Refuse Systems

SIC 4953

Industry report:

This category includes establishments that are primarily engaged in the collection and disposal of solid waste. Firms in the industry operate incinerators, solid waste treatment plants, hazardous waste facilities, landfills, and other disposal sites and services. Companies that only collect and transport waste without such disposal are classified in SIC 4212: Local Trucking Without Storage.

Industry Snapshot

The refuse industry traditionally has been fragmented in comparison to other businesses. Organizations range from local firms and government bodies that manage consumer garbage to companies that handle hazardous and specialty waste. However, from the mid-1990s on, there has been a trend toward acquisition of smaller firms and privatization of former municipal efforts, which often were absorbed by large private companies. Municipal and government entities, which owned 85 percent of landfills in the early 1990s, owned less than 70 percent by 1997. By the mid-2000s about 60 percent of municipal waste was managed by private firms, and eight of the nation's ten largest landfills by daily volume were privately owned.

According to the Environmental Protection Agency, the United States produced more than 251 million tons of municipal solid waste (MSW)--otherwise known as trash or garbage--equal to about 4.6 pounds per individual per day in the late 2000s. Approximately 32.5 percent of the total was recovered and recycled or composted, 12.5 percent was burned at combustion facilities, and the remaining 55 percent was disposed of in landfills. Paper constituted 33.9 percent of waste generation, yard trimmings 12.9 percent, food scraps 12.4 percent, and plastics 11.7 percent. The remainder was made up of metals (7.6 percent); rubber, leather, and textiles (7.3 percent); wood (5.5 percent); glass (5.3 percent); and other waste (3.3 percent).

By the mid-2000s, waste disposal generated approximately $42 billion annually in industry revenues. Although the industry was highly fragmented, with thousands of small operators involved in the industry, regional and even national firms were gradually expanding their territories through mergers and acquisitions. The number of landfills continued to decline, but the size of landfills had grown tremendously so that overcapacity had not shifted significantly.

By the late 2000s, an estimated 20,600 waste disposal operations were in the U.S. The industry was valued at $44.3 billion in 2009 with industry-wide employment of an estimated 246,500 workers. States with the majority of operations were California, Texas, and New Jersey.

Organization and Structure

The two largest segments of the refuse management market are municipal solid waste (MSW) and hazardous waste. MSW includes nonhazardous garbage discarded by homes, businesses, and governments. Hazardous waste includes liquid and solid materials that are toxic or radioactive. Liquid waste commonly emanates from nuclear energy facilities and U.S. Department of Defense activities. Solid waste often comes from mining and milling operations (especially from extracting uranium ore), sludge in abandoned storage tanks, and contaminated equipment and structures. Large amounts of both solid and liquid hazardous materials also emanate from chemical, medical, and petroleum industry activities, as well as from the mishandling of those wastes by businesses, governments, and consumers.

Disposal Methods.
Through the late 1990s and 2000s, landfills were managing about 55 percent of MSW. In 2006, roughly 82 million tons of materials were recycled rather than dumped into landfills, including approximately 21 million tons that were composted. The highest recycle recovery rates are batteries (99 percent) and paper/paperboard products (50 percent). About 62 percent of yard trimmings are also recycled.

Like MSW, most hazardous waste is sent to landfills. Various types of toxic waste are also incinerated and even recycled. Solid waste landfills differ from MSW fills in that they are usually built to contain the waste for a long period of time, and a greater effort is made to break down or neutralize the refuse, thus making hazardous waste fills more expensive to build and operate. Highly radioactive waste may be sealed in special drums or tanks where it can be held indefinitely.

Background and Development

Municipal Solid Waste.
Prior to the industrialization of the United States, most people managed their own waste. Garden and organic waste was composted and used as fertilizer and soil conditioner. Scrap wood, glass, metal, and other debris were often taken to a local dump or burned on one's property. A garbage collection and landfill industry emerged, however, as industrialization occurred and large urban areas began to develop in the 1800s. In fact, WMX Technologies, Inc., one of the largest refuse companies in the world, originated in 1894 as a collector of Chicago's waste.

The waste disposal industry flourished after World War II. As the U.S. economy and population expanded, so did the amount of garbage produced per capita. By 1960, in fact, Americans were discarding a combined total of more than 100 million tons of garbage per year, prompting some people to call the United States the "disposable society." In order to handle mass quantities of garbage created by the new suburban consumer society that evolved in the 1950s and 1960s, municipalities began building large numbers of landfills and incinerators. By the early 1970s, 300 to 400 municipal landfills were opening each year.

During the 1970s, the MSW environment began to change. In addition to the fact that many landfills were becoming saturated, environmental problems began to plague landfill operators. Some landfills were emitting hazardous gases and fluids that were seeping into the air and water. Americans became more conscious of the need for safer and more attractive waste management. Federal initiatives that affected the refuse industry included the Clean Air Act, the Clean Water Act, and the Safe Drinking Water Act. Recycling programs, such as the "one-bag" and "blue-bag" programs, emerged in several states. Consumers also became less receptive to landfill development, thus coining the acronym NIMBY (not in my back yard).

In the 1980s, North American landfill capacity began to shrink. Public opposition to new landfills posed major barriers to refuse organizations. Furthermore, new federal and state environmental regulations made it increasingly difficult and expensive to operate existing landfills. During the 1980s, the number of landfills opened each year declined to between 50 and 200 while existing landfills closed at a high rate. The total number of dumpsites dropped from 14,000 in 1980 to 6,000 by 1990 then to fewer than 2,000 by 2000.

Despite society's apparent concern over MSW and the environment in the 1970s and 1980s, both personal and commercial waste volumes continued to grow at a record pace. By 1992, the average American was producing four pounds of trash per day. Landfills were further stressed by curbside collection of yard waste, which was not commonly practiced until the mid-1980s. The total amount of U.S. trash had ballooned to more than 280 million tons per year.

Waste companies responded to refuse growth and market demands for safer, less conspicuous disposal by stepping up recycling operations and by developing other disposal options, such as waste-to-energy (WTE). By the late 1980s, recycling programs processed 15 percent of all MSW, and about 125 WTE plants consumed nearly 15 percent of all refuse. The future importance of innovative waste management companies seemed clear to investors. Many refuse companies enjoyed skyrocketing stock prices and healthy profit growth.

Hazardous Waste.
At the same time that the MSW industry was rapidly growing, government and industry began producing large amounts of toxic and radioactive waste that would eventually result in the proliferation of an entire hazardous waste industry. New synthetic chemical products that were developed during World War II, for instance, were offered to the public on a broad scale in the 1950s and 1960s. Industrial wastes that resulted from production of these chemicals were often carelessly dumped in waterways, landfills, and wells. Furthermore, the Department of Defense, which was busy creating a nuclear defense system, jettisoned mass amounts of highly radioactive materials.

By the 1970s, the refuse industry began to respond to societal concerns about the environment. Toxic substances, including some that had seeped into aquifers or had been used to produce children's clothing, resulted in a new category of refuse called "hazardous waste." Prompting the formation of the hazardous waste industry were federal mandates regarding toxic refuse. The Resource Conservation and Recovery Act (RCRA) of 1976, for instance, was implemented to control the creation and disposal of hazardous materials.

Laws that followed RCRA in the 1980s included the 1984 Hazardous and Solid Wastes Amendments (HSWA); the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund), which designated billions of federal dollars for clean up; the Toxic Substances Control Act; and the 1986 Superfund Amendments and Reauthorizations Act (SARA). CERCLA earmarked over $9.6 billion for hazardous waste cleanup in the 1980s, much of which went to contractors in the refuse industry. In addition, the federal government required companies to spend additional billions to recover toxic waste sites.

Like MSW, the creation of hazardous waste continued to grow during the 1980s and early 1990s. By 1985, ten times more chemicals were in use than in 1970. In the early 1990s, synthetic chemical manufacturers were producing 220 million tons per year of about 58,000 different chemicals. In addition to growing amounts of hazardous waste produced in the United States in the early 1990s, refuse companies also benefited from ongoing CERCLA cleanups. By 1990, the Environmental Protection Agency had identified 1,224 priority cleanup sites, as well as more than 31,000 sites that needed attention. In addition, the General Accounting Office estimated that 130,000 to 425,000 potentially hazardous sites existed. The average bill for a Superfund site cleanup in the early 1990s exceeded $26 million.

Stock prices of refuse companies during the late 1980s and early 1990s reflected the surging demand for both MSW and hazardous waste services. The average earnings per share for the ten largest companies, for instance, jumped from 59 cents to more than 70 cents in 1990. Stock prices of those firms peaked in 1990 as well, rising from about $22 to an average of nearly $30. In the early 1990s, however, most refuse firms were stalled by an industry recession.

Several factors contributed to the slowdown in the early 1990s. MSW tonnage dropped to around 280 million tons per year by 1993. The amount of money spent on hazardous waste cleanup also declined in the weak economy. In addition, larger amounts of garbage were being collected for recycling. A weak economy also played a role in keeping prices down, as stagnant waste growth created a more competitive business environment.

At the beginning of the new millennium, the industry was continuing to seek new ways to safely handle growing amounts of waste at the same time that landfill space was rapidly declining. The industry placed a greater emphasis on recycling efforts. By 1998, there were 9,000 curbside recycling programs in the United States. There also was a strong move toward privatization of former municipal operations, consolidation of firms, and increased flexibility of government regulation of the industry. About 2,400 landfills were still functional in 1997, and these, along with hundreds of incinerators, consumed the bulk of America's trash (not including hazardous waste).

However, by 1999, new problems loomed on the horizon. Of major concern was that the "clean-up" of America was causing new toxic byproducts. MTBE additives to gasoline fuel, ostensibly to reduce air emissions, ended up contaminating ground water. Methane gas fumes released from landfills had reached toxic levels in many states, and dioxin, a byproduct of incinerated waste, was brought under EPA monitoring. Moreover, chloroform, a byproduct carcinogen created during the disinfection phase of water treatment, was detected in high levels in approximately 1 to 3 percent of drinking water samples reported in 1999 by the U.S. Geological Survey.

During the early 2000s, landfills remained the primary means of waste disposal in all regions except New England, where incineration dominated. Although recycling quadrupled between 1990 and 2001, from 8 percent to 32 percent, the industry saw a leveling of recycling programs. While Americans increased recycling during the 1990s, they also decreased their garbage output for the first time in more than 30 years. Between 1960 and 1990, average garbage output jumped 70 percent from 2.7 pounds per day to 4.6 pounds per day, before dropping to 4.46 pounds per day in 1998. That total edged back up past 4.6 pounds per day by the end of the decade. The rapid increase in waste production could be attributed to a 50-fold increase in the use of plastic as well as a doubling of all other waste material. The recent leveling off in waste production was due in part to increased efficiency in packaging by manufacturers and the rapid implementation of recycling programs.

But no state caught the attention of the industry more than New York, which closed its Staten Island Fresh Kills landfill in the spring of 2001. It was reopened to hold the debris of the World Trade Center following the terrorist attacks of September 11, 2001, and served as a crime lab for police investigation. For 50 years, the landfill had been home to New York City's 13,000-ton daily trash load. Of concern to citizens of neighboring states, as well as to legislators, was the absence of laws preventing interstate dumping, and many Americans living in the eastern United States were wary of their states taking on New York's trash, even if they had the room and could use the money. For example, in 1997, Pennsylvania imported 6.3 million tons of trash from other states and buried it in its landfills for a fee. Virginia had also been a high-volume trash importer. However, in 1998, barges of trash traveling the historic James River on their way to landfills began to spill, leaking their loads into the river. At about the same time, New York papers featured Governor James Gilmore wearing latex gloves and showing the press items of medical and human waste that had been mixed with Brooklyn garbage. As a result, several state legislators quickly addressed the potential ban of imported trash.

In the early twenty-first century, waste management firms were exploring and expanding ways to harness the power of landfill gases. Under EPA regulations, landfills were required to collect and burn landfill gases to be in regulatory compliance. Usually, landfill gases were burned off by flares installed in the landfill; however, the industry discovered that the gases, composed primarily of methane and carbon dioxide, could be used to produce a viable energy source. "Almost every community across America has a landfill, and that landfill is generating landfill gas," Brian Guzzone of the EPA's Landfill Methane Outreach Program told American City and County. "So, when feasible, why not do something with it?" Guzzone added. By capturing the gases and using them as a fuel source for such purposes as heating and motor fuel, greenhouse emissions are reduced and otherwise-wasted energy is used.

According to the research firm Chartwell Information, the solid waste industry was valued at $44 billion in 2004. Collection services accounted for 58 percent of revenues, disposal services generated 30 percent, and processing accounted for 12 percent. Much of the industry remained highly fragmented, with an estimated 27,000 organizations, including public, private, and public-private partnerships, involved in hauling and facilities management.

According to the National Solid Waste Management Association, about 15,500 organizations were solely in the business of hauling waste, and approximately 11,500 firms owned about 15,700 facilities that disposed, recycled, incinerated, or otherwise processed solid waste. Many of these were very small operations that handled relatively minute amounts of MSW. The nation's top three firms--Waste Management, Inc., Allied Waste Industries, Inc., and Republic Services--together earned nearly 50 percent of the market share.

Although the number of landfills had been drastically reduced over the years, from more than 8,000 in 1988 to about 1,750 in the mid-2000s, capacity remained about the same while landfills dramatically increased in size. In 2004, the nation's five largest landfills by tons deposited per day (TPD) were all privately owned. These were Puente Hills Landfill, Whittier, California (13,200 TPD); Grows Landfill, Morris, Pennsylvania (10,000 TPD); Pontiac Landfill, Pontiac, Illinois (8,000 TPD); Tullytown Landfill, Tullytown, Pennsylvania (8,000 TPD); and Columbia Ridge Landfill, Arlington, Oregon (7,000 TPD). Although private landfills had become increasingly important in the industry, WTE projects were primarily public ventures, with eight of the top ten WTE sites publicly owned.

The approximately 138 million tons of MSW discarded in the 1,754 landfills in the United States in 2006 was a decrease of about 4 million tons from 1990. The drop held steady even though the number of curbside recycling programs in the nation had declined from 8,875 in 2002 to 8,660 in 2006. At the same time, operational community composting programs grew from 3,227 to 3,470.

With the number of landfills decreasing and many of the new landfills being built farther from highly populated areas, disposal costs have risen from businesses and residents because of long-haul transportation. That has helped generate the expansion of WTE plants for the first time since the mid-1990s. By 2008, the 87 WTE facilities in the United States disposed of more than 90,000 tons of trash per day.

Current Conditions

An estimated 505 million tons of municipal wastes (MSW) were collected in the U.S. in 2008. The top five U.S. landfills in descending order and their operators were Apex Regional, Las Vegas, Nevada (Republic Services Inc.); Puente Hills, Whittier, California (Los Angeles County); Newton County Landfill, Brook, Indiana (Allied Waste Industries Inc.); Okeechobee, Okeechobee, Florida (Waste Management Inc.); and Atlantic Waste, Waverly, Virginia (Waste Management Inc.). Collectively, these five landfills constituted 14,234,519 tons of waste.

In an effort to survive during the ongoing economic downturn, more companies sought relief through consolidation. In fact, industry leaders Allied Waste and Republic Services merged in 2009. The refuse industry expected further consolidation going forward as increased regulations and technological advances surfaced.

All across the national landscape, wastes delivered to landfills fell seven percent in 2009. The largest decline, however, was from construction and demolition (C&D) wastes that fell nearly 20 percent. Residential and commercial construction was virtually at a standstill as the economy worsened. Virginia's 2009 year-end statistics, for example, revealed waste delivered to its landfills decreased by 11 percent compared to 2008. Moreover, there was a 19 percent decline in wastes arriving from surrounding states, such as Maryland with waste volume down 22 percent from a year earlier. Wastes collected from U.S. companies fell 15 percent, while residential wastes decreased three percent.

Meanwhile, efforts were underway to curve gas consumption and carbon dioxide emissions in the three miles per gallon garbage trucks. One company, Waste Management, was testing "hydraulic hybrids" in four of its trucks in Fort Worth, Texas. While still in its early stages, the technology "captures the energy released during braking and stores it in a specialized hydraulic system," according to Waste & Recycling in April 2009. The company's long-term goal was to boost fuel efficiency by 15 percent by 2020.

Industry Leaders

The multinational waste management and environmental services firm Waste Management Inc. remained the largest in the industry. With almost $11.7 billion in revenues in 2009, it served more than 20 million customers at about 1,000 sites, including 265 landfills and 120 beneficial-use landfill gas projects, in addition to transfer stations, material recovery facilities, and waste to energy plants. In late 2008, the third-largest waste management company, Republic Services, acquired the second-largest waste management company, Allied Waste Industries. The combined Republic employed 31,000 people and operated a total of 400 collection companies, 210 solid waste landfills, 240 transfer stations, and about 80 recycling centers. Revenues reached $8.1 billion in 2009.

Research and Technology

The industry is increasingly affected by new technologies related to packaging, waste transportation, and hazardous waste disposal. Recycling services are becoming a more important part of waste management services, even though residential recyclables recovers only a fraction of the cost necessary to collect and process them. Therefore, new recycling technologies, such as the development of papers and inks that are easier to process, could play a critical role in MSW profitability. Additionally, great strides were made in the development and promotion of refuse-derived fuel under what has been referred to as waste-to-energy technology.

National Environmental Technology Applications Corp. was one firm on the technological edge. This firm devised a mile-deep tube that could pressurize hazardous sludge for use as bricks, road base material, and structural fill. Importantly, advances in scrubber technology could help strengthen the WTE sector, allowing cleaner emissions at reasonable costs for energy plants. WMX had already developed new fabric filters and dust collectors that allowed it to convert trash to energy more efficiently and cleanly.

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