A lot has happened in the waste and recycling industry in the past year, so 国产麻豆 gathered some experts to participate in our annual roundtable and give their views on what happened and what鈥檚 to come.
Looking back on 2015, how have the waste/recycling industry and its markets changed?
Joe Sloan (SloanVazquez): The prices of fuel, energy and commodities have all plummeted. This is a blessing and a curse. It is good for current operating costs but bad for planned innovation and competitive conversion processes.
Will Flower (Winter Bros.): While the industry was fairly stable in 2015, there were a few factors that significantly affected the waste and recycling industry over the past year.听 The first was low fuel prices鈥攖he lowest we have seen in 12 years鈥攚hich resulted in some cost savings.听 Unfortunately, any gains from lower fuel prices were largely offset by the depressed commodities market, which negatively affected revenue for recyclers.
Drew Weil (Sunbelt Waste Systems): More continuation of the growth of single stream recycling, organics and a steady stream of equipment replacement occurring.
David Biderman (SWANA Executive Director and CEO): Declining fuel and commodity prices impacted the industry over the past year.听 The decline in fuel has reduced operating costs for haulers, while the decline in commodity prices has directly affected recyclers, and indirectly, many of the local governments and haulers who collect recyclables.
Michael Paglia, Sr. (Florida Express Environmental): This was a very interesting year in the waste and recycling business and it looks like 2016 is off to a pretty big bang on the waste side with the consolidation of Progressive Waste and Waste Connections that just took place and Waste Management buying out SWS in Florida. Some of the bigger mom and pop operations are starting to disappear. I read it as the natural cycle of the waste industry.
What is the biggest overall change that you鈥檝e seen so far?
JS: A focus on the organics/compostable segment of the MSW stream. With the decline, and likely stagnation, of the traditional post-consumer recycling markets, I expect that regulators and entrepreneurs who are intent upon landfill diversion will give more attention to the organic segment of the waste stream.
WF: The biggest impact I see is the cost associated with the collection and processing of solid waste. People don鈥檛 understand our costs. Today, the cost for a waste collection vehicle can top $300,000. The equipment in recycling centers can cost millions of dollars.听 People are seeing their bills increase and need to realize the tremendous capital that is needed to create and maintain the infrastructure associated with managing solid waste and recyclables.
DW: Spending seems to be back on, perhaps temporarily, but nonetheless back on.
DB: The most significant change in the waste industry and its markets in 2015 has been the continued decline in commodity prices.
MP: I think recycling doesn鈥檛 have much good news going for it. Commodity prices continue to deteriorate. The end user positions are starting to get smaller which is typically not good for trying to procure the best price for your commodity. It is putting pressure on the material as pristine and clean as possible, therefore its putting pressure on the single stream market. The woes of China are going to spill into the recycling market, requiring them to import less. I think it needs to go back to source separation and I think that recycling is going to be more for a diversion than a cost-savings. People are going to become accustomed to having to pay to get rid of recycling, maybe in some cases more than garbage. The silver lining to this falling commodity market is lower fuel, lower container prices, lower steel, etc.
Is there a particular type of technology that has really stood out this year in moving the waste/recycling industry forward?
JS: Both transformation and anaerobic digestion processes have viable applications depending upon the regulatory environment. Transformation processes will likely continue to have permitting problems in areas where air-quality is an issue. This will be true, regardless of technological advances that have dramatically reduced emissions from many processes. Transformation, has been branded, albeit incorrectly, as 鈥渂urning鈥�. Professional protesters have been able to leverage public ignorance in order to stop several important projects that were economically viable and environmentally beneficial. Anaerobic digestion projects, on the other hand, have met with a measure of success on the permitting side. However, unless the implementation of AD projects is driven by regulation and supported by local government service fee increases, AD will not be able to compete with the current low-cost of traditional hydro-carbon based energy sources.
WF: Without a doubt, the ongoing advancements in optical sorting were most impressive. The ability to sort recyclables using the refraction of light has great promise for the recycling industry.
DW: A lot of advancements in routing and GPS tracking software and hardware, also more folks using onboard scales.
MP: The integration of GPS and routing, and onboard computers is really starting to become much more dependable, reliable, accurate and affordable so I see even small one, two and three truck operations having GPS technology, therefore becoming more efficient. I would love to see an uber-style garbage service in some rural communities. I think that would be an awesome development for our industry. For a technology to make itself more affordable across the board, we have to have the big ones like Waste Management and Republic lead the way because they have funds to put the R&D into it leading the industry to pick up on it after a certain period of time. The advances Waste-to-Energy technology is also going to affect recycling. There is not better, more efficient, less costly way than to just bring everything co-mingled to a WTE plant. If you look at these advances made in scrubbing technology and how they are cleaning the air, it is much less intrusive than a coal-burning power plant, almost as clean as gas burning. I think we鈥檒l get there and when it does, you may see more WTE plants in more rural areas. I think that would reduce our carbon footprints and the collection of streams.
There has been a lot of focus especially on organics and composting last year, what additional changes do you see happening in the future with regards to this area?
JS: There are many processes that are being marketed that run the gamut from theoretical to commercial enterprises. As market demand increases for the diversion of the organic stream, only a few of these processes will emerge as economically viable. The cost (purchase price) of the physical plant for most renewable energy processes is almost immaterial. Not totally, but almost. The driving factor in this and, in fact, in almost everything we do in this industry is the cost of energy. It will be difficult for most all of the emerging renewable energy technologies to become economically competitive with oil prices under $80/bbl. Now, they鈥檙e under $40/bbl. No matter the convoluted arguments of some promoters, it鈥檚 not rocket-science. The math is pretty simple.
WF: Composting and organics management will continue to get a lot of attention in 2016. Mostly because organics is such a large component of the waste stream. The cost associated with bringing a viable, commercial scale facility to fruition which can compete with the economics of landfilling is going to be the biggest challenge for developers.
DB: The EPA/USDA goal of reducing food waste by 50 percent by 2030 will start to get traction in the next few years.听 As innovative companies and local governments partner to address this portion of the waste stream, some progress towards this goal can be expected.
There is some concern about removing or diverting food waste and organics from the landfill since it will affect LFG projects and facilities. How do you see these concerns being addressed?
JS: Without regulation, waste flows where the money goes. So, if municipalities and private sector waste generators are going to pay the market driven costs of organic material diversion, I expect the material to go there.
WF: There are many factors which affect the generation of landfill gas including waste composition, rainfall in the area, the moisture content of the waste mass, temperature and quality of the gas collection system.听 Keep in mind that landfill gas is generated over a long period of time and most landfill-gas-to-energy projects are scalable so that they can adjust to changing amounts of gas over the life of the project.听 Engineers can design plants to match the landfill gas generation rates and adjust accordingly. The bigger challenge for landfill gas is the competition from low priced oil.
DW: It seems apparent that it definitely affects the process; I believe this will be a growing concern moving forward as these organic programs grow.
DB: I hope that SWANA鈥檚 Applied Research Foundation will study this issue and publish a report for government decisionmakers and the industry that will help guide operations and policy regarding this important topic.
Another concern is in packaging affecting tipping fees and percent recovery. What are some ways that landfills/transfer stations/recycling facilities can recover lost profits?
JS: Total processing costs are driven by tonnage and volume. Production through mechanical systems is primarily affected by the bulk density of the feedstock, e.g. residential single stream, commercial single stream, C&D or mixed waste (MSW). As post-consumer materials are 鈥渓ight-weighted鈥� bulk density decreases and MRF operating costs increase. So we have a conundrum. 鈥淟ight-weighting鈥� is good in terms of conserving natural resources but it is bad for MRF operations as it pertains to the per-unit (lbs/cubic yards) cost of operations. There are two avenues for recovery by MRF operators: 1) increase MRF tipping fees, or 2) reduce operating costs via capital investment in new technology.
WF: The recycling stream is evolving over time due to consumer habits and the manufacturing packaging.听 For example, there are less newspapers today as more and more people get their news online.听 At the same time, there is more cardboard as people do more online shopping.听 The recycling industry will adjust to the evolution of material that is at the curb.听 However, as the value of recyclables at the curb decreases, the consumer will have to pay more for recycling services. Rates are going up and will continue to escalate in 2016 and beyond.
DW: Cleaner streams, better education of the programs.
DB: Lightweighting is having an impact on recycling facilities, as it takes more containers to make a pound of metal or plastic than it did 15 years ago. Like all enterprises, recycling facilities need to adjust their operations to reflect changes in the marketplace, including changes in the waste stream. Some recycling facilities are doing a very good job of getting glass out of the recyclables early in the process, which means less contamination of the paper and plastic bales, resulting in higher revenue.
MP: This is one issue that creates a lot of problems for the recycling industry. There are so many variations now of packaging that there are no set rules. If there could be a handful of packaging, compared to the hundreds we have out there, it would make recycling a whole lot easier because once they developed some automation to sort the stream out, the packaging changes again, continually complicating the matter. Think about what the recycling industry would be if all we had were true fiber and metal as packaging products. One of the plastics (HDPE) could be an automated process (that could turn out a pristine product) and we may see a whole different landscape in recycling. But you are talking about changing way too many factors.
Do you think that waste conversion, which was once a hot topic, has transitioned into people concentrating more on diversion rather than conversion? Why? Which conversion technologies are popular now and do you think they will continue to be so?
JS: Not necessarily. Diversion and conversion are important in their own rights. We have seen many of the technologies that have been floated around the industry in the last decade. Right now, four companies representing different approaches, are making rapid advances. Fulcrum Bioenergy鈥檚 MSW transformation plant that is currently under construction in Reno, NV, will produce jet fuel from MSW, and is poised to be a tremendous breakthrough. With several commercial installations, Zero Waste Energy鈥檚 dry anaerobic digestion process has gained popularity in the San Francisco Bay area. Anaergia, with its OREX 500 press, is moving to engage several MSW operations in the extrusion of an organic 鈥渟lurry鈥� that will be delivered to wastewater treatment plants for diversion. Very interestingly, Sustainable Alternative Feed Enterprises (SAFE) has developed a system to convert source-separated food waste into a high-quality animal feed. Each of these processes represent viable opportunities for waste conversion in the coming year.
WF: Every week I get a phone call or two about a 鈥渘ew鈥� technology that sounds like it will make waste magically disappear or be converted into a valuable raw material or feedstock.听 I still believe that conversion technology holds great promise. Unfortunately, the truth is that no one has yet to develop a viable, cost-effective, sustainable, functioning system that can effectively compete with landfills.
MP: I think the technology of the future will be the WTE plant, especially now, growing as long as you have this big push for recycling and diversion and the prices become cheaper and more efficient, it has a pretty big benefit.
Since transitioning or purchasing alternative fuel vehicles is the 鈥渘orm鈥� for the industry, what percentage of the industry do you think has already made this transition? What is holding up others?
JS: Though CNG technology has radically improved over the past five years, the impetus for change has primarily been driven by local air/emissions laws and regulations. The move toward CNG will continue to be regulatory in nature.
WF: Natural gas is a proven fuel for our industry.听 For small and mid-sized haulers, it鈥檚 an expensive proposition to switch to natural gas fuel especially when you are only doing a few trucks at a time.听 You may need to install a filling station, make significant changes to your shop for safety purposes and train employees on new technology.听 Converting one truck at a time is too expensive. Switching an entire fleet at once is the most cost effective way to make the move to natural gas. However, for many small and mid-sized haulers that is not realistic due to the capital needed to make the switch.
DW: It is a large capital investment and within declining fuel prices the ROI鈥檚 are greatly extended. I think the fleet replacements are still growing at a steady rate but it is still a small percentage of the fleet make-up.
DB: According to recent data, at least half of the new trucks placed into service in 2015 in the waste industry were fueled by natural gas.听 I expect this trend to continue, despite low diesel prices.听 Some haulers are concerned about the cost of new NG trucks.听 For example, in New York City, where there is an impending emissions reduction deadline for waste haulers, many haulers are concerned that suggested changes to the City鈥檚 regulatory structure could put them out of business. This business uncertainty is leading them, quite rationally, to delay upgrading their fleets. In addition, the low growth economy may be holding back some companies from investing in new trucks.
What are the most important issues that need to be addressed right now? What are the current challenges for the industry?
JS: In our industry, fuel and energy costs are king, followed by the market values of other commodities. The industry cannot dictate or necessarily predict price volatility. The big players can take some comfort in their ability to hedge and play in the managed future markets. But for most companies, flexibility is the name of the game. Companies need to be nimble and able to respond to market changes in short order.
WF: The single most important issue that needs to be addressed in our industry is safety. Accidents and injuries are big expenses for our industry. It鈥檚 an even bigger cost to the individual who gets hurt. As an industry, we simply must do a better job protecting our people. I applaud the efforts of SWANA as they launch a creative and innovative safety initiates to promote safety. Every organization鈥攑rivate and public鈥攎ust invest in and work to improve the industry鈥檚 safety record.
DW: The continued efforts to streamline the single-stream process leading us to the path of zero waste.
DB: One of the leading challenges facing the waste sector continues to be our safety record. Waste collection is the 5th most dangerous job in the U.S., according to the federal Bureau of Labor Standards (BLS), and fatal accidents continue to occur in Canada with unfortunate regularity. The BLS report issued for 2014 found an increase in the worker fatality rate for the industry, and SWANA鈥檚 preliminary 2015 data shows there were more waste collection workers killed last year than in 2014. For these reasons, and to reduce the number of tragic accidents involving our trucks in which a third-party (e.g., other driver, pedestrian) is killed, SWANA is expanding its safety program to provide additional resources to the entire waste industry鈥攊n both the U.S. and Canada, and in both the private and public sectors.听 These resources include additional safety training opportunities, our recent giveaway of 2,000 Slow Down to Get Around stickers, the new SWANA Safety Ambassador program, and the launch of our new safety Web page, www.SWANA.org/safety, which contains information about SWANA鈥檚 safety initiatives, upcoming events, and valuable resources such as links to OSHA鈥檚 Web site.听 We will continue our efforts in 2016 to improve the industry鈥檚 safety performance, and in particular, reach the thousands of small haulers who are not members of any association, don鈥檛 have safety directors, and don鈥檛 read trade publications such as Waste Advantage. These small haulers have a disproportionate number of worker fatalities, and we need to help them educate their drivers and helpers about safety.听 We look forward to partnering with others to achieve this objective.
MP: I think our biggest challenge is going to be the shrinking labor pool. We are now below 5 percent unemployment, with a lot of retiring baby boomers, so it is very difficult to find drivers and middle management people and attract them. We do need to try as an industry promote a conscious career choice into the waste industry; it does have a lot of benefits, it is a rewarding, stable environment. It has to be marketed on an industry level as a career choice. Safety in our business is the top challenge everyday鈥攊t is a dangerous occupation. We need some legislation to appear on a national level that brings attention to people, like coming up on a garbage truck. Much like how school buses are treated, the garbage industry needs to be treated the same way. We need a big national push on that That is going to take publications, associations and other entities to push that.
Do you think this year will be positive or negative? What kind of advances/changes in technology or regulations do you see coming?
JS: I am an eternal optimist. I am not big on regulation, believing instead that market-driven innovation is the best path toward the best solution. Our industry is full of ingenious entrepreneurs who are always looking for a better mousetrap. With the right market incentives, our industry will produce solutions that are good for the economy and the environment.
WF: I see a positive forecast. The US economy is improving. Consumer confidence is rising. Volumes are increasing. Job growth is up. The headwind we face is from weak commodity pricing and the unknown of the Asian economy. That said, I think that overall 2016 is looking good for the North American waste and recycling industry.
DW: I have a very positive outlook for 2016 and expect to see a lot of continuing advancement of technologies and equipment; however I am skeptic for the long-term sustainability for this to continue. We came out of a few year slump were the lack of capital and skepticism of the market held these advancements back, I only hope this pattern doesn鈥檛 repeat.
DB: I鈥檓 an optimist, and I think this year will be a better one for the industry than 2015.听 It鈥檚 an election year, and I don鈥檛 anticipate any major new legislative or regulatory proposal in 2016, although I expect the Obama Administration to finalize some of its current proposed revisions to existing rules (e.g., EPA NSPS for Landfills; FMCSA safety for truckers). There continues to be a significant amount of venture capital being invested in a variety of technologies relating to waste disposal, though I do not expect those investments to necessarily come to fruition in 2016.
MP: I think 2016 is going to be a very interesting year. I think it will be a very positive year with fuel prices declining and technology strides being made. They say robotics is going to be a big thing in the future. It is an exciting year in more ways than one. Those consolidations that just happened are going to open up a lot of opportunities. I think we will see more. I think you鈥檝e got other companies to gain the headlines share that Waste Connections just had. Margins are looking stronger across the board on a lot of companies. | WA
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国产麻豆 would like to thank the participants in
this roundtable about the changes going on in the waste and recycling industry.
Joe Sloan is the founding partner of Sloan Vazquez/McAfee, a solid waste and recycling consulting firm based in Orange County, CA. The firm helps clients to improve the efficiency and profitability of waste and recycling collection, processing, transfer and disposal operations, and manages competitive procurement processes for municipal solid waste and recycling services.
Will Flower, is Vice President of Corporate and Public Affairs at Winters Bros. Waste Systems.听Will has 30 years of experience in the area of solid waste management and environmental protection.听He has worked in the Director鈥檚 Office of the Illinois Environmental Protection Agency, for Waste Management, Inc. and later, for Republic Services. Inc.听 He has held operational and executive leadership positions. He is an active member of the International Board of SWANA and has served on the boards of the American Red Cross 鈥� Grand Canyon Chapter and Keep Phoenix Beautiful.
As an Account Representative at Sunbelt Hydraulics & Equipment (Pompano Beach, FL) Drew Weil has more than 25 years of waste industry experience in the field of fleet maintenance and operation. Sunbelt represents various waste equipment companies and manufacturers, including Heil Environmental. Previously, Drew spent many years as a local fleet maintenance manager for one of the major companies for a fleet of 250+ vehicles and later advanced to a regional fleet maintenance manager covering all of Florida for a fleet of 3,500+ route vehicles and 72 locations. He currently sits on the board of three companies for the waste industry and fleet maintenance field and is a Lieutenant with the Florida Highway Patrol Auxiliary.
Following in his father and grandfather鈥檚 footsteps, Michael D. Paglia has been involved in the recycling and environmental waste services at a young age. Beginning as a part time summer employee for his father鈥檚 garbage collection company in Rockland County, New York, Michael soon realized that his future was in Environmental Services. Since 1974, Michael, alongside his brother, John Paglia Jr, have owned and operated recycling, solid, and liquid waste companies throughout the Southeastern U.S. In 2000, Michael and John started SunStar Transport and Florida Express Environmental. Florida Express has grown into a regional solid and liquid waste company with a fleet of 30 trucks, two landfills and a recycling facility. As Chief Operating Officer, Michael has served with his brother, John, Chief Executive Officer for four decades.
David Biderman is the Executive Director and CEO of the Solid Waste Association of North America (SWANA).听 David joined SWANA in April 2015 after 18 years with the National Waste & Recycling Association, where he was their General Counsel, Vice President for Government Affairs, and Safety Director.听 He has litigated cases before the Supreme Court; testified before federal agencies, state legislatures and city councils; and provided safety and compliance training to thousands of workers throughout the U.S. Prior to entering the waste industry, David was an attorney at the Washington, DC law firm Steptoe & Johnson, where he specialized in environmental and transportation law.