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TECHNICAL REPORT

UCED 2010/11-09

Economic Analysis of Waste Recycling Options

for Washoe County

The University of Nevada, Reno is an equal opportunity, affirmative action employer and does not discriminate on the basis of race, color, religion, sex, age, creed, national origin, veteran status, physical or mental disability or sexual orientation in any program or activity it operates. The University of Nevada employs only United States citizens and aliens lawfully authorized to work in the United States.

Economic Analysis of Waste Recycling Options for Washoe County

Report Prepared by

Thomas R. Harris

Robert M. Dick

Man-Keun Kim

Anthony Oliver

and

Charles Coronella

Thomas R. Harris is a Professor in the Department of Resource Economics and Director of the University Center for Economic Development at the University of Nevada, Reno

Robert M. Dick is a Faculty Teacher in the Department of Economics at the University of

Nevada, Reno Man-Keun Kim is a former Research Assistant Professor in the Department of Resource

Economics at the University of Nevada, Reno Anthony Oliver is a former Graduate Research Assistant in the Department of Resource

Economics at the University of Nevada, Reno Charles Coronella is an Associate Professor in the Department of Chemical and Materials

Engineering at the University of Nevada, Reno

March 2011

This publication, Economic Analysis of Waste Recycling Options for Washoe County, was published by the University of Nevada Economic Development Center. Funds for the publication were provided by the Washoe County Commissioners, City of Reno, City of Sparks, and the United States Department of Commerce Economic Development Administration under University Centers Program contract #07-66-06415. This publication's statements, findings, conclusions, recommendations, and/or data represent solely the findings and views of the authors and do not necessarily represent the views of the Washoe County Commissioners, City of Reno, City of Sparks, the United States Department of Commerce, the Economic Development Administration, University of Nevada, Reno or any reference sources used or quoted by this study. Reference to research projects, programs, books, magazines, or newspaper articles does not imply an endorsement or recommendation by the authors unless otherwise stated. Correspondence regarding this document should be sent to:

Thomas R. Harris, Director University Center for Economic Development

University of Nevada, Reno Department of Resource Economics

Mail Stop 204 Reno, Nevada 89557-0204

UCED University of Nevada, Reno

Nevada Cooperative Extension Department of Resource Economics

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TABLE OF CONTENTS

Executive Summary ................................................................................................................................................. 1

Introduction ................................................................................................................................................................ 6

Materials Recovery Facilities ............................................................................................................................... 8

Overview of Proposed Washoe County MRF and Data .......................................................................... 13

Simulation of MRF Economic Feasibility ..................................................................................................... 41

Results ........................................................................................................................................................................ 44

Additional Issues .................................................................................................................................................... 49

Potential Waste-to-Energy Process ............................................................................................................... 54

Conclusions .............................................................................................................................................................. 59

References ................................................................................................................................................................ 60

Appendix A, Glossary ........................................................................................................................................... 65

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LIST OF TABLES

Table 1. Comparisons of the Three Options ............................................................................................... 17

Table 2. Plant and Equipment Costs for Proposed Collection Options ............................................ 17

Table 3. Recyclables and MSW Assumptions for Proposed Collection Options, (tons per year), Assumes a Recovery Rate of 20% MSW ........................................................................ 18

Table 4. Recyclables and MSW Assumptions for Proposed Collection Options, (tons per year), Assumes a Recovery Rate of 50% MSW ........................................................................ 18

Table 5. Summary Statistics of Historical Prices of Loose Steel Cans. ............................................. 31

Table 6. Summary Statistics of Historical Prices of Loose Aluminum Cans. ................................. 32

Table 7. Summary Statistics of Historical Prices of Loose White Goods ......................................... 33

Table 8. Summary Statistics of Historical Prices for Amber Glass .................................................... 34

Table 9. Summary Statistics of Historical Prices for Flint Glass ......................................................... 35

Table 10. Summary Statistics of Historical Prices of Green Glass ..................................................... 36

Table 11. Summary Statistics of Historical Prices of Colored HDPE Plastic. ................................. 37

Table 12. Summary Statistics of Historical Prices of Natural HDPE Plastic. ................................. 38

Table 13. Summary Statistics of Historical Prices of PET Plastic....................................................... 39

Table 14. Summary Statistics of Historical Prices of LLDPE Stretch Film Plastic ....................... 40

Table 15. Summary Statistics of Historical Prices of Mixed Residential Paper............................ 40

Table 16. Results of Monte Carlo Simulation of Proposed Collection Options, Assuming 264,055 Ton Per Year Available .................................................................................................. 47

Table 17. Results of Monte Carlo Simulation of Proposed Collection Options for Large Operation. .............................................................................................................................................. 48

Table 18. Projected Costs and Outputs for Plasma WTE Project ....................................................... 57

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LIST OF FIGURES Figure 1. “Clean” MRF Operation .................................................................................................................... 19

Figure 2. Small “Dirty” MRF Operation, Scenario 20% MSW .............................................................. 20

Figure 3. Small “Dirty MRF Operation, Scenario 50% MSW ................................................................ 21

Figure 4. Large “Dirty” MRF Operation, Scenario 20% MSW .............................................................. 22

Figure 5. Large “Dirty” MRF Operation, Scenario 50% MSW .............................................................. 23

Figure 6. Small Hybrid Operation, Scenario 20% MSW ......................................................................... 24

Figure 7. Small Hybrid Operation, Scenario 50% MSW ......................................................................... 25

Figure 8. Large Hybrid Operation, Scenario 20% MSW ......................................................................... 26

Figure 9. Large Hybrid Operation, Scenario 50% MSW ......................................................................... 27

Figure 10. Historical Prices for All Recyclable Commodity Prices Considered in this Report ............................................................................................................................................................................. 29

Figure 11. Historical Prices of Loose Steel Cans (dollars/ton). .......................................................... 30

Figure 12. Historical Prices of Aluminum Cans (cents/pound).......................................................... 31

Figure 13. Historical Prices of White Goods (dollars/ton) ................................................................... 32

Figure 14. Historical Prices of Amber Glass................................................................................................ 33

Figure 15. Historical Prices of Flint Glass .................................................................................................... 34

Figure 16. Historical Prices of Green Glass ................................................................................................. 35

Figure 17. Historical Prices of Colored HDPE Plastic ............................................................................. 36

Figure 18. Historical Prices of Natural HDPE Plastic .............................................................................. 37

Figure 19. Historical Prices of PET Plastic .................................................................................................. 38

Figure 20. Historical Prices of LLDPE Stretch Film Plastic ................................................................... 39

Figure 21. Historical Prices of Mixed Residential Paper ....................................................................... 40

Figure 22. Probability Distribution of Fees to Consumer for “Clean” MRF Option .................... 44

Figure 23. Probability Distribution of Fees to Consumer for Small 50% Hybrid Option ........ 45

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EXECUTIVE SUMMARY

This study was commissioned by Washoe County, City of Reno, and City of Sparks. This section provides a summary of the analysis.

Introduction

Recycling is the collection and processing of used products returned to the economic

mainstream in the form of raw materials or products.

With recycling, one company’s or area’s waste stream can become another company’s or area’s feed stock.

In 1991, the state of Nevada set a recycling goal of 25 percent for each municipality.

Since the state has been tracking recycling, Washoe County and Carson City have surpassed the 25 percent goal, while Clark County has not met the recycling goal.

Washoe County Health District set a mandatory goal of diverting 35 percent of solid waste generated within Washoe County from the landfill disposal by 2015.

Materials Recovery Facilities

Materials recovery facility (MRF) is a specialized plant or building that receives, separates, and prepares recyclable materials for marketing to end users.

There are two types of MRF systems. A “clean” MRF is a facility that accepts source separated recyclable materials. A “dirty” MRF receives a mixture of waste material that requires labor intense sorting activities to separate recyclables from the mixed waste.

In 1993, Platt and Morris found net recycling costs were lower than the collection and disposal cost in most communities.

In 1996, the average net recycling costs for curbside programs in 158 cities were $49 per ton less than average costs for collection and disposal of solid waste.

National Solid Waste Management Association in 1992 found the average cost to process individual recyclable material was $89.16 per ton, which average revenues of recyclable products would not cover costs.

Container Recycling Institute in 2009 found with recent world recession, exports of recycled materials to China declined and the demand for high quality recycled materials increased.

Container Recycling Institute (2009) suggested that municipalities and private entities should weigh the lower collection costs of a “dirty” MRF option against the higher sorting costs now required to improve the quality of recyclable materials. The cost advantages originally anticipated for a “dirty” MRF option may not be apparent over competing options.

Most studies of solid waste disposal and diversion are case studies under deterministic assumptions.

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Because of variability of recyclable output, prices and costs, Monte Carlo simulation should be used for feasibility analysis.

Deterministic investment analysis ignores potential variabilities and risk of key output variables. Monte Carlo simulation provides decision-makers with extreme values of key output variables as well as probability for favorable or unfavorable outcomes.

Overview of Proposed Washoe County MRF and Data The amount of trash put into the Lockwood landfill averaged about 1.7 million tons per

year since 2004.

The current recession has impacted the local waste stream. Municipal solid waste (MSW) is approximately 70 percent of 2004 and 2005 levels.

The average MSW for 2009 was 2,247 tons per day as compared to 3,000 tons per day for 2004 through 2006.

Of the total tons per day, Washoe County makes up 54 to 56 percent while the rest comes from other Nevada counties and several California counties.

Most MSW sent to the Lockwood landfill from counties other than Washoe County has already been processed through an MRF with most recyclables removed.

If the rate of recycling is to be increased in Washoe County, it must come from the 1,200 tons per day currently collected in the county. However, higher amounts may be realized with expansion of the local economy.

The MRF processing scenarios for this paper are “clean” MRF, “dirty” MRF, and hybrid MRF systems.

Recyclable commodity prices were investigated and collected for the following commodities: steel cans, aluminum cans, white goods (metals), amber glass, flint grass, green glass, colored high density polyethylene (HDPE) plastic, natural high density polyethylene (HDPE) plastic, polyethylene terephthalate (PET) plastic, linear low density polyethylene (LLDPE) plastic, and residential mixed paper.

From data provided by Waste Management (2010b), total waste stream available for all three of the proposed MRF processing scenarios was estimated to be 264,055 tons per year. This is equivalent to between 723 and 724 tons per day.

The first proposed system is the “clean” MRF option where all recyclables are placed in

a single container and provide feed stock for the MRF. All MSW would be taken to the landfill. For “clean” MRF, the total waste available is 264,055 tons per year with 54,576 tons per year for recyclables processed, 45,555 recycles actually sold, and 217,665 tons per year taken to the landfill.

For the “dirty” MRF and hybrid options, operations will be classified as either small or

large. The difference between the small and large systems is that a small system can process 1.5 tons per day while a large system can process 2.0 ton per day.

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The second method of collection is designated as “dirty” MRF. In this method, no recycling is done by households. Everything is treated as MSW and deposited in the trash collection containers. Waste would be brought to the recycling facility and would be separated at the recycling facility. A figure of 20 percent recyclable recovery was given by Waste Management for the “dirty” MRF option while Western Placer Waste Management in Roseville, California claims a 50 percent recovery rate. For the “dirty” MRF analysis, two scenarios will be analyzed, which are 20 percent and 50 percent recovery rates. For “dirty” MRF, a total waste stream is 264,055 tons per year. For the small 20 percent recovery “dirty” MRF, 131,978 tons per year of recyclables would be processed with 25,419 tons per year actually sold and 237,659 tons per year of MSW sent to the landfill. For the small 50 percent recovery “dirty” MRF, 131,978 tons per year of recyclables would be processed with 63,547 tons per year actually sold and 198,066 tons per year of MSW sent to the landfill. For the large 20 percent recovery “dirty” MRF, 181,860 tons per year of recyclables would be processed with 35,026 tons per year actually sold and 227,683 tons per year of MSW sent to the landfill. For the large 50 percent recovery “dirty” MRF, 181,860 tons per year of recyclables would be processed with 87,566 tons per year actually sold and 173,125 tons per year of MSW sent to the landfill. An advantage of “dirty” MRF compared to “clean” MRF is the lower collections costs. However, a major disadvantage, especially now with the national recession, is the increased contamination of sorted commodities that are often refused by the purchaser. An additional disadvantage of “dirty” MRF is related to the lost revenue associated with recyclables ending up in the wrong separated system.

The third option is the hybrid option. This option consists of a combination of the

“clean” MRF and “dirty” MRF using the residential MSW that is collected. For the third option, 264,055 tons of MSW per year will be available for recycling. For the small hybrid 20 percent recovery operation, 80,972 tons per year of recyclable products would be processed with 48,378 tons per year actually sold and 191,269 tons per year sent to the landfill. For the small hybrid 50 percent recovery operation, 120,565 tons per year of recyclable products would be processed with 117,141 tons per year actually sold and 151,676 tons per year sent to the landfill. For the large hybrid option, 264,055 tons of MSW per year would be available for recycling. For the large hybrid 20 percent recovery operation, 82,762 tons per year of recyclable products would be processed with 80,851 tons per year actually sold and 181,293 tons per year sent to the landfill. For the large 50 percent recovery operation, 140,320 tons per year of recyclable products would be processed with 136,009 tons per year actually sold and 126,735 tons per year sent to the landfill.

Simulation MRF Feasibility Model The Semitar Excel package was used to derive a Monte Carlo simulation analysis of

potential recycle projects.

For the model, commodity prices were forecasted so that net return for alternative recycle projects could be stochastically estimated as well as the carbon footprint.

From the stochastic revenue and costs for each recycle project, the stochastic fees that Washoe County customers may realize will be estimated.

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Results

Results summarize the risk-based (or probabilistic) forecast for key KOVs (key output variables).

For each KOV, the stochastic analysis reports the mean, standard deviation, coefficient of variation and minimum and maximum statistic that indicates the risk associated with each KOV.

Additional Items

Additional items were addressed in this report. These items are commodity pricing effects on rates, “dirty” MRF option, green waste option, methods of handling extra bags/bins, large item collection centers/events, inclusion of clean and green costs, household hazardous waste events, illegal dumping, potential economic cluster effects, and waste-to-energy consideration.

Numerous studies have found employment multiplier impacts from recycling. Goldman and Ogishi (2001) found in California that approximately 2.5 jobs would be added for every additional 1,000 tons of waste disposed while approximately 4.7 jobs would be added if the same volume had been directed as recyclable.

An MRF system in Washoe County could provide the county with a current and future economic cluster for recycling.

After recycling, there would be a large amount of MSW put into the Lockwood landfill. A number of technologies exist today that use post-sorted MSW as a feed stock to provide additional diversion opportunities and be returned to the economic mainstream in the forms of raw materials or products.

Additionally, if the recyclable market is determined to be too volatile, the output from these alternative recyclable options could be inputs to these waste-to-energy and/or waste-to-fuel options.

Unlike the older “mass-burn” incineration technologies used for waste-to-energy (WTE) facilities, there are two basic categories of technologies designed to convert MSW feedstock into synthesis gas that can be further used to produce electricity, synthesize fuels, or chemical products. These include thermochemical technologies (pyrolysis, conventional gasification, pyrolysis gasification, and plasma, and gasification), and biochemical technologies (aerobic, landfill, anaerobic digesters).1

An example plasma WTE project was analyzed for Washoe County. If gas and steam are generated, the potential net returns range from -$4 million to $23 million. If only steam is generated, the forecasted net returns range from -$4 million to $12 million.

Detailed engineering analysis is required before any WTE or waste-to-fuels option can be adopted by Washoe County.

1 “Biomass Conversion: Emerging Technologies, Feedstocks, and Products.” December 2007, EPA/600/R-

07/144, U.S. Environmental Protection Agency, p7.

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Fulcrum BioFuels, Inc’s waste-to-fuels facility, currently under development in the Tahoe-Reno Industrial Center, will convert approximately 420 tons per day of MSW feedstock into synthesis gas utilizing down-draft gasification and plasma arc technologies. The synthesis gas will be converted into 10.5 million gallons per year of ethanol and renewable energy.

An additional suggested study would be a feasibility analysis of an eco-industrial park. Such an eco-industrial park could develop value added product from the Washoe County waste stream and create an industrial cluster.

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INTRODUCTION

The U.S. Environmental Protection Agency (2009) estimated that in 2008,

Americans generated approximately 250 million tons of trash, of which 83 million tons

were recycled and composted. This is equivalent to a 33.2 percent recycling rate. Also, the

83 million tons of municipal waste recycled and composted is equivalent to 182 million

metric tons of reduced carbon dioxide emissions. This is comparable to the annual

greenhouse gas emissions from more than 33 million passenger vehicles.

With current national, state and local interest in green industries, there has been

expanded interest in recycling of municipal waste streams. Recycling is the collection and

processing of used products into inputs that can be used by manufacturers. Examples of

recycling are old newspapers into newsprint, used glass bottles and aluminum cans, and

used cardboard into new cardboard. With recycling, one company’s waste stream becomes

another company’s feed stock.

Often to increase recycling, legislative mandates are proposed. For the state of

Nevada in 1991, Assembly Bill 320 set a recycling goal of 25 percent for each municipality.

Since Nevada has been tracking recycling, the statewide recycling rate has continuously

increased to 21 percent (2007). Washoe County and Carson City have surpassed the 25

percent goal, while Clark County has not met the recycling goal. Also, the Washoe County

Department of Health recently set a mandatory goal of diverting 35 percent of solid waste

generated within the county from landfill disposal by the year 2015 (Vogles, 2010).

Governor Gibbons stated that technology exists to convert 75 percent of all waste

collected into recycle materials for agriculture and construction uses (2010). Such a goal

would require an integrated solid waste management effort. This would require efficient

and effective solid waste management starting with generation of waste by an individual to

final disposal by county/local government.

Integrated solid waste management is based on not a single solution to the waste

management problem but encompassing five areas of solid waste reduction, which are

source reduction, recycling, composting, waste-to-energy, and landfills (Tchobanoglous and

Kreith, 2002). Source reduction would reduce the amount of waste generated by reusing

materials to prevent entrance to the waste stream, and recycling them so that they are not

disposed of in landfills. Recycling is taking plastic, glass, metals, and paper from the waste

stream and reprocessing these materials into new products. Composting is the process of

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converting organic material into compost that could be used for soil enhancement and/or

fertilization. Waste-to-energy is the process of transforming waste by heat into steam,

electricity, and/or syngas. Waste-to-energy would lower the volume of waste to landfills

and would be part of renewable energy efforts for the state. Lastly, landfills dispose of

wastes that cannot be recycled, composted, or used in waste-to-energy operations.

As discussed earlier, products are collected in numerous ways. For curbside

collection, residents place their collectables at the curbside for collection. This type of

collection is common in urban or suburban areas. Other deposit programs are drop-off

centers or buy-back centers that are centralized.

The chain of recycling goes from collection at curb side, drop-off centers, or buy-

back centers to materials recovery facilities (MRF). At the MRF recyclables are sorted and

processed into marketable commodities for manufacturing. Most MRFs process different

grades of paper, glass bottles, aluminum, steel cans, and plastic containers. However,

because of variabilities in price for recyclable goods, risk must be addressed for any

proposed MRF system.

Therefore the primary objective of this study is to provide a risk assessment of

proposed MRF systems in Washoe County. Specific objectives are listed below:

1. To discuss the materials recovery facilities system,

2. To discuss Monte Carlo simulation and its use for MRF analysis,

3. To provide an overview of the proposed MRF systems for Washoe County and data,

4. To complete a risk and carbon foot print analysis of proposed MRF systems, and

5. To provide initial feasibility analysis as to possible WTE or waste-to-fuels facility.

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MATERIALS RECOVERY FACILITIES

An MRF can be defined as a building that receives sorts, processes, and stores

recyclable materials to be shipped and marketed to end users. An MRF accepts materials,

whether source separated or mixed, and separates, processes, and stores them for later use

as raw materials for remanufacturing and reprocessing. The main function of the MRF is to

maximize the quantity of recyclables processed while producing materials that will

generate the highest possible revenues in the market.

For this study, there are three types of MRFs classified as “dirty”, “clean”, and

hybrid. A “dirty” MRF receives a mixture of waste material that requires labor intense

sorting activities to separate recyclables from the mixed waste. A “dirty” MRF increases the

likelihood of contaminates to the recyclables captured. Most recyclable products affected

by potential contamination by a “dirty” MRF system are paper products.

A “clean” MRF facility accepts recyclable commingled materials that have already

been separated at the source from municipal solid waste generated by either residential or

commercial sources. A hybrid MRF” incorporates characteristics of both a “clean” and

“dirty” MRF system.

Recycling streams can also be classified as “dirty” and “clean”. “Dirty”, or fully

commingled recycling, is a system in which all paper fibers and containers are collected in

the same bin instead of waste commodities being allocated into separate bins (source

separated) such as newspaper, cardboard, plastics, glass, etc. (State of Wisconsin, 2005).

“Dirty” recycling typically collects a greater variety of materials than do source separated or

“clean” (paper is one bin; glass, plastic and cans in another) (University of Wisconsin

Extension, 2007).

“Clean” recycling is a recycling process in which cans and bottles are collected

separately from other potential recyclables. “Clean” operations have higher collection costs

than “dirty” operations but the contamination of recyclable products is lower.

Revenues and Costs of Disposal and Diversion

Most recent economic studies of waste disposal and diversion are case studies;

these studies compare the costs of waste collection and disposal with the costs of collection

and processing recyclable materials in different communities.

Platt and Morris (1993), who studied 15 different communities throughout the

United States, estimated that the collection and disposal costs of residential solid waste

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ranged from $68 to $288 per ton2, while the net costs of source-separated curbside

recycling and composting ranged between $60 and $204 per ton. Net recycling costs

include costs of collection and processing minus revenues from the sales of recyclables.

They found that the net recycling costs were lower than the collection and disposal costs in

most communities. Platt and Morris (1993) found that recycling could be more expensive if

the study communities experienced high start-up program costs, lower levels of initial

material recovery, additional system design needs, and low costs of land filling.

Deyle and Schade (1991) compared the long-term cost of municipal enterprise

curbside recycling of mixed residential and commercial materials to that of waste disposal

in landfills for four large and small communities in Oklahoma. They found that net recycling

cost less than landfill disposal when the landfill tipping fees were more than $64 per ton in

the large cities and $110 per ton in the small ones. A nationwide survey by Folz (1992)

suggested that when the tipping fee was $58 per ton, the cost of recycling was the same as

that of disposal, assuming an equal scale and efficiency of recycling and disposal collection

programs. In cities where recycling is mandatory, which results in higher participation and

recovery amounts, recycling was competitive at tipping fees as low as $25 per ton. Folz

(1999) also reported that in 1996, the average net recycling costs for curbside programs in

158 cities were $47 per ton less than the average costs for collection and disposal of solid

waste.

The state of North Carolina analyzed the full costs of solid waste management for 15

selected local governments by considering operating costs, costs of capital expenditures,

revenues from sales of recyclables, and indicators of efficiency (North Carolina DEHNR,

1997). Of the 15 jurisdictions, six of the eight that had household recycling rates of more

than 12 percent found that the net recycling costs were less than that of solid waste

collection and disposal. A similar study in Washington showed that in 1992, the net per-ton

costs of residential recycling in three large study cities were lower than the costs of disposal

by $44 to $115 per ton (Sound Resource Management Group, Inc., 1993). A fourth city had

a mix of residential and commercial waste and the net savings advantage of recycling was

$17 per ton over disposal. The comparative cost advantage of recycling would increase as

the market demand for recyclables and landfill-tipping fees rise as expected in coming

years.

2 All prices have been adjusted to an Engineering News Record – Construction Cost Index (Engineering

News Record, 2010).

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With expanded interest in MRF and its rapid growth, unfortunately there is little

information about the costs of these facilities. The National Solid Waste Management

Association (1992) commissioned a study of MRFs. The MRF cost studies had two

objectives: one to determine the average cost per ton to process residential recyclables at

MRFs and two, to determine costs per ton to process each individual recyclable material.

The study found on average it costs $89.16 (National Solid Waste Management, 1992) to

process a ton of recyclables at an MRF. They concluded that on average, average revenues

of recyclable products would not cover costs.

The Pennsylvania Department of Environmental Protection (R.W. Beck, Inc., 2004)

completed a feasibility of a Goodwill Industries MRF. This case study found that the

Goodwill Industry MRF should focus on steel can recyclables, which could increase

revenues by $7,500 per year.

Eureka Recycling (2002) compared five different collection methods in the St Paul-

Minneapolis area and found that a “dirty” MRF operation collected 21 percent more

material than the current collection method. However, Eureka Recycling (2002) did not

ultimately recommend the “dirty” MRF system because the lower collection costs of the

“dirty” MRF system were outweighed by higher processing costs and lower material

revenues.

Lantz (2008) analyzed recovery rates from three “dirty” MRF and four “clean” MRF

programs in Ontario, Canada. Lantz (2008) found that the collection cost benefits of “dirty”

MRF systems do not outweigh their costs. He found that cost advantages originally

anticipated from “dirty” MRF recycling was not apparent over the “clean” MRF system.

Beck (2006) found in a Pennsylvania study that “dirty” MRF options had matured

somewhat but a higher number of contaminants were still present, more than for the

“clean” MRF system option. Beck (2006) found that 3.7 percent of materials were rejected

under the “dirty” MRF option as opposed to 1.8 percent rejected under the “clean” option.

Container Recycling Institute (2009) found with the recent world recession, exports

of recycled material to China declined and therefore demand for high quality recycled

material increased. The new marketplace requires reassessment of the economies of “dirty”

MRF option. Municipalities or private entities must weigh the lower collection costs of the

“dirty” MRF option against higher sorting costs at the MRF that improves the quality of

recycled material and therefore revenue potential.

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Most feasibility studies of proposed MRF systems ignore price and cost variability

and risk. Because of variation in recyclable prices and costs, these variable prices and costs

need to be incorporated in any analysis of a proposed MRF in Washoe County. Therefore,

this paper will incorporate Monte Carlo Simulation in a feasibility analysis. The next section

provides an overview of Monte Carlo Simulation for analysis of a potential recycle project

appraisal.

Monte Carlo Simulation for Feasibility Analysis

Deterministic investment feasibility analysis that ignores price and cost variability

and does not incorporate risk provides only a point estimate of key output variables (KOVs)

instead of estimates for probability distributions that incorporate risk of success and failure

(Pouliquen, 1970; Reutlinger, 1970; and Hardaker, et al., 2004). Pouliquen (1970) indicates

the benefits of Monte Carlo simulation are that it provides decision-makers the extreme

values of KOVs and their relative probabilities along with a weighted estimate of the

relationships between unfavorable and favorable outcomes. In addition to the risk analysis

and how it affects the feasibility of the project, Pouliquen (1970) suggests that the complete

feasibility simulation can be used to analyze alternative management plans if the

investment is undertaken.

Easy to use simulation add-ons for Excel, such as Semitar, @Risk, and Crystal Ball,

are available to convert deterministic Excel spreadsheet models to Monte Carlo simulation

models. For this paper, the add-on Excel Semitar package will be used (Richardson et al.,

2006b). The Semitar program allows investigators to ask “what if” questions for recyclable

projects.

Richardson (2006a) outlined steps in developing Monte Carlo simulation analysis of

investment projects. First probability distributions for all risky variables must be defined,

parameterized, simulated and validated. Second, the stochastic variables from the

probability distributions are used in the accounting equations to calculate production,

receipts, costs, cash flows, and balance sheet variables for the project. Stochastic values

sampled from the probability distributions make the financial statement variables

stochastic. Third, the completed stochastic model is simulated many times (i.e. 1,000

iterations) using random values for the risky variables. The results of the 1,000 samples

provide the information to estimate empirical probability distributions for unobservable

KOVs; such as: present value of end net worth, net present value, and annual cash flows, so

investors can evaluate the probability of success for a proposed project or the added fees to

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a customer’s rate. Fourth, the analysis uses stochastic simulation model to analyze

alternative management scenarios, and provide the results to the decision-maker in the

form of probabilities and probabilistic forecasts for the KOVs.

For this analysis, the Monte Carlo simulation analysis will provide a range of

potential results for proposed recycle operations. The complete simulation model will be

simulated many times (i.e.; 1,000 times) using random variables. The empirical probability

distributions for the KOVs will be for recyclable tons per year, fees to consumers, and Green

House Gas Emissions (GHGE) avoided. From the KOVs’ distribution, decision makers are

provided information as to a range of results from various recyclable programs.

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OVERVIEW OF PROPOSED WASHOE COUNTY MRF AND DATA

The amount of trash put into the Lockwood landfill has averaged about 1.7 million

tons per year since 2004. That is 4,700 tons each day. However, this average is misleading

as there has been a drastic drop in the amount of trash deposited in the landfill since 2007.

Through the third quarter of 2009, daily amounts were 3,000 tons which is 52

percent of the average daily tonnage that was put into the landfill in 2005 and 2006. This

drop can be explained by the economic downturn that began in 2007, which affected the

construction industry dramatically. In 2005 and 2006, construction waste accounted for 40

percent of the total amount deposited in the landfill. For the first three quarters of 2009, it

had dropped to 17 percent of the total. Overall, construction waste through the first three

quarters of 2009 was 20 percent of the amount deposited in 2006.

Municipal Solid Waste (MSW) deposits have also been affected by the economic

downturn but not to the same degree. Average MSW is 70 percent of the highs in 2004 and

2005. This amounts to a daily average of 2,247 in 2009 compared to averages of above

3,000 tons per day (TPD) in 2004 to 2006. Of this amount, 54 to 56 percent comes from

Washoe County. The rest comes from other counties in Nevada and several counties in

California. The bulk of the MSW from California comes from Sacramento County with El

Dorado, Plumas, Nevada, and Modoc counties supplying the rest.

It is important to distinguish between other MSW providers and Washoe County

MSW. Most of the trash that is sent to the Lockwood landfill from other than Washoe

County has already been processed and most of the recyclables removed. Therefore, if the

amount of recyclables is to be increased, it must come from the MSW currently collected

from Washoe County residents. In 2009, that amount was 1,200 tons per day but higher

amounts should be expected in the future as the economy recovers. From 2004 through

2006, the daily tonnage was in the 1,700 to 1,800 tons per day range. That amount

decreased each year from 2006 to its current level.

For this study, the input amount used is 264,055 tons per year which averages

between 723 and 724 tons per day (Waste Management, 2010b). This is the amount

collected from residential household pick up in Washoe County. The rest of the daily

tonnage comes from other sources (commercial, multiple residential and self-haul to the

landfill). While not included in the totals of this study, this additional 450-500 tons per day

14

represents a potential source of feedstock for any waste-to-energy project that might be

considered

The following section presents a review of data used by the research team. Also, the

three potential MRF systems will be outlined.

Proposed Collection Scenarios

Local governments in Washoe County are proposing three possible methods for

collecting and processing recyclable trash in Washoe County. Each of these methods will

have different costs and will yield different qualities and quantities of recyclables from each

waste stream. In addition, the “dirty” MRF and the “hybrid” MRF are split further based on

different assumptions of recycle returns. A figure of 20 percent recyclable recovery was

given by Waste Management while Western Placer Waste Management Authority in

Roseville, California claims a 50 percent recovery rate (Thompson, 2011). The Western

Placer Waste Management Authority facility recovers and sorts through both the municipal

and commercial waste to recovery recyclable products. These wastes are wood/green

waste that is processed for compost and woodchips, metal that is ferrous/metallic etc.,

plastic, glass, and paper (Western Placer Waste Management Authority, 2011).

Table 1 is an overview of the three systems showing comparisons for selected

characteristics. Table 2 presents capital costs for the three options broken down by

equipment, land, and buildings. Tables 3 and 4 break down the amounts diverted in each

method for recycling and how much recycled product is obtained under a recovery rate of

50 percent of MSW (Table 3) and under a recovery rate of 20 percent of MSW (Table 4).

Figures 1 through 9 present flow charts that track the amounts in Tables 3 and 4 along with

the costs for each stage of processing. These costs are presented as total costs and per

household costs. These costs are also summarized in Tables 15 and 16.

The first method of collection and processing is the “clean” MRF (Figure 1) where all

recyclables are placed in a single container and provide feed stock for the MRF. No further

attempt would be made to separate recyclables. All MSW would be taken to the landfill. For

“clean” MRF option, the total waste available is 264,055 tons per year of which 54,576 tons

per year is collected for recycling. Of that 54,576, 45,555 tons per year of recyclables would

be available for sale. The remaining 217,665 tons per year of MSW would be sent to the

landfill. The figure of 54,576 is derived from an assumption that approximately 16.7

pounds of recyclables is available per household per week.

15

The second method of collection is designated as small “dirty” MRF (Figures 2 and

3) and large “dirty” MRF (Figures 4 and 5). The difference between small and large systems

is that a small system can process 1.5 tons per day, while a large system processes 2.0 tons

per day. Waste would be brought to the recycling facility and would be separated there.

For both small and large “dirty” MRF, a total waste stream would be 264,055 tons per year.

For both “dirty” MRF options, two recovery rates will be used. They are a 20 percent

recovery rate, which is the recovery rate stated by Waste Management, and a 50 percent

recovery rate as stated by Western Placer Waste Management Authority. For the small 20

percent recovery “dirty” MRF, 25,149 tons per year of recyclables would be collected for

sale, while 237,659 tons per year of MSW would be sent to the landfill (Figure 2 and Table

3). Under the large 20 percent recovery “dirty” MRF, 35,026 tons per year of recyclables

would be collected for sale, while 227,673 tons per year of MSW would be sent to the

landfill (Figure 4 and Table 3). For the small 50 percent recovery “dirty” MRF, 63,547 tons

per year of recyclables would be collected for sale while 198,066 tons per year of MSW

would be sent to the landfill (Figure 3 and Table 4). Under the large 50 percent recovery

“dirty” MRF, 87,566 tons per year of recyclables would be collected for sale, while 173,125

tons per year of MSW would be sent to the landfill (Figure 5 and Table 4). The disadvantage

of the “dirty” MRF is that there is greater chance of contamination of output with MSW that

is not recyclable. However, there are advantages with the “dirty” MRF options as detailed

by University of Wisconsin Cooperative Extension (2007). These factors are enumerated

below:

Simplified recycling. Recycled materials are collected in one container making collection easy and convenient for participants. This added convenience typically increases the number of participants, tonnage collected, and materials diverted from landfills.

Reduced collection costs by using single-compartment trucks. These trucks are typically cheaper to purchase and operate, they can also be used for garbage collection, and allow for larger loads and fewer trips to the recycling center than two-component trucks.

Increased cleanliness. There is a decrease of loose materials blowing through streets and alleys. Hinged lids on carts are often distributed to keep recyclables dry.

Increased collection efficiency and reduced injuries since wheeled carts used in automated collection eliminate heavy lifting for residents and workers.

Switching to “dirty” MRF offers the opportunity to update the collection and processing system, including adding more paper grades such as junk mail, telephone books, and mixed residential paper, a good opportunity considering approximately 35 percent of all municipal solid waste is paper (U.S. Environmental Protection Agency, 2005).

16

Under the “dirty” MRF option, there are additional factors to be considered that

come from a referenced study by the Container Recycling Institute (2009). These factors

are enumerated below:

“Dirty” MRF systems lower the cost of collection as opposed to “clean” MRF operations. A 2007 presentation by the Solid Waste Association of North America (2007) estimated that collection savings from “dirty” MRF operations were between $10 and $20 per ton. Therefore for this study, collection costs were reduced by $15 per ton for the “dirty” MRF simulation as oppose to “clean” MRF and hybrid simulations.

After initial investments are made, communities may realize cost savings from the “dirty” MRF option but a decrease in collection costs will possibly be negated by a rise in processing costs. The materials that arrive at a “dirty” MRF operation are unsorted; the recovery facility must sort these items to be marketed.

Generally, the final commodities sorted in a “dirty” MRF option will be more contaminated than those that are collected in a “clean” MRF operation or sorted at curbside. This contamination increase often causes the commodities sorted under a “dirty” MRF system to be worthless. In the current recession, contaminated recyclables could be refused by the purchaser.

Another inefficiency related to “dirty” MRFs versus the “clean” or curbside sorting is related to lost revenue associated with recyclables ending up in the wrong separated stream.

Beck (2006) found in Pennsylvania that even as “dirty” MRFs had matured somewhat, a higher percentage of contaminants were found in the incoming stream at “dirty” MRFs than in the stream of “clean” MRFs. The rejection rate for the Beck (2006) study will be applied in the simulation runs for this paper. From Beck (2006), the rejection rate for “dirty” MRFs was estimated to be 3.7 percent and for “clean” MRFs, it was estimated to be 1.8 percent.

The third option is the small and large hybrid option with 20 percent MSW and 50

percent MSW (Figures 6 through 9). This option consists of a combination of the “clean”

MRF and “dirty” MRF using the residential MSW that is collected. For the third option,

264,055 tons of MSW per year would be available for recycling. For the small 20 percent

MSW hybrid option, 79,019 tons per year of recyclables would be available for sale and

191,269 tons per year sent to the landfill (Figure 6 and Table 3). Under the large hybrid

option, 80,851 tons per year of recyclables would be available for sale and 181,293 tons per

year sent to the landfill (Figure 8 and Table 3). For the small 50 percent MSW hybrid

option, 117,141 tons per year of recyclables would be available for sale and 151,676 tons

per year sent to the landfill (Figure 7 and Table 3). Under the large option, 136,009 tons per

year of recyclables would be available for sale and 126,735 tons per year sent to the landfill

(Figure 9 and Table 4).

17

Finally, this analysis assumes that the recycle program will continue to be voluntary.

Currently, forty percent (40%) of households in Washoe County recycle. Waste

Management believes that a “dirty” MRF system will increase the participation rate to

seventy percent (70%). If an incentive program is initiated and the participation rate is

increased, the tonnage of recovered recyclables will increase in the “clean” MRF portion of

the hybrid option. With increased tonnage of recyclables, the tonnage from the MSW

portion of the hybrid option will decline.

Table 1. Comparisons of the Three Options.

Option “Clean” MRF “Dirty” MRF Hybrid MRF

Process 2 Containers 1 Container 2 Containers

Output of recyclables Middle Lowest Higher

Quality of recyclables Highest Lowest Close to “clean” MRF

Capital Costs:

Land and building $7.6 million $9.6 million $7.6 million

Equipment $8 million $11 million $12 million

Labor Costs Lowest Highest Middle

Operating Costs High Low High

Collection methods Requires 2 different trucks Requires 1 truck Requires 2 different trucks

Impact on Carbon Footprint

113,704 161,757 – 274,9901

275,141 – 388,7041

Recovery rate 85% 50% 50%/85%

Rates (approx.) $18.43 $20.00 to $23.13 $23.70 to 27.03 1Ranges for small 50 percent recovery option to large 50 percent recovery option.

Table 2. Plant, Equipment, and Land for Proposed Collection Options.1

Option Equipment2

Land3

Building4

“Clean” MRF $8,000,000 $1,600,000 $6,000,000

MSW Small (“Dirty” MRF) $11,000,000 $1,600,000 $8,000,000

Hybrid Small $12,000,000 $1,600,000 $6,000,000

MSW Large (“Dirty” MRF) $16,000,000 $1,600,000 $8,000,000

Hybrid Large $21,509,000 $1,600,000 $12,800,000

1Costs estimated through conversations with Waste Management personnel (Waste Management, 2010a).

2Equipment life assumed to be seven years.

3Land costs investment for 20 years.

4Building cost investment for 20 years.

18

Table 3. Recyclables and MSW Assumptions for Proposed Collection Options, (tons per year), Assumes a Recovery Rate of 20% MSW.1

Category “Clean” MRF Small MSW Small Hybrid Large MSW Large Hybrid

Total Collected 2 264,055 264,055 264,055 264,055 264,055

Processed for Recyclables 54,576 131,978 186,554 181,860 236436

Recovered for Sale 46,390 65,989 120,565 90,930 140,320

Unsalable 3,4

835 2,442 3,424 3,364 4,311

Actual Recyclable Sales 45,555 63,547 117,141 87,566 136,009

Residue to Landfill 8,186 65,989 74,175 90,930 99,116

Unprocessed MSW (Landfill)

209,479 132,077 77,501 82,195 27,619

Total to Landfill 217,665 198,066 151,676 173,125 126,735

Fees (approx.) $18.50 $20.00 $23.70 $21.87 $25.70 1Twenty percent recovery rate from Waste Management.

2Based on 723 TPD.

3Amount rejected by purchaser and disposed of by purchaser.

4Based on 1.8 percent rejection rates for “clean” MRF and 3.7 percent rejection rates for “dirty” MRF.

Table 4. Recyclables and MSW Assumptions for Proposed Collection Options, (tons per year), Assumes a Recovery Rate of 50% MSW.1

Category “Clean” MRF Small MSW Small Hybrid Large MSW Large Hybrid

Total Collected 2 264,055 264,055 264,055 264,055 264,055

Processed for Recyclables 54,576 131,978 186,554 181,860 236436

Recovered for Sale 46,390 26,396 80,972 36,372 82,762

Unsalable 3,4

835 977 1959 1,346 2,181

Actual Recyclable Sales 45,555 25,419 79,019 35,026 80,851

Residue to Landfill 8,186 105,582 113,768 145488 153,674

Unprocessed MSW (Landfill)

209,479 132,077 77,501 82,195 27,619

Total to Landfill 217,665 237,659 191,269 227,673 181,293

Fees (approx.) $18.50 $20.90 $24.63 $23.13 $27.03 1Fifty percent recovery rate from Western Placer Waste Management Authority.

2Based on 723 TPD.

3Amount rejected by purchaser and disposed of by purchaser.

4Based on 1.8 percent rejection rates for “clean” MRF and 3.7 percent rejection rates for “dirty” MRF.

19

1

Picking up, Transporting,

etc.

Trash 209,479 tons

(873 tons/day)

Recycles 54,576 tons

(227 tons/day)

Recyclables For Sale

45,555 tons (98.2%)


etc.

Landfill

Cost: 209,479 tons x $82/ton

= $17.2 million Fee: $17.2 million/125,000/12

= $11.45/month/HH

Receipt: 45,555 tons x $36/ton

= $1.6 million

Processing

54,576 tons

Cost: 54,576 tons x $63.50/ton = $3.5 million

Cost: $5.1 m +3.5 m - $1.6 m = $7.0 million

Fee: $7.0 million/125,000/12

= $4.60/month/HH Fee: $11.45 + $1.2 +$4.6

= $17.25/month/HH

Price projection

Carbon Footprint

Figure 1. “Clean” MRF Operation.

Cost Flow: “Clean” MRF

Investment/Capital Cost Trucks and Equipment

Depreciation 1.8 million >> $1.20/month/HH

46,390 tons (85%)

8,186 tons (15%)

GHGE avoided: 111,670 MTCO2E

Contaminated 835 tons (1.8%)

Cost: 54,576 tons x $93/ton = $5.1 million

209,479 tons (100%)

20

2 2

Trash 264,055 tons

(1,100 tons/day)

MSW 131,978 tons


25,419 tons (96.7%)


etc.

Landfill



= $14.44/month/HH


= $0.9 million

Processing

131,978 tons

Cost: 131,978 tons x $73.50/ton

= $9.8 million

Cost: $9.7 m - $0.9 m = $8.8 million

Fee: $8.8 million/125,000/12

= $5.86/month/HH Fee: $14.44 + $1.6 +$5.86

= $21.90/month/HH

Price projection

Carbon Footprint

Figure 2. Small “Dirty” MRF Operation, Scenario 20% MSW.

Cost Flow: Small “Dirty” MRF Operation, Scenario 20% MSW


Depreciation

2.5 million >> $1.60/month/HH

26,396 tons (20%)

105,582 tons (80%)


Contaminated 977 tons (3.7%)

132,077 tons (50.02%)

131,978 tons

(49.98%)

21

3

..

Trash 264,055 tons

(1,100 tons/day)

MSW 131,978 tons


65,547 tons (96.3%)

Picking up; Transporting;

etc. .

Landfill



= $14.44/month/HH


= $2.3 million

Processing 131,978 tons

Cost: 131,978 tons x $73.50/ton

= $9.7 million

Cost: $9.7 m - $2.3 m = $7.4 million

Fee: $7.4 million/125,000/12

= $4.93/month/HH Fee: $14.44 + $1.6 +$4.93

= $20.97/month/HH

Price projection

Carbon Footprint

Figure 3. Small “Dirty” MRF Operation, Scenario 50% MSW.

Cost Flow: Small “Dirty” MRF Operation, Scenario 50% MSW


Depreciation 2.5 million >> $1.60/month/HH

65,989 tons

(50%)

65,989 tons (50%)


Contaminated 2,442 tons

(3.7%)

132,077 tons (50.02%)

131,978 tons

(49.98%)

22

4

Trash 264,055 tons

(723 tons/day)

MSW 181,860 tons

(700 tons/day)


35,026 tons (96.3%)


etc. .

Landfill

(227,683 tons)



= $14.40/month/HH


= $1.3million


Cost: 181,860 tons x $73.50/ton

= $13.3 million

Cost: $13.3 m - $1.3m = $12.0 million

Fee: $12.0 million/125,000/12 = $8.00 month/HH

Fee: $14.4 + $1.6 +$8.0

= $24.00/month/HH

Price projection

Carbon Footprint

Figure 4. Large “Dirty” MRF Operation, Scenario 20% MSW.

Cost Flow: Large Dirty MRF Operation, Scenario 20% MSW


Depreciation


36,372 tons

(20%)

145,488 tons (80%)



(3.7%)

82,195 tons (31.13%)

181,860 tons

(68.87%)

23

5

Trash 264,055 tons

(723 tons/day)

MSW 181,860 tons

(700 tons/day)


87,566 tons (96.3%)


etc. .

Landfill

(173,125 tons)



= $14.40/month/HH


= $3.2 million


Cost: 181,860 tons x $73.50/ton

= $13.3 million

Cost: $13.3 m - $3.2m = $10.1 million

Fee: $10.1 million/125,000/12

= $6.73month/HH Fee: $14.4 + $1.6 +$6.73 =

$22.73/month/HH

Price projection

Carbon Footprint

Figure 5. Large “Dirty” MRF Operation, Scenario 50% MSW.

Cost Flow: Large Dirty MRF Operation, Scenario 50% MSW


Depreciation


90,930 tons

(50%)

90,930 tons (50%)



(3.7%)

82,195 tons (31.13%)

181,860 tons

(68.87%)

24

6

8,186 tons (15% of Rcycl)

Trash 209,479 tons

(814 tons/day)

MSW 131,978 tons


79,019 tons (97.6%)


etc. .

Landfill



= $11.45/month/HH

Receipt: 79,019 x $36/ton

= $2.8 million

Processing 131,978 tons 54,576 tons

Cost: 131,978 tons x $73.50/ton = $9.7 million 54,576 tons x $63.50/ton = $3.5 million

Total Cost = $13.2

Cost: $5.1 m + $13.2 m - $2.8 m = $15.5 million

Fee: $15.5 million/125,000/12 = $10.33/month/HH

Fee: $11.45 + $1.6 +$10.33

= $23.38/month/HH

Price projection

Carbon Footprint

Cost Flow: Small Hybrid Operation, Scenario 20% MSW


Depreciation

$2.41 million >> $1.60/month/HH

80,972 tons

105,582 tons (80% of MSW)



(2.4%)

77,501 tons

(37%)

131,978 tons

(63%)


etc. .


(227 tons/day)

Cost: 54,576 tons x $93/ton = $5.1 million

Figure 6. Small Hybrid Operation, Scenario 20% MSW.

25

7

Figure 7. Small Hybrid Operation, Scenario 50% MSW.


Trash 209,479 tons

(814 tons/day)

MSW 31,978 tons


117,141 tons (97.2%)


etc.

Landfill

Cost: 209,479 tons x $82/tons


= $11.45/month/HH


= $1.9 million



Total Cost = $13.2

Cost: $5.1 m + $13.2 m - $4.2 m = $14.2 million


Fee: $11.45 + $1.6 +$9.46

= $22.51/month/HH

Price projection

Carbon Footprint


Depreciation


120,565 tons

65,989 tons (50% of MSW)


Contaminated 3,424tons

(2.8%)

77,501

(37%)

131,978 tons

(63%)


etc. .

Cost: 54,576 tons x $93/tons = $5.1 million

Cost Flow: Small Hybrid Operation, Scenario 50% MSW


(227 tons/day)

26

8

Figure 8. Large Hybrid Operation,Scenario 20% MSW.


Trash 209,479 tons

(814 tons/day)

MSW 181,860 tons

(700 tons/day)


80,851 tons (97.4%)


etc.

Landfill

(181,293 tons)



= $11.45/month/HH


= $2.9 million



Total cost = $16.9 million

Cost: $5.1 m + $16.9 m - $2.9 m = $19.1 million


Fee: $11.45 + $1.6 +$12.73

= $25.78 month/HH

Price projection

Carbon Footprint


Depreciation


82,762 tons

145,488 tons (50% of MSW)



(2.6%)

27,619 tons

(13.18%)

181,860

(86.82%)


etc. .


Cost Flow: Large Hybrid Operatio, Scenario 20% MSW


(227 tons/day)

27

9

Figure 9. Large Hybrid Operation, Scenario 50% MSW.


Trash 209,479 tons

(814 tons/day)

MSW 181,860 tons

(700 tons/day)


136,009 tons (96.9%)


etc.

Landfill

(126,735 tons)



= $11.45/month/HH


= $4.9 million



Total costs= $16.9 million

Cost: $5.1 m + $16.9 m - $9.9 m = $12.1 million


Fee: $11.45 + $1.60 +$8.07

= $21.12 month/HH

Price projection

Carbon Footprint


Depreciation


140,320 tons

90,930 tons (50% of MSW)



(3.1%)

27,619 tons

(13.18%)

181,860

(86.82%)


etc. .


Cost Flow: Large Hybrid Operation, Scenario 50% MSW


(227 tons/day)

28

Recyclable Commodity Prices

As a component of the feasibility analysis, price data on recyclable commodity

prices was gathered.3 This price data is used to derive stochastic revenues for different

recyclable plant scenarios. Also, the goal of the price data collection is to forecast prices for

recyclable commodities throughout the project horizon.

Price data was gathered for 11 different recyclable commodities and their markets.

They are:

Steel cans

Aluminum cans

White goods (metals)

Amber glass

Flint glass

Green glass

Colored high density polyethylene (HDPE) plastic

Natural high density polyethylene (HDPE) plastic

Polyethylene terephthalate (PET) plastic

Linear low density polyethylene (LLDPE) plastic

Residential mixed paper

Figure 10 shows the historic patterns and relationships of recyclable commodity prices.

The analysis of historical price data for each of these 11 markets follows in this

report. In general, the analysis for each market consists of a time series graph of historical

price data. The analysis also includes summary statistics for each market, including the

number of price observations included in the data set, the average regional and national

price over time, the standard deviation of the price, the coefficient of variation, the

minimum, and the maximum. The average is the average of all prices equally weighted over

time, the standard deviation is a measure of variance (volatility) of the prices, the coefficient

of variation is a percentage measure of how large the standard deviation (volatility) as a

percentage of the average price, and the minimum and maximum are the minimum and

maximum prices observed in the market respectively.

3 Waste and Recycling News. “Commodity Pricing.” http://www.wasterecyclingnews.com/smp/prices.html?cid=3&city=LOS+ANGELES+%28Southwest+USA%29#prices.

29

Figure 10. Historical Prices for All Recyclable Commodity Prices Considered in this Report.

0

200

400

600

800

1000

1200

1400

1600

1800

12

-Ap

r-0

5

12

-Ju

n-0

5

12

-Au

g-0

5

12

-Oct

-05

12

-Dec

-05

12

-Feb

-06

12

-Ap

r-0

6

12

-Ju

n-0

6

12

-Au

g-0

6

12

-Oct

-06

12

-Dec

-06

12

-Feb

-07

12

-Ap

r-0

7

12

-Ju

n-0

7

12

-Au

g-0

7

12

-Oct

-07

12

-Dec

-07

12

-Feb

-08

12

-Ap

r-0

8

12

-Ju

n-0

8

12

-Au

g-0

8

12

-Oct

-08

12

-Dec

-08

12

-Feb

-09

12

-Ap

r-0

9

12

-Ju

n-0

9

12

-Au

g-0

9

12

-Oct

-09

12

-Dec

-09

Do

llars

pe

r to

n

Recyclable Commodity Prices

Colored HDPE

Natural HDPE

PET

Green Glass

Amber Glass

Flint Glass

Aluminum Cans

White Goods

Steel Cans

30

The national average price is the average of markets from eight different regions including,

Chicago (Midwest/Central), New York (Northeastern USA/Maritimes), Ontario/Western New York,

Pacific Northwest, Quebec, Atlanta (Southeast USA), Los Angeles (Southwest USA.), and Houston

(South Central USA). The regional average price illustrated in Figure 6 is the average price of the

Los Angeles (LA) region, which encompasses Washoe County. As is depicted in this figure, when

the national average price exceeds the regional average price, the majority of the eight regions have

a higher price for the commodity than the LA region and when the regional average exceeds the

national average, the LA region has a higher price than the majority of other regions.

Loose Steel Cans Price

Steel cans are a component of household and commercial waste which will be extracted

from the waste stream for recycling. Figure 11 illustrates the historical prices for the steel cans

market, where prices are in units of dollars per ton of loose steel cans.

Figure 11. Historical Prices of Loose Steel Cans (dollars/ton).

As given by the summary statistics in Table 5, the average regional price of steel cans is

$68.25 per ton over a five year period. The standard deviation, which is a measure of volatility, is

$8.12 per ton. This implies a coefficient of variation of 11.8 percent, which is the amount of

variation in prices adjusted for the average price. The average national price has a higher average

price of $75.94 per ton and a higher amount of total variability with a standard deviation $18.71

0

20

40

60

80

100

120

12-Apr-05 12-Apr-06 12-Apr-07 12-Apr-08 12-Apr-09

Do

llars

pe

r to

n

Steel Cans (average loose price)

Regional Average

National Average

31

per ton. Comparing the coefficient of variation for the regional and national price, it is clear that the

national average price is much more variable than that of the LA region.

Table 5. Summary Statistics of Historical Prices of Loose Steel Cans

Variable Observations Average Std. Dev. Coefficient

of Variation Minimum Maximum

Regional average

258 68.25 8.12 11.8% 52.5 77.5

National average

258 75.94 18.71 24.6% 73.93 108

Loose Aluminum Can Price

The next recyclable commodity market analyzed is that of aluminum cans. Aluminum cans

are the most valuable on a per unit basis of all recyclables considered in this analysis. Figure 12

illustrates the historical prices for the aluminum cans market, where prices are given in units of

cents per pound.

Figure 12. Historical Prices of Aluminum Cans (cents/pound).

As given by the summary statistics in Table 6, the average regional price of loose aluminum

cans is $0.6065 per pound over the approximately five year period. The standard deviation, which

is a measure of volatility, is $0.1396 per pound. This implies a coefficient of variation of 23 percent,

which is the amount of variation in prices adjusted for the average price. The average national

price has a higher average price of $0.6304 per pound and a higher amount of total variability with

0

10

20

30

40

50

60

70

80

90

28-Jul-06 28-Jul-07 28-Jul-08 28-Jul-09

Ce

nts

pe

r p

ou

nd

Aluminum Cans (average loose price)

Regional Average

National Average

32

a standard deviation $0.1552 per pound. Comparing the coefficient of variation for the regional and

national price, it is clear that the national average price is more variable than that of the LA region.

Table 6. Summary Statistics of Historical Prices of Loose Aluminum Cans.



Regional average

192 60.65 13.96 23% 31 83

National average

192 63.04 15.52 24.6% 31.25 82.81

Loose White Goods Price

White goods include large domestic appliances such as, refrigerators, dishwashers and

washing machines that can be recycled. Figure 13 illustrates the historical prices for recycled white

goods.

Figure 13. Historical Prices of White Goods (dollars/ton).

As given by the summary statistics in Table 7, the average regional price of white goods is

$52.60 per ton over the approximately five year period. The standard deviation, which is a measure

of volatility, is $5.54 per ton. This implies a coefficient of variation of 10.5 percent, which is the

amount of variation in prices adjusted for the average price. The average national price has a

higher average price of $57.18 per ton and a higher amount of total variability with a standard

deviation $8.29 per ton. Comparing the coefficient of variation for the regional and national price, it

is clear that the national average price is more variable than that of the LA region.

0

10

20

30

40

50

60

70

80

90


Do

llars

pe

r to

n

Metals White Goods

Regional Average

National Average

33

Table 7. Summary Statistics of Historical Prices of Loose White Goods.



Regional average

258 52.60 5.54 10.5% 35 73.5

National average

258 57.18 8.29 14.5% 31.33 81.5

Amber Glass Prices

Figure 14 illustrates the regional average and national average historical prices for amber

glass over an approximately five year period.

Figure 14. Historical Prices of Amber Glass.

As given by the summary statistics in Table 8, the average regional price of amber glass is



amount of variation in prices adjusted for the average price. The national average price is lower

than region at $15.32 per ton, but has higher amount of total variability having a standard deviation

$2.06 per ton. Comparing the coefficient of variation for the regional and national price, it is clear

that the national average price is much more variable than that of the LA region.

0

5

10

15

20

25


Do

llars

pe

r to

n

Amber Glass

Regional Average

National Average

34

Table 8. Summary Statistics of Historical Prices for Amber Glass.



Regional average

258 18.57 1.19 6.4%

17.5 20

National average

258 15.32 2.06 13.4% 12.31 20

Flint Glass Prices

Figure 15 illustrates the regional average and national average historical prices for flint

glass prices over a five year period.

Figure 15. Historical Prices of Flint Glass.

As given by the summary statistics in Table 9, the average regional price of flint glass is

$32.34 per ton over the five year period. The standard deviation, which is a measure of volatility, is

$6.97 per ton. This implies a coefficient of variation of 21.6 percent, which is the amount of

variation in prices adjusted for the average price. The national average price is lower than region at

$26.71 per ton with a lower amount of total variability having a standard deviation $2.96 per ton.

Comparing the coefficient of variation for the regional and national price, it is clear that the national

average price is much less variable than that of the LA region.

0

5

10

15

20

25

30

35

40

45

50


Do

llars

pe

r to

n

Flint Glass

Regional Average

National Average

35

Table 9. Summary Statistics of Historical Prices for Flint Glass.



Regional average

258 32.34 6.97 21.6% 27.5 45

National average

258 26.71 2.96 11.1% 23.58 45

Green Glass Prices

Figure 16 illustrates the regional average and national average historical price for green

glass prices over a five year period.

Figure 16. Historical Prices of Green Glass.

As given by the summary statistics in Table 10, the average regional price of green glass is



amount of variation in prices adjusted for the average price. The national average price is lower

than region at $7.63 per ton and has a lower amount of total variability with a standard deviation

$1.45 per ton. Comparing the coefficient of variation for the regional and national price, it is clear

that the national average price is less variable than that of the LA region.

0

2

4

6

8

10

12


Do

llars

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n

Green Glass

Regional Average

National Average

36

Table 10. Summary Statistics of Historical Prices of Green Glass.



Regional average

258 8.29 2.15 25.9% 5 11

National average

258 7.63 1.45 19.0% 5 11

Colored HDPE Plastic Prices

Figure 17 illustrates the regional average and national average historical price for colored

HDPE plastic over a five year period

Figure 17. Historical Prices of Colored HDPE Plastic.

As given by the summary statistics in Table 11, the average regional price of colored HDPE

plastic is $0.1858 per pound over the approximately five year period. The standard deviation,

which is a measure of volatility, is $0.0683 per pound. This implies a coefficient of variation of 36.8

percent, which is the amount of variation in prices adjusted for the average price. The national

average price is higher than region with a price of $0.2018 per pound and has a lower amount of

total variability with a standard deviation $0.0704 per pound. Comparing the coefficient of

variation for the regional and national price, it is clear that the national average price is less

variable than that of the LA region.

0

5

10

15

20

25

30

35

40


Ce

nts

pe

r p

ou

nd

Colored HDPE Plastic (baled)

Regional Average

National Average

37

Table 11. Summary Statistics of Historical Prices of Colored HDPE Plastic.



Regional average

258 18.58 6.83 36.8% 3.5 36.5

National average

258 20.18 7.04 34.9% 6.56 36.5

Natural HDPE Plastic Prices

Figure 18 illustrates the regional average and national average historical prices for natural

HDPE plastic over a five year period.

Figure 18. Historical Prices of Natural HDPE Plastic.

As given by the summary statistics in Table 12, the average regional price of natural HDPE

plastic is $0.2856 per pound over the approximately five year period. The standard deviation,



average price is higher than region at $0.2947 per pound and has a higher amount of total

variability with a standard deviation of $0.0768 per pound. Comparing the coefficient of variation

for the regional and national price, it is clear that the national average price is more variable than

that of the LA region.

0

5

10

15

20

25

30

35

40

45

50


Ce

nts

pe

r p

ou

nd

Natural HDPE Plastic (baled)

Regional Average

National Average

38

Table 12. Summary Statistics of Historical Prices of Natural HDPE Plastic.



Regional average

258 28.56 6.88 24.1% 9.5 40.3

National average

258 29.47 7.68 26.1% 11.69 45.13

PET Plastic Prices

Figure 19 illustrates the regional average and national average historical prices for PET

plastic over a five year period.

Figure 19. Historical Prices of PET Plastic.

As given by the summary statistics in Table 13, the average regional price of PET plastic is

$0.2013 per pound over the approximately five year period. The standard deviation, which is a

measure of volatility, is $0.0552/lb. This implies a coefficient of variation of 27.4 percent, which is

the amount of variation in prices adjusted for the average price. The national average price is lower

than region with a price of $0.1600 per pound and has a lower amount of total variability with a

standard deviation $0.0459 per pound. Comparing the coefficient of variation for the regional and

national price it is clear that the national average price is more variable than that of the LA region.

0

5

10

15

20

25

30

35


Ce

nts

pe

r p

ou

nd

PET Plastic (baled)

Regional Average

National Average

39

Table 13. Summary Statistics of Historical Prices of PET Plastic.



Regional average

258 20.13 5.52 27.4% 5.5 30

National average

258 16.00 4.59 28.7% 4.13 24.7

LLDPE Stretch-Film Plastic Prices

Figure 20 illustrates the regional average and national average historical prices for LLDPE

stretch-film plastic over a five year period.

Figure 20. Historical Prices of LLDPE Stretch Film Plastic.

As given by the summary statistics in Table 14, the average regional price of LLDPE stretch

film plastic is $0.1822 per pound over the approximately five year period. The standard deviation,



average price is lower than the region at $0.1734 per pound and has a lower amount of total

variability with a standard deviation of $0.0836 per pound. The coefficients of variation for the

regional and national price are nearly the same.

0

5

10

15

20

25

30

14

-Ju

n-0

7

14

-Au

g-0

7

14

-Oct

-07

14

-Dec

-07

14

-Feb

-08

14

-Ap

r-0

8

14

-Ju

n-0

8

14

-Au

g-0

8

14

-Oct

-08

14

-Dec

-08

14

-Feb

-09

14

-Ap

r-0

9

14

-Ju

n-0

9

14

-Au

g-0

9

14

-Oct

-09

14

-Dec

-09

Ce

nts

pe

r p

ou

nd

LLDPE - Stretch Film Plastic(baled)

Regional Average

National Average

40

Table 14. Summary Statistics of Historical Prices of LLDPE Stretch Film Plastic.



Regional average

144 18.22 8.77 48.1% 5.5 27.5

National average

144 17.34 8.36 48.2% 5.44 27.5

Mixed Residential Paper Prices

Figure 21 illustrates historical prices of mixed residential paper. Only the national average

price was available from the utilized database.

Figure 21. Historical Prices of Mixed Residential Paper.

As given by the summary statistics in Table 15, the average national price of mixed

residential paper is $10.84 per ton. The standard deviation, which is a measure of volatility, is

$7.18 per ton. This implies the largest coefficient of variation of all markets analyzed at 66.2

percent, which is the amount of variation in prices adjusted for the average price. It is also

important to note that the minimum price observed in this market is $0 per ton, indicating that in

the past and as of the time this report was written, residential mixed paper had no value on the

recyclable market.

Table 15. Summary Statistics of Historical Prices of Mixed Residential Paper.

Variable Observations Average Std. Dev. Coefficient of Variation

Minimum Maximum

National average

255 10.84 7.18 66.2% 0 20

0

5

10

15

20

25

6-May-05 6-May-06 6-May-07 6-May-08 6-May-09

Do

llars

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Mixed Residential Paper (loose)

National Average

41

SIMULATION OF MRF ECONOMIC FEASIBILITY

The Simetar add-on Excel package with data and recyclable options was used to complete

the feasibility analysis. The feasibility model will be discussed as a price projection model,

recyclable and carbon foot print model, total receipts, amortized investment payment, operating

costs, net returns of net costs, and fee to customers.

Price Projection

Recyclable prices are assumed to be a function of the raw material prices, U.S. Gross

Domestic Product growth and China Gross Domestic Product growth. The West Texas Crude Oil

Price represents the raw material prices. Gross Domestic Product growth of the United States and

China are introduced to capture the recyclables demand. Of interest is that most of the state of

Nevada’s recyclables are exported to China.

Recyclable prices are projected under the following assumption. First, West Texas Oil

Prices are estimated under three scenarios which are high, reference, and low West Texas Oil

Prices. Crude oil price projections are obtained from Energy Outlook from the U.S. Energy

Information Administration (EIA). Second, Gross Domestic Product growth for China is assumed to

be nine percent in 2010 and 10 percent thereafter. Third, U.S. Gross Domestic product growth is

assumed to be five percent for the next 10 years. The error term is employed to derive stochastic

prices. Also, employing procedures by Richardson, Klose and Gray (2000), the relationship of

prices among recyclable goods is maintained.

Recyclables and Carbon Footprint

Recyclables are fixed over the scenarios, base (“clean” MRF), “dirty” MRF and Hybrid

options. Let recyclables in time period t denote .4 Thus the carbon footprint can be estimated

by the quantity of greenhouse gas emissions avoided from recycling recyclable stream or shown in

equation 1 as:

(1)

Where:

is the carbon footprint (greenhouse gas emission avoided) for time period t,

cb is the greenhouse gas emission factor for recyclables from recycling the waste as compared to

putting it in a landfill. WARM model (U.S. Environmental Protection Agency, 2006) is used to

compute cb, and RCYt was defined earlier.

4 Recyclables tonnage obtained through conversations with Waste Management personnel (Waste Management,

2010b.)

42

Total Receipt

Total receipts from sales of recyclables are derived by equation 2:

(2)

Where:

is total revenue from sales of recyclables in time period t,

is the stochastic price for recyclables in time period t, and

RCYt was defined earlier.

Amortized Investment Payment

Investment payment is assumed to be paid back over a 20 year period at a 4.5 percent

interest rate. Also, no payment is assumed in the first year.

Operating Cost

Operating cost data were collected from a personal communication with Waste

Management (2010a). Minimum operating cost is $62/ton and maximum operating cost is $65.

For operating cost estimation, first capacity of the facility or total waste to be processed was

defined as in equation 3:

(3)

Where:

is the capacity of the facility or total waste to process,

is the waste to landfill, and

RCYt was defined earlier.

Once facility capacity (CPCT) is computed, stochastic operating cost is computed as

following

(4)

Where:

is total operating cost in time period t and

is stochastic operating cost.

Stochastic operating cost is generated using the GRKS distribution as in equation 5:

(5)

43

GRKS distribution is similar to a triangular distribution. The GRKS distribution was

developed by Richardson (2006a) to simulate a “subjective probability distribution” with minimal

data. The GRKS distribution is useful when there is minimal available information such as

(average), minimum, and maximum. The GRKS distribution has useful properties: the midpoint is

where 50 percent of the observations are less than the midpoint, 95 percent of the simulated values

are between the minimum and maximum, 2.2 percent of the simulated values are less than the

minimum, and 2.2 percent of the simulated values are more than the maximum values (Evans and

Stallman, 2006). Therefore, total operating costs are stated below as:

Total Cost

Total cost is the summation of total operating cost ( ) and amortized investment costs

( ) and is shown in equation 6.

(6)

Where:

is stochastic total cost in time period t for a given recycle operation,

is fixed cost in time period t or the amortized investment cost, and

was defined earlier.

Net Returns

Equation 7 shows the net returns above operating costs or:

(7)

Where:

are the net returns above operating costs at time period t.

Net returns are estimated in equation 8:

(8)

Where:

are net returns in time period t.

Fee

The tipping fee for each recyclable operation is given in equation 9:

(9)

44

RESULTS Results for the various recyclable projects are presented in Table 16 (small) and Table 17

(large) that summarizes the risk-based (or problematic) forecasts for key KOVs. For each of the

KOVs, the stochastic analysis reports the mean, standard deviation, coefficient of variation, and

minimum and maximum stochastic, thus indicating the risk associated with each KOV.

The Monte Carlo simulation was run 1,000 times. From the simulation results, the revenue

for recyclables is quite variable (Table 16 and 17). Of interest is the impact to consumers from

these variable returns.

For the “clean” MRF option, the deterministic or average forecast for customer fees is

$17.25. The stochastic forecast for customer fees has an average value of $17.26 with a standard

deviation of 0.50 and coefficient of variation of 2.72. With high commodity prices, the fee drops to

$15.66 and if commodity prices are low, the fee rises to $18.73. From Figure 22, the probability

distribution of customer fees for the “clean” MRF system is seen as the average price to customers

is the vertical line for $17.26 in Figure 22, which is $1.47 less than the maximum ($18.73) and $1.60

greater than the minimum ($15.66). This is due to the somewhat symmetrical distribution in fees.

Figure 22. Probability Distribution of Fees to Consumer for “Clean” MRF Option.

45

For comparison, Figure 23 shows the probability distribution for consumer fees for the

small 50 percent hybrid option. From Table 16 and Figure 23, the average fee to the consumer for

the small 50 percent hybrid option is $22.47. However for the small 50 percent hybrid option, the

standard deviation was 0.50 with coefficient of variation of 2.60. With high commodity prices, the

fee drops to $20.55 and if commodity prices are low, the fee rises to $24.43.

Figure 23. Probability Distribution of Fees to Consumer for Small 50% Hybrid Option.

Also from Table 16 are estimated carbon footprints for each of the recycle options. For

carbon footprint, there is no variability. The carbon footprint values were derived from Tables 1

through 4 and conversations with Waste Management personnel (2010b). Of all the small

operations, the small 50 percent MSW hybrid option had the largest greenhouse gases avoided with

287.15 thousand metric tons of CO2 emissions per year avoided.

Of interest is that Table 16 results concur with previous studies by Eureka Recycling

(2002), Lantz (2008), and Container Recycling (2009). As with previous studies, the “dirty” MRF

recycling options had the higher cost of recycling. However, when cost of collection is included as

shown in Table 16, the “dirty” MRF options cost less than the other options.

As shown in Table 16, the small “dirty” MRF with 50 percent MSW had an average monthly

household fee of $21.00, which is higher than “clean” MRF operations but lower than the small

hybrid operation with 50 percent MSW option. When considering the “dirty” MRF options, one

must be aware of the increased likelihood of contamination to recyclables captured. Given the

46

current international recession, the cost of obtaining high quality recyclables would increase the

recycling costs.

The larger value Green House Gas Emissions (GHGE) avoided means the larger the carbon

footprint provided. As seen from Table 16, of the small operation options, the small hybrid under

50 percent MSW had the highest GHGE avoided, followed by the small hybrid with 20 percent MSW.

An additional analysis was run for potentially larger “dirty” MRF and hybrid operations.

The larger operations would process more tons per day. For the “dirty” MRF, capacity would

increase from 35 tons per day to 50 tons per day. For the hybrid operation, “clean” MRF component

capacity would remain the same but “dirty” MRF component would increase capacity from 20 tons

per day to 50 tons per day.

From Table 17, under the larger “dirty” MRF options, monthly household fees would be on

average $24.08 under 20 percent recycle rate as opposed to $22.88 per household per month under

50 percent recycle rate. As for the larger hybrid systems, household monthly charges would on

average be $25.77 under 20 percent recycle rate as opposed to $24.48 per month per household

under the 50 percent recycle rate. The highest greenhouse avoidance on average was the 50

percent recycling under the large hybrid option.

47

Table 16. Results of Monte Carlo Simulation of Proposed Collection Options for Smaller Operation, Assuming 264,055 Ton Per Year Available.a, b

“Clean” MRF 20% MSW – “Dirty” MRF 50% MSW – “Dirty” MRF Hybrid with 20% MSW Hybrid with 50% MSW

Deterministic Stochastic Deterministic Stochastic Deterministic Stochastic Deterministic Stochastic Deterministic Stochastic

Cost of Processing (MSW + Recycling) ($/ton) Mean 84.27 84.27 82.00 82.00 82.00 82.00 84.27 84.27 84.27 84.28 Standard Deviation 2.85 2.87 2.88 2.84 2.84 Coefficient of Variation 2.63 2.42 2.43 2.48 2.48 Minimum 76.66 75.45 75.85 76.87 77.43 Maximum 91.13 88.31 88.33 90.87 91.66

Cost of Processing (Recycling only) ($/ton) Mean 63.50 63.50 73.50 73.50 73.50 73.50 70.57 70.57 70.57 70.57 Standard Deviation 0.75 0.75 0.75 0.75 0.75 Coefficient of Variation 1.18 1.02 1.02 1.02 1.02 Minimum 60.70 71.10 71.12 67.97 67.97 Maximum 66.08 76.07 75.89 73.39 72.94

Plant Cost (Land + Recycling facility, million $) 7.60 7.60 9.60 9.60 9.60 9.60 7.60 7.60 7.60 7.60

Trucks and Equipments (million $) 8.00 8.00 11.00 11.00 11.00 11.00 12.00 12.00 12.00 12.00 Recyclables (tons/year) Mean 45,555 45,555 25,419 25,419 63,547 63,547 79,019 79,019 117,141 117,141 Standard Deviation 0.00 0.00 0.00 0.00 0.00 Coefficient of Variation 0.00 0.00 0.00 0.00 0.00 Minimum 45,555 25,419 63,547 79,019 117,141 Maximum 45,555 25,419 63,547 79,019 117,141 Receipt from Recyclables Sales (000$/year) Mean 1,639.98 1,624.88 873.50 873.77 2,182.91 2,182.86 2,769.60 2,769.38 4,109.15 4,110.42 Standard Deviation 65.52 36.92 94.01 71.21 79.39 Coefficient of Variation 4.03 4.07 4.15 4.13 4.23 Minimum 1,430.95 773.04 1,906.42 2,444.38 3,471.51 Maximum 1,853.90 987.88 2,469.06 3,139.69 4,616.14 Fees to Consumer (Recycling + MSW) ($/Month/HH) Mean 17.25 17.26 21.90 21.36 20.97 21.00 23.38 24.18 22.51 22.47 Standard Deviation 0.50 0.50 0.51 0.50 0.50 Coefficient of Variation 2.72 2.42 2.56 2.59 2.60 Minimum 15.66 19.67 19.34 22.00 20.55 Maximum 18.73 22.98 22.59 26.14 24.43 GHGE Avoided (000 metric tons CO2 E/year) Mean 111.67 111.67 62.31 62.31 155.77 155.77 193.70 193.70 287.15 287.15 Standard Deviation 0.00 0.00 0.00 0.00 0.00 Coefficient of Variation 0.00 0.00 0.00 0.00 0.00 Minimum 111.67 62.31 155.77 193.70 287.15 Maximum 111.67 62.31 155.77 193.70 287.15 aEach simulation run for 1,000 iterations. bAssuming 125,000 households

48

Table 17. Results of Monte Carlo Simulation of Proposed Collection Options for Large Operation.a, b

20% MSW – “Dirty” MRF 50% MSW – “Dirty” MRF Hybrid with 20% MSW Hybrid with 50% MSW

Stochastic Deterministic Stochastic Deterministic Stochastic Deterministic Stochastic Deterministic Stochastic

Cost of Processing (MSW + Recycling) ($/ton)

Mean 82.00 82.00 82.00 82.00 84.27 84.27 84.27 84.27 Standard Deviation 1.72 1.72 1.70 1.69 Coefficient of Variation 2.13 2.14 2.19 2.18 Minimum 76.56 75.68 76.44 76.44 Maximum 87.69 87.74 90.16 90.16

Cost of Processing (Recycling only) ($/ton)


Plant Cost (Land + Recycling facility, million $) 9.60 9.60 9.60 9.60 14.40 14.40 14.40 14.40

Trucks and Equipments (million $) 16.00 16.00 16.00 16.00 21.50 21.50 21.50 21.50

Recyclables (tons/year)

Mean 35,026 44,873 87,556 112,181 80,851 80,851 136,009 136,009 Standard Deviation 0.00 0.00 0.00 0.00 Coefficient of Variation 0.00 0.00 0.00 0.00 Minimum 35,026 87,556 80,851 136,009 Maximum 35,026 87,556 80,851 136,009

Receipt from Recyclables Sales (000$/year)

Mean 1,203.18 1,203.24 3,007.64 3,007.59 2,833.88 2,833.76 4,771.02 4,770.90 Standard Deviation 62.80 164.40 122.42 134.67 Coefficient of Variation 4.07 4.27 4.17 4.22 Minimum 1,061.03 2,658.16 2,494.08 4,133.28 Maximum 1,372.19 3,387.74 3,224.22 5,429.10

Fees to Consumer (Recycling + MSW) ($/Month/HH)


GHGE Avoided (000 metric tons CO2 E/year)

Mean 85.86 85.86 214.65 214.65 198.19 198.19 333.40 333.40 Standard Deviation 0.00 0.00 0.00 0.00 Coefficient of Variation 0.00 0.00 0.00 0.00 Minimum 85.86 214.65 198.19 333.40 Maximum 85.86 214.65 198.19 333.40 aEach simulation run for 1,000 iterations. bAssuming 125,000 households

49

ADDITIONAL ISSUES

In the MRF analysis for Washoe County, additional questions and additional information as to

energy production from waste were presented.

1. Commodity Pricing Effects on Rates: This was addressed by the Semitar analysis. The

randomness of recycle commodity prices was incorporated in the analysis.

2. “Dirty” MRF Option: This was addressed in the analysis of alternative MRF systems.

3. Green Waste Option: The primary mission of MRFs is to process recyclables collected

through residential curbside collection. MRFs also have received residential materials from

drop-off centers. Such a center may collect yard waste for compost. The Central Valley

Region of California, which has a large agricultural sector, has green waste as compost for

crop production (Goldman and Ogishi, 2001). Green waste, being organic material can be

used to generate energy through any of the waste-to-energy technologies. If a waste-to-

energy option were adopted the green waste could be gathered through “dirty” MRF

collection and then used as an additional efficient fuel source for the waste-to-energy

process, possibly reducing the need for designated centers to collect green waste.

4. Method to Handle Extra Bags/Bins: The community of San Jose, California charges extra

bags beyond the customer’s 32 gallon plastic bag. A person will be charged if the garbage

lid is not closed. The extra garbage bag sticker is $6.26 and can be purchased in selected

grocery and variety stores in San Jose. The city of Lancaster, California has a weekly

maximum of 14 bags or a 35-pound garbage limit. The city of Lancaster charges an extra

$2.69 per bag. Also, in Bettendorf, Iowa, there is a fee of $3.00 per bag for those times when

all the garbage will not fit into the 32 gallon cart with the lid completely closed. The extra

bag must have a $3.00 sticker on it or the bag will not be picked-up. One must set the extra

bag of trash on top of the closed lid of the cart. The bag size is limited to no larger than 32

gallons and no more than 50 pounds. The garbage stickers are available at the City Hall, City

Annex, and local grocery and convenience stores in Bettendorf, Iowa. If Washoe County

wanted to charge extra for additional bags and bins at the curbside, the government in

Washoe County and Waste Management would have to develop an agreement.

5. Large Item Collection Centers/Events: As mentioned earlier, most MRF systems process

recyclables through residential curbside collection programs. Additional recyclables may

be received through buy-back centers which may pay or charge residents for materials they

50

bring to the center. Buy-back centers may be located at the MRF or at some other locations

in Washoe County. It may also be possible to large item collection through the proposed

mechanical arm truck option in conjunction with Waste Management’s Bagster program.

6. Inclusion of Clean and Green Costs: These costs, once formalized, could be added to the

simulation model to derive impacts to returns of an MRF scenario. Waste Management

estimates the charge of clean and green waste dumping to be $60,000 per quarter. Also,

this waste stream will be seasonal, lasting five months in a year. This seasonality needs to

be included in all feasibility analyses.

7. Household Hazardous Waste Events: This is an area that could be handled at the buy-back

center or centers. Household hazardous waste could be deposited and charges or payments

derived. If a plasma incineration furnace was used, then items would be incinerated.

8. Illegal Dumping: Illegal dumping in Washoe County is a problem. The proposed MRF and

buy-back collection centers could reduce illegal dumping. A recent study by Cowee and

Curtis (2009) examined Nevadans’ perception of illegal dumping and their willingness to

pay for expanded cleanup and enforcement in Northern Nevada. In person surveys were

conducted in public areas such as parks and shopping centers in the Reno/Sparks area. A

total of 452 usable surveys were completed across 18 separate zip codes.

One portion of the survey asked respondents to answer three hypothetical scenarios

that the local government might undertake in an effort to address illegal dumping in

Northern Nevada. These three hypothetical scenarios were: (1) a tax/fee collected with

Waste Management charges or property ownership taxes to pay for the cleanup of illegal

dumping sites on public lands; (2) a tax/fee collected with Waste Management Charges or

property ownership taxes to pay for increased law enforcement and prosecution of illegal

dumping offenses; (3) a public lands use permit that would restrict use of public lands to

permit holders, with fees collected from the permit dedicated to the regulation and cleanup

of illegal dump sites. After the respondents were presented with the three hypothetical

scenarios they were presented with a dollar amount, which they were asked if they would

be willing to pay.

Results of survey indicate that respondents were willing to pay for cleanup of illegal

dumping on public lands which was $3.78 per year or $0.315 per month. A total of 351

respondents or 78 percent of the survey sample were willing to pay some amount for this

51

option. The highest amount elicited from a respondent was $18.00 per year or $1.50 per

month.

As for the second option, survey respondents’ willingness to pay for increased law

enforcement and prosecution of illegal dumping offenders was estimated to be $3.17 per

year or $0.324 per month. A total of 319 respondents or 71 percent of the survey sample

were willing to pay some amount for this option. The largest amount a respondent was

willing to pay for the second option was $25.00 per year or $2.08 per month.

For the final scenario, survey respondent’s willingness to pay for a hypothetical

public land permit was estimated to be $23.12 per year or $1.93 per month. A total of 250

respondents or 55 percent of the sample were willing to pay some amount for this option.

The highest amount a respondent was willing to pay was $75.00 per year or $6.25 per

month.

Information provided from Cowee and Curtis (2010) show how residents of

Northern Nevada value the elimination and enforcement of illegal dumping and their

willingness to pay indicates the level of amenability on the part of Northern Nevada

residents to eliminate illegal dumping either through tax increases or increases in monthly

charges by Waste Management. This information may be used in the future to support

proposals to either increase residential taxes or Waste Management service fees to expand

cleanup and/or enforcement of illegal dumping laws.

9. Potential Economic Cluster Effects: Numerous studies have found that recycling increases

the net employment and value-added in the local economy. Quigley (1988) reported that

with conservative estimates, one job would be created in the collection and processing

sectors per 800 tons of material recycled. Platt and Morris (1993) estimated that just the

processing alone of recycled materials directly created nine jobs for every 15,000 tons of

recovered materials (one job for every 1,667 tons)to two jobs created with incineration

(one job for every 7,500 tons), and one job created with land filling (one job for every

15,000 tons). Importantly Platt and Morris (1993) indicated that recycling would attract

new industries such as scrap-based manufacturing further increasing the number of jobs

created through recycling. Studies done in the Northeast (Roy F. Weston, Inc., 1994), South

(Roy F. Weston, Inc., 1996), and state of Washington (Sound Resource Management Group,

Inc., 1993) showed that most of the increase in recycling jobs was in manufacturing sectors.

Goldman and Ogishi (2001) found that approximately 2.5 jobs would be added for every

additional 1,000 tons of waste disposed while approximately 4.7 jobs would be added if the

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same volume had been directed as recyclable. The proposed MRF for Washoe County could

provide the impetus for an economic cluster around recyclables. Also with further and

future technological developments, this could be an avenue for high paying manufacturing

jobs for Washoe County.

10. Residual Wastewater Solids (Sludge): In the process of treating wastewater (sludge),

nearly all the wastewater is converted to clean water. A byproduct of residual solids is

produced by biological processing and is called sludge or biosolids. TMWRF, operated

jointly by the cities of Sparks and Reno, produces approximately 160 tons per day of sludge

that consists of 85 percent water. Current practice is to send six (6) truckloads per day to

the landfill in Lockwood. Previously, the sludge was shipped to Empire Farms for use as a

soil amendment; however, this practice was discontinued three years ago due to the high

cost of transportation.

Dried sludge is a valuable fuel with BTU content similar to dry wood. Dried sludge

could be converted to steam, power, or heat by several practical means. At the University of

Nevada, Reno, the fuel value of sludge was estimated to be sufficient to generate

approximately 1.0 MW of electricity. In principle, this could be done on site at TMWRF or

on site in Lockwood. Also at Lockwood, this process could be integrated with the landfill

gas facility currently being planned by Waste Management that is projected to produce 3.0

MW of electricity.

To make use of sludge as a fuel, it must be dried first. Several technologies are

available on the market currently, and work is ongoing at the University of Nevada, Reno to

commercialize one of these technologies. The technology currently being studied is a low-

temperature fluidized bed dryer that utilizes heat capture from a co-generation (combined

heat and power) facility. Use of sludge as a fuel in such a CHP facility is discussed by

Horttaninen et al. (2010).

11. Potential Waste-to-Energy: With MRF systems, approximately 30 percent of the waste is

recyclable. Some MRF systems also collect organic wastes. This waste is often shipped to

landfills but new pulse energy technologies have been developed. Using the organic wastes,

the pulse furnace system can produce power that could be added to the grid or used as

energy input to clustered recyclable industry. A detailed analysis of the potential for waste-

to-energy is in the following section.

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12. Potential Waste-to-Fuels: To produce MSW feedstock for waste-to-fuels and reduce

processing and handling costs, additional equipment could be installed at the backend of the

MRF to produce feedstock that meets appropriate specifications for waste-to fuels

technologies.

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POTENTIAL WASTE-TO-ENERGY PROCESSES

After recycling, there will be a large amount of MSW that will be put into the Lockwood

landfill. Some of this waste in the long-run could be diverted to processes that would allow the

MSW to be converted to energy or other commodities. A number of technologies exist today that

use MSW as feed stock to produce electricity, syngas, or chemicals that offer sources of revenue to

offset the costs of processing MSW. They also provide a way to reduce the amount of material that

has to put into a landfill. The output for all proposed system could in the long-run be food stock to

the waste-to-energy or waste-to-fuel projects. Being direct inputs would by-pass the volatile recycle

market and potentially even reduce the processing costs because recycle quality for energy-to-fuel

and/or energy-to-gas is less stringent.

Incineration Technologies

Incineration technologies are probably the most common way of using MSW to produce

electricity. Trash is burned in an incinerator which heats water in boilers. Steam from those

boilers drives turbines which produce electricity. The biggest drawback to incineration is the

emission of noxious gases and the potentiality of hazardous residue, which must then be disposed

of in landfills.

More recent technology attempts to reduce these negative byproducts (Regional

Municipality of Halton, 2007). The tipping area is enclosed and air from the tipping area is used to

feed the incinerator fires. Doing this creates negative pressure in the tipping area which prevents

odors and emissions from escaping. After burning, flue gases are scrubbed to remove harmful

emissions before gases are vented. The residue is further processed to remove metals and to

separate hazardous residue from non-hazardous. The non-hazardous can be used for construction

or disposed of in non-controlled landfill. The hazardous residue must be put in landfill areas

designed for hazardous materials.

The estimated output for incineration technologies is around 550 to 600 kWh per ton of

MSW net. This will vary by the composition of the MSW being burned (Circeo, 2009).

Pyrolysis

Pyrolysis is a process very similar to the process used to convert wood to charcoal or coal to

coke. The MSW is cooked at temperatures between 400 degrees and 900 degrees Celsius (750

degrees to 1,650 degrees Fahrenheit) with no air or oxygen present. An outside fuel source is

necessary to produce the heat. The process takes some time, which means an investment in more

ovens is needed or the amount of MSW must be reduced (Regional Municipality of Halton, 2007).

55

At low temperatures, pyrolysis produces liquid oils which may be burned or processed for

chemicals. At higher temperatures, pyrolysis produces syngas; methane, carbon monoxide, and

hydrogen. Syngas can then be used as fuel to drive a gas turbine or used to produce other products

such as ethanol (Cheminfo online, 2009) or biodiesel (Young, 2008). Some pyrolysis may produce

less energy than is needed to operate the ovens. Where the process is energy self-reliant, net

production can be up to 570 kWh per ton of MSW (Circeo, 2009).

The by-products of pyrolysis are ash and char. Both may be put in landfills but the char may

be processed further (see below). Extensive pre-processing is required to remove non-organic and

hazardous materials. This increases the efficiency of the process and makes the residue safe for

landfills. The process also minimizes air emissions but scrubbing is required for the emissions to

meet standards.

Conventional Gasification

Gasification involves the conversion of organics into syngas through thermal gasification at

temperatures of 760 degrees to 1,540 degrees Celsius (1,400 degrees to 2,800 degrees Fahrenheit)

(Regional Municipality of Halton, 2007). Organic materials are decomposed into syngas. Pre-

processing is required to achieve maximum efficiency by removing non-organics. If burned

directly, the syngas needs to be scrubbed to reduce harmful emissions. The syngas can also be

cooled and scrubbed. From there it can be burned or used in the production of other chemicals.

The estimated net electricity created by gasification is 685 kWh per ton of MSW (Circeo, 2009).

The residue of gasification is a slag. The slag neutralizes any hazardous materials and is

safe to be used for construction or to be put into landfills.

Pyrolysis Gasification

This is a combination of the previous two processes. The char that is “precooked” in the

pyrolysis stage is used as fuel for the gasification process. This method yields higher outputs of

syngas (Regional Municipality of Halton, 2007). However, because some of the energy is needed to

fuel the pyrolysis oven, net electricity is also about 685 kWh per ton of MSW (Circeo, 2009). As

with conventional gasification, the slag is safe for land fill or for uses in construction.

Plasma Arc Gasification

Plasma arc gasification is the most recent WTE technology. MSW is inserted into a plasma

furnace which attains extremely high temperatures (4,000 degrees to 7,000 degrees Celsius, 7,200

degrees to 12,600 degrees Fahrenheit, or higher). At those temperatures, organic materials are

broken into carbon monoxide and hydrogen gas to form syngas. The syngas is cleaned and can then

be processed further or burned to produce electricity through gas turbines. Additionally, the heat

56

from the plasma furnace can be used to produce steam to drive steam turbines and produce

additional electricity. Some of the electricity produced in the process is used to power the plasma

arcs; the rest can go to the grid. Net electricity to the grid is more than 800 kWh per ton of MSW

(Circeo, 2009).

Because of the high temperatures, extensive preprocessing is not necessary although

increasing the organic content of the feedstock increases the efficiency. Non-organic components

become slag which is non-leachable. The slag can be safely put into landfills or used for

construction purposes. A potentially profitable byproduct of plasma furnaces is plasma wool which

is created by blowing air through the molten slag. This appears to have potential as a competitor to

fiberglass in insulation products (Circeo, 2009).

Plasma technology has been around and in use for nearly 40 years. However, plasma

furnaces were generally small and designed for specialized disposal of such things as munitions,

chemically hazardous waste, and catalytic convertors. These operations were small with a daily

capacity of 25 tons or less.

Only in the past 10 years has it become economically feasible for large scale disposal of

MSW. Currently the technology is in use on a large scale in Japan and in Pennsylvania. The plant in

Japan has been largely successful. The Lighthouse Project in Madison, Pennsylvania came online in

2009 and produces 100 gallons of ethanol for every ton of input. Its process capacity appears to be

about 1,500 tons per day. However, it currently uses highly processed biomass rather than MSW

(Cheminfo online, 2009).

A better indicator of WTE conversion through plasma arc technology will be some projects

that are currently in development. A plant in Tallahassee, Florida is designed to process 1,000 tons

per day. A project in St. Lucie, Florida is now designed to handle 600 tons per day. Finally, Sun

Energy Group LLC is developing a plant in New Orleans to handle 2,500 tons of MSW per day

(Circeo, 2009).

Example Plasma WTE Project

For this example analysis, a plasma WTE Project is analyzed that is based on the assumption

that a plasma operation uses 750 tons per day of MSW. From Table 16, the example plasma

operation has an initial investment cost between $250 to $350 million to produce output of 52

megawatts. Assuming a 7 percent rate over 20 years and prices ranging from $50 to $100 per

megawatt hour, net returns can range from a loss of $3 million to a gain of $20 million annually

(Alter NRG, 2009). The break-even price was estimated to be approximately $58 per megawatt

57

hour, which may be a low estimate for the price of electricity. Other studies use $70, which is also

believed to be an underestimation of price (Clark and Rogoff, 2010).

If steam is only produced with this method, the projected capital cost ranges between $128

million and $175 million. The projected electrical output is 26 megawatts. Given the same

assumptions as above, net return could range between a $4 million loss to a to $7 million gain. The

break-even price for this scenario is approximately $67 per megawatt hour (Alter NRG, 2009).

It is assumed for these two examples that MSW was costless which is not realistic.

However, actual costs of MSW should reduce the tipping fees customers in Washoe County pay to

Waste Management. Additional carbon footprint for these two plants is of interest. From Table 16,

the 52 megawatt plant produces 290,000 metric tonnes of CO2 per year or 325,000 short tons of

CO2. For the 25 megawatt capacity plant, the plant produces 140,000 metric tonnes of CO2 per year

or 155,000 short tons of CO2 (Circeo, 2010).

Table 18. Projected Costs and Outputs for Plasma WTE Project.1, 3

Integrated Gasification Combined Cycle (IGCC)

Projected Capital Costs = $250-300 million

Projected Yearly Payments @ 7% interest $22-26 million

@ 5% interest $18-22 million

Projected Output = 52 MW

Projected Revenue @$100 per MWhr $45 million

@$50 per MWhr $22 million

Potential Net $(3) to $20 million

Steam Cycle Only

Projected Capital Costs = $125-175 million

Projected Yearly Payments @7% interest $12.5-15 million

@5% interest $10-12.5 million

Projected Output = 25 MW

Projected Revenue @$100 per MWhr $22 million

@$50 per MWhr $11 million

Potential Net $(4) to $12 million

Carbon Footprint (CO2 produced)2

52 MW capacity plant produces about 290,000 metric tonnes of CO2 per year (325,000 tons)

25 MW capacity plant produces about 140,000 metric tonnes of CO2 per year (155,000 tons) 1Based on data from Alter NRG (2009).

2Lou Circeo, Georgia Tech Research Institute.

3The results based on an assumption of a plant that can process 750 tons per day of MSW.

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Example Waste-to-Fuels Project

Fulcrum BioFuels’ waste-to-fuels project is leading the next generation of clean, sustainable

alternative transportation fuels with the development of its first commercial-scale project, Project

Sierra, located approximately 20 miles east of Reno in the TRIC in McCarran, Storey County,

Nevada. Project Sierra will use non-combustion, thermochemical conversion technology to convert

feedstock, comprised of the organic component of MSW derived from the residual materials

remaining after recycling operations into ethanol. Project Sierra will convert nearly 140,000 tons

of feedstock per year into 10.5 million gallons of ethanol. A portion of Project Sierra includes a

Generating Facility that will be fueled using synthesis gas to produce electricity. All the renewable

energy will be used by Project Sierra for its own station use and in the production of ethanol.

Project Sierra will be configured with three synthesis gas generation units, each comprised

of a gasifier, a patented plasma enhanced melter (“PEM™”) system, a thermal residence chamber

(“TRC”) and a HRS. The synthesis gas generation units are designed to maximize the conversion of

feedstock to an intermediate product – synthesis gas.

The conditioned synthesis gas produced by Project Sierra will pass through a catalytic

reactor for conversion to an ethanol product. Within the alcohol synthesis loop, excess CO2 and

other inert gases are removed to maintain the proper synthesis gas composition. The ethanol

product is then cooled and condensed prior to entering the alcohol separation equipment to

remove excess water and any alcohol co-products before being sent to above-ground storage tanks,

located in a bermed area designed to provide secondary containment, to await shipment to market.

Project Sierra will reduce air pollutants and reduce the anthropogenic emissions of

greenhouse gasses. Project Sierra has received a Class II air permit from the NDEP, which permits

the facility as a “minor source” emitter. Along with its environmental consultant, Fulcrum

performed detailed air emissions modeling analyses in support of its air permit. These analyses

indicate that Project Sierra will:

Eliminate 70,000 tons of GHG emissions (on a CO2 equivalent basis) annually and reduce approximately 1.4 million tons of GHG emissions over the life of the project.

Divert MSW from landfills and reduce the release of methane gas, which has a global warming potential over a 100-year time horizon that is 25 times greater than CO2.

Reduce GHG emissions on a life-cycle basis by more than 75 percent relative to gasoline and by 44 percent relative to corn ethanol.

Produce ethanol that will have the effect of removing 11,600 cars from the highway.

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CONCLUSIONS

This study investigated the potential feasibility of alternative recycling programs in Washoe

County. With the public and government interest to increase recycling while reducing input into

landfills, recycling may have potentials. The report also showed that the economic linkages of

recycling are higher than that of just hauling trash to a landfill. Also given potential backward and

forward economic linkages, recycling could afford Washoe County a potential economic cluster.

For adoption of any recycling program, a detailed engineering study is required as well as

assessment of the waste stream from the Washoe County populace. Alternatively, waste-to-energy

or waste-to-gas options could be considered as a viable outlet for the recyclable output of Washoe

County. Given the volatility in the national economy and variability of the recycle market, an

alternative approach could be to use the recyclable products from the proposed recycle options as

input to these waste-to-energy and/or waste-to gas options. Additionally, Washoe County might

want to investigate the feasibility of an eco-industrial park similar to Perry County, Illinois

(University of Southern California Center for Economic Development, 2005). Such an eco-industrial

park could develop value added products from the waste stream and create an industry cluster.

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Alter NRG, “Investor Presentation.” Proprietary communication with company. Beck, R. W., Inc. Executive Summary, Targeted Statewide Waste Characterization Study: Characterization and Quantification of Residuals from Materials Recovery Facilities. Cascadia Consulting Group: Sacramento, CA, 2006. “Biomass Conversion: Emerging Technologies, Feedstocks, and Products.” December 2007, EPA/600/R-07/144, U.S. Environmental Protection Agency, p7. Cal Recovery and PEER Consultants. Materials Recovery Facility Design Manual. C.K. Smoley: Boca

Raton, Florida, 1993. Cheminfo online. “Licensed to Flex Feedstock Muscle.” 2009. Circeo, L., Presentation and personal conversations. Director of Georgia Tech Research Institute,

Georgia Tech, Atlanta, Georgia, 2010. Clark, B. and M. Rogoff. “Economic Feasibility of a Plasma Arc Gasification Plant, City of Marion,

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Stream Collection Systems. Culver City, CA, 2009. Cowee, M. W. and K. R. Curtis. “Illegal Dumping in Northern Nevada: Resident Perceptions and

Willingness to Pay for Expanded Cleanup and Enforcement.” UCED 2009/10-14, June 2010. Deyle, R. and B. Schade. “Residential Recycling in Mid-America: The Cost Effectiveness of Curbside

Programs in Oklahoma.” Resources, Conservation, and Recycling. 5(1991): 305-327. Engineering News Record. “Construction Costs Index History.” ENR.com, 2010. Eureka Recycling. A Comparative Analysis of Applied Recycling Collection in St. Paul, St. Paul

Neighborhood Energy Consortium: St. Paul, Minnesota, 2002. Folz, D. The Economics of Municipal Recycling: A Preliminary Analysis. Department of Political

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Works Management and Policy. 1999. Gibbons, Jim. State of the State Message. Governor of the State of Nevada: Carson City, 2010. Goldman, G. and A. Ogishi. The Economic Impact of Waste Disposal and Diversification in California.

University of California, Berkeley, Department of Agricultural Economics, 2001. Hardaker, J., R. Huirne, J. Anderson, and G. Lien. Coping with Risk in Agriculture. CABI Publishing:

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Horttanainen, M., J. Kaikko, R. Bergman, M. Pasila-Lehtinen, and M. Nerg, J. “Performance Analysis of

Power Generating Sludge Combustion Plant and Comparison Against Other Sludge Treatment Technologies.”

Incline Village Public Works. PW News, Issue VI, Volume IX, July 2010. Lantz, D. “Mixed Results.” Resource Recycling, Portland, Oregon, 2008. Morawski, C. Understanding Economic and Environmental Impacts of Single-Stream Collection

Systems. Container Recycling Institute: Culver City, California, 2009. National Solid Wastes Management Association. The Cost to Recycle at a Materials Recovery

Facility. Washington D.C., 1992. Nevada Division of Environmental Protection. State of Nevada Solid Waste Management Plan 2007.

Nevada State Environmental Commission: Carson City, Nevada, 2007. North Carolina Department of Environment, Health, and Natural Resources (DEHNR). Analysis of

the Full Costs of Solid Waste Management for North Carolina Local Government. Raleigh, North Carolina, 1997.

Platt, B. and D. Morris. The Economic Benefits of Recycling. Institute of Local Self-Reliance:

Washington, D.C., 1993. Pouliquen, L. “Risk Analysis in Project Appraisal.” World Bank Staff Occasional Paper (11),

International Bank of Reconstruction and Development, The John Hopkins University Press, 1970.

Quigley, J. “Employment Impact of Recycling.” Biocycle, 1988. R.W. Beck, Inc. Goodwill Industries Material Recovery Facility Evaluation. Pennsylvania Department

of Environmental Protection: Harrisburg, Pennsylvania, 2004. Regional Municipality of Halton. EPW Technology Overview, 2007. Reutlinger, S. “Techniques for Project Appraisal Under Uncertainty.” World Bank Staff Occasional

Paper (10), International Bank for Reconstruction and Development, The John Hopkins University Press, 1970.

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Texas A&M University, College Station, Texas, 2006a. Richardson, J. “Simetar: Simulation Excel to Analyze Risk.” Department of Agricultural Economics,

Texas A&M University, College Station, Texas, 2006b. Richardson, J., S. Klose, and A. Gray. “An Applied Procedure for Estimating and Simulating

Multivariate Empirical (MVE) Probability Distribution in Farm-Level Risk Assessment and Policy Analysis.” Journal of Agricultural and Applied Economics. 32(2000): 299-315.

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Sound Resource Management Group, Inc. The Economics of Recycling and Recycled Materials (Revised Final Report). Prepared for the Clean Washington Center. A Division of the Department of Trade and Economic Development, Seattle, Washington, 1993.

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Tchobanoglous, G. and F. Kreith. Handbook of Solid Waste Management. Second Edition. McGraw-

Hill: New York, 2002. Thompson, S. Junior Civil Engineer and Public Awareness. Personal Communication. Western Placer

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Disposal in the United States: Facts and Figures for 2008. Solid Waste and Emerging Response: Washington, D.C., 2009.

University of Southern California Center for Economic Development. Feasibility Analysis of a Rural

Eco-Industrial Park in Perry County, Illinois. University of Southern California, School of Policy, Planning and Development, Los Angeles, California, 2005.

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States Energy Board, Norcross, Georgia, 1996.

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Young, G. “From Waste Solids to Energy.” Pollution Engineering. 2008.

64

APPENDIX A

GLOSSARY

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APPENDIX A, GLOSSARY

Biological waste: Waste derived from living organisms.

Biomass: Amount of living matter in the environment.

British thermal unit (Btu): Unit of measure for the amount of energy a given material contains (e.g., energy released as heat during the combustion is measured in Btu). Technically, 1 Btu is the quantity of heat required to raise the temperature of 1 lb of water 1°F.

Buy-back recycling center: Facility that pays a fee for the delivery and transfer of ownership to the facility of source-separated materials for the purpose of recycling or composting.

Capital costs: Those direct costs incurred in order to acquire real property assets such as land, buildings, and machinery and equipment.

Carbon dioxide (CO2): Colorless, odorless, nonpoisonous gas that forms carbonic acid when dissolved in water. It is produced during the thermal degradation and microbial decomposition of solid wastes and contributes to global warming.

Carbon monoxide (CO): Colorless, poisonous gas that has an exceedingly faint metallic odor and taste. It is produced during the thermal degradation and microbial decomposition of solid wastes when the oxygen supply is limited.

Clean Air Act: Act passed by Congress to have the air “safe enough to protect the public’s health” by May 31, 1975. Required the setting of National Ambient Air Quality Standards (NAAQS) for major primary air pollutants.

“Clean” materials recovery facility or “clean” MRF: Accepts recyclable commingled materials that have already been separated at the source from municipal solid waste generated by either residential or commercial sources.

Codisposal: Burning of municipal solid waste with other material, particularly sewage sludge: the technique in which sludge is combined with other combustible materials (e.g., refuse, refuse-derived fuel, coal) to form a furnace feed with a higher heating value than the original sludge.

Cofiring or coburning: Combustion of MSW along with other fuel, especially coal.

Cogeneration: Production of electricity as well as heat from one fuel source.

Collection routes: Established routes followed in the collection of commingled and source-separated wastes from homes, businesses, commercial and industrial plants, and other locations.

Collection systems: Collectors and equipment used for the collection of commingled and source separated waste. Waste collection systems may be classified from several points of view, such as the mode of operation, the equipment used, and the types of wastes collected.

Collection, waste: Act of picking up wastes at homes, businesses, commercial and industrial plants, and other locations, loading them into a collection vehicle (usually enclosed), and hauling them to a facility for further processing or transfer to a disposal site.

Combustible : Various materials in the waste stream that are burnable, such as paper, plastic, lawn clippings, leaves, and other organic materials; materials that can be ignited at a specific temperature in the presence of air to release heat energy.

Combustion: Chemical combining of oxygen with a substance, which results in the production of heat.

Combustion air: Air used for burning a fuel.

Combustion gases: Mixture of gases and vapors produced by burning.

Commercial solid wastes: Wastes that originate in wholesale, retail, or service establishments, such as office buildings, stores, markets, theaters, hotels, and warehouses.

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Commercial waste: All types of solid wastes generated by stores, offices, restaurants, warehouses, and other nonmanufacturing activities, excluding residential and industrial wastes.

Commingled recyclables: Mixture of several recyclable materials in one container.

Commingled waste: Mixture of all waste components in one container.

Component separation: Separation or sorting of wastes into components or categories.

Conservation: The planned management of a natural resource to prevent exploitation, destruction, or neglect.

Construction and demolition waste: Waste building materials, packaging, and rubble resulting from construction, remodeling, and demolition operations on pavements, houses, commercial buildings, and other structures. The materials usually include used lumber, miscellaneous metal parts, packaging materials, cans, boxes, wire, excess sheet metal, and other materials.

Consumer waste: Materials used and discarded by the buyer, or consumer, as opposed to wastes created and discarded in-plant during the manufacturing process.

Consumption: Amount of any resource (material or energy) used.

Controlled-air incinerator: Incinerator with excess or starved air having two or more combustion chambers in which the amounts and distribution of air are controlled. The U.S. EPA prefers to use the term combustor instead of incinerator.

Conversion: Transformation of wastes into other forms; for example, transformation by burning or pyrolysis into steam, gas, or oil.

Conversion products: Products derived from the first-step conversion of solid wastes, such as heat from combustion and gas from biological conversion.

Cost-effective: Measure of cost compared with an unvalued output (e.g., the cost per ton of solid waste collected) such that the lower the cost, the more cost-effective the action.

Curbside collection: Collection of recyclable materials at the curb, often from special containers, to be brought to various processing facilities. Collection may be both separated and/or mixed wastes.

Curbside separation: To separate commingled recyclables prior to placement in individual compartments in truck providing curbside collection service; this task is performed by the collector.

Demolition wastes: Wastes produced from the demolition of buildings, roads, sidewalks, and other structures. These wastes usually include large, broken pieces of concrete, pipe, radiators, ductwork, electrical wire, broken-up plaster walls, lighting fixtures, bricks, and glass.

“Dirty “materials recovery facility or “dirty” MRF: Facility that accepts a mixed solid waste stream and then proceeds to separate out designated recyclable materials through a combination of manual and mechanical sorting.

Disposal: Activities associated with the long-term handling of (1) solid wastes that are collected and of no further use, and (2) the residual matter after solid wastes have been processed and the recovery of conversion products or energy has been accomplished. Normally, disposal is accomplished by means of sanitary landfilling.

Disposal facility: Collection of equipment and associated land area that serves to receive waste and dispose of it. The facility may incorporate one or more disposal methods.

Diversion rate: Measure of the amount of material now being diverted from landfilling for reuse and recycling compared with the total amount of waste that was thrown away previously.

Dual-stream recycling (“Clean”): Recycling process in which waste streams are separated. For example, a dual-stream (“clean”) recycling process can be where one stream contains cans and bottles and a

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separate stream collects other potential recyclables. Dual-streams (“clean’) have higher collection costs than single-stream (“dirty”) operations but the contamination of recyclables products is lower.

Drop-off center: Location where residents or businesses bring source-separate recyclable materials. Drop-off centers range from single-material collection points (e.g., easy-access “igloo” containers) to staffed, multimaterial collection centers.

Energy: Ability to do work by moving matter or by causing a transfer of heat between two objects at different temperatures.

Energy recovery: Conversion of solid waste into energy or a marketable fuel. A form of resource recovery in which the organic fraction of waste is converted to some form of usable energy, such as burning processed or raw refuse, to produce steam.

Environmental quality: Overall health of an environment determined by comparison with a set of standards.

External costs: Cost relating to, or connected with, outside expenses.

Fee: Dollar amount charged by a community to pay for services (e.g., tipping fee at a landfill).

Flue gas: Products of combustion, including pollutants, emitted to the air after a production process or combustion takes place.

Front-end loader: (1) Solid waste collection truck that has a power-driven loading mechanism at the front; (2) vehicle with a power-driven scoop or bucket at the front, used to load secondary materials into processing equipment or shipping containers.

Furnace: Combustion chamber; an enclosed structure in which heat is produced.

Garbage: Solid waste consisting of putrescible animal and vegetable waste materials resulting from the handling, preparation, cooking, and consumption of food, including waste materials from markets, storage facilities, handling and sale of produce, and other food products. Generally defined as wet food waste, but not synonymous with trash, refuse, rubbish, or solid waste. (See food wastes.)

Gas control system: System at a landfill designed to prevent explosion and fires due to the accumulation of methane concentrations and damage to vegetation on final cover of closed portions of a landfill or vegetation beyond the perimeter of the property on which the landfill is located and to prevent objectionable odors off-site.

Hybrid materials recovery facility or hybrid MRF: Incorporates characteristics of both “clean” and “dirty” MRF systems.

Incineration: Engineered process involving burning or combustion to thermally degrade waste materials. Solid wastes are reduced by oxidation and will normally sustain combustion without the use of additional fuel. Incineration is occasionally referred to as combustion.

Industrial waste: Materials discarded from industrial operations or derived from industrial operations or manufacturing processes, all nonhazardous solid wastes other than residential, commercial, and institutional. Industrial waste includes all wastes generated by activities such as demolition and construction, manufacturing, agricultural operations, wholesale trade, and mining. A distinction should be made between scrap (those materials that can be recycled at a profit) and solid wastes (those that are beyond the reach of economical reclamation).

Integrated solid waste management: Management of solid waste based on a combination of source reduction, recycling, waste combustion, and disposal. The purposeful, systematic control of the functional elements of generation; waste handling, separation, and processing at the source; collection; separation and processing and transformation of solid waste; transfer and transport; and disposal associated with the management of solid wastes from the point of generation to final disposal.

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Integrated waste management: Management of solid waste based on a consideration of source reduction, recycling, waste transformation, and disposal arranged in a hierarchical order. The purposeful, systematic control of the functional elements of generation, onside storage, collection, transfer and transport, processing and recovery, and disposal associated with the management of solid wastes from the point of generation to final disposal.

Manual separation: Separation of wastes by hand. Sometimes called hand picking or hand sorting, manual separation is done in the home or office by keeping food wastes separate from newspaper, or in a materials recovery facility by picking out large cardboard and other recoverable materials.

Materials recovery facility or MRF: A specialized plant that receives, separates, and prepares recyclable materials for marketing to end-user manufacturers.

Municipal incinerator or combustor: A privately or publicly owned incinerator or combustor primarily designed and used to burn residential and commercial solid wastes within a community.

Municipal solid waste (MSW): Includes all of the wastes that are generated from residential households and apartment buildings, commercial and business establishments, institutional facilities, construction and demolition activities, municipal services, and treatment plant sites.

Operational costs: Those direct costs incurred in maintaining the ongoing operation of a program or facility. Operational costs do not include capital costs.

Pyrolysis: Way of breaking down burnable waste by combustion in the absence of air. High heat is usually applied to the wastes in a closed chamber, and all moisture evaporates and materials break down into various hydrocarbon gases and carbon like residue.

Recovery: Refers to materials removed from the waste stream for the purpose of recycling and/or composting. Recovery does not automatically equal recycling and composting, however. For example, if markets for recovered materials are not available, the materials that were separated from the waste stream for recycling may simply be stored or, in some cases, sent to a landfill or combustor. The extraction of useful materials or energy from waste.

Recycled material: Material that is used in place of a primary, raw, or virgin material in manufacturing a product and consists of material derived from postconsumer waste, industrial scrap, material derived from agricultural wastes, and other items, all of which can be used in the manufacture of new products. Also referred to as recyclables.

Recycling: Separating a given waste material (e.g., glass) from the waste stream and processing it so that it may be used again as a useful material for products that may or may not be similar to the original.

Recycling program: Should include the following: types of collection equipment used, collection schedule, route configuration, frequency of collection per household, whether curbside setout containers are provided by the program, publicity and educational activities, and budget, financial evaluation (costs, revenues, and savings), processing and handling procedures, market prices, ordinances, and enforcement activities.

Separation: To divide wastes into groups of similar material, such as paper products, glass, food wastes, and metals. Also used to describe the further sorting of materials into more specific categories, such as clear glass and dark glass. Separation may be done manually or mechanically with specialized equipment.

Sewage sludge: Semiliquid substance consisting of settled sewage solids combined with varying amounts of water and dissolved materials.

Single-stream recycling (“Dirty”): A recycling process where the recyclable stream is fully commingled. Recyclable materials are collected in one bin instead of separated bins. A single-stream (“dirty”)

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operation has lower collection costs than dual-stream (“clean”) operations but contamination of recyclables products is higher.

Sludge: Any solid, semisolid, or liquid waste generated from a municipal, commercial, or industrial wastewater treatment plant, water supply treatment plant, or air pollution control facility, or any other such waste having similar characteristics and effects. Must be processed by bacterial digestion or other methods, or pumped out for land disposal, incineration, or composting.

Solid waste disposal facility: Any solid waste management facility that is the final resting place for solid waste, including landfills and incineration facilities that produce ash from the process of incinerating municipal solid waste. Solid wastes: Any of a wide variety of solid materials, as well as some liquids in containers, which are discarded or rejected as being spent, useless, worthless, or in excess, including contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities.

Source-separated materials: Waste materials that have been separated at the point of generation. Source-separated materials are normally collected separately.

Source separation: Separation of waste materials from other commingled wastes at the point of generation.

Tipping fee: Fee, usually dollars per ton, for the unloading or dumping of waste at a landfill, transfer station, recycling center, or waste-to-energy facility. Also called a disposal or service fee.

Tipping floor: Unloading area for wastes delivered to an MRF, transfer station, or waste combustor.

Transfer station: Place or facility where wastes are transferred from smaller collection vehicles (e.g., compactor trucks) into larger transport vehicles (e.g., over-the-road and off-road tractor trailers, railroad gondola cars, or barges) for movement to disposal areas, usually landfills. In some transfer operations, compaction or separation may be done at the station.

Trash: Wastes that usually do not include food wastes but may include other organic materials, such as plant trimmings. Generally defined as dry waste material, but in common usage, it is a synonym for rubbish or refuse.

Waste: Unwanted materials left over from manufacturing processes, or refuse from places of human or natural habitation.

Waste categories: Grouping of solid wastes with similar properties into major solid waste classes, such as grouping together office, corrugated, and newspaper as a paper waste category, as identified by a solid waste classification system, except where a component-specific requirement provides alternative means of classification.

Waste composition: Relative amount of various types of materials in a specific waste stream.

Waste diversion: To divert solid waste, in accordance with all applicable federal, state, and local requirements, from disposal at solid waste landfills or transformation facilities through source reduction, recycling, or composting.

Waste generation: Act or process of generating solid wastes.

Waste generator: Any person whose act or process produces solid waste, or whose act first causes solid waste to become subject to regulation.

Waste reduction: The prevention or restriction of waste generation at its source by redesigning products or the patterns of production and consumption.

Waste sources: Agricultural, residential, commercial, and industrial activities, open areas, and treatment plants where solid wastes are generated.

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Waste stream: Describes the total flow of solid waste from homes, businesses, institutions, and manufacturing plants that must be recycled, burned, or disposed of in landfills; or any segment thereof, such as the residential waste stream or the recyclable waste stream. The total waste produced by a community or society, as it moves from origin to disposal.

Some glossary definitions obtained from referenced study by Tchobanoglous and Kreith (2002).

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