=======================Electronic Edition========================
RACHEL’S HAZARDOUS WASTE NEWS #307
—October 14, 1992—
News and resources for environmental justice.
——
Environmental Research Foundation
P.O. Box 5036, Annapolis, MD 21403
Fax (410) 263-8944; Internet: erf@igc.apc.org
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NEW GARBAGE STRATEGIES NOW POSSIBLE
The garbage situation in the U.S. has changed considerably during
the past two years. The new situation offers opportunities to
grass-roots activists seeking to discourage waste.
THE BASIC FACT IS, THE PRICE OF TRASH DISPOSAL IS DROPPING.
Philadelphia and Cleveland recently hammered out new long-term
garbage contracts that lower their costs 20%.[5] Philadelphia’s
1988 garbage contract with Waste Management, Inc. locked the city
into $67 per ton through 1994. But in March, 1992, Philly signed
new contracts for the years 1995-2001 at $50 per ton.[5] Boston
recently received bids for the city’s garbage disposal at $50 per
ton instead of the previous year’s $70 per ton, a 28% price
drop.[5] Pittsburgh’s contract with Chambers Development is up at
the end of 1993 and Pittsburgh officials expect to get a new
contract at a price “the same or better” then the 1993 price of
$38.17 per ton.[5]
BUT COMMUNITIES WITH INCINERATORS ARE LOCKED INTO HIGH PRICES
THEY OFTEN CAN’T AFFORD.
Two Long Island communities–Babylon and Huntington–acted last
week to shore up the fiscal stability of their incinerators. Each
town had paid roughly $200 million to build its incinerator, and
now neither town can keep up the payments on the debt. This past
week, the NEW YORK TIMES reports, the town of Huntington almost
missed its payroll because it had diverted operating monies to
cover its debt payments.[2] Huntington officials voted to impose
a fee increase of $170 per year on each family in the town–the
second increase this year. Earlier the town had imposed a $500
per year increase on residents living in certain parts of the
community.[2]
To bail itself out, Babylon took another approach. It signed a
20-year agreement with neighboring community North Hempstead,
locking Babylon into accepting 60,000 more tons of trash each
year at $84 per ton, with an annual price-increase of 4%.[2]
The two Long Island towns are not the only ones facing these
problems. As the NEW YORK TIMES put it, “Incinerators throughout
the Northeast, from Essex County, N.J., to Washington County in
upstate New York, have found themselves unable to attract enough
trash because landfills in other parts of the country are
charging as little as one-sixth as much.”[2]
There are 4 main reasons why the price of trash disposal is
dropping, 2 temporary, and 2 permanent.
First the temporary reasons:
THE NATION’S LINGERING ECONOMIC DECLINE HAS REDUCED THE OUTPUT OF
TRASH FROM THE COMMERCIAL AND INDUSTRIAL SECTORS. Presumably this
will change in the future.
And: FEDERAL SOLID-WASTE REGULATIONS ARE ABOUT TO FORCE THE
CLOSURE OF SEVERAL THOUSAND SMALL LANDFILLS IN THE NEXT TWO
YEARS. THESE SMALL FRY ARE ACCEPTING WASTES AT FIRE-SALE PRICES.
And the longer-term reasons:
THE BIGGEST WASTE HAULERS HAVE BUILT MORE LANDFILL CAPACITY THAN
THE NATION NEEDS.
Browning-Ferris owned 600 million cubic yards of unused capacity
in 1984. They tripled that, to 1.7 billion cubic yards, in 1991,
and plan to nearly double that again, to three billion cubic
yards, by the year 2000. According to estimates by EPA [U.S.
Environmental Protection Agency], that will represent a 10-year
supply for the nation as a whole. And that’s just one company.
Waste Management, Inc. won’t say how much capacity its 130 dumps
represent, but the WALL STREET JOURNAL estimates that it ranges
from 650 million to a billion tons.[5] “Who’s going to fill up
all these dumps,” asks Douglas Augenthaler, a financial analyst
with the Wall Street firm Oppenheimer, and noted for conducting
his own research, not merely accepting companies’ words.[1]
RECYCLING AND WASTE REDUCTION HAVE BEGUN TO CUT INTO THE
AVAILABILITY OF TRASH. Some towns are now achieving a 73%
recycling rate, and other towns have instituted a pay-per-bag
garbage plan that has got people focused on buying things
differently, to reduce their personal wastes and thus their
personal costs.[6],[7]
As a result, some financial analysts are predicting that even the
largest and wealthiest waste-hauling companies will not be able
to maintain the high returns on investment they maintained
throughout the ’80s. In short, the big garbage haulers are in
trouble.
ANOTHER FACTOR DRIVING DOWN THE COST OF TRASH DISPOSAL IS THIS:
MANY PUBLIC OFFICIALS HAVE REALIZED THAT GOVERNMENTS CAN USUALLY
MANAGE WASTE MORE CHEAPLY THAN PRIVATE COMPANIES CAN.
The WALL STREET JOURNAL reports that cities are “banding together
to increase public-sector leverage over dump prices, and building
new dumps of their own and expanding old ones to bypass more
expensive private landfills.”[5]
Some municipalities know they’re paying too much for trash
disposal but can’t do anything about it. Morris County, N.J.,
must pay $131 per ton for disposal through the end of 1994 in
part because it allowed a single company, Chambers Development
Co. of Pittsburgh, to step in four years ago and gain control of
the county’s only two disposal outlets. “That lack of control
really costs us,” says Glenn Schweizer, the county’s trash czar.
“The rates are excessive.”[5]
In the early 1980s, Delaware voluntarily raised its trash
disposal fees, to finance construction of its own dumps in the
early 1980s. This strategy has begun to pay off. In the last few
years, neighbor states reliant on the private sector have been
paying more than Delaware’s $43.51 to $49.60 a ton, says N.C.
Vasuki, the state’s trash chief.[5]
When it comes to managing trash, municipalities have several
advantages over private trash companies. Cities’ borrowing costs
are often lower, and they don’t pay taxes or look for profits.
Furthermore, they can legislate so-called flow control, which
gives them the power to steer all the trash within their borders
to their own dump–a monopoly.
“Anybody who can walk and chew gum on a clear day ought to be
able to beat out the private sector,” says H. Lanier Hickman,
head of the Solid Waste Association of North America, a group of
mostly municipal waste officials. “We’re learning to compete with
the private sector,” he says.[5]
The WALL STREET JOURNAL reports that, “In Los Angeles County, the
nation’s largest trash market, and in big Texas cities like San
Antonio and Dallas, officials are fighting to preserve municipal
control of dumps. Losing that control could cost Los Angeles
County $350 million a year in added dump fees, officials estimate.
“Even in Waste Management’s back yard, the Chicago area,
municipalities are fighting back. In the northern suburbs, Lake
County has essentially said no to any private-sector dump or
incinerator project, and instead plans to build its own.
‘Ownership is key,’ to controlling costs,’ says Bill Barron,
deputy county administrator.”[5]
Finally, the elections next month may bring big changes in the
federal government’s attitude toward trash, especially toward
incineration. President Bush, in his national energy strategy,
called for a seven-fold increase in the number of garbage
incinerators by the year 2010. On the other hand, Al Gore, in his
book, EARTH IN THE BALANCE, has this to say about incineration:
THE HUGE NEW INVESTMENT IN NEW INCINERATORS–ALMOST $20 BILLION
WORTH–IS BEING MADE EVEN THOUGH MAJOR HEALTH AND ENVIRONMENTAL
CONCERNS HAVE NEVER BEEN ADEQUATELY ADDRESSED. ACCORDING TO
CONGRESSIONAL INVESTIGATORS, THE AIR POLLUTION FROM WASTE
INCINERATORS TYPICALLY INCLUDES DIOXINS, FURANS AND POLLUTANTS
LIKE ARSENIC, CADMIUM, CHLOROBENZENES, CHLOROPHENOLS, CHROMIUM,
COBALT, LEAD, MERCURY, PCBS, AND SULFUR DIOXIDE….
THE PRINCIPLE CONSEQUENCE OF INCINERATION IS THUS THE
TRANSPORTING OF THE COMMUNITY’S GARBAGE–IN GASEOUS FORM, THROUGH
THE AIR–TO NEIGHBORING COMMUNITIES, ACROSS STATE LINES, AND,
INDEED, TO THE ATMOSPHERE OF THE ENTIRE GLOBE, WHERE IT WILL
LINGER FOR MANY YEARS TO COME. IN EFFECT, WE HAVE DISCOVERED YET
ANOTHER GROUP OF POWERLESS PEOPLE UPON WHOM WE CAN DUMP THE
CONSEQUENCES OF OUR OWN WASTE: THOSE WHO LIVE IN THE FUTURE AND
CANNOT HOLD US ACCOUNTABLE.[8] These facts offer opportunities
to activists hoping to discourage waste.
** The economics of incineration are looking worse than ever.
Incinerator companies and other waste haulers are resorting to
extraordinary accounting measures–“cooking the books” is the way
BUSINESS WEEK[4] and FINANCIAL WORLD[1] express it–to make
themselves appear as profitable as ever, but these tricks can
only fool investors for so long. Besides, landfilling is much
cheaper, and there’s plenty of landfill capacity for the
foreseeable future.
** Incinerators require a 20-year commitment to providing a
steady stream of trash, and the modern world seems poised to
produce less trash. Communities that commit to incineration are
locked out of a modern approach to environmental protection based
on waste reduction, waste avoidance and pollution prevention.
** The small dump operators who are selling landfill space at
bargain prices have made people mad because they’re filling their
dumps with outsiders’ trash. The big new landfills built by BFI,
Waste Management, and Chambers have the same problem: they only
make sense financially if they accept trash from outside the
local area. This means there are ready-made constituencies angry
enough to push hard for federal legislation giving local
governments the right to say “no” to outsider’s trash. (See RHWN #299.)
** There is now abundant evidence that local governments are
better off managing their garbage themselves, instead of handing
it to private companies. Communities that lose control of their
garbage can be held hostage. Local control is more flexible and
cheaper.
–Peter Montague, Ph.D.
===============
[1] Leland Montgomery, “Down in the Dumps.” FINANCIAL WORLD June
23, 1992, pg. 30.
[6] Editorial, “The price of garbage pickup is in the bag,” THE
[BERGEN, NJ] RECORD June 24, 1992.
[7] Editorial, “How to Price Garbage Pickup,” TRENTON [NJ] TIMES
June 29, 1992.
Descriptor terms: waste disposal technologies; incineration;
wmx; bfi; landfilling; local government; waste treatment
technologies; economics; bonding; financing; ny; waste hauling
industry;