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THE ECONOMICS OF
CLEAN WATER
Summary Report
U. S. Department of the Interior
Federal Water Pollution Control Administration
March 1970
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price 60 cents
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UNITED STATES
DEPARTMENT OF THE INTERIOR
OFFICE OF THE SECRETARY
WASHINGTON. D.C. 20240
APR 3 1970
Dear Mr. President:
I am transmitting to the Congress the third report on the national
requirements and cost of water pollution control as required under
Section 16 (a) of the Federal Water Pollution Control Act, as amended.
The decade of the 1970's, a decade which will address itself to improv-
ing the quality of man's environment, will see great strides toward
the effort to abate water pollution. The enclosed report entitled
"The Economics of Clean Water" represents our current estimates of the
investment levels necessary to attain applicable water quality
standards.
This report, along with the two previously submitted, contributes to
closing the information gap in terms of the overall magnitude, geograph-
ical, and financial dimensions, all of which are essential to the
development of national policies and programs directed toward achieving
water quality standards in an efficient and effective manner.
The alternatives analyzed in the course of this study, especially
those aspects contained in Volume I, presented valuable background
for development of proposals on aid to municipal treatment works
presented to the Congress in the President's Environmental Message
and subsequent legislation.
There are four parts to this year's report. The first is a summary of
major findings and conclusions of the analysis. The second, Volume I,
contains the details of the analysis. The third, Volume II, is a
profile of animal wastes. The fourth and last section, Volume III,
is an industrial profile of the inorganic chemicals industry.
Sincerely yours,
Secretary- or the Interior
Hon. Spiro Agnew
President of the Senate
Washington, D. C. 20510
Enclosure
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UNITED STATES
DEPARTMENT OF THE INTERIOR
OFFICE OF THE SECRETARY
WASHINGTON. D.C. 20240
APR 3 1970
Dear Mr. Speaker:
I am transmitting to the Congress the third report on the national
requirements and cost of water pollution control as required under
Section 16 (a) of the Federal Water Pollution Control Act, as amended.
The decade of the 1970's, a decade which will address itself to improv-
ing the quality of man's environment, will see great strides toward
the effort to abate water pollution. The enclosed report entitled
"The Economics of Clean Water" represents our current estimates of the
investment levels necessary to attain applicable water quality
standards.
This report, along with the two previously submitted, contributes to
closing the information gap in terms of the overall magnitude, geograph-
ical, and financial dimensions, all of which are essential to the
development of national policies and programs directed toward achieving
water quality standards in an efficient and effective manner.
The alternatives analyzed in the course of this study, especially
those aspects contained in Volume I, presented valuable background
for development of proposals on aid to municipal treatment works
presented to the Congress in the President's Environmental Message
and subsequent legislation.
There are four parts to this year's report. The first is a summary of
major findings and conclusions of the analysis. The second, Volume I,
contains the details of the analysis. The third, Volume II, is a
profile of animal wastes. The fourth and last section, Volume III,
is an industrial profile of the inorganic chemicals industry.
Stincerely yours,
Secretary of the Interior
Hon. John W. McCormack
Speaker of the House of
Representatives
Washington, D. C. 20515
Enclosure
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CONTENTS
Introduction 1
Background 3
History 3*
Method 3
Limitations 5
Conclusions 5
Investment Trends 5
Investment Needs 5
Federal Cost Sharing 6
Priority Systems 6
Public Treatment of Industrial Waste 6
Regional Waste Handling Systems 7
Status of Prior Investment Estimates 7
Public Waste Treatment, Transmission, and Disposal 7
Collecting Sewers 8
Separation of Storm Sewers 8
Industrial Waste Treatment 8
Industrial Cooling Facilities 8
Sediment Control and Acid Mine Drainage Reduction 8
Special Studies 9
Inorganic Chemicals Industry 9
Animal Feeding Industry 9
vii
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LIST OF TABLES
1. Comparative Investment Outlays for Waste-Handling 11
Purposes, 1967 & 1968
2. Estimated Annual Public Investment for Waste Treatment 13
Plants and Ancillary Works, by State
3. Comparative Categorization of States by Recent 15
Investment Behavior
4. Industrial Pollution Control Investments, as 17
Reported by McGraw Hill
5. Normative Assessment of Annual Capital Needs 19
Generated In 1962 & 1968
6. Increase in State Governemt Defined Waste Treatment 21
Needs Over Time
7. Water Quality Standards-Related Public Investments 23
8. Comparison of State Investment Intentions and 25
Derived Value of Needs
9. Water Quality Standards-Related Manufactures' 27
Investment for Waste Treatment
10. Relation of Federal Assistance to Total Estimated 29
Public Waste-Handling Expenditures
11. Dollars of Total Investment Per Dollar of Federal 31
Construction Grants
12. Priority System Criteria 33
13. Distribution of FWPCA Grants by Size of Community 35
14. Metropolitan and Non-Metropolitan Distribution 35
of FWPCA Construction Grants 1956 - 1968
15. Relative Domestic and Industrial Loading of 37
Municipal Waste Treatment Plants 1n 1968
16. Projected Cumulative Inorganic Chemical Industry 41
Capital Costs for Waste Treatment
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LIST OF FIGURES
1. Facilities Evaluation Models — Generalized Logic 4
2. Number and Percentage of Cattle Marketed from Feedlots 39
with Capacities of 1,000 Head and Greater « Selected
States, 1968
1x
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THE ECONOMICS OF CLEAN WATER
INTRODUCTION
This is the third in a series of reports to the Congress on the
subject of the cost of treating liquid wastes that the Secretary of
the Interior is charged to deliver annually, under the terms of the
Federal Water Pollution Control Act.
The first report in the series attempted to draw together and
evaluate in gross fashion all available information on water-borne
waste sources, treatment technology, and control deficiencies. The
second report examined the processes of providing physical capital for
waste treatment—the interaction of funds over time under the influ-v
ence of developing technology, shifting regulatory requirements,
rising demand, and normal replacement conditions.
This report combines the concept of investment processes developed
in the second report with the generally held concept of an investment
gap that was evaluated in the first report. Its product is the
definition of a rate of investment that will close the gap for munici-
pal and industrial waste treatment within a five year period, given
the continued pertinence of today's regulatory and technological
conditions. Detailed studies of the pollutional impact of the
inorganic chemicals industry and of concentrated animal populations
are submitted as separate sub-reports.
The report considers several issues germane to the policy decisions
required with the expiration of current municipal grants legislation.
The alternatives and conclusions reached in this report are intended
to be illustrative and suggestive, not statements of policy. Economic
analysis can provide insights into the consequences of alternative
actions, but the political process must in the final analysis mold
the necessary decisions within the context of total national interests
and values.
A number of subsidiary issues are considered, including the
influence of industrial waste discharges on public investment outlays,
the influence of location on unit investment, the status of broadly
integrated regional waste handling systems, the incidence of recapi-
talization, the influence of price levels on investment, and patterns
of change in the real cost (i.e., costs adjusted for price levels
changes) of waste treatment facilities. Consideration of these and
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other sub-questions was consistently pointed to their relationship to
the problem of deriving a normative annual level of investment, one
appropriate to five year attainment of an investment equilibrium in
the public waste treatment sector; and the force of Federal assist-
ance programs on investments is a minor theme that pervades the
report.
This is a summary report. Detailed information is contained in
three appendix volumes, Volumes I through III. Volume I (Detailed
Analysis) contains the detail of the comprehensive assessment of the
Nation's municipal sewage systems. Volume II (Animal Waste Profile)
contains a study of the animal feeding industry which describes the
scope of the problem and possible measures of control. Volume III
(Inorganic Chemicals Industry Profile) is an industrial profile
covering the description of the industry and the costs to attain
various levels of pollution abatement over the five year period
through 1974.
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Background
History
Section 16(a) of The Federal Water Pollution Control Act, as
amended, requires the Secretary of the Interior to deliver to the
Congress on January 10, 1968, an estimate of the five year costs of
treating municipal, industrial and other effluents, and to update the
report annually thereafter.
The current report is the third in the series. The first, that
assessed municipal investment requirements for the period 1969 to 1973
to be $8.7 billion, was critized by twelve States for estimating too
low and by two States for estimating too high. The second report,
without reassessing the five year need, examined the influences that
determine investment levels, and concluded that the critical factors
were to be found in the dynamics of the situation—in the interaction
of investment with time-conditioned qrowth, replacement, and demand
for higher efficiencies. It was also found that regional cost differ-
ences, transmission cost, and influence of industrial waste loadings
were more important matters than had been previously believed.
This report consists primarily of a comprehensive reassessment
of the nation's municipal sewage treatment needs and costs. Each
reported need associated with those systems was evaluated individually
on the basis of the kind and normal size of the project required to
eliminate it and the average unit cost of components required. In
addition, adjustments were made to reflect the higher than average
costs that occur in some States. Expected future needs and unreported
needs were also evaluated in terms of observed statistical relation-
ships between capital supply and growth and replacement factors.
The report also deals with industrial investment requirements,
historical investment, Federal cost-sharing, priority systems, public
treatment of industrial wastes, and status of regional waste handling
systems.
Method
The analysis was based on the 1968 Municipal Haste Inventory
and on investment outlays reported for the period 1952-1969. Because
of the large number of calculations involved, most of the operations
were performed on a digital computer, with three separate programs
developed for the purpose. The basic logic is described in the
accompanying figure.
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FACILITIES EVALUATION MODELS
GENERALIZED LOGIC
CURRENT
REPLACEMENT
VALUE
(12.4 BILLION]
AGGREGATE
INVESTMENT
REQUIREMENT
($10 BILLION)
TIME
[5 YEARS)
&
INFLATION
[J.5%1
COSTX
SIZE
FACTOR
1 NEW PLANT
2 REPLACE PLANT
3 UPGRADE PUNT
4 ENLARGE PLANT
5 DISINFECTION
6 CONNECTION
7 OTNER
n>
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Results derived were compared to point by point estimates for
specific projects developed by each of the States. Agreement was
extremely close for total national values, though differences occurred
with respect to individual States.
Limitations
The over all reliability, of the national assessments presented in
the report is considered to be high; but that reliability is due in
some measure to built-in statistical factors that are not distributed
equally below the national level. For that reason, in the case of
certain States the results of the model are of questionable accuracy.
While the reported evaluations and projections may be applied with
considerable confidence at the macroeconomic level, caution should be
used in interpreting them with respect to any individual State; and it
should be recognized that projections and economic assumptions have an
inescapable element of uncertainty.
Conclusions
Investment Trends
The over-all level of investment is rising steadily, though some
States had begun to cut back their investment in the last three years.
Investment of $880 million in 1969 did little more than cover replace-
ment and growth needs developed in the same year. The distribution of
Federal assistance, by favoring low population States, may have contri-
buted to an imbalance in investment in the past; and delays caused by
local governments that wait for State financial participation seem to
be a factor in low relative investment in some States. More than
offsetting these influences is a major rise in investment in other
States as a result of active programs of State participation in financ-
ing construction.
Investment Needs
On January 1, 1970, the nation's municipal waste-handling systems
presented the need for the investment of $4.4 billion, and were generat-
ing additional needs at the rate of over $ROO million a year. With
expected growth of the system, and inflation occurring at an average
rate of 3.5% a year, total investment requirements will conservatively
amount to $10 billion over the five years 1970-74 1f all existing
deficiencies are remedied and no new deficiencies are allowed to occur.
The underlying determinant of need is population, but other
factors have an influence, particularly for the short run. Local
design practice, nature of industrial specialization, climate and
geology, and the extent to which controls have previously been achieved
all bear upon the level of investment required. Needs are very
-------
unevenly distributed, even on a per-capita basis; and the heaviest
incidence of requirements is found in the Northeast quartile of the
United States, where waste treatment prevalence lags, and unit costs
of construction are at least twice the national average.
Current estimates by Federal agencies of their budget requests for
construction of waste collection, treatment, and disposal facilities
amount to almost $0.25 billion. No evaluation of these costs has been
presented in previous cost estimate reports.
Federal Cost Sharing
Financial constraints on local governments, perhaps reinforced by
expectations of Federal assistance, have created a general dependence
on Federal revenues; and any expansion of local government services may
be exoected to require increasing Federal assistance—particularly
under conditions of money market constraint. At the present time,
the Federal share of all local waste-handling costs (including operat-
ing charges and sewer installation investments) is 18%, or about
the same as the over-all level of Federal assistance to local govern-
ments for all purposes. While Federal waste treatment plant construction
grants have in the past been very effective in eliciting investment
response, that effectiveness has steadily declined. Where $13.70
of total investment for waste-handling works was made in 1960 for
every dollar of FWPCA grants, by 1967 that ratio had slipped to $5.20
per FWPCA dollar as a result of a larger average Federal share of
the cost of most projects, the meaningful inclusion of large projects
that received little assistance under earlier forms of the Act, and
continuing decline in sewer installations—a form of activity that
receives very little Federal assistance.
Priority Systems
Although the Federal Water Pollution Control Act requires that
applications for construction grants be rated on a priority basis, the
priority system has been ineffective in directing funds to the most
useful projects. Since there is no requirement that oriorities be
established for every potential project, States restrict the system
to applicants for funds. In consequence, allocation of funds has in
most cases been unguided by effective priority considerations. Will-
ingness of the community to proceed with a project is the operative
allocation mechanism.
Public Treatment of Industrial Waste
Roughly half of the water and an even larger portion of the
polluting materials discharged through public sewerage systems
is of industrial origin, if one includes commercial, service industry,
and dry process factories. The recent tendency for large wet process
factories to connect to public systems is generally realized to
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have efficiency and economy benefits, but also to serve as a means
of shifting private costs to the public sector. Recognizing that
inequities are associated with any solutions to the apparent problem,
it is concluded that the most desirable policy would be to continue to
accept all industrial wastes that can be treated in municipal plants
but to establish user fees that create a correspondence between the
fee paid by each user of the system and the cost incurred to collect
and treat his wastes.
Regional Waste Handling Systems
There are great advantages in theory to establishing coordinated
river basin organizations for the purpose of managing the handling and
treatment of wastes. But while the establishment of such systems is
generally encouraged, none exists in full scale in the U. S. today.
The reason appears to be a resistance on the part of State and local
governments and on the part of industry to the establishment of such
special purpose governmental units, unresponsive to other social
purposes.
Related kinds of systems are, however, developing in the U. S.
Metropolitan sewerage services are practically universal today. Moreover,
some of the States are in the process of creating State-wide systems
that coordinate financing, planning, and operation of sewerage services.
Both trends are considered to be desirable, in that they have many
of the potential advantages of river basin systems and are suited to
American political behavior.
Status of Prior Investment Estimates
Public Waste Treatment, Transmission, and Disposal
The current estimate of the expectable amount of the investment
required within the next five years for facilities to comply with
water quality standards is about $10 billion.
The estimate differs from the $8.7 billion estimate presented to
the Congress in 1968 for two reasons. 1) Two years of sub-standard
investment, together with two years of growth, replacement, and greater
than anticipated inflation, have caused a real increase in the required
amount of investment, 2) PJPCA has improved its knowledge of the situ-
ation in two years. In particular, the current estimate is considered
to reflect more accurately: a) ratio of transmission and outfall costs
to treatment plant costs, b) influence of location on construction
costs, c) annual effects of growth and recapitalization, and d) level
of industrial connections to public systems.
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Col1ecti ng Sewers
No change has been made in the $1.2 billion a year estimate pre-
sented in the initial report.
Separation of Storm Sewers
Activity in this area continues to take place largely in the area
of research and development. Absence of a scientific concensus on the
nature of the problem and control procedures suggests that the extremely
broad $15 billion to $49 billion estimate provided in 1968 continues
to reflect the clearest evaluation of the potential investment con-
sequences of this very undefined problem.
Industrial Waste Treatment
The current estimate of the five year investment requirement
associated with treatment of industrial wastes is a probable value of
$3.3 billion, in a range of $2.2 billion to $4.4 billion—the breadth
of the range indicating the variety of technological possibilities.
The assessment is essentially the same as that presented in the 1968
report, but updated to include the estimated effects of investment,
growth of demand, recapitalization requirements, and inflation in the
intervening period. While lack of an industrial waste inventory pre-
cludes meaningful improvement of the estimate, information made available
over the last two years generally corroborates its validity.
Industrial Cooling Facilities
The estimate of the cost of comprehensive controls is $1.9 billion,
a simple updating of the 1968 estimate. The figure must be assumed
to represent a maximum value, since no regulatory concensus (such as the
secondary waste treatment requirement) has been reached for thermal
controls.
Sediment Control and Acid Mine Drainage Reduction
No information has appeared to justify the modification of the
$1.7 billion to $6.6 billion range developed earlier. The physical
situation is materially unchanged, and the validity of the estimates
depends upon those conditions.
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Special Studies
Inorganic Chemicals Industry
Inorganic chemicals include a broad variety of products, mostly
bulk-produced intermediates but including a number of final products.
Growth of demand varies among the segments of the industry, but pro-
duction growth has consistently been 1.5 to 2.0 times the growth
of GNP, Production tends to fallow location of raw materials, and
is concentrating in the Southwest and Midwest. Inorganic dissolved
solids, suspended solids, and extremes of acidity or alkalinity are
characteristic of process wastewater; and waste treatment methods are
limited to physical and chemical methods. Current materials removal
efficiency of the total industry waste treatment system is estimated to
be only 27%—less than half of that for municipal waste or organic
chemicals, where biological treatment processes are possible—though
widespread application of neutralization effects a substantial reduction
of pollutional effects that is not accompanied by materials reduction.
Current replacement value of waste treatment facilities is estimated to
be about $300 million, and operating charges are estimated to amount to
more than $80 million a year. To sustain the current level of treatment
through 1974 is estimated to require expenditure of an incremental
$200 million and to add more than $50 million a year to operating charges
Animal Feeding Industry
Locational concentration is the principal technological develop-
ment of the industries whose raw materials are animals. Development
of large beef fattening operations is the most obvious manifestation of
the trend, but fewer and large dairy, swine fattening, and poultry
producing activities is also part of the development. Roughly half
of the beef cattle marketed today are fattened in ten States; and in
those States, the majority of the animals are sold from the relatively
few feedlots with capacities of 1000 head or more.
Such large concentrations of animals pose a potential source of
water pollution, particularly in that they tend to occur in arid or
semi-arid regions where intermittent flushing rains combine with
low streamflow. Control measures vary, ranging from such simple
expedients as ditching around lots (to reduce incidence of polluted
runoff) to sophisticated techniques such as adjusting feeding cycles
and animal concentrations to climatic cycles, to regular hydraulic
flushing with collection and treatment of wastewater. There is no
single method of control that combines the desirable features of low
cost, dependability, and climatic relevance. Significant is the
fact that the problem is seldom clear cut, but only potential; with
lot size, climate, type of feeding, and soil conditions all relevant
to the situation of any unit.
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TABLE 1
Water pollution control investments moved to a new hiqh in
1968, in spite of a decline in outlays for industrial waste treatment
and collectinq sewers.
10
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Table 1
Comparative Investment Outlays for
Waste-Handling Purposes, 1967 & 1968
Investment Category Investment (millions of current dollars)
1967 1968
New Waste Treatment Plants 149 180
Expansion, Upgrading, Replacement 213 189
Interceptors & Outfalls 188 284
Collecting Sewers 606 550
Industrial Waste Treatment 564 529
Total Capital Outlay 1,720 1,732
11
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TABLE 2
Estimated public investments for water pollution control
facilities have increased steadily in recent years, with State
financial assistance becoming an increasinqly effective incentive.
In a number of States, however, investments during the last three
years have reflected a reduction from the level of the previous
five vears.
12
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TABLE 2
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyomi ng
Puerto Rico
Totals
Estimated Annual Public Investment
for Waste Treatment Plants and
Ancillary Works, by State
Average,
1962-66
6.E
0.3
5.8
C.4
34.0
7,4
8.2
2.2
6.8
10.6
8.7
5.5
0.9
30,
16,
7.3
5.3
7.0
11.2
3.3
7.7
12.4
21.1
10.4
4.3
21.1
1.3
4.8
3.5
3.1
15.9
3.4
40.6
14.8
0.8
23,
4.
5.5
23.8
2.8
5.2
1
10.
17.
2.8
3.4
10.
20.
6.
18.
0.
,5
.0
.5
.5
.5
1967
1968
12.6
0.1
5.4
10.7
43.0
3.0
17.7
-
13.6
9.4
13.2
4.4
1.3
45.3
24.4
8.2
5.2
4.0
7.6
1.4
20.2
6.7
7.6
8.6
2.7
15.2
0.5
4.5
3.4
2.0
30.0
4.0
33.3
18.7
0.8
26.1
6.5
3.2
42.6
1.0
4.6
2.9
5.1
14.9
1.9
1.8
20.9
3.8
1.2
13.4
4.3
4.0
2.9
3.2
34.9
4.6
7.9
1.0
3.2
16.8
4.5
..
0.7
33.5
27.1
13.1
11.1
4.4
4.5
5.7
17.3
13.4
30.4
13.3
2.7
26.5
1.3
2.0
0.4
6.0
10.5
0.4
115.0
10.8
0.3
35.1
5.5
3.3
65.3
1.2
10.5
0.2
19.9
17.1
0.1
2.4
10.4
20.9
3.0
17.1
1969 est.
18.
0,
10.5
41.1
10.5
71.5
1.4
C.4
29.6
22
0
1
33
10
4
10
11.0
10.0
31.0
28.1
5.7
13.3
2.4
12.8
1.3
3.0
0.2
1.9
40.2
3.5
97.0
17
0
41
14
,3
.4
.9
,6
7.6
90,
1.
26.0
1.8
508.9
3.8
542.4
652.1
1
18
38
1
3.9
25.0
4.6
4.0
20.7
0.8
6.5
880.8
1967-69 Avge
1962-66 Avge
179?
478%
127%
117%
82%
395%
36%
114%
175%
155%
30%
144%
121%
123%
164%
131%
92%
69%
173%
297%
130%
G9%
113%
60%
86%
79%
66%
38%
106%
169%
77%
201%
105%
63%
146%
222%
85%
277%
49%
263%
109%
138%
134%
38%
79%
175%
48%
44%
94%
133%
191%
136%
13
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TABLE 3
Almost eighty percent of the Nation's sewered population is
located in States where per-capita public investment for waste treat-
ment is rising. For the most part, instances of investment stability
or relative decline correlate with a lesser incidence of untreated
waste and wastes with only primary treatment.
14
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TABLE 3
Comparative Categorization of States
by Recent Investment Behavior
Percent of National Total
Current
Sewered Sewered Pop. Sewered Pop. Investment Investment
Population w/o Treatment w/Prlmary Trtmt. 1952-66 1967-69 Requirements
States with major Increases (150J or more of
1962-66 average) 1n Investment 1n 1967-69:
Alabama, Alaska, {Connecticut). Florida,
Georgia. Iowa, (MalneT. [Maryland). (New
Jersey). (New York). Oklahoma. (Pennsylvania).
South Carolina, Virginia. Puerto KKO 35.6 42.1 38.0 32.9 48.9 40.2
States with Increases (111-149* of 1962-66
average) 1n Investment In 1967-69:
Arkansas, California. District of Columbia,
Idaho, Illinois. (Indiana). Kansas,
(Massachusetts). Minnesota, Ohio, Tennessee.
Texas. Wyoming 42.6 30.2 38.1 39.4 33.9
States with substantially unchanged (90-110X
of 1962-66 average) Investment In 1967-69:
Kentucky, New Hampshire. North Carolina.
South Dakota. Wisconsin 5.1 3.3 3.3 7.7
States with declining (75-891 of 1962-66
average) Investment In 1967-69:
Arizona, Colorado. Missouri. Montana,
(New Mexico). (Oregon). (Vermont) 5.3 4.8 3.9 6.9
States with sharply declining (74* or less
than 1962-66 average) Investment 1n 1967-69:
(Delaware). Hawaii, Louisiana. (Michigan).
Mississippi. Nebraska. Nevada, North Dakota,
(Rhode Island). Utah. (Washington).
West Virgin^ — 12.6 20.0 17.5 14.3
United States Totals 100.0 100.0 100.0 100,0 100.0
6.4
5.8
6.8
32.0
6.7
7.0
14.1
Average ~AnhuaTPer-Caplta Investment*
1952-55 1956-61 1962-66 1967-69
(1.95) (2.40) (2.88) (5.37)
1.60 2.42 3.20 .6.98
(1.64) (2.57) (2.85) (3.11)
1.34 2.60 3.16 4.04
(1.77) (3.63) (5.82) (4.91)
1.45 3.67 6.46 6.38
(1.21) (2.37) (6.02) (4.29)
0.99 2.39 6.68 5.58
100.0
(1.34) (2.56) (4.50) (2.12)
1.10 2.59 5.00 2.76
(1.67) (2.54) (3.33) (3.91)
1.37 2.56 3.70 5.08
* Per-caplta Investment based on 1968 sewered population. Constant (1957-59) Dollars 1n Parentheses
Hote: States which provide financial assistance are underlined and States with funded assistance programs are Indicated by parantheses.
-------
TABLE 4
Industrial investments for environmental protection -- 50$ to
55% of the total is for water pollution control — rose strongly
over the previous year during 1969, if first quarter projections
are to be believed. In 1968, however, such projections proved to
be a very unreliable guide.
16
-------
TABLE 4
Industrial Pollution Control Investments,
as Reported by McGraw Hill
(Millions of Dollars)
INDUSTRY Projected Actual Planned
1968 1968 1969
Iron & Steel $ 144 $ 123 $ 184
Nonferrous metals 37 13 51
Electrical machinery 116 38 47
Machinery 41 58 83
Autos, trucks & parts 66 29 49
Aerospace 8 14 15
Other transp. equipment
(RR Equipment., ships) 3 12 17
Fabricated metals & instruments 41 40 57
Stone, clay & glass 40 33 56
Other durables 89 28 93
TOTAL DURABLES 585 388 652
Chemicals 112 104 126
Paper & pulp 91 91 104
Rubber 6 6 H
Petroleum 102 157 160
Food & beverages 32 15 31
Textiles 26 13 19
Other nondurables 40 2 10
TOTAL NONDURABLES 409 388 461
ALL MANUFACTURING 994 776 1,113
Mining 83 49 71
Electric & gas utilities 481 223 284
ALL INDUSTRY $1.558 $1,048 $1,468
17
-------
TABLE 5
Waste treatment requirements are dynamic. New needs are
constantly being generated out of the inescapable pressures of
replacement and growth.
18
-------
TABLE 5
Normative Assessment of Annual Capital
Needs Generated in 1962 and 1968
A-Millions of 1957-59 Dollars
1962 1968
Replacement Value of Trtmt.Plants 2975.2 4132.7
Recapitalization @ 435 119.0 165.3
Replacement Value of Assctd.Works 3498.9 4847.0
Recapitalization Q 2% 69.8 69.9
Loading growth at 3.3% 213.3 296.3
Incremental Recapitalization
for plants to be upgraded at 4% 22.9* 25.5*
Annual Needs developed in year 425.0 584.0
B-Mlllions of Current Dollars
1962 1968
Replacement Value, Plants 3183.5 5703.1
Recapitalization @ 4% 127.3 228.1
Replacement Value, Assctd.Works 3743.8 6688.9
Recapitalization @ 2% 74.7 133.7
Loading Growth @ 3.335 228.2 408.9
Incremental Recapitalization
for plants to be upgraded at 4% 24.5* 35.2*
Annual Needs 454.7 805.9
*Value considered to be associated with primary treatment capacity
required to be upgraded to secondary treatment.
19
-------
TABLE 6
Deficiencies associated with the Nation's public waste handling
systems have increased steadily — both in number and in terms of
population affected — as the system has expanded. The nature of
deficiencies has chanqed, with major and minor upgrading require-
ments progressively replacing the need for new plants. The condition
is considered to be expectable, entirely consistent with the reali-
ties of an expanding economy and the growing maturity of our waste
handling systems.
20
-------
TABLE 6
ro
Increase in State Government Defined
Waste Treatment Needs Over Time*
Kind of Need
Number of Systems
1957 19G2 1968
2549
973
688
753
41
329
57
5390
10,511
51.3
3579
1441
370
2143
853
809
821
42
332
45
5045
11,006
45.8
3311
3071
374
1586
625
1003
2130
723
20S
123
6399
13,849
46.2
2334
3133
932
New Plants
Replacement
Enlargement
Additional Treatment
Chi on" nation
Improved Operation
Connection
Total No. Needs
Total Systems
% w needs
New Facilities l/_
Major Upgrading 2/
Minor Upgrading 3_/
*Source: Municipal Waste Inventory, 1957, 1962, 1968
!_/ New Plant, replacement, connection
2/ Enlargement, additional treatment
3/ Chi on" nation, improved operation
1957
Population Served
(000's)
1962
1968
13,504.0
3,101.6
15,315.9
7,687.0
598.1
887.3
676.4
41,770.3
98,361.9
42.5
17,282.0
23,002.9
1,485.4
13,058.4
3,888.2
24,849.0
8,215.8
201.4
1,068.2
482.3
51,763.3
118,371.9
43.7
17,428.9
33,064.8
1,269.6
9,575.3
1,719.9
27,861.6
36,327.5
2,937.8
888.8
1,019.7
80,330.6
139,726.7
57.5
12,314.9
64,099.1
3,826.6
-------
TABLE 7 A through C
Although the Nation entered 1970 with about $4.4 billion of
waste treatment needs, it will require $10 billion to eliminate
such needs within five years, due to the dynamic effects of growth
recapitalization, and price level changes. At lower levels of
investment, the reduction of accumulated needs takes longer to
accomplish: and with investments of less than $1.5 billion a year
it is mathematically impossible to achieve a state of investment
equilibrium.
22
-------
TABLE 7
Water Quality Standards-Related Public Investments
(Values in Millions of Current Dollars)
A- Five Year Backlog Elimination Schedule
"Backlog" at
Year year end Growth Recapitalization Investment
1969
1970
1971
1972
1973
1974
1975
4438.4
3441.8
2489.5
1584.5
730.0
n
437,
467,
499,
534,
571.
410.9
459.9
508.1
555,
602.
.7
,5
610.7
648.4
Total indicated investment, 1970-1974:
"Backlog"
Growth
Recapitalization
*Includes an Inflation Component of: 928.8
2000.0
2000.0
2000.0
2000.0
1929.3
1259.1
9929.3*
4882.3
2509.8
2537.1
"Backlog" at
Year year end
B-Stretchout Schedule
Growth Recapitalization Investment
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
Year
1969
1970
1971
1972
1973
1974
1975
1976
1977
,4
.8
.0
4438,
3741
3091
2489.0
1939.0
1444.
1008.
635.
437.2
467.4
499.7
534.3
.3
.5
.3
571.
610,
410.9
450.8
490.1
528.6
566.2
602.9
653.0
328.9
93
.4
0
0
,1
.4
698,
746.
798.0
853.2
638,
673.
706.
738.8
769.5
,6
.2
.6
1700.0
1700.0
1700.0
1700.0
1700.0
1700.0
1700.0
1700.0
1700.0
1630.2
1622.7
"Backlog" at
year end
4438.4
4041.8
3692.5
3393.5
3148.0
2959.3
2831.0
2767.0
2847.9
C-Deficiency Schedule
Growth Recapitalization Investment
437.2
467.4
499
534
571
610
653.0
698.1
410.9
441.8
472.0
501,
529,
557,
583.
.4
,9
.4
.9
609.2
1400.0
1400.0
1400.0
1400.0
1400.0
1400.0
1400.0
1400.0
23
-------
TABLE 8
State by State estimates of investment intentions over the
next five years total $10.2 billion -- very close to the amount
indicated by FWPCA analysis to be necessary to reduce in five years
the accumulation of needs built up in the past. One third of the
States report investment intentions that fall within F^PCA's range
of estimate. Half fall below the range -- though in twenty-one
cases the deviation is considered to be expectable, in that it
Is due to local variations in construction procedures and lack
of anticipation of either price level increases or probable increases
in real costs. Similarly, the cases of six States that report
investment intentions that exceed the range of expectable require-
ments are explainable in terms of expanded time frames or accelerated
construction programs. However six States -- Alabama, Hawaii, Idaho,
New Mexico, Pennsylvania, and West Virginia -- report investment
intentions inexplainably below the level of their probable require-
ments; and three States -- New York, New Jersey, and Maryland --
report expenditure intentions that far exceed that which can be
explained by the conditions and needs that each has reported in
the Municipal Waste Inventory.
-------
TABLE 8
Comparison of Stats Investment Intentions and Onrlvet) Value of Needs
(Millions of Dollars)
State Intentions
Needs
Intentions
Intentions Intentions
Exceed Range Below Range
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
fieorqla
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
Hew Mexico
New York
North Carolina
North Dakota
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Guam
Puerto R1co
Virgin Islands
TOTAL
35.0
12.0
86.0
33.0
651.8
133.0
280.5
28.0
355.0
200-0
150.0
14.4
0.5
"7.2
152.6
33.3
61.0
62.6
140.0
140.9
236.9
438.0
253.7
136.3
40.0
390,0
13.5
62.0
28,6
138.0
»80.0
9-9
T900.I
69-3
22.0
432.5
65.3
135.0
432.0
51.5
76. 0
27.0
105.5
525.0
11-7
™-°
151."
160.0
44.3
243.7
12.0
6-2
28.9
15.4
10217.1
224.3
12.2
46.1
118.6
838.5
143.7
187.7
17.7
68.2
209.5
250.5
44.<>
75.5
493.7
337.6
160.3
250.9
102
206
206
63
586
311.7
193.3
141.0
359,1
63.7
119.0
38.6
150.4
343.4
50-1
1323.6
254,5
38.9
511.8
123.0
146.1
1122.8
96.7
121.8
48.2
184.9
502.9
82-4
H7.5
152.8
19S.5
140.3
275.0
38.3
165.5
7.6
35.1
72.6
738.1
103,1
147.1
12.
19.
157.
198.
32.
58.1
396.9
282.8
122.3
118.3
54.4
104.1
114.2
29.5
356.5
249.3
114.1
82.2
195.3
42.1
88.4
30.0
93.6
262.B
38,7
788.6
199,1
31,9
429.8
94.0
114.5
720,8
72.9
96.0
39,2
115.7
441.5
68.6
83.
117
146.
101
231.
- 19.1
X
X (a)
x (a)
X
> 39.9
i 10.3
>.173.2
i30.9
>S36.6
>S76.5
> 22.1
fil.3 - 36.1
4.4 - 2.6
11960.9-8473.7
i 6.2
> 11.0
£.130.5
> 39.6
£86.3
> 48.3
> 18.0
i 57.6
>130.2
> 89.0
"57.3
i28.6
I 1-4
2.28.8
>129.8
1 9.9
>.288.8
~2KO
> 12.2
i 10.2
> 56.9
>.13.9
>, 56.8
> 7,1
i 7-2
(a) Programed needs adjusted for recent accelerated level of starts or state Intentions, excluding .year 1975,
bring two sets of estimates Into aqreement.
25
-------
TABLE 9
The level of deficiency estimated to occur in industrial
waste treatment (other than treatment required to reduce thermal
pollution) is currently about $1.5 billion. As in the case of
public deficiencies, their elimination within five years will
require a substantially larger investment, because of the effects
of recapitalization, growth, and price level factors.
26
-------
TABLE 9
Water Quality
Standards-Related Manufacturers' Investment
For Waste Treatment
(Values 1n Millions of Current Dollars)
Year "Backlog" at Growth Recapitalization Investment
Year End
1969 1513.2
1970 1129.5 139.4 118.5 650.7
1971 817.3 150.8 138.0 650.7
1972 526.4 163.1 156.9 650.7
1973 258.0 176.4 175.2 650.7
1974 — 190.8 192.8 650.7
1975 -- 206.3 209.7 416.0
Total Indicated Investment* « 3253.5
"Backlog" 1651.6
Growth' 820.5
Replacement 781.4
*Includes an Inflation Component of 330.0
27
-------
TABLE 10
Total Federal assistance to communities for waste-handling
purooses has been rising steadily. At this time it amounts to 18%
of such outlays — almost exactly the relationship that exists
between all Federal aid and State and local governments expenditures
Assistance is unbalanced, in that the bulk of it takes the form of
FWPCA grants for waste treatment plant construction, with little
direct assistance for sewer installation and none for operating and
maintenance purposes.
28
-------
TABLE 10
Relation of Federal Assistance to Total Estimated
Public Waste-Handling Expenditures
(Millions of Dollars)
Annual Average
Outlay for Period
Investments Operating Charges
Treatment Collection Treatment Collection
Works Works Works Works
Percent Federal in
Period
1956-61 13
1962-66 20
1967 37
Total
1956-61, Total
Federal Share
1962-66, Total
Federal Share
1967, Total
Federal Share
339
45
515
105
551
203
317
-
375
-
504
50
95
-
135
-
170
-
170
-
195
-
200
-
921
45
1210
105
1424
253
10
5
9
18
29
-------
TABLE 11
As financial constraints have progressively impinged on local
governments, it has become necessary to expand the relative propor-
tions of funds provided by Federal government in extending water
pollution controls. So, as total investment has risen, the multiplier
effect exercised by Federal funds has been consistently reduced.
30
-------
TABLE 11
Dollars of Total Investment
Per Dollar of Federal Construction Grants
Year
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
Total
Investment
11.54
13.40
13.24
13.78
9.54
8.92
10.04
8.62
6.40
6.13
5.20
Sewer
Investment
4.94
6.20
6.72
7.18
4.75
3.55
4.05
3.96
2.74
2.66
2.49
Treatment PI;
Investment
6.60
7.20
6.52
6.60
4.79
5.37
5.99
4.66
3.66
3.47
2.71
31
-------
TABLE 12
It is a requirement of the Federal Water Pollution Control
Act that applications for Federal qrants be accorded a priority by
State government. Though all States weigh water pollution abatement
objectives strongly, in most cases priorities are assessed only for
those making arant applications. Even in the case where the
priority system is general, there are no mechanisms for forcing
needed construction decisions. A community's readiness to construct,
then, is more important than priority in determining the disposition
of Federal funds.
32
-------
TABLE 12
PRIORITY SYSTEM CRITERIA
POLLUTION
ABATEMENT
Comp. Health Trtnt. Abatnt.
Plan Hazard UQS Reqd. Needs
Alabama
Alaska X X
Arizona XXX X
Arkansas X X
California X XX
Col orado X X
Connecticut X
Delaware X X
District of Columbia(a)
Florida XXX X
Georgia XX X
Hawaii X
Idaho X X
Illinois X X
Indiana X XX
Iowa X
Kansas X X
Kentucky X
Louisiana X XX
Maine XXX X
Maryland X X
Massachusetts X
J*» Michigan X X
"* Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Puerto Rico
X
X
X
X
X
X
X
X
X
X
X
X X
X
X
X
X
X
X X
X
X X
X
X
X
X
X
X X
X
X
V
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
FINANCIAL
l.'ater Vol. Inter/ Finan. Inc- Const. °ss. Bond.
Uses Waste Intra Status one Cost Val. Debt POD. Other
X X
XXX X
X X X X X
XXX
XX XXX
X X
XX XX X
X XXX
X X
X
X
XXX
X XXX
X X
X XX
X XX
XXX X
XX X
X XX
XXX X
X XX
X XXX
X
X
X
X X
X
X
X X
X
X
X
X
X
X
X X
X
X X
X
X
X
X
X
X
X X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X X
X X
X XX
X
X X
X
X
X
XXX
X
X
X X
X X
X X
X
X X
X X
X
XXX
X X
X
XXX
X
X X
X
X X
FLAMMING/READINESS
Site Engr. Plans Flnacng. Contract Implitmtn. Grant
Acqd. Rept. Apprvd. Arrangd. Awarded Plans Appl.for
X XX
X
X
XXX
XX X
X X
X XX
X
X X
X
X X
XXX X
XX X
X X
X
X X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X X
X
X
X
X
X
X
X
X X
X
X X
X
X
X
X
X
X
X
Priorities Assessed
Independent of
Grant Applications
Yes No Unk.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
y
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
(a) Priority system not applicable
-------
TABLES 13-14
An unfortunate effect of the lack of effective priorities is
to channel funds away from the larger cities that include the most
significant concentrations of pollution. The "readiness to proceed"
test brings applications from those communities in weak bargaining
situations vis a yj[s_ State regulatory agencies. The net result is
that funds have flowed in almost reverse correlation to population.
And though over half of FWPCA qrants have gone to metropolitan
areas, they have been made available largely in the smaller suburban
places rather than in central cities.
34
-------
TABLE 13
Distribution of FWPCA Grants by Size of Community
as of January 31, 1969
Population Size
Less than 2,500
2,500
5,001
10,001
25,001
50,001
125,001
250,001
- 5,000
- 10,000
25,000
50,000
125,000
250,000
500,000
500,001 and over
TOTAL
$ Million
173.1
128.1
155.9
215.7
150.6
143.9
62.
36,
68.8
% of Grants
.3
.3
,7
15,
11,
13,
19.0
13.3
12.7
5.5
3.2
6.1
10U70
TABLE 14
Metropolitan & Non-Metropolitan Distribution
of FWPCA Construction Grants,
1956-1968
Grants Offered
Communities within SMSA's
Communities outside SMSA's
Less than 2,500
2,500 - 4,999
5,000 - 9,999
10,000 - 24,999
25,000 - 49,999
TOTAL
$Mi11ions
659.4
111.2
74.0
78.5
103.0
77.9
1103.9
Percent
59.7
10.1
6.7
7.1
9.3
7.1
100.0
35
-------
TABLE 15
Although the treatment of industrial wastes by public agencies
has only begun to receive attention, the practice is well established.
A very substantial portion of the hydraulic loading of the total
national system of public treatment plants is of industrial origin
— the precise relationship varies according to the definition of
"industry" that is employed. Because of the hioher materials con-
centrations of industrial wastes, it is probable that well over
half of all wastes removed or stabilized by public treatment are of
industrial origin.
36
-------
TABLE 15
Relative Domestic and Industrial
Loading of Municipal Waste Treatment Plants in 1968
CO
Community
Population
Category
under-500
500-999
1,000-2499
2,500-4999
5,000-9999
10,000-24,999
25,000-49,999
50,000-99,999
100,000-249,999
250,000-500,000
over 500,000
TOTAL
1400
1600
2400
1300
1000
800
300
160
85
28
24
9100
Gross
Indicated
Loading
64.0
156.0
588.0
682.5
1050.0
2010.0
1687.5
2040.0
2677.5
2100.0
2700.0
15,756.0
Domestic Component
e 100 G/C/D
49.0
120.0
420.0
487.5
750.0
1400.0
1125.0
1200.0
1487.5
1050.0
1800.0
9890.0
-------
FIGURE 2
Potential feed lot waste problems are highly concentrated.
Forty-seven percent of beef animals sold are sold from lots with
feeding capacity of 1000 head or more, and 88 percent of these cattle
are sold from lots in ten States where large feeding operations
predominate.
38
-------
FIGURE 2
Number and Percentage of Cattle Marketed from Feedlots with Capacities of 1,000 Head and Greater --Selected States, 1968
u>
Indicates the ten States
West and South of the Missouri
River which account for almost
90 percent of all cattle marketed
from lots with capacities of 1,000
head and greater.
Top number shown in each State refers to thousand head of cattle marketed from lots
with capacities of 1,000 head and greater.
Percentages shown refer to the percent ot cattle marketed from feedlots with capacities of
1,000 head and greater.
-------
TABLE 16
Investment and operating costs associated with two levels of
waste treatment have been calculated for the inorganic chemicals
industry, the levels representing current industry efficiency and
complete removal of contaminants. Because of the nature of the
wastes, there are no intervening technologies. An almost infinite
number of configurations of elements are possible within the range,
depending on the degree of waste treatment reguired for individual
plants.
40
-------
TABLE 16
Projected Inorganic Chemical Industry
Costs for Waste Treatment
Cumulative Capital Costs in Millions of Current J3p liars I/
01
Removal 95 1970 1971 1972 19.73
27 299.3 325.4 359.9 400.1 445.4 494.7
100 1808.4 1964.0 2173.2 2416.3 2689.0 2970.0
Annual Operating Costs in M111 ions of Current Dollars
I/
Removal
27
100
1969
82.0
157.5
1970
89.1
171.0
1971
98.6
189.2
1972
109.6
210.5
1973
122.0
234.2
1974
135.5
260.2
\J Based on an averaqe 3.6% annual increase in the price level
and growth of production.
41
•ft U. S. GOVERNMENT PRINTING OFFICE- 1970 O - 384-03S
------- |