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#83 - Opposition By Grass Roots Groups Slows Trash-to-Steam Bandwagon, 26-Jun-1988

An expensive new report by Kidder, Peabody & Co., a Wall Street
investment banking firm, summarizes the status of resource recovery
(trash to steam) plants in the U.S. as of February, 1988. A letter from
Kidder promoting the report begins, "No one wants one in his own
backyard, but many of us need and will eventually have one pretty close
to home. Despite environmental concerns, resource recovery plants will
continue to be built."

However, a summary sheet accompanying the letter reveals that grass
roots opposition to trash-to-steam is making a real difference, and
fewer plants are being planned and built than was true a year ago.

In 1987, 20,585 tons per day (tpd) of capacity was ordered, compared to
18,267 tpd in 1986. However, in 1987, 35,656 tpd of capacity was
canceled. What do these big numbers mean? A VERY large plant is 3000
tons per day (tpd), and a large plant is 2000 tpd. So in 1987, the
equivalent of 10 large plants were ordered but the equivalent of 18
large plants were canceled. (Please note that most trash-to-stream
plants are smaller than 2000 tpd, so when we say "10 large plants were
ordered," we mean the EQUIVALENT CAPACITY of 10 large plants was
ordered--in reality, there were more likely 20 to 30 smaller plants
ordered.)

In 1987 Kidder, Peabody identified 92,025 tpd of capacity in the
planning stages, compared to 131,777 tpd of capacity Kidder had
reported in the planning stages in 1986. In other words, in 1987, about
45 large plants were in the planning stages, but, in 1986, 65 large
plants had been in the planning stages, so the future was looking
dimmer in 1987 than it had looked in 1986.

Plants going on-line In 1987 totaled 11,607 tpd (about 6 large plants)
compared to 5503 tpd capacity that went online in 1986 (about 3 large
plants). Thus total U.S. capacity in 1987 went up to 50,094 tpd (the
equivalent of about 25 large plants). Another 85,418 tpd (equivalent to
43 large plants) has been ordered and most are scheduled to be online
by the end of 1991. Of this 85,418 planned, 41% (34,645 tpd) is under
construction and the rest is in the permit/negotiation stage.

New orders for trash-to-steam plants in 1987 totaled 20,585 tpd
compared to 18,267 tpd in 1986, so this looks like an increase. But it
helps to know that 1985 orders totaled 41,846 tpd, so 1986 and 1987
both represent significant declines in new orders for the industry. The
economics of trash-to-steam, the problems of ash disposal, and the
opposition of citizens across the land are taking their toll on this
industry.

Ogden Martin leads the industry by managing 20% of existing plants.
Wheelabrator Environmental, a subsidiary of Wheelabrator Technologies
(now a Waste Management, Inc. company) is second with 18% of the
industry. Third place, with 8%, goes to American Ref-Fuel, a joint
adventure of Browning-Ferris Industries (BFI) and Air Products.
Combustion Engineering is fourth with 7% followed by Westinghouse
Electric with 5%. The remaining 42% of the business is split among 14
other, smaller firms.

Ogden Martin received 40% of all new orders in 1987 and Wheelabrator
Environmental received 15%. In total, only 12 companies received new
business in 1987.

Kidder, Peabody summarizes the industry's problems this way: "Community
opposition remains a difficult and unpredictable risk to this business.
Vehement opposition, motivated by the "NIMBY" syndrome ("Not in My Back
Yard") has quashed numerous projects.... We believe public opposition
will remain the toughest hurdle for this industry over the next several
years.... However, the long-run outlook for the industry is positive as
the population expands and the waste flow accumulates."

Kidder, Peabody is an 80%-owned subsidiary of General Electric, which
is itself a minor participant in the resource recovery industry with
1,328 tpd installed capacity.

The Kidder, Peabody STATUS REPORT ON RESOURCE RECOVERY is based on
surveys sent to all participants in the resource recovery industry
during January and February, 1988; all responded.

The 27-page REPORT offers the following sorts of details on roughly 300
projects: project manager [what company is building the plant],
customer, location, capacity, cost, status, date construction starts,
operation date, type of burning, boiler manufacturer, turbine
manufacturer and megawatts of electrical output. In addition, the
report presents a partial list of units in the planning stages and a
table of 1987 projects cancelled. It also contains a summary listing,
1983-1987, of all the projects managed by each player in the industry.

In addition to the STATUS REPORT, Kidder, Peabody is offering a
computer printout on the 300 projects; their letter says the printout:
"In many cases, you will find comments on financing, the likelihood or
progress of construction, electrical output and plant technology as
well.... You can also use it to determine the amount of waste in any
region committed to resource recovery facilities."

Kidder believes that public acceptance of resource recovery hinges on
two key items: air pollution emissions and ash handling. Once the
government has established allowable air emissions and has set rules
for handling ash, public opposition will diminish, Kidder believes.

KIDDER FAILS TO RECOGNIZE THIS INDUSTRY'S UNDERLYING DILEMMA, WHICH
WILL KEEP THE INDUSTRY OFF BALANCE AND WILL CONTINUE TO FUEL CITIZEN
OPPOSITION ALL ACROSS THE COUNTRY. PEOPLE DON'T WANT "RESOURCE
RECOVERY" PLANTS PRECISELY BECAUSE THESE PLANTS DON'T RECOVER
RESOURCES. THESE PLANTS ARE WASTEFUL AND EXPENSIVE, AND THEY DO NOT
CAPTURE DANGEROUS MATERIALS FROM THE MUNICIPAL WASTE STREAM. THERE CAN
NO SATISFACTORY SOLUTION TO THE NATION'S GARBAGE CRISIS SO LONG AS THE
GARBAGE ITSELF REMAINS TOXIC AND DANGEROUS. UNTIL WE GET THE TOXICS
OUT, LANDFILLING AND INCINERATION WILL BOTH CONTINUE TO BE UNACCEPTABLE
TO THE HEALTH-CONSCIOUS PUBLIC

Kidder, Peabody is offering a package deal on the STATUS REPORT and the
PRINTOUT: only $475 for the two of them, a saving of $125 over the
individual prices of $250 for the REPORT and $350 for the PRINTOUT.
Authors of the report are Robert McCoy, Jr. [phone (212) 510-3848] and
Richard Sweetman, Jr. [phone: (212) 510-3896.] To purchase Kidder's
wares, phone Marion Brown at (212) 510-3770 or write Kidder, Peabody &
Co., 10 Hanover St., NY, NY 10005.

--Peter Montague

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Descriptor terms: incineration; msw; economics; ogden martin;
wheelabrator; american ref-fuel; combustion engineering; westinghouse;
citizen groups; incineration; waste disposal technologies; waste
treatment technologies; nimby;