
ports increasingly limits his share of the market. Figure
18 illustrates the recent market situation for steel in a
semi-quantitative manner, i.e., the data are for a period
of 5 years and only approximate true supply and demand curves.
Domestic steel was only taken to the extent of 96 million tons
91
-------
FIGURE 16, MARKET EFFECTS2OF AN ADDED TAX WITH ELASTIC DEMAND
FIGURE 17, MARKET EFFECTS # %\ ADDED TAX WITH INELASTIC DEHAND
92
-------
VO
C
o
-p
\
c/i-
g 150
-H
H
Pn
80 82 84 86 88 90 92 94 96 98 100 102 104 106 108 110 112 114 116 118
FIGURE 13, DEMAND AND SUPPLY - STEEL INDUSTRY (1967-72) Quantity, .minion tons
-------
at a price of $204 per ton; the remaining steel consumed
was taken from lower priced imports. The general case of
such a market situation is illustrated in Figure 19.
x
S /
SD,
SD
V
SI
d
Q3 Q! Q2
FIGURE 19, INCREASED DOMESTIC COST AND IMPORTS
94
-------
Before the increase in the cost of domestic steel, the
quantity Q1 of domestic steel is taken at price P,. The
quantity (Qz - Q:) of imported steel is taken at price
P2. The revenue to domestic producers is (Pi Q-, ) and to
importers is P? (Q2 - Q ) . After the increase in the
cost of domestic steel ta non-productive cost) the quan-
tity Q3 of domestic steel is taken at price P.. The
smaller quantity costs the consumer about the same total
amount as the former larger quantity and represents the
consumer's burden. The domestic producer's revenue falls
to Py 03 and represents the producer's burden. The
importer's revenue rises to P2 (Q2 - Q3) and the importer,
of course, thus benefits from the domestic cost increase.
The electric power industry, as a regulated public utility,
can, in the long run, shift such a cost increase completely
to the consumer. The available quantity of electric power
will be taken at the regulated price (generating capacity
being limited as compared to -the amount wanted) ; the
consumer will pay more for less total power, because the
requirement of cooling towers would reduce generating
capacity due to the higher condenser temperature.
Resource Requirements
Under the assumed zero discharge technology, about 1,672
billion gallons of water annually would be evaporated, i.e.,
the effluent volume under minimum discharge less the residual
brine. At 1,000 BTU per Ib, the energy required would be
13.9 x 10^1 BTU annually as of 1968, increasing to about
22.9 x 10 5 BTU annually in 1980. The heat energy required
in 1980 would be about twice that rejected in electric
power plant condensers in 1980, equal to about 33 percent
of the total U. S. energy consumption in 1970, and equal
to the total natural gas use in the U. S. in 1969.
The 40 billion pounds per year of solids disposed of on the
land in 1980 would be about 65 percent of the total salt
produced as a product in the U. S. in 1969. At a density
of 48 Ibs per cu ft', the 40 billion pounds of solids would
occupy 838 million cu ft, i.e., about 19,000 acre feet, or
about 30 square miles.
The combustible material to be incinerated and thus dis-
charged to the air amounts to 220 million pounds per year,
mostly expressed as B.O.D., thus equivalent to 290 million
pounds of CO- and 20 million pounds of CO at 90 percent
combustion efficiency. The carbon monoxide emissions would
be about 0.5 percent of that resulting from stationary
fuel combustion in the U. S. in 1969.
95
-------
The 1,672 billion gallons of water to be evaporated annually
in 9,402 establishments would require that number of
distillation units averaging 500,000 gpd, and would require
some 5,000 deep wells for disposals of brine where this
method is feasible. There are presently about 30,000
oil wells annually drilled; therefore, 5,000 wells would
not represent a major problem. The peak production of
power boilers in 1969 was valued at $645 million and
represented steam productions 300 million pounds per hour.
The total value of fabricated products in S.I.C. 344 in
1969 was $11.26 billion. The evaporator capacity required
in 1968 was thus equivalent to above 5 times the power
boiler production capacity, since boiler manufacturers
have been at production capacity for several years. A
waste treatment market estimated at only about $150 million
has been a major marketing target of a large company pro-
ducing evaporators. If reverse osmosis were a feasible
alternative to evaporation, power requirements at 35 KW-hr
per 1,000 gallons would total 58.5 million KW-hr per year..
This is about 50 percent of the electric energy generated
by industrial plants and about 5 percent of that generated
by electric utilities in 1968.
96
-------
SECTION XI
ACKNOWLEDGEMENTS
The advice and guidanc'e provided by Mr. Donald H. Lewis,
Mr. Paul Gerhardt, and Dr. Roger Don Shull of the
Environmental Protection Agency are acknowledged with
sincere thanks.
The courtesy of the National Council of the Paper Industry
for Air and Stream Improvement and the American Petroleum
Institute in meeting with Project personnel to discuss
problems of minimum discharge is appreciated.
The credit information regarding financing of pollution
control equipment, provided by Mellon Bank, N.A., Western
Pennsylvania National Bank and the Union National Bank
of Pittsburgh is appreciated.
97
-------
SECTION XII
REFERENCES
1. "The 500 Largest U. S. Industrial Corporations,"
FORTUNE, LXXXV, 5, May, 1972.
2. Federal Power Commission, "Steam-Electric Plant
Construction Cost and Annual Production Expenses,
Twenty-Second Annual Supplement-1969," Washington,
D. C., January, 1971.
3. Council on Environmental Quality and Environmental
Protection Agency, "The Economic Impact of Pollution
Control - A Summary of Recent Studies," Washington,
D. C., March, 1972.
4. Bureau of Domestic Commerce, "U. S. Industrial Out-
look 1972 with Projections to 1980," Washington,
D- C.
5. Colberg, M. R. , Forbush, D. R., and Whitaker, G. R. ,
Jr., "Business Economics, Principles and Cases,"
Richard D. Irwin, Inc., Homewood, Illinois (1964)'.
6. Gregory, R. G. , "U. S. Imports and Internal Pressure
of Demand, " American Economic Review, LXI, 1, p. 28
March, 1971,
7. Fisher, A. C. , Krutilla, J. V., and Cicchetfci/ C. J. ,
"The Economics of Environmental Preservation,"
American Economic Review, LXII, 4, p. 605 September,
1972.
8. Bain, Joe S., "Price and Production Policies," A
Survey of Contemporary Economics - Volume I, Richard
D. Irwin, Inc., Homewood, Illinois, p. 139 (.1964).
9. Mack, Ruth P., "Economics of Consumption," A Survey
of Contemporary Economics - Volume II, Richard D.
Irwin, Inc., Homewood, Illinois, p. 39 (1952).
10. Stigler, George J., "The Theory of Price," The Mac-
Millan Company, New York (1952) .
11. Federal Water Pollution Control Administration, "Deep
Wells for Industrial Waste Injection in the United
States - Summary of Data," Cincinnati, Ohio, November,
1967.
99
-------
12. Federal Water Pollution Control Administration, "The
Cost of Clean Water," Washington, D. C., January 10,
1968.
13. The Institute for Environmental Quality, "An Over-
view of the Technology and the Economics of Indus-
trial Heat Rejection and Thermal Pollution Abatement,"
Chicago, Illinois, March, 1971.
14. Federal Water Pollution Control Administration,
"Industrial Waste Guide on Thermal Pollution," Pacific
Northwest Water Laboratory, Corvallis, Oregon,
September, 1968.
15. U. S. Atomic Energy Commission, News Release, 3_, 30,
Washington, D. C., July 26, 1972.
16. Environmental Protection Agency, "Inorganic Chemicals
Industry Profile," Washington, D. C., July, 1971.
17. Aries, R. S., and Newton, R. D., "Chemical Engineering
Cost Estimation," McGraw-Hill Book Company, New York
(1955).
18. Popper, Herbert, "Modern Cost-Engineering Techniques,"
McGraw-Hill Book Company, New York (1970).
19. Parker, F. L. , and Krenkel, P. A., "Engineering Aspects
of Thermal Pollution," Vanderbilt University Press,
Nashville*(1969).
20. Anon., "How to Save on Pollution Outlays," Chemical
Week, November 10, 1971, p. 65.
21. Rapier, P. M., "Ultimate Disposal of Brines from
Municipal Waste Water Renovation," Burns and Roe, Inc.,
FWQA Contract No. 14-12-495 (17070 DJW).
22. Koenig, L., "Disposal of Saline Water Conversion Brines,"
OSW R & D Progress Report No. 20, 1958.
23. Koenig, L., "Ultimate Disposal of Advanced^Treatment
Waste," Parts l*and 2 US.P.H.S. AWTR-3, October, 1963.
24. Office of Business Economics, U. S. Department of
Commerce, "1971 Business Statistics," Washington, D. C.,
October, 1971.
100
-------
SECTION XIII
APPENDICES
Page
A. FACTORS DETERMINING TECHNOLOGY UTILIZATION 102
B. INDUSTRY ATTITUDES TOWARD MINIMUM DISCHARGE
101
-------
APPENDIX A
FACTORS DETERMINING TECHNOLOGY UTILIZATION
This phase of the project to evaluate the Economic
Feasibility of Universal Requirements of Minimum
Practicable Industrial Waste Load Discharges was devoted
to research and study of the determinants of the adop-
tion and utilization of available technology, as dis-
tinct from the degree to which it has in fact been adop-
ted and utilized. Whereas the latter approach would
constitute an instant picture of the present state of
affairs, it sheds no light on the factors which brought
it about or the pressures operating to accelerate or
retard the rate of adoption of available technology in
the future. The former approach, on the other hand,
provides an understanding of the motivating factors which
have led to the present state and which can be relied
upon to influence the rate 6f adoption in the future.
These determinants or factors, both positive and nega-
tive, have been identified, and an attempt has been made
to evaluate the importance of each in isolation, in its
affect on management decisions concerning the adoption of
available technology.
i
The conclusions and results of this phase of the Project
are based, for the most part, on data collected in an
earlier study conducted by Frederick D. Buggie, a Data-
graphics associated consultant. Secondary data supple-
menting this material included "Industry Cleanup Actions
in Progress", by the National Industrial Pollution Control
Council; "A Nationwide Survey of Environmental Protection",
by the Wall Street Journal; recent polls conducted by
Louis Harris & Associates; and selected articles and re-
ports from business, technical and professional journals.
American industry has not done their part in controlling
pollution, according to 57% of the respondents to a 1971
poll by Louis Harris & Associates. However, 60% of the
general public who responded to the poll indicated that
they felt industry had installed the latest improvements
in equipment, generally. The results indicate a deterio-
ration in industry's reputation for adopting the latest
technology for pollution control, since five years earlier
when a similar poll yielded figures of 42% and 89%,
respectively.
*
This "image" problem has become increasingly recognized
by business executives and in fact appears to constitute
one of the three fundamental positive factors motivating
102
-------
industry to adopt and utilize available technology for
pollution control. In an independent survey of execu-
tives conducted this year, almost two-thirds of the
respondents said they believe that their corporate image
has suggered from adverse publicity and slanted news
reporting. There are indications of a certain amount of
resentment and despondency in the attitudes of business-
men regarding their pollution-control reputation. A 1971
survey by The Wall Street Journal showed that only 35%
of the respondents felt that even their most impressive
environmental achievements would improve their image among
consumers, and a substantially-lower proportion thought
it would favorably influence stockholders and the finan-
cial community.
But there is not much question that the "image" problem
does serve as a spur to businessmen to adopt available
pollution-control technology so that they can then promote
and publicize what they are doing to improve the environ-
ment (or at least minimize its degradation), among the
various publics on which they rely for long-run success.
The second major factor influencing industry to utilize
available pollution-control technology is seen as "regu-
latory pressure". Those charged with the responsibility
of enforcing water-pollution control have by and large
succeeded in calling industry's attention to the problem
of water pollution, and convincing management that some-
thing must be done to control it. The Federal efforts
(including permit application, voluntary questionnaires,
publicity concerning enforcement actions and administrative
decisions by E.P.A., and the activities of the E.P.A.
Regional Officials) in combination with, in some cases, an
extremely active effort by state and local regulatory
authorities, have led to a situation wherein practically no
manufacturer is now unaware of pressures to control indus-
trial waste discharges, and not persuaded that some kind
of management response is necessary. As a matter of fact,
over half the respondents to a recent survey indicated that
they had been subject to overlapping and duplicative
regulatory requirements by various levels of authority.
But the point is, "regulatory pressure" has had fundamental
influence on management to seek out the available technology
for controlling pollution.
The third positive factor the only other observed major
influence on industry to adopt and utilize available tech-
nology for pollution control could be called "corporate
conscience", or management's desire to do what is right.
Whether such a corporate policy derives from a concern for
103
-------
corporate image, or from fear of prosecution by the regu-
lators, or pragmatic long-run self-interest, or simply the
American ethic, is a matter for speculation. Regardless,
it is a discernible force motivating industry to adopt
available technology for controlling pollution. Industry
attitudes, from the perspective of a recent survey, clearly
seem to be cooperative. Excerpts from comments volunteered:
"...I believe that both government and industry
have a responsibility to clean it up together..."
"We believe we have a responsibility to control these
(dangerous components in our effluent)..."
"The present crunch should not surprise anyone who
has had his eyes open for the last 15 years."
"Too long have we lived like slobs ..."
These comments typified the underlying current of the
general attitude of polluters toward the task of improving
the environment. The results of the survey turned up wide-
spread acceptance of the desirability of adopting available
pollution-control technology. The overall impression
created by comments of respondents was one of a willingness
to do their best ultimately to solve the problem.
On the other side, there are several negative factors
influencing management decisions at this point on the adop-
tion and utilization of available technology for pollution
control. These negative determinants, mostly uncovered
in the survey conducted earlier this year, lead one to two
fundamental conclusions: 1) They are transitory. The
individual manufacturers will eventually discontinue post-
ponement actions (i.e. stop foot-dragging) and take positive
measures to adopt current pollution-abatement technology.
2) In most instances, it is apparent that something can
be done, in time, to eliminate or ameliorate these negative
factors. This may constitute the most useful practical
purpose served by the present study: To serve as a guide
to the areas in which effort can be devoted effectively to
spur the earlier adoption of current technology for pollu-
tion control.
One qualification to these two conclusions in cases
where nothing can be done and an individual plant must be
closed (or operations cannot be expanded) in the judgment
of management responsible for those operations, on the macro-
economic scale over time, it will be found that those
manufacturers which have survived will have adopted current
pollution-control technology.
104
-------
Eleven of the companies surveyed had already closed 43
plants affecting 1,434 employees; eight companies were
considering closing nine marginal plants affecting a total
of 3)200 employees; and three companies had decided not
to expand, canceling plans for new plants with probably
between 800 and 1,600 new jobs.
A consultant to the mining industry foresees that "up
to 20" marginal facilities in that industry may be shut
down. The American Paper Institute recently claimed
that 40 paper mills were closed during 1971 because of
environmental problems; reportedly some 160 iron foundries
have ceased operations over the past three years; and the
Department of Commerce reports 60 plant closings in other
industries, as a result of environmental pollution-control
pressures.
It should come as no surprise to anyone that marginal
firms will be unable to survive in the face of sudden, forced
outlays of cash for nonproductive assets. The social cost
and inequities of frictional dislocations caused by man-
datory environmental pollution-control requirements are
inherent in restructuring the priorities of our society.
In this setting then, the negative determinants, or the
factors discouraging the immediate adoption of available
pollution-control technology by industry, many of which are
inter-related, will be enumerated:
(1) The cost of pollution-abatement equipment.
Aggregate costs to certain industries for controlling their
pollution to current required levels has been recently
dealt with by contractors to the President's Council on
Environmental Quality. Comparative costs of alternative
methods for controlling pollution will be dealt with else-
where in this study. The-main point we wish to make here
is that the high cost of pollution control, as perceived
by management, is a factor discouraging the immediate
adoption by industry of the available technology. Two-thirds
of the surveyed companies indicated that they are experiencing
"serious cost problems" stemming from current pollution-
control regulations. One-third felt that it is necessary for
pollution-control equipment manufacturers to reduce!their
prices. This gives rise to the thought that when pollution
control systems are purchased in greater quantity, prices
will surely come down due to economics of scale made
possible thereby. But, on the-other hand, there has been
recent speculation in the press (via. Business Week, March
18, 1972, p. 20) that the result will be just the opposite -
105
-------
that increased demand in the face of fixed supply will tend
to increase prices. The answer will lie in a study of the
specific cost structures of firms in the pollution-control
equipment industry, barriers to entry into the industry,
the competitive climate, and cross-elasticities of demand
as among alternative pollution-control devices.
(2) Competitive pressures
Manufacturers are (rightly) sensitive to cost advantages
which their competitors may be able to gain. In the survey,
39% of the respondents indicated they are having competition
problems, and 26% felt that some of their competitors are
located in geographical areas where they are subject to less
stringent pollution-control regulations. Foreign competition
is of particular concern, for some industries, including
the mining industry. In addition to spatial competitive
disadvantage, temporal competitive disadvantage was of
major concern. For example, "Competitors with more modern
mills can achieve new pollution goals at less cost." The
president of one prominent consulting engineering firm was
especially concerned about competitive parity in the steel
industry between new mills which could design in available
pollution-control technology, and old mills which faced the
"extensive retrofit problem" in meeting the necessary stan-
dards for the industry. He suggested more R & D by the
Federal Government and construction grants to industry for
retrofit of old plants.
(3) Economic conditions
This factor is intrinsically neither positive nor negative.
It may explain in part why available technology for pollu-
tion control has not been adopted in the past couple of
years; but it may also contribute toward greater utilization
of available technology in the next couple of years ('72-
'74). The point must simply be made that it is a factor
which is to be taken into account.
(4) Moving target (no. 1)
An attitude of incredulousness has been exhibited in some
quarters concerning existing and proposed pollution-control
regulations. There is the feeling that they are not realis-
tic and that reasonable compromise will eventually prevail.
In the words of a management representative of one industry,
there is a need "to determine standards divorced from
environmental hysteria and political gamesmanship, that
would represent not the maximum achievable reduction in
pollution, but a degree of pollution abatement commensurate
with the maximum social good." This feeling of impending
106
-------
change in the ground rules is fostered and reinforced by
perceived confusion, complexity, duplication, conflicts,
and inconsistency in the present regulations and enforce-
ment activities of the various pollution-control regulatory
authorities. In the survey, 45% of the respondents saw
inconsistency on the part of E.P.A., and slightly more than
one-third complained of changing policies by State regulatory
authorities. In the case of 13% of the companies, there
has been what could be called "counterproductive impact"
of such regulatory efforts. These firms have assumed the
posture that they will just sit tight until the situation
is clarified and they are told exactly what to do.
(5) Overkill
In some instances, there has been rigid all-or-none approach
by the regulatory authorities, a lack of pragmatism, a
failure to understand that degree of perfection and time
delay represent trade-offs. One manufacturer reported that
he offered to adopt measures that would result in a 50%
reduction in pollution immediately, but that this was
rejected as unacceptable because it fell short of the require-
ments, and therefore considerable delay ensued before any
pollution abatement at all was achieved. This is regarded
as an atypical case. The implementation plans and compliance
schedules are designed for just the purpose of bringing
polluters gradually up to required standards over a reason-
able period of time. But the point remains: Excessive
rigidity can retard the adoption of available technology.
And the corollary, insistence on the adoption of latest
available technology can forestall the utilization of immed-
iate temporary expedients, perhaps to the detriment of the
environment.
(6) Absolute unavailability of products embodying avail-
able technology.
The need for pollution-control equipment manufacturers to
improve their products was expressed by 47% of the survey
respondents. As one manufacturer put it, "most abatement
equipment manufacturers are municipally-oriented; better
equipment for industrial waste treatment needs to be
developed." The need for improved maintenance service and
response to complaints regarding operation of equipment,
by manufacturers was also expressed.
(7) Moving target (no. 2)
In some cases, pollution-control systems are being developed
to incorporate the latest technology, and in other areas,
the technology itself is advancing. There is some irreducible
107
-------
minimum reasonable time period required for planning,
budgeting, engineering specifying, purchasing, installa-
tion, and start-up of new pollution control systems
embodying the latest available technology. Time must be
allowed to study and install process changes and/or new
pollution control systems, between the time the avail-
able technology is discovered and the time it can be
utilized by the manufacturer. And after it is installed,
it is reasonable to permit a utilization period (5 years
?) during which the newly-installed equipment can be
depreciated/worn out/used up, notwithstanding continuing
advances in technology which may £ake place during that
period. In the words of one industrial executive, "We
must remove the threat of having to replace the best of
today's equipment with the new equipment of a few years
hence. Some longer planning period, say 11 years, must
be allowed." It is clear that the anticipation of a
significant advance in pollution-abatement technology
can, of itself, immobilize prospective users of currently-
available technology.
(8) Lack of Information
Although the technology may be adequate and the products
and systems incorporating it may be available, ignorance
of their applicability may deter adoption by those most
requiring them. Some 45% of the survey respondents
indicated the need for more information concerning pollu-
tion control technology. About one-third desired an
advisory service on call, and a like number of those
surveyed felt that seminars held on a regional level would
be helpful in disseminating the needed information. Some
30% thought that more dialogue among firms in their own
industry, including case histories on typical problem
solutions, would be salutory, provided that such coopera-
tion would not run afoul of the anti-trust laws. We
believe that the Technology Transfer program of E.P.A.
has an important role to play in this area and can, through
its efforts, encourage the adoption of available technology
for pollution control.
(9) Truth in Advertising
Closely related to the preceding factor, is the difficulty
of evaluating among alternative pollution-abatement systems
which are promoted by their manufacturers. It has been
found that in some cases, the advertisers' puffery and mis-
leading claims only add to the confusion, fallacious
assumptions, and invalid conclusions, rather than eluci-
dating the proper course of action.
108
-------
(10) Safety in Numbers
Some resentment has continually cropped up, in arguments
by\polluters, that there are inequities in the treatment
of municipalities and industrial manufacturers by the
enforcement officials. This is simply a red herring,
albeit oft used as a tactic to support delay in adopting
available technology for the control of pollution.
(11) Sidestep
A very small proportion of manufacturers are begging the
question altogether, by either tying in to a public
treatment facility, or by hiring a private contractor
to handle their waste. This may be practicable from the
polluter's standpoint and desirable from society's stand-
point, but nonetheless must be recognized as an avenue
available to avoid the adoption of current available
pollution-control technology.
109
-------
APPENDIX B
INDUSTRY ATTITUDES TOWARD MINIMUM DISCHARGE
Some general observations concerning industry's attitude
toward minimum discharge can be made on the basis of
interviews and discussions with representatives of
industry, consultants, and equipment vendors.
It has been tacitly assumed by many people that if and
when the effluent quality required for discharge from
an industrial operation is equal to or better than the
previously used water supply or the quality of water
required for that industry operation, reuse of the effluent
would follow almost automatically. The interviews that
have been held and the progress ,of current litigation in
Illinois indicate that this is far from the case.
The first principal reason for resistance to the concept
of minimum discharge, as opposed to terminal treatment,
is the claim that no demonstrable benefit can be shown
insofar as) water quality affecting uses is concerned.
This is apparently a sincerely held belief on the part
of industry representatives. It is inherent ,in the water
quality standard concept which implicitly says that the
assimilative capacity of the surface waters, up to the
tolerable limits of any contaminant for specific uses,
should be available to the discharger of waste -water
effluents.
Litigation in Illinois has been based on the State's conten-
tion that nothing less than minimum discharge, i.e.,
recirculation and blowdown treatment, is acceptable. In
most of these cases, the average quality of the process
waste water effluent would be as good or better than that
of the intake water or equal to or better than the water
quality required for use when agreed-upon treatment is
installed. Pumping and distribution facilities would have
to be added and cooling would generally be required for
reuse. The Plaintiffs here are not seeking any restric-
tions on the once-through use of indirect cooling water.
The Defendents have taken the position that only a court
order will force them to recycle the treated process waste
water and this attitude is apparently based upon the
additional costs involved. There has been no argument that
reuse is not technologically feasible. A very likely
additional motive, however, is the fear that a precedent
set here will be noted in other plants where present treat-
ment is not nearly as good. That other comparable indus-
trial plants in the Lower Lake Michigan region have insti-
tuted measures similar to those demanded by the Plaintiffs
apparently has no significance insofar as these Defendents
are concerned.
110
-------
In nearly all cases, the age of the plant seems to be the
second most important point. It is maintained that the
cost of instituting reuse systems in old plants'is pro-
hibitive due to lack of space and the complexities of
pumping and piping changes; and that had reuse systems
been mandated prior to the construction of terminal treat-
ment facilities, construction layouts would have been
different and presumably less extensive treatment systems
installed. An additional factor of importance is undoubt-
edly the reluctance of those responsible for the design
and installation of present facilities to go again to
management and say that more money must be spent; this
seems to be akin to saying that there was no foresight of
increasingly stringent regulations. There is little
indication of militant resistance to minimum discharge
facilities in plants under construction.
The consent decree in the case of Illinois vs. U. S. Steel,
South Chicago Works indicates that the change to minimum
discharge in old plants with terminal treatment is neither
impossible nor impractical. Not only is this particular
plant old and large, but the required construction was in
a sandy soil on the lakeshore and involved extensive
tunneling.
In the opinions of some consultants, resistance to any
change, the unwillingness to assume any additional real or
imagined problems or to do anything that might conceivably
interfere with production, the lack of knowledge of alter-
native technology, and the costs involved are the reasons
why once-through use with terminal treatment is so stub-
bornly advocated by industry. The engineering profession
seems to be at least partially guilty of perpetuating ter-
minal treatment systems, i.e., recommending and designing
systems on the basis of past, tried-and-true, similar
systems. This may be as much due to the lack of knowledge
of the alternative technology as to the specification of
terminal treatment by the client in the opinion of many.
The installation of reuse systems is frequently blamed for
production problems. A "new" factor such as this undoubt-
edly provides a convenient scapegoat for plant operators
who must always explain any production problems to their
superiors. Many reported "failures" of reuse systems can
be traced to this sort of situation. There is also the at
least implied resentment of "changing the rules in the
middle of the game." It is perhaps a moot question as to
whom is most guilty of the lack of foresight: Industry or
those responsible for regulations. Industry, at its own
insistence, has been part of the business of formulating_
regulations; it is hardly credible to now maintain that it
111
-------
had no foreknowledge of things to come.
Several consultants and equipment vendors felt that pollu-
tion control measures costing more than 20% of profits
would be regarded as prohibitive; investment of 10% of
profits would be considered normal. The concept of
minimum discharge would find greater acceptance if blow-
down of 5-20% of the recirculation rate could go to
municipal sewers. Capital costs and the reluctance to
change are the primary objections to reuse systems. The
availability of loans that would not reduce borrowing power
for production facilities would greatly accelerate reuse
systems acceptability.
Interviews with loan officers at three major Pittsburgh
banks indicate that loans for pollution control facilities
are generally available to good credit risks and such loans
are based upon general financial position as are any other
loans. Such equipment is useless as collateral, except
for some package-type plants which can be easily removed
and sold. The largest commercial bank regards pre-treat-
ment facilities and post-treatment facilities in much
the same way, i.e., as overhead costs which reduce profit-
ability. This bank, however, frequently will loan money
for such purposes as a community service gesture when the
project, considered on its own, is not regarded as a good
risk. The other two banks regard pre-treatment facilities
as production equipment and will lend money as for any
production facility. Generally, good credit risks can
borrow money for any purpose; marginal risks generally
have to justify loans on ttie basis of -expected return and
can only borrow a portion of the cost.
Personnel interviewed at the American -Petroleum Institute
were able to offer certain generalizations regarding the
practical application of various water pollution control
techniques by the refining industry that seemed to offer
insight into the factors influencing management attitudes
toward minimum waste water discharge.
The first, and most basic, of these is consideration of the
difference in economic aspects of pollution control in the
petroleum industry as between the integrated and non-
integrated producing and refining companies.
In the petroleum industry an integrated company is one that
owns its own production, transportation, refining and,
usually, marketing facilities. In the case of refineries,
the non-integrated unit is usually the independent refiner
who owns only the refinery and purchases his feedstock from
the producing companies at competitive prices. He may, or
may not, have marketing facilities at the consumer level.
112
-------
These two categories of companies are in very different
positions regarding large capital and/or operating
expenditures. Thus, while a given pollution control
process may be technically feasible for all refineries,
it may also be economically difficult for a great many
presently operating, non-integrated refineries.
The differences in these two categories of petroleum
operations also shows up in the organization of respon-
sibility for originating and implementing pollution con-
trol measures. In general, the integrated companies make
all major final decisions at the corporate management
level. Each integrated company, of which there are
approximately 30 in the United States, now has a manage-
ment environmental control group operating at corporate
headquarters and reviewing and supervising the installation
and operation of pollution control facilities at the corpo-
ration's individual refineries. The non-integrated
(approximately 1,500) refineries generally have key deci-
sions regarding such facilities made by the plant owner
or manager. In both cases, however, the practice of using
consultants for final design and installation of any
pollution control system is nearly universal. The reason
for this practice is primarily political, i.e., it puts a
neutral and presumably, objective, third party between the
refinery and the various regulatory bodies.
There are significant differences in management's willing-
ness to install pollution control in new plants as opposed
to older, existing plants. When designing new refineries,
the pollution control facilities, in general, are designed
to the maximum limits of current technology, irrespective
of existing treatment standards or limitations prescribed
by law. In older refineries the installation of such
facilities is usually geared to minimum, short-range com-
pliance. The complexities of piping systems in refinery ^
processes usually makes any modification in existing fluid-
flow systems expensive. The technology for high-level
treatment, or closed-systems design, may also be expensive.
Since the rate of obsolescence is usually high in refining
installation, the management of older refineries often
finds that high-level or reuse treatment systems require
capital expenditures involved that will require, say twenty
years to recover when the refinery itself may only have a
projected remaining life of ten years. In such cases, both
the initial cost of the system and the operating costs may
be critical to the decision-making process.
Due to the intensive level of competition between petroleum
product producers at the level of the ultimate consumer,
113
-------
it becomes almost impossible for the non-integrated refiner
to pass along these increased costs, in the form of price
increases, to the consumer. Furthermore, the small refiner
is unable to purchase his feedstock at any significantly
lower price to compensate for the increased cost. On the
other hand, the integrated company often can: (1) balance
increased cost at one particular facility against other
higher profitability operations (2) has some control over
the actual cost of his feedstock supply, and (3) can
often influence the overall market sufficiently to pass
his increased costs on in the form of product price
increases. In consideration of the foregoing marketing
and economic factors, it is the opinion of people in the
petroleum industry that pollution control requirements will
lead to the disappearance of the non-integrated refiners
in the next few years. This will probably occur through
mergers and acquisitions between the two categories,
rather than by individual plant shutdowns caused by finan-
cial stress, thus hopefully avoiding serious employment dis-
location during the period. This situation will, of course,
be accelerated by the addition of new environment restric-
tions on lead and sulfur in the finished product. These
restrictions will add a great deal to the total cost of
rennovating old plants to meet all the new environmental
restrictions. Given the relatively narrow profit margins
of the independent refiner, it does appear as though the
combination of the factors cited will probably, in the
near future, result in a considerable realignment of the
traditional processing and marketing phases of the petroleum
industry.
The industry is currently spending about 20 to 25% of new
plant cost on various pollution control systems. One case
has shown a system cost of 36% of new plant cost but this
was exceptional. The relation between pollution control
costs and plant cost varies widely in the case of older
plants. And it will usually appear as an excessive percen-
tage if current equipment costs are applied to original
plant costs.
A more practical relationship, in the case of these older
plants, is to calculate the cost of pollution control sys-
tems against the percentage of profitability that has been
established by past plant operation. This is the approach
most plant managers are using either, consciously or sub-
consciously, and it does appear to give them a more rea-
listic base from which to estimate funds available for
installation and operation of control facilities.
In general one might say that, for new plants, an invest-
ment over 10% of plant cost would be considered significant,
an investment of 20 to 25% would be normal, and in investment
114
-------
in excess of 35% would be considered excessive or prohibi-
tive by most corporate managers.
However, for older plants the percentage figures will
vary widely, in attempting to relate pollution control
facilities cost to plant cost. The determining factor
being, of course, the particular numbers used to repre-
sent "plant cost". Obviously, in most cases, relating
current pollution control system cost to old plant original
cost will make the pollution system cost up as an excess-
ive percentage figure of "plant cost".
In relating pollution control cost to profitability one
gets a little better picture of the relationship between
system cost and the old plant management's "ability to
pay" for the system. In general, the "old plant" profit
per gallon of finished product will average between .05
cents and .075 cents across the total product line pro-
ducer per year. Thus, if total pollution control system
initial cost and operating cost run over about 5% of this
figure, for very long, the older non-integrated plant will
be in serious trouble.
Furthermore, this problem does not appear to be greatly
helped by low-cost, long-term loan availability in many
such cases. If we assume a period of 10 to 12 years as
the breakdown point between new and old plants and an
average refinery life of 25 years, it follows that a 20-
year loan, for example, would be of little use to manage-
ment for the construction of pollution control facilities
in a non-integrated 12 year old plant.
For this reason, the non-integrated older refineries would
frequently not be able to avail themselves of such loans.
On the other hand, the larger integrated companies would
probably make use of such loans but, in most cases, do
not really need them to survive.
Insofar as the A.P.I, is concerned, an effective environ-
mental protection program for the petroleum refining indus-
try must balance several important factors in order to
achieve optimal overall social benefit. Among these are:
1. Maximum protection of the natural environment.
2. Maximum protection of total current refinery capacity
in the U. S. ("a country that runs on oil cannot
afford to run out.")
3. Minimum economic dislocation in terms of unemploy-
ment or increase of product prices.
4. Maintenance of availability of adequate water supply.
115
-------
The views of industry representatives to the National
Council of the Paper Industry for Air and Stream
Improvement were sought at a meeting of this group in
New York. The opinion was expressed that the problems
of the pulp and paper industry are primarily due to the
fact that it is an extractive industry whose technology
is heavily dependent upon water as the extractive medium.
Additionally, various segments of the industry are really
quite different in water use, potential contaminant loads,
process water requirements, and financial positions.
The contaminants in the industry's waste waters fall into
three categories: suspended solids, soluble organics,
and esthetically objectionable characteristics such as
color. Insofar as the reuse of paper is concerned, it
can be reused in its own grade or down-graded to a lower
grade, but cannot be reused to produce a higher grade or
class. These grades can be classified as follows from
the highest to lowest grades:
1. Tissue and bond paper
2. Magazine and coated paper
3. Newsprint and paperboard
4. Roofing felt
The production of de-inked pulp creates by far the most
severe pollution problem in the pulp and paper industry.
For every one-hundred pounds of waste paper entering a
de-inking plant, seventy-five pounds of de-inked pulp is
produced; i.e., twenty-five pounds of broken fibers, ink,
and foreign materials must be disposed of. Most of this
waste is as a watery sludge which must be thickened and
dried prior to incineration. The B.O.D. in the waste from
a de-inking plant is 110 pounds per ton of de-inked pulp
versus 60 pounds per ton of kraft pulp, the major pulping
process in the United States.
Paper can be recycled to such uses as coarse paper, paper-
board, carton stock, roofing felt, and building board
without de-inking, i.e., without removing inks, binders,
coatings, and filters, thus producing less waste per ton
of pulp. All reprocessing of papers is limited in the
number of cycles through which the basic cellulose fiber
can pass. In the higher grades of paper, the loss per
cycle is 25 to 30 percent. A maximum overall reuse rate
of 60% has been predicted, versus the current 20% in the
U. S. and 45% in tree-starved Japan. Polychlorinated bi-
phenyls, an ingredient of some inks and carbonless repro-
duction paper until recently, is a very stable compound
which has been predicted to have adverse environmental
effects. Materials such as this in much of the previously
116
-------
accumulated waste paper could be a limiting factor in
reuse for, say, food containers.
Of major concern to the pulp and paper industry are the
effects on pollution abatement costs in older plants and
in those whose operations are marginally profitable.
Space problems are of great concern in older plants.
Municipal co-treatment offers limited potential in most
pulp mills which are not near large cities; most plants
near municipal sewage treatment facilities are very large
water users as compared to the volume of sewage flows.
Correspondence with a major non-ferrous metals company
indicates that their primary concern is that the costs
of pollution abatement facilities be measured on the basis
of the "opportunity costs" of capital. This company's
concern is largely with measures such as "return on invest-
ment" or "return on capital employed", since they regard
themselves as highly capital intensive. The data on
Table 66 show some relationships between investment, sales,
and profitability for 8 major U. S. Corporations.
117
-------
Table 66. Comparative Tr.vest'-'d C.v-:ital ;-r.d Profitability
Selectee: Industry Laadwrs
Yo.ir 1171
Source: Annual Reports
SECTION I - BASIC DATA
Net Sales
Cost of Goods Sold (1)
Invested Capital
Net Worth (Equity)
Long-Term Debt and Notes,
including amounts due
within one year
TOTAL
N II
Invested Capital/? of Sales
SECTION III
A raarkup of 10% on Cost of Goods
Sold would result in a return
on invested Capital of ........
A aarkup of 10* on Invested
Capital woul-J result in a
return on Cost of Goods Sold of
(Amounts in Millions of Dollars)
Standard
General General Phelps- Oil of U.S.
Alco-i D'J Pont Electric Motors IBM Dodrre Sew Jersey Stoel
$1,441
1,328
1,269
976
2,245
$3
3
3
3
,848
,275
,095
236
,331
$ 9
8
2
1
4
,425
,683
,927
,357
,284
$28,
24,
10,
11,
264
608
805
616
421
$8,274
6,300
6,642
919
7,561
$704
632
710
166
8-76
$20
17
11
3
15
,362
,631
,593
,865
,453
$4,963
4,734
3,507
1,498
5,005
$ l.r»S
.87 $ .45 $ .40 $ .91 $1.2-1 $ .76 S 1.01
5.9% 9.8%
16.94 10.24
20.3% 21.54 8.3% 7.2%
4.9J 4.6% 12.0% 13.9*
11.4%
9.51
8.7% 10.6%
(i) Excludes interest where identified
118
*U.S. GOVERNMENT PRINTING OFFICE:1973 514-155/320 1-3
-------
SELECTED WATER
RESOURCES ABSTRACTS
INPUT TRANSACTION FORM
1. Rrjor? 'Vti.
2.
w
ECONOMIC FEASIBILITY OF MINIMUM INDUSTRIAL
WASTE LOAD DISCHARGE REQUIREMENTS
<;*?<.!'5)
Bramer, Henry C.
Datagraphics, Inc.
5100 Centre Avenue, Pittsburgh, PA 15232
5. RapvrtDate
S. F- -torm;>,i, Orga.: Cation
Report No.
EPA-2800775
12. 'Sr~"nsoriB* Organ.' rtion
68-01-0196
13. Typ>- .-fRep'-'ti
Period Coveted
IS. Su-,
Environmental Protection Agency report number,
EPA-R5-73-016, April 1973.
ii: *>** » This study presents order-of-magnitude estimates of the costs of imple-
menting minimum and zero discharge requirements for the manufacturing and electric
power industries. The analysis was made, for the most part, at the 2 digit S.I.C.
level for the manufacturing industries. The assumed technology was maximum in-plant
recirculation and reuse, concentration of the recirculation blowdown by evaporation,
and final residual disposal by the applicable least-cost method among incineration,
deepwell disposal, solar evaporation, and ocean disposal.
It is concluded that a strict zero discharge requirement would have
greatly variable and significant economic consequences, but that less stringent
definitions of minimum discharge would be feasible. The limiting factors in applying
a strict zero discharge requirement appear to be the availability of physical resources
particularly energy, for purposes of effluent concentration.
. Descriptors *Economics, *Industrial Wastes
i"b. identifiers *Treatment Costs
17c. CO WRR Field & Group ^5D
pfeVBMH
Availability J9: Security Class.
"I. Sfc'-frity Cl' ;s.
(Page)
21. No. of
Pages
'2., Pit 9
Send To:
WATER RESOURCES SCIENTIFIC INFORMATION CENTER
US DEPARTMENT OF THE INTERIOR
WASHINGTON. D. C. ZO24O
------- |