PB-230 100 RESOURCE RECOVERY THROUGH COMPOSTING AT ECOLOGY, INC./ NEW YORK, NEW YORK. AN EVALUATION PREPARED BY U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION II Environmental Protection Agency November 1973 DISTRIBUTED BY: U. I. DEPARTMENT ®F ------- bibliographic data SHiiT 1. B cport No. PB 230 140 J. Tide and Subtitle Resource Recovery trough Composting at Ecology, Inc., Sew York, New York, an evaluation prepared by the U. S, Environmental Protection Agency, Region II. T* ^purt 5»,e November 15, 1973 6. 7. Author(s) Vincent, Burnell w., Ruf, John A. 8* Performing Organization Rej>c. No. 9. Performing Organization Name and Address U. S. Environmental Protection Agency, Region II. Rev York, Hew York 10. Prei.ct/Task/Work Unit No. 11. Contract 'Grant No. 1Z Sponsoring Organization Name and Address IX Type i>i Report & Period Covered 14. 15. Supplementary Notes 16. Abstracts One cuvious problem facing municipal solid waste disposal is that the spatial distribution pattern of generation is nearly inverse to that of the most cost effective existing techniques for disposal. IMs suggests widespread, intensive reliance on transportation or on the potential of development of new technology. Ibis report addresses one attempt at development of a technological approach, as Is being made by Ecology, Inc. of Brooklyn, Hew York. Hie technology involved is composting; the attempt is to develop the economic viability of its use on muni* cipal refuse in an inner city situation. 17. Key Words and Document Analysis. 17a. Descriptors municipal solid waste disposal composting municipal refuse development 17b. Identifiers/Open-Ended Terms 17e. C'.GSATI Field/Croup 68 IB. Availability Statement Available from NTIS 19. Security Class (This Report) UNCI,ASSIFI|n 20. Security Class (This Page UNCLASSIFIED 21. No. of Pag es 22. Price -0*M NTIS-35 '"EV. 3-721 THIS FORM MAY BE REPRODUCED USCOMM-OC '4B52-P72 ------- RESOURCE RECOVERY THROUGH COMPOSTING AT ECOLOGY, INC.. NEW YORK, N.Y. AN EVALUATION PREPARED BY U.S. ENVIRONMENTAL PROTECTION AGENCY REGION II BURNELL W. VINCENT, URBAN PLANNER JOHN A RUF, CHIEF SOLID WASTE MANAGEMENT BRANCH ENVIRONMENTAL PROGRAMS DIVISION November 15, 1973 PREFACE One obvious problem facing municipal solid waste disposal is that the spatial distribution pattern of generation is nearly inverse to that of the most cost effective existing techniques for disposal. This suggests widespread, intensive reliance on transportation or on the potential of development of new technology. This report addresses one attempt at development of a technological approach, as is being made by Ecology, Inc. of Brooklyn, New York. The technology in- volved is composting; the attempt is to develop the economic viability of its use on municipal refuse in an inner city situation. This report was written in response to our perception of a need for public information for resource recovery technologies which have been developed by private industry as well as those developed by the Environmental Protection Agency. This particular process was selected on the basis of prox? uity and number of requests for information received. In addition, Corporate Executives of Ecology, Inc. requested that this office review their process. The sources of information for preparation of this paper were site visits and interviews with officials of the developing company, accountants' reports supplied by the company, an* interviews with and reports by officials in New York City Environmental Protection Administration. The plant closed about June, 1973, during the preparation of this report. We were informed by Corporate Executives of Ecology, Inc. that the reason it closed was because of (1) lack of funds, (2) general reorganization of the company, including new refinancing, to allow the construction of larger plants, and (3) need to modify equip- ment in order to be self-energizing. The plant is scheduled to reopen about June, 1974. : b ------- TABLE OF CONTENTS PREFACE i TABLE OF CONTENTS ii CONCLUSION lit 1.0 - INTRODUCTION 1 1.1 - history 1 1.2 - present status of the company 4 1.3 - market constraint® 6 corporate - 7 1.3.1 - disposal fees I 1.3.2 - fertilizer 9 1.3.3 - fuel 9 1.3.4 - construction materials 13 2.0 - PROCESS TECHNOLOGY 14 2.1 - shredding segment 15 2.2 - conversion segment 18 2.3 - product segment 20 2.4 - facility, general 21 3.0 - ECONOMICS 24 3.1 - financial status 24 3.2 - operating 6 capital costs 25 3.3 - revenues 32 4.0 - ASSESSMENT 33 4.1 - process § technology 33 4.2 - economics 33 4.3 - environmental impact 34 ii ------- CONCLUSION The composting facility owned and operated by Ecology, Inc. in Brooklyn, New York, appears to offer an environmentally sound method of disposal ot municipal solid wastes. The facility employs a process which subjects raw municipal refuse to environmental conditions suit- able for biological activity in such a way that natural degradation processes are accelerated, achieving effective stability within forty hours. The remains after this activity appear to be environmentally inoffensive. The cost of this process per incoming ton of raw refuse for a 600 ton per day plant is estimated by Ecology, Inc. as $5.34 operating expenses plus capital expenses of 15.80 per rated ton of capacity, amortized for 20 years at 6% plus land costs. Thtce data indicate that the total cost per ton of refuse for the conversion pro- cess in New York City, for a 600-1000 ton rated capacity, could be less than $15.00; according to City auditor figures, this is competitive with new or upgraded incineration facilities. If the Company's cost estimates prove to be correct, the process compares very favorably with incineration. Bulky and large ferrous wastes are removed as usual in incineration; there is little unconverted residue comparable to incinerator ash; there is no reported air pollu- tion, the major gaseous emissions are water vapor and carbon dioxide; there is no water pollution comparable to quench water; and the ver- satility of the product is much greater. It still retains two thirds of its raw Btu content for subsequent use in energy recovery, and it may be used as a fertilizer carrier, a building aggregate or other saleable raw material. The cost of processing the conversion product for sale as fertilizer will permit a considerable return from sale in subsidy to the whole operation. In the estimation of Ecology, Inc. it will render a net profit as well. Processing for sale as fuel or con- struction material are less profitable but still self supporting. It is our conclusion that the refuse conversion process in opera- tion at the Ecology, Inc. facility in Brooklyn offers considerable promise as a candidate system for inner-city disposal of domestic solid waste. This conclusion was based on two assumptions, the verifica- tion of which is outside the scope of this assessment: (1) that intra- city disposal is in fact desirable, as opposed to regional systems with iii ------- transhipment and, (2) that the cost estimations of interviewed officials Is in fact valid. It is also based upon casual observation of the system, its apparent environmental impact, its product, and on independent analyses of the product. The conclusion of this investigation are as follows: a. The process receives municipal domestic refuse as collected, removes 15% by weight as bulky rejects and tramp iron salvage, and processes the re- maining 85% to an environmentally inoffensive pro- duct in a manner compatible with urban industrial land use. b. The product of this process is useable as a carrier for fertilizer; it also lends itself to separation into fractions which may prove useable as construction materials and as fuel. c. The economic viability of the conversion process as presented by the Company appears plausible, and the addition of chemical nutrients to the product for sale as fertilizer seems economically sound. * d. The process is capable of handling domestic refuse without apparent environmental degradation, and subsequent reuse of its product is no more environ- mentally deleterious than is the use of the materials for which it may substitute. ~No definitive economic conclusions should be based on this investigation, however, since company cost and market pro- jections were used without attempt at validation. iv ------- SECTION 1.0 INTRODUCTION 1.1 History Ecology, Inc. was originally organized in Florida in 1958 under the name National Waste Conversion Corporation. It became a public corporation with its 1981 incorporation under Delaware law and changed its name to Ecology, Inc. In 1911 the company installed the first pilot plant, a one ton a day unit at Manhattan College, Civil Engineering Department, in Riverdale, New York. The College made available their laboratory facilities in conjunction with an experiment they were performing on biological oxidation of liquid wastes, and contracted with the Company to provide equipment for observing biological oxidation of solid waste. The contract ran for eight years, after which the equipment was moved to a spare room at the present facility at 221 Varick Avenue. During that period the Company assessed the feasibility of the process and filed their patents. Some ba«is for cost estimation were developed during this period, and limited investigations were done into marketability of compost. The conversion process in use today is nearly identical to the early process operated at Manhattan College, based entirely upon the patents that were filed in 1961 and granted in 1966. In 1969 the Company put together the format for their present operation, including the building layout and facility design for this particular site, and negotiated loans with the United States Economic Development Administration (EDA) and Manufacturers Hanover Trust Company. Ground breaking at the Varick Avenue site (Figure 1) was September 11, 1969, and they began moving equipment into the building in May of 1970, about eight months later. The first load of refuse was received in July of 1970; the next six months were de- voted to debugging the flow process. The early periods of operation were devoted primarily to product improvements since the intention was to derive the primary revenue from sales. As metropolitan dis- posal costs went up, more and more attention was devoted to improving the disposal process. Since June 1972 they have been handling on a fairly consistent basis 25 tons a day of New York City's refuse with a smaller and smaller residue or reject fraction. A contract was signed in September, 1972 with the City of New York to handle up to 150 tons a day, and the intentions are now to approach that figure by 1974. ------- EDA loans were contingent upon locating within designated impact areas. Sit® selection was therefore limited to the Brooklyn Navy Yard and some adjacent property. The Company's original selection was Building No. 292 on the Brooklyn Navy Yard but the City did not take title to this property until much later and so their lease was not hono-ed. They then looked for M-3 zoning within the designated area adjacent to the Yard. Zoning and land use maps of the Williamsburg Area are shown in Figure 2. The present location described in Section 2.4 (page 21), was the only site available. It was not originally for sale so they ac- cepted a 21 year lease, which was acceptable to EDA. They later purchased the site. The site has navigable access which could provide direct rail service, delivering additives and transporting the marketable products from the plant. Lighterage is included in the rail haul freight rates throughout th«* New York Metropolitan Area. The river channel capacity allows 4,000 ton barges to load freight for rail transit south along the Eastern Seaboard so as to spread seasonal demand. This brief summary of a history reflects an uncharacteristically smooth beginning for solid waste processing facility start-up. Much of this is due to the opportunity afforded by the EOA development of the Brooklyn Navy Yard. There was little or no site opposition during this period of intensive build-up of the area with light and medium indus- tries. Access to capital was facilitated and several other traditional road blocks to the start-up of new industries were avoided. The purpose of the EDA involvement. of course, was to stimulate the hiring of unskilled workers living in the area. This was willingly done by the Company and has proved to be of little deficit. Every person on the plant staff was brought on originally as an unskilled laborer at minimum wages of $2.50 an hour, including the plant fore- man, the mechanics and all the craft trades. During the first year of operation the turnover rate was 40% or less, and nearly all those who remained after the first year are still with the Company. In 1959 the Corporation made their first overture to the City of New York. The discussion lasted for three years, and by 1961 they had a fairly detailed contract negotiated, but the City was not faced at that time with the same pressures and prices for disposal services that they are today. Also there was no evidence that the process was reliable. All that was in existence was a pilot plant at Manhattan College. During the intervening ten years the discussions remained -2- ------- I ) m Figure 1 Plant Location ------- open but no refusa was received from Mew York City. In feet they im- ported their reftise from Broomall, Pennsylvania where a shredder manufacturer was paid to pick up raw domestic refuse from a local in- cinerator, shred it, and sMp it fresh to New York. The first shipment of New York City refuse was received by the Company in July 1970; the arrangement at that time was an on-call basis with no money involved. Whan the Company needed refuse they called the City and deliveries were made. This system stayed in effect until August, 1972, when they signed their present contract. It provides payment of $4.50 per too up to ISO tons per day, with the City providing free pick-up for the 5% bulky ex- tract. The City has computed this fee an a basis of the reduction in haulage cost from the immediate vicinity of the plant to the nearest dis- posal site. This contract went into ef «@t for payment in October 1972. There is a verbal understanding between the Company and the City that when capacities of the system have reached tt paint of 1,000 tans a day that the Company will be eligible for the same offer that Monsanto was made, that is, 112.50 a ton on a guaranteed receipt basis. A request for proposal dated February 13, 1972 from the City confirms that the system is under consideration as one of several 1.000 TPD systems be demonstrated under an arrangement wherein the City would purchase the facilities and lease them back on a service fee basis. 1.2 Present Ststus of the Organiiattoa. Ecology, Inc. is today a corporate entity established under the laws of the State of Delaware. It is wholly self sustaining, attempting to support itself solely by salee receipts and disposal contracts. It employes 49 full time personnel plus four part time or temporary em- ployees. The Company is authorized by charter to issue 3,800,000 shares of which 1,527,540 have been issued. At the and of 1972 the Company had current liabilities of $5.2 Million and current assets of $100,000, and had intentions of offering for sale $2.75 Million worth of shares. A successful return on this offering will permit Company continuation, Much is dependant 19cm a profitable market situation during the next season. Tl»s Company spends a considerable portion of its time and energy upon market analysis and product research. The plant appears to have been considerably debugged during the period of closure in the Spring of 1972. Since the commencement of the New York City contract in the Fall of 1972, the plant has had an increasingly stable operation and production schedule. -4- ------- ------- Chemical additives and oilier supples are purchased by the Company on an as needed basia, COD. Fertiliser distribution is bandied essentially through area distributors both wholesalers and retailers. Although market analyses have indicated a potential demand for the conversion process pro- duct, called Stabilate, as a fuel, and as an aggregate for construction materials, the Company has as yet received no proceeds from the sale of Stabilate for these uses. The Market potential does appear favorable, however, for production for specific use fuel, for instance, institutional boiler fuel. Pelletised for use as a fuel, the material is fairly light weight, clean, and has reasonably good burning characteristics. While not as high as coal or oil in Btu content, the ash residue, and particulate emissions are likely to be similar to coal and it will have a low (0.1%) aulfur content; its fuel value has been estimated at around $3 to $4 per ton. Its utility as paper board aggregate is nearly identical with that of paper, and its value as a paper replacement is estimated to be about $25 per ton; its value as a construction material aggregate on the same basis is estimated by the Company at about $19 per ton. While the productivity of this plant .earns to have stabilized, it was impossible to determine, in the few site visits made in connection with this paper, the reliability of the system. The Company states that there have been no periods of significant duration during which the system was inoperatle, and claims that the preventive maintenance activities, the standardization and stockpiling of parts, and the on-site ability to disassemble, repair and reassemble all components without serious process disruption preclude unscheduled down time. At the end of March 1873, General Electric acquired a process license from the Company for the use of the Company's biological oxi- dation process. Under the agreement General Electric and the Company will submit joint proposals for construction of the Company's solid waste conversion plants throughout the United States. The plants will be operated and the products will be marketed by General Electric. The Company granted General Electric options to purchase up to 30% of the Company's outstanding shares. " This involvement dates back to June 1972, when General Electric made a preliminary review of the Company's plant operations, products and market development. At that time General Electric made a proposal to the Company to analyze the markets and the plant operation; under the terms of this agreement. General Electric sent teams of plant operations and marketing specialists to work -6- ------- with the Company's staff to assess as well as to attempt to improve the operation. The General Electric employees worked on-site throughout the Fall of 1972 in cooperation with the Company's staff, making sug- gestions for improvement of the operation, and analysing the propects of the facility in the context of its national potential. The General Electric staff has also accompanied the Company's personnel on trips to several communities including the Town of Greenwich, Connecticut, and New York City; presumably General Electric will direct some por- tion of their activities in the field of resource recovery towards investi- gating the potential of the Company's system. 1.3 - Market. Constraints, and Corporate Posture. The Company's intention is to produce saleable products which use domestic municipal refuse as a raw product. The intended market pre- sently is the retailing of fertilizer, fuel, and construction materials. Refuse is received and rendered inoffensive by stimulating oiochemical action, producing Stabilate, which is used as n vehicle for chemical nutrients, as a fuel, or as a fine aggregate for construction materials. This Stabilate is classified into five categories by the Company accord- ing to its characteristics and intended use. Some characteristics are given in Table 1 on page 10. Generally, Stabilate I is the untreated product of the digester and may be used directly as a fertilizer carrier or may be processed into Stabilate n or III. Stabilate H may prove to be useful as an aggregate in bricks or blocks. Stabilate III is used as fuel or soil conditioner or may be separated into Stabilate IV for heavy fiber board, and Stabilate V for light. See the Flow Diagram in Figure 4, page 17. When the Company originally began their investigations, the dis- posal fees for domestic municipal refuse were low. Subsequently in- creases in intra-dty disposal costs and in the cost of pollution control tend to offset the increases in cost of production due to inflation, and for over-estimation of the market demand for the products. It is pre- sently anticipated that disposal service will form a major portion of the Company's revenues. The realization of this has precipitated the only change in the Company's intentions since its early inception. It is now the Company's intention to accept all domestic refuse and process it as completely as possible. The corporate posture regarding each of the four potential sources or revenue now being considered will be dis- cussed in the following paragraphs: -7- ------- a. Disposal Fees. The facility1® compatibility with heavy industry land uses is an important factor in determining locational acceptability. Unlike many traditional forms of disposal, these resource recovery facilities do not require a disproportionately large land area, they have no visible effluent, and they are not generally obnoxious neighbors in land zoned for heavy industry. This would permit inner city locations, achieving a competitive advantage in terns ©f haulage and transportation fees over those types of disposal facilities which require larger area. For instance, the present location of the Company's facility enables New York City to pay the present contract amount of $4.50 per ton without reliability. Sxnce the intermittent nature of the contract would not permit New York City to reduce its necessary disposal capacity, the only basis upon which a fee could be negotiated was upon the City's own computations of the haulage costs between the end of the collection route and transfer or disposal facilities. It is upon this basis that $4.50 per ton was decided as a fair rate for the small interruptable service presently provided. The design of the facility and its modular composition do not per- mit great economies of scale beyond one thousand tons per day capacity according to the Company, so that dispersion of these plants is, at this point in their investigations, feasible. This dispersed municipal con- figuration in an intensely developed megalopolis will permit the most flexible provision of disposal services; this process may be incorporated with other® in a city's system. The corporate posture regarding provi- sion of disposal services is in full recognition of the flexibility provided by the economies of the 1,000 ton a day plant capacity. Since charac- teristics of a 1,000 ton a day plant are nearly indistinguishable in a heavy industry land use pattern, it is superficially evident that much of the 26,000 tons a day disposal capacity of New York City or that of any major metropolitan area with a fair distribution of industrial zoning would lend Itself to relief by this approach. Those metropolitan areas whose spatial distribution patterns are less adaptable for these purposes could discover through analysis some lesser extent of dependence upon the method, Integrating it into their existing system, while retaining al- ternative disposal techniques where existing land use is incompatible or when markets are not ldentifiable. As shown in Table 1, page 10, the true specific gravity is greater than one. This could be significant if marine disposal were contem- plated , but obviously the material would need some form of restraining -8- ------- cover since many particles (e.g.. stynfoam) would not sink. It should not be anticipated that ray appreciable quantities of Stabilate will re- quire disposal, however, since there are cheaper methods of pretreating refuse for disposal. While no attempt lias been made to provide sludge disposal at this facility. the credit to composting at the Environmental Protection Agency's Johnson City. Tennessee, plant was estimated at $0 to $1 per ton of re- refuse processed. The prospects for including sludge handling appear favorable at lutuia facilities. b. Fertilizer. The conversion process end product, Stabilate I, is basically clean, easily stored and transported. It is enr ched so as to contain specified minimum percentages of nitrogen, phosphorous and potassium and qualifies under most state laws as organic in that a certain part of the nitrogen is in slow release form. The Company intends to produce a whole range of fertilizers, ranging from manure substitutes through high-analysis compounds such as would be used on lawns, gardens and shrubbery. The flexibility of formulation extends from unenriched compost (less than 1-1-1) to highly enriched organic fertilizer with nitrogen units covering the entire range of the inter- mediate formulae. The production will be determined by market require- ments independent of the content of the raw material or the refuse handled. The average fertilizer product bulk density is 35 pounds per cubic foot. Tests performed at the Department of Agronomy, of Penn State University* indicate that this fertilizer compares favorably with Scott s Turf Builder and Borden's as a lawn fertilizer. Three Ecology for- mulae were tested and found to prodice no appreciable "fertilizer burn" and, as shown in Figure 3 on page 11, very comparable color and growth (measured in clipping weights). c. Fuel. The conversion process as presently configured pro- duces five classifications of Stabilate. The characteristics of these classifications are shown in Table 1 cm page 10. Only the designation of Stabilate HI has been proposed for use as fuel. According to General *Waddington, Duich and Moberg, Progress Report 327 Evaluation of Fertilizer Containing Composted Refuse, Penn State University, May 1972. -8- ------- TABLE 1 STABILATE CHARACTERISTICS Stabllate Grade I II III IV V Bulk Density Qb./cu. ft.) Moisture % Retained on Sieve No. 6 8 10 12 20 pan 4-6 15 • 5 10 40 10 20 8-10 15 10 5 60 5 5 3-4 30 35 5 5 5 10 15-20 30-40 8-12 To be determined for product specifications. Dependent upon IV. (V«II!-I?) Results of the calorimetlc tests run on Stabllate III by New York University's C1v1l Englneerlng Department are as fol 1 ours: BOMB CALORIMETER Gram Sample Charred Residue Btu Per Pound hoistur® .0556 .0245 7566 7% .2470 .0538 7500 7% .4065 .0890 7725 7% Washed Sample: Ash Weight: Sample Weight: Whatman Filter Paper: BARNETT TEST 7841 Btu per pound 0.0897 0.0178 7,445 Btu per pound Specific Gravity: Moisture: Fiber Length: OTHER CHARACTERISTICS 1.66 6.5X 0.6 to 1.0 mr average 20 to 35S Is less than 0.2 m 20 to 40% is between 1.0 mm and 3.0 mm -10- ------- Figure 3 dims11 y from Pyn SUti UnlwrtUy toport - t— p>9« 9) awni music, ( civ,: is; w.nn. * ?! h b 2* ? i P S3 1,1. » I mm mnm n hi I! g H ?J 3* 1 § S| _ r ?L M Is « © »• if I? 1 I « V -t*- ------- Elactric computations. If all of the refuse collected in the United States were to be converted to Stabilate III, less than 5% of the electric power demand could be satisfied. On the basis of calorimetric tests performed by New York University for Ecology, Inc., Stabilate HI as produced by the existing plant has an average heating value between 7,000 and 7,500 Btu per pound. The raw municipal refuse as received has an average of 4,700 Btu per pound. Stabilate retains 2/3 of the total heating value of the raw incoming refuse and 1/2 its weight. This compares with approximately 12,000 Btu per pound for anthracite coal, and 18,000 Btu per pound for fuel oil. Stabilate Ill's combustion characteristics seem most adaptable to the market comprising institutional and large scale residential boilers now served by coal, s.* nee only at such smaller furnaces would storabil'ty be worth the pro- cessing costs. Storage and handling facilities would be similar, and pollution abatement problems would be less expensive, as would the cost per Btu. The effluent loadings would be low in sulfur and most other gaseous pollutants, but as high or higher in particulate content. Ash residue would be greatly increased, and provisions for its handling may be difficult in some facilities. Stabilate Ill's utility for large power plants and other burners with high performance fuel requirements would be notably less than that of coal and oil. It is not clear that its advantage over shredded refuse would even warrant investigation, considering pro- cessing costs. Matching these limits to the market for the use of Stabilate M as fuel, the Company projections indicate a higher return for the use of Stabilate I as fertiliser and n, I¥ and V m pmpmr board and construc- tion materials. Therefore, the Company's intentions are to satisfy the demand for fertilizer and aggregate, first and then produce fuel. General Electric studies show, for instance, that for the economic sit- uation in New York City, Hartford, Philadelphia and Los Angeles in 1965, the outputs should be allocated as follows: Seven 1,000 tons per day plants would produce fertilizer, 20 would produce piper board and construction matexials and 130 would provide fuel. If each of these 130 plants were to generate 500 tons per day of bio-stabilized refuse, the net megawatt output would be 20 per plant; thus, the total for these 130 plants would b® 2,600 megawatts, only a fraction of the power de- manded in these areas. In terms of heating energy supplied, with a heating value of 7,000 to 7,500 Btu per pound at 7% moisture, with 130 plants generating 1,000,000 pounds per day each, or a total of 130 million pounds per day, the total energy produced would be 910 x 10® Btu. For comparison purposes the City of New York at present has over 400 schools and other city facilities which purchase at least 4,736 x 10® Btu per year of coal. This alone would count for three times the -12- ------- quantity produced by the 130 plaits. Large apartment building complexes with their own boiler facilities, hospitals, and many smaller industries would be prim® targets for sales efforts in this regard. It is important to note, however, that to date there has been no attempt to burn Stabilate IH outside the laboratory. Trial runs will certainly be needed to deter- mine suspension and ash characteristics, handling problems, and the adaptability of coal storage and feed mechanisms. The value in terms of heat of this Stabilats in is estimated at $14 per ton delivered. This revenue would have to cover any portion of the conversion process not covered by the disposal fee, yet permit the user to meet the cost of transportation to the furnace, plus any storage fee at strategically located storage areas within the City, plus the cost of conversion of coal storage hoppers to larger compost storage and larger ash storage, and the cost at each facility of converting so that Stabilate LD could replace coal or oil or whatever is now being used. The cost of emission control equipment which would have to be upgraded or adjusted to handle particulate emissions anticipated would have to be weighed against the cost of upgrading some or most of these sites to conform with sulfur emissions control requirements. An engineer with the New York City Environmental Protection Administration has calculated that this usage of the refuse is competitive with the usage of raw refuse directly as a fuel in these smaller facilities. His rational is based on computations showing the net value of bio-stabilized refuse FOB plant would be between $3 and $5 per ton (or $1.50 to $2.50 of originating raw refuse) considering the cost of transportation, storage and conver- sion. The value of raw shredded refuse is between $2 and $3.30 per too. which is the price that Consolidated Edison is offering to New York City for the heating content of raw refuse for steam generating facilities. d. Construction Materials. The Company has investigated the use of Stabilate as aggregates for such products as Hberboard, card- board and paper. The total annual demand for which Stabilate is competitive in paper board and construction materials is estimated to be 4,343,000 tons in New York City, Hartford and Philadelphia. If it is felt that 15% of the market is within the reach of these plants, then five of them would be able to handle the market in these three cities altogether. General Electric has also done some quantity es&mation which indicates that nationally and regionally the amount of Stabilate available for paper board and other construction materials, if all the refuse were to be converted to Stabilate, would greatly exceed the demand. For instance, in 1970 nationally 752,000 tons of Stabilate would be required to produce construction materials in the range of 70% to 80% Stabilate by weight. The annual supply of Stabilate, however, would be 37,609,000 tons. Little other data is available at this time for analysis. -13- ------- SECTION 2.0 - PROCESS TECHNOLOGY The raw refuse presently received and processed at the plant is collected by the City for incineration. The routes served are primarily the residential routes in the areas adjacent to the plant. No unusual attempt is made to exclude bulky items, but rather anything that is left on the street for collection which the collectors are willing to pick up and put into the hopper of a compaction truck is brought to the facility. The City has chosen to hold itself responsible for retrieving and dis- posing of whatever miscellaneous bulky wastes are not marketable (usually 5% by weight). The tramp iron (usually 10%) is removed by a dealer without reimbursement. Hopper dimensions and other hardware constraints at the present facility limit the entry size of bulky waste re- ceipts to a maximum dimension of 3* x 2* x l1. In the present facility the truck load* are dumped on to a platform, and the refuse is pushed into the hoppers using a small front end loader. TMs arrangement per- mits extraction of refrigerators, large rugs, bowling balls, or other items which may damage the hopper and the shredding mechanism, but any preferred system could be adopted for use compatible with the process. The following is a loose description of the apparatus contained in the present facility, which is designed so that it may be increased in capacity through modular addition of standard sise units. Essentially there are three basic elements to the process, the first being the shredding segment, the second being the digester or the bacteriological segment and the third being the product finishing portion of the plant. The first and third seg- ments are designed for eight hour operation per day, the middle stage, of course, is designed for a twenty-four hour operation. The first seg- ment is composed of the above -mentioned feeder process, with the dump- ing platform and front end loader, and two parallel lines, each with a hopper and two shredders in series connected by conveyors and mag- netic separation devices. The second segment, the digester apparatus, consists of superposed, stationery decks on which the composting mate- rial is turned over by mechanical rakes which move it along the deck horizontally where it drops to the next lower deck. The height of the composting layer on the decks is maintained at an average of 12 inches; the decks are composed of a basic unit of eight stacked decks ten feet long and twelve feet wide. Each modular unit holds 14 tons for a de- sign maximum retention time of 72 hours. The minimum effective length of a digester, determined by through-put/cost ratio, is eight modules, or 80 feet. Structurally it is considered by the Company to be uneconom- ical to go beyond 200 feet. The third segment is presently devoted to the -14- ------- manufacture of finished organic fertilizer; it consists of a screen, a dryer, compost storage, a mixer, a compactor, a granuiator, a product screen, and a product storage and bagging area. 2.1 - Shredding Segment. Access to this particular facility is awkward and not clearly marked. Trucks entering pass over an automatic truck scale where weight, tickets and billing paper work is handled, and then up a ramp around to a charging platform. Queueing space is confined; the ramp will allow only one truck at a time. Two parallel feeders, SO feet by § feet and two apron conveyors 30 feet by 6 feet carry the wastes past two manual sort- ing stations to the primary shredders. Manual separation is designed to remove large chunks of metal, mattresses, springs, rugs, and other hard to handle items which could damage or bind the machinery; the purpose of removal is not for salvage, the wastes removed (approximately 5% by weight) are simply stored for Sanitation Department removal. Approxi- mately 10% of the refuse is magnetically separated for removal by a broker at no fee. The two primary shredders, arranged in parallel, each have 250 horsepower motc.rs. They shred the refuse so that about 85% is 1/2 inch or less according to tests performed by the Company, in- creasing the incoming refuse bulk density from 15 lbs. per cubic foot to about 25 lbs. per cubic foot, the Company claims. Particle size deter- minations are run on 5 pound grab samples of the product of both sets of shredders and grate adjustments can be made to achieve the optimal particle size for composting. Conveyors transport the shredded refuse across magnetized head pulleys which remove SO to 95% of the tramp iron, and discharge the remaining material to the secondary shredders. These shredders further reduce the particle size to the point where approximately 10% is 3/1 inch or less, further increasing bulk density to about 40 pounds per cubic foot according to the Company's estimation. Both pairs of Pennsylvania Crusher Company shredders, similarly constructed and operated, have a single horizontal rotor shaft with swing- ing hammers. The design rate of all four shredders is 20 tons per hour. Each is powered by a 250-horsepower, open, drip-proof, electric motor that powers the rotor shaft by means of a flexible coupling. Refuse is crushed between the swinging hammers and the grates. The refuse is pounded until it is small enough to pass through the grates, located below the rotor shaft. The grates are adjusted after every 200 tons so that they almost touch the swinging hammers. These adjustments tend to improve the efficiency of the shredders in reducing the particle size. -15- ------- The grate openings 1n the primary shredder are 6" x 8". The grates of the secondary shredder, have openings that are 1" x 6". The secondary shredder grates were extended from 135® to 180° when it was found that no bulky by-pass was occurring. Each shredder Is provided with a cover for access to the harners and grates. Some additional data on these units as provided by the Company 1s shown in Table 2, below: Table 2 Item Manufacturer Number Rotor Speed (rpm) Capacity, each (rated) (Operating) Rotor Inertia (lbs.) Number of Hammers Weight per Hammer (lbs.) Feed Opening (in.) Grate Opening (in.) Installation Date Hammer Replacement Frequency: tons processed Total Installed Cost ($) Repair Cost, 1972: labor ($) Parts & supplies Primary Secondary Pennsylvania Crusher Company 2 720 20 tons/hour 12-16 tons/hour 2 720 20 tons/hour 16 tons/hour 11,500 7,000 36 48 70 35 44 x 78 44 x 54 6x8 1 x 6 May 70 May 70 1,000 1,000 72,500 68,900 9,000 7,500 4,200 6,000 The extrapolated costs per ton shredded during 1972 1s approximately $7.79. The costs per rated ton of capacity is $5.46. For the primary shredders, the hourly costs are as fol1ows: $/Hr. Operation (power, labor, etc.) 23.00 Repair I Parts Replacement 30.00 Amortizat1on & Interest 1.50 Total for Primary 54.50 -16- ------- Figure 4. MATERIALS FLOW by weight RAW REFUSE SHREDDERS WATER V BULK REJECTS TRAMP IRON DIGESTER ADDITIVES V 5TABILATE I \ WATER DRIER 16-4-4 FERTILIZER * SEPARATOR STABILATE III STABILATE II WATER / STABILATE IV STABILATE V ------- 1.2 - Digestion Segment. The shredded refuse which contains about 30 to 40% moisture is then carried by conveyor to a storage tank, and then to the top deck of the digestor. A chain loop arrangement provides drive for a series of parallel bars which tow rakes through the compost pile. Four rakes are spaced about 24" apart cm each bar. These bars are about 20 to 25 feet apart on the chain and travel on one chain south bound on one platform. drop down to a lower platform and travel the return north bound trip. The normal operating speed of the rakes is between 30 and 45 feet per minute. These rakes provide the only means of physical agitation that the composting material receives in the digester, both for forward motion and for aeration and mixing. The spacing between the furrows on a bar is such that consecutive furrows travel in slightly offset paths, providing thorough agitation in this con- tinuous flow process. The process provides considerable flexibility for independent control and measurement of the determining factors of composting. Some of the techniques for providing these controls are proprietary. but a general description follows: (a) Aeration. The supply of oxygen is maintained by the forced air heating system; the rate of aeration is then determined by the par- ticle size, the height of the pile and the agitation. The bed agitation is controlled separately for each pair of decks by the speed and the posi- tion adjustment of the raking apparatus (see (f) below). While the control of neither supply nor contact is completely independent, the range of operating requirements is such that both may be adequately achieved without disrupting the other factors such as detention time or the air temperature. (b) Particle sise may be optimized by adjustment of primary and secondary shredder grates. Experimentation his determined optimal ad- justment for given agitation,, temperature and moisture ranges. (c) Moisture recording sensors are set in probes to each of the deck® to measure moisture content of the compost pile. Water may be sprayed at the beginning of each deck as needed for increasing moisture. There is no provision for downward adjustment other than stopping the spray and increasing the air temperature. The optimal moisture con- tent m the top deck is 50 to 55%. -18- ------- (d) pH is measured by the same deck-mounted probes. It can be controlled by the addition of buffering agents to the moisturizing spray, separately for each deck. pH is thus not independent of mois- ture controls in that it may not be controlled when no moisture is needed, but in routine operation that is not a problem. Initially, as microbial action commences» pH will drop quickly due to carbohydrate breakdown into organic acids. After the consumption of the adds, the pH tends to rise to 7.5 but seldom higher. (e) Temperature can be controlled by an air heating system sep- arately adjustable for each deck. Probes are used to measure air tem- perature anc® pile temperature. While air temperature can be controlled directly, pile temperature adjustments can only be influenced through air temperature or other controls such as addition of hot water or agitation. The air heating system is presently adjusted to maintain ambient air temperature about 10°F above pile temperature on the top six decks and at 150°F on the bottom two decks. (0 Detention time. The speed that the pile travels across the decks can be adjusted separately for each pair of decks, since a single chain drives the rakes for two decks. Leveling bars which travel in frost of each rake assembly can be adjusted between a minimum pulp layer height of 8n and a maximum of 16". Chain speeds can be adjusted between 3 feet per minute minimum and 45 feet per minute maximum. The rake delivery can be measured with automatic impact sensors which feed back instructions to the drive chain. These may be adjusted by overrides which provide for temperature control or mixing or the other parameters. Table 3, following indicates the optimal parameter settings. The detention time is normally adjusted to 40 hours. -18- ------- Tabla 3 PARAMETER SETTINGS Peek m % Moisture Pile Temperature ®P Air Temperature I 5.5-6.2 50-55 90-120 125-130 ~ 5.5-6.2 45-50 130 135-140 ill £.5-8.2 40-45 120 125-130 IV 5.7-6.4 35-40 115 120-125 V 5.9-6.6 30-35 110 115-120 ¥1 6.1-6.8 25-30 110 115-120 VII 6.8-7.0 15-20 90-100 150 vm 7.0 10-15 90-100 150 The Warburg respirometer test, similar to BOD tests, is used Id determine the degree of degradation of available carbon. The Company claims that these tests indicate no adverse effect due to normal fluctua- tion in paper content. As noted above, much of the system is automated. Further automa- tion provides safety control devices such as flow sensors and, oxygen sensors, excessive binding or torque demands, as well as fire and system component breakdown alarms. 2.3 - Product Segment. The third segment, the product treatment apparatus, is arranged for fertiliser production in the existing facility. It is described as follows: The compost screen (Number 4 mesh) is fed by conveyors from the bottom of the digester, it removes approximately 10% of the oversized material for regrinding, mostly unde- oomposed substances, including plastics and nanferrous metals. This is followed by a compost storage tank, which holds some biologically stable material in stockpile for process flow equi- librium. Several compartments may be required depending upon chemical consistency needed in the various product speci- fications. This is followed by a mixer, fed by a conveyor -20- ------- belt, through which solid additives axe incorporated. The next process uses a compactor, granulator and product screen. They are adjustable to achieve various particle size and other physical characteristics in the product. It is followed by another storage tank which feeds the bagging operation. The processing of construction materials and/or fuel has not yet been described in detail by the Company since it is still in research stages. Automatic additives control is also provided in the production of fertiliser for the nitrogen enrichment. The final N-P-K enrichment is accomplished by the addition of solid additives after the composting process. Quality control sensors are used for gross indicators of carbon and nitrogen in the raw material, and in the composting pulp. 2.4 - Facility. General. The plant is situated on a five acre site. Thirty percent of the property is devoted to vehicular access, twenty percent to storage of the product and fifty percent to the building which houses the process. Of the 42,000 square feet of building on the site, ten percent is ad- ministrative, twenty-five percent is in the shredder segment, forty per- cent is in the digesting segment and twenty-five percent is in the pro- duction of fertilizer. Intentionally, ihere is no unprocessed refuse holding capacity other than the shredder hopper, and the apron upon which the vehicles dump. Today there is holding capacity provided in two 18 cubic yard open top metal boxes for separated bulky and ferrous wastes, and another for digester residue which has been removed by screening and is hauled away to disposal. The Company's intentions are to phase out the use of this latter need for disposal by reg rinding the screening for inclusion in the Stabilate. These screenings, however, are largely made up of glass, plastic, and non-ferrous metals which do not enhance the quality of the Stabilate for fuel or soil conditioning uses. The pur- pose, however, is that eventually there will be absolutely no residue which is not processed for subsequent sale or reuse. -21- ------- As mentioned in Chapter 2, General Electric has provided some amount of staff time on market analyses and to investigate the opera- tion and to provide recommendations for its improvement. They determined that 25% of the personnel man/hours are involved directly in production, 30% are devoted to supervisory capacity, and 45% are involved in maintenance. Detailed findings have not been released. At one point, the Department of Public Health of the City of New York required placing of rodenticide and other rodent control pro- cedures on a monthly basis; this was discontinued after a period of several months in which no rodents were observed. Operating person- nel have noted rats on the top (undigested) deck, however. Casual site inspection does not indicate any inordinate amount of noise or odors or other dispieasant emissions from the operation in its present location in an industrial area on the waterfront of th<» East River. A backup equipment inventory is maintained at a level of 7% of the number of items of operating equipment, and the total maintenance and tool inventory value combined with the backup equipment inventory is $28,000, estimated at 1% of the capital inventory. Nearly all main- tenance is performed on-site; each of the components of the facility is modular and replaceable. There is a twenty percent scheduled down time for maintenance. The Company claims to have nearly no non- scheduled down time, declaring that there is sufficient redundance in the system to permit by-passing nonfunctioning components during their removal and replacement so that continuous non-disrupted opera- tion is virtually assured. (The only serious disruption to plant opera- tions occurred as a result of zero degree weather during which the plant had been closed. Several burst pipes occurred, seriously hamper- ing the operation during subsequent startup.) The present operation has the flexibility to permit scheduled down time during operating hours since the City does not require receipt of the materials and the Companv can simply call the Sanitation Department on any day and request that truck deliveries not be sent. Table 4 gives operating data for much of 1972-3. Some of the smaller aberrations are due, of course, to the logistics of municipal delivery. Now that relative stability has been achieved, the intentions are to begin demonstration of reliability. -22- ------- Table 4 9/19-30, 1972 Oct. Nov. Dec. 1/1-7, 1973 1/8-14 1/15-21 1/22-28 1/29-2/4 2/5-11 2/12-18 2/19-25 2/26-28 3/1-4 3/5-11 3/12-18 3/19-25 3/26-31 4/2-8 4/9-15 4/16-22 Number of Days Available for Operat1or 9 22 20 20 4 5 5 5 5 5 4 4 3 2 5 5 5 5 5 5 Operating Data Tons of Refuse Taken In Number of Days of Dally Period Operation Average Aggregate 7 22.4 157 15 7.9 119 18 7.5 135 17 5.8 100 4 15.7 63 5 3.0 15 5 8.6 43 5 13.6 68 5 7.8 39 5 26.5 113 3 28.3 85 3 36.6 110 3 28.0 84 2 21. 42 5 15.3 78 5 22 110 3 28 84 3 31 105 5 32.5 162 4 27 108 5 23 115 Tons of Fertilizer Produced Dally Period Average Aggregate 3.6 55 9.2 167 2.8 49 10.7 43 10.8 54 13.6 68 16.2 81 17.6 88 18.6 93 17.0 51 22.3 67 24.3 73 28.5 57 18.2 91 26.4 132 28.3 85 31.0 93 34.2 171 38.3 153 36.2 181 -23- ------- SECTION 3.0 - ECONOMICS The economics of this process is based primarily upon the premise that disposal fees will support to some extent the conversion of & muni- cipal refuse to a commercially competitive raw material. Obviously if the net cost of the raw material produced is greater than an acceptable equivalent, this venture win fail economically. Thus, the economic test is the identification of end products whose raw material specifica- tions are most nearly met by the conversion process product. A corpo- rate decision has been made not to segregate any materials for salvage. Thus, the only sales revenue potential are the disposal revenues, and the direct marketing of unrefined converted waste®, under the trade- mark Stabilate, or the internal sale of Stabilate for refinement or sub- sequent processing. As mentioned in Chapter 2, the Company presently sees three potential products of such processing; construction materials, fertilizer, and fuel. Each of these has some situational advantages which enhance its competitive advantage for some markets. For instance, the inner city market for aggregates for construction materials is more accessible to this process than it is to the typical quarry or forest. This chapter of the report will address (a) the financial status of the enterprise, (b) the operational costs, (c) the revenues, and (d) the prospects for this enterprise. 3.1 - Financial Status. Ecology, Inc. has total assets, as of November 30, 1972 of $6,336,191; as shown in the balance sheets, this comprises essentially $400,000 in land. $800,000 in land improvements, and $2 million in building and $3 million in equipment. Liabilities on that date totaled $6,102,770 comprising largely a U.S. Economic Development Administra- tion loan of $1,300,000 at 4 1/2% interest, and a working capital, mortgage, and other loans from a Commercial Bank of $1,600,000 and accounts pay- able and accrued expenses of $1.3 million; loans and short term notes payable make up the remainder, and shareholders equity on that date ' was $234,000. In this connection, the Company has a $3.8 milMcm ac- cumulated deficit and a working capital deficiency of $2.5 million. $1.5 million shares have been issued at a par value of $.10 per share; 35% are held by Company Chairman and Directors. An audit in September 1972 found that a successful consumation of a current offering of almost $3 million worth of common stock would permit resolution of current deficiencies and continue operation. Reasonably profitable future opera- tions should produce stability. -24- ------- The Company his been engaged primarily in process development and in market analysis since inception. Total proceeds received by January 1, 1973 were $96.009, disposal fees constituting only 3% of that since the contract only became effective in October 1972. At the pre- sent facility, the estimated maximum annual proceeds are anticipated by the Company as: Disposal fees (150 TPD X 300 days X $4.50/ton) $ 200,000 Sale of fertilizer (ISO TPD X 300 days X $20/ton) 900,000 Total $1,100,000 It is not the Company's intention to derive self sustaining revenues from the existing facility. It has been designed as an operational prototype in order to demonstrate system effectiveness. Modular insertions will permit the existing facility to be developed to a final plant capacity of 300 tons per day. It is the present corporate intention to proceed with the existing facility in this manner. The Company is entirely dependent upon private capital for its existence to date. The total investment, almost $10 million, is split evenly between debt and equity. Th* only outright cash grant amounted to $150,000 for training. This was funded by New York State and by the NABS program, and did not go towards plant support, but entirely went into the training and upgrading of indigenous hard core unemployed members of the surrounding community, 3.2 Operating and Capital Costs. Net costs of mechanical digestor types of composting facilities were estimated to range from $12.46 per tan at 250 TPD to $4.14 per ton at 2,000 TPD operations in a recent survey by the Midwest Research Institute. * Tables 5 and 6 were developed by Midwest Research Institute on a 1,000 TPD basis using gross assumptions such as $5 per hour labor wage rates plus 30% fringe, $0.01 per kwh, $0.50 per million Btu's and municipal ownership; they are shown here to provide a framework for comparison of tills plant. ~Resource Recovery, The State of Technology, Midwest Research Institute - U.S. G.P.O. Washington, D.C. - February 1973. -25- ------- hwmmL QiaAYtm rxmim-iTm wmcms <300,000 W¥ Rat* Vast* Input) Taken directly fro® (MRI) Per Too of Annual Costs Total Waata Input Operating Costs „ f 915,000 $3.05 Fixed Costs 217,000 0.72 Capital Charges Amortized Investment $ 439,000 Fixed Investment 1,385,000 Recoverable Investaent 31.000 Total Capital Charges $1.855.000 6.19 Total Annual Cost of Operation $2,987,000 $9.96 Value of Recovered Resources Humus $ 450,000 Ferrous Metals 245,000 Nonferrous Metals 240,000 Glass 168.000 Gross Value of Recovered Resources $1.103.000 $3.68 Met Annual Cost of Operation $1,884,000 $6.28 Effect of Systea Capacity on Disposal Costs 250 TPS 500 TP3J 1.000 TPB 2.000 TPD Total Annual Cost $1,211,000 $1,902,000 $2,987,000 $4,699,000 Resource Value 276.000 552.000 1.103.000 2.206.000 Net Annual Cost $ 935,000 $1,350,000 $1,884,000 $2,484,000 Net Cost Per Ton $12.46 $9.00 $6.28 $4.14 Net Gain Over Goa- ($2.09) C$0.02) $1.40 $2.51 ventional Incinera- tion Per Input Ton ------- Table S (Table Taken Directly From MRI) TOTAL CAPITAL RMflRaHMTS FOR CglFOSTIlS PROCESS (1,000 TPD Raw Vast* Input Capacity) Amortised Investment Engineering, IU $ 1,748,000 Plant Startup 353.000 Total Amortized Investment $ 1,901,000 Fixed Investment Waste Handling, Preparation and Storage $ 1,730,000 Waste Conversion 5,500,000 Resource Recovery Processes 946,000 Auxiliary and Support Facilities 6.400.000 Total Fixed Investment $14,570,000 Recoverable Investssent Land and Site Improvements $ 400,000 Working Capital 229.000 Total Recoverable Investment $ 629,000 Total Capital Requirement $17,100,000 Total Capital Requirement at: 250 TPD Capacity $ 6,940,000 500 TPD Capacity $10,900,000 2,000 TPD Capacity $26,850,000 -27- ------- Tables 7 and I have been developed by Ecology. Inc. for general distribution. They give the Company's projection of costs on a basis of private ownership at 8% interest but exclusive of land cost. Just for comparison purposes, the 500 TPD plant cost may be interpolated at $6.27 per ton; converted to 5% interest, it would be $§.77 per tern, nearly identical with the average investigated by Midwest Research Institute. Company estimates for 1,000 TPD and 2,000 TPD were not available at the time of writing for comparison and economies of scale. The 500 TPD "opezating" costs may be interpolated at $816,000, which is approximately the same as the Midwest Research Institute figure for "operating plus fixed" costs for that size plant. It was concluded by Midwest Research Institute that in general the economy of scale re- garding plant size for these high rate digestors is more pronounced than in alternative systems. This is in apparent contradiction to the conclusions of the Company, who feels the optimal scale is around 1,000 TPD. It should be noted that the operating costs, Table 7, submitted by the Company are the costs only of the conversion process, not the production of fertilizer. The cost of chemical additives, the largest single item in fertilizer production, varies considerably according to market condition and formulation. For instance, June, 1973, seasonally adjusted, showed a 20% price increase for additives. The cost of addi- tives for one ton of 12-3-3 is $35, for one ton of 16-4-4 is $50 and for one ton of 20-5-5 is $70. The cost of processing is an additional $30 per ton. The Statement of Expenses given in Table 9 was prepared by an independent C.P.A. for submission to the Securities Exchange Com- mission . It gives a fairly good picture of the aggregate cost of the several categories of actual plant operation, again with the glaring ab- sence of the cost of chemical additives. Evidently these costs had not been incurred at the time of audit. They should substantially affect the total. -28- ------- Table 7 ECOLOGY, INC. SOLID HASTE DISPOSAL PLANT COST ESTIMATES (CAPITAL) PLANT CAPACITY TONS OF REFUSE COST Daily Yearly Plant Per Ton of Refuse 100 30,000 $ 4,000,000 $11.70 150 45,000 5,000,000 9.70 200 60,000 5,300,000 8.50 250 75,000 6,500,000 7.60 300 90,000 7,000,000 6.80 450 135,000 10,000,000 6.50 600 180,000 12,000,000 5.80 - Plant cost figures do not include cost of land or preparation but do include all construction costs. - "Per Ton" cost is estimated on the basis of 20 years amortlza tion 6% p.a. straight line. -29- ------- ECOLOGY, INC PER MONTH 100-150 T/D (Hen) (16) PLANT LABOR $13,000 PLANT SUPERV'N 3,000 UTILITIES 5,000 MAINTENANCE 2,000 SERVICES 2,000 INSURANCE 2,000 OFFICE 2,000 TOTAL MONTHLY: 29,000 X 12 - YEARLY 348,000 PER TON OF REFUSE: 7.72 to 11.60 Table 8 JAN 73 PROJECTION OF OPERATING COSTS 200-300 T/D 450 T/D 600 T/D (30) (40) (50) $24,000 $32,000 $40,000 4.000 4,000 5,000 10,000 14,000 20,000 3,000 4,000 6,000 2,000 2,000 2,000 3,000 4,000 5,000 2,000 2,000 2,000 48,000 62,000 80,000 576,000 744,000 960,000 6.40 to 9.60 5.51 5.34 30- ------- Table 9 - Statement of Expenses Five Months Ended November 30 1872 1171 (Unaudited) Year Ended June 30 1072 1971 Interest income Costs and expenses: Salaries and wages Employee benefits Plant maintenance and pre-operating expenses Prototype equipment and operating expense Market development Lease of plant site, office and storage facilities Travel and related costs Depreciation of plant and equipment Amortization of patents, royalty rights and debt discount and ex- pense Legal and account- ing fees Interest Insurance Taxes (other than federal income taxes) Office expenses Miscellaneous Net (loss) 117,360 5.028 67,024 13,219 9.011 128,000 26,788 33,935 107,144 19,520 29,000 7,717 3,076 566,822 (564,072 3,701 8,083 20,385 19,300 21,517 96,075 27,445 19,299 9,414 7,464 23,950 40,236 37,844 45,078 106,657 287,218 46,7*7 26,065 91,794 283,527 46,481 90,245 20,016 22,499 44,882 47,490 19,608 32,846 13,545 20,598 753,970 1,804.043 833.174 (751.220 (1.796.943) (823.043) -II- 1970 I 2,750 $ 2,750 $ 7,100 $ 10,131 I 79,160 237,416 413,755 143,643 54,043 24,084 34,216 49,264 153,130 416,663 202,630 93,569 152,149 9,068 53,720 90,582 41,000 27,474 22,033 19,366 19,178 13,914 11.353 451,092 (371,932) ------- 3.3 - Revenues. Officials to the Hew York City Environmental Protection Administra- tion indicate that the final price for disposal services would be established through negotiations prior to contract award, but that they are presently suggesting $13 to $12 as a target for proposals. It has been publicly stated by the Administration that their present intention is to select several processes and contract at 1,000 TPD capacities with each. Using that volume for projection of revenues, the Company has indicated that ferti- liser production exclusively will be the most profitable. The volume pro- duced would probably have a significant impact on the market, saturating the lawn fertilizer market and reaching into commercial uses. Detailed investigations are being conducted by General Electric and the Company at present, but no findings have been made available. Extrapolating company projections appear unreasonable for 1,000 TPD operations. The $12 per ton disposal fee yields $3.6 million per year. This appears to cover projected operating expenses of the con- version process. The company estimates a return of approximately $20 per ton of incoming refuse. A ton of refuse is converted to one-half ton of Stabilate to which is added one-half ton of chemicals to produce a ton of fertilizer; the estimated profit of $20 per ton for fertilizer is presumably the proceeds accruing to the disposal operation, or the net proceeds from manufacture of fertilizer from Stabilate I. The retail suggested price for the lawn market is $5.95 for a 28 pound bag as printed an the label. The suggested wholesale price is $3.00 per bag, or $200 per ton of incoming refuse; the difference, $180 per ton, is the cost of additives ($35 to $70 per ton), processing ($30 per ton), trans- portation to the wholesaler, and advertising and marketing ($25 per ton). Bach of these figures is likely to change when the commercial use market is entered, so until General Electric marketing studies are made available for analysis, no conclusions should be drawn on projected revenues. -32- ------- 4.0 Assessment €.1 - Process 8 Technology. The technology involved seems to be fairly well developed. The stability of the product has not been rigorously determined. Mew York City engineers have reported faint odors while experimenting with the product submerged in sealed containers of sea water, suggesting possible degradation. Strobel and Rongved, with s similar product, has proposed sterilization by irradiation, indicating that they doubt the effectiveness of the pasteurizing effect of the composting process. The health effects of the use of compost for edible crops has not been well researched at pre- sent. The Company is continuing to investigate product characteristics, of course, since they will affect all oi the products' usesbility. Other- wise, the general technology of composting is commonly considered well developed. This specific process is still in developmental stages, and should be considered as such until successful operation on a scale of 1.000 TPD. 4.2 - Economics The costs as projected by the Company do not appear unreasonable. The revenues, however, appear soft without having the results of General Electric's detailed analysis. Only time will tell, of course, if the system is economically viable, but historical data indicate that there should be no aspect of market analysis overlooked. Of all the compost plants operating in the United States, only a few are still in operation. The U.S. Environ- mental Protection Agency has recently selected the State of Delaware as the recipient of a resource recovery demonstration grant; the funded portion of tMs project focuses on the marketing aspects. Present in- dications are, however, that there may be health hazards associated with Delaware's use of the compost for raising mushrooms. The use of the conversion system product as a raw material for more readily marketable products greatly enhances the economic- pro- file, if the costs can be covered. A major apparent softness of previous market analysis was the failure to properly assess the impact of ex- panding supplies of a commodity of marginal utility. Fuel, fertilizer and construction material compos® more definitive markets than humus or sail conditioner. What remains to be determined, therefore, is whether the economics of the use of a slightly inferior raw component at greatly reduced costs to produce a highly marketable commodity is preferable to the direct marketing of that component as a commodity of marginal demand. -33- ------- The environmental ethos may tend to offset quality as a demand factor. The Company's advertising emphasises the ecological advantage accruing to this process. They have advertised their willingness to underwrite advertising by retailers at $25 per ton sold. The evidence for a more conclusive economic assessment was not apparent. In principle the concept of marketing the compost internally in a system whose products are more widely consumed is attractive. Data on revenues suggests circumspection, but on the other hand there is little negative evidence to suggest assuming timid or unenterprising posture. 4.3 - Environmental Influence. Assessment of the influence on the environment of proliferation of this concept must compare the impact of the system with the systems it would replace not only at the point of processing or disposal but also at the point of intended usage of the products. No lasting environmental degradation was observed at the facility from either the conversion pro- cess or the subsequent processing. Noise, configuration, and potential odors confine potential locational choices for aesthetic reasons, but pro- perly located, environmental degradation appears negligible. The impact of this system, then, would be positive to the extent that it relieved the need for usage of alternative polluting methods. Solid outflow from the plant is in four categories: bulky rejects, ferrous scrap, non-compostable residue, and Stabilate. The bulky, such as appliances, rugs, etc., constitute 5% of the waste stream received and are the only major fraction of the incoming stream not intended for reuse. It is extracted without alteration and is removed by the City for land dis- posal at present; it is typically non-putrescible and can be mixed with demolition wastes or other "clean" fill. The ferrous scrap, 10% by weight of the incoming, is shredded and extracted for removal by scrap dealers. Presumably, most of this material is recycled. The reside® comprises plastics, non-ferrous metals, glass fragments and other particles which have passed through shredding and digesting segments of the process and are subsequently removed by screening. At present, this fraction is being reshredded and/or reprocessed for inclusion in the Stabilate with minimal -34- ------- loss of quality. The success is of course dependent upon degree of re- processing and on the subsequent use of the Stabilate; at present the volumes are not significant. Stabilate is wholly intended for subsequent usage. To the extent that its us® is not demanded at any price, it may be satisfactorily landfilled. Its characteristics in landfill are only specu- lative at this point. There is presently no removal of heavy metals or of many of the components of leachate except for ferrous extraction and pasteurization of most pathogens. Some of the potential for gas produc- tion has been exhausted, but some doubt remains that on a volumetric basis, ii« place, there would be significant improvement over raw or shredded refuse. Thare would be a definite improvement, of course, on a basis of refuse handled. It was estimated by an engineer with the New York City Environmental Protection Administration that only 1/3 the volume of the raw refuse landfill would be required, not including any reduced cover requirements. Carbon Dioxide, methane, water vapor and other gaseous emissions will occur, of course, but testing is needed to determine the degree of problem, if any. Subsequent usage of Stabilate as a component of fertilizer adds to the soil some trace amounts of whatever miscellaneous elements were present in the waste stream. Considerable mixing occurs during the handling process, however, and the small dosages applied in fertiliza- tion of soil make investigation of resulting environmental damage seem futile. Utilization as fuel produces a potential air pollutant which must be weighed against usage of alternative fuels. Particulate emissions will be high. The presence of heavy metals, plastics or whatever chemicals comprised in that day's collection could become the component of the day's emissions. Experience in monitoring existing incinerators1 emissions will be useful in determining the environmental impact from specific solid waste streams. It is not anticipated that this impact will be considerable. The nature of the product oi the construction materials is such that little human or environmental contact will occur during usage or upon discard. Other miscellaneous uses, such as for "kitty litter," appear likewise to offer no particular pollutant threat. -35- ------- |