November/December 2008
The U.S. military wants to scrap its stockpile of old and obsolete munitions, but scrap processors question whether the material is worth the risks and headaches of processing it.
By Theodore Fischer
Scrap processors of America: Uncle Sam wants you. The U.S. military is inviting the scrap industry to lighten the load of beleaguered U.S. taxpayers—and turn a tidy profit—by purchasing and processing demilitarized munitions.
Over the years, the five branches of the military have amassed a combined stockpile of nearly 500,000 tons of unusable conventional ammunition, more than 300,000 missiles and missile components, and sundry other military items that are stored at great expense at 13 depots around the country. Storage, security, demilitarization, and recycling or disposal of this material represents a nearly $2 billion liability for the U.S. Department of Defense through the current budget and program years. And though it might seem like the military has room to spare at its bases around the country, one goal of the program is to clean house—the Defense Department can free 7 to 9 square feet of covered storage space for every ton of conventional ammunition it unloads.
It costs the federal government about $1,800 a ton to demilitarize this material—a process with a very precise meaning. Demilitarization is taking something that once had a military purpose and destroying it "to the extent that it can no longer do what it was originally intended to do," says Tom Carr, a strategic management consultant for the Defense Department's Office of Project Manager for Demilitarization (PM Demil). Munitions and weapons-related materials must go through the "demil" process before they can leave a government installation. The process is not foolproof, Carr says, "but the odds of something getting into the hands of a scrap dealer that's still in its original form is essentially zero."
Where do these munitions come from? "When ammunition and missiles come into the [demil] account, they are by definition excess, obsolete, or defective," says Bruce Potter, PM Demil deputy. It might seem odd to think of munitions as a product with a shelf life, but it's true. Most missiles have a "safe service life" of about 25 years, he says, before they get transferred into the demil account. Some of the material comes from weapons systems that are no longer in use, like a 16-inch gun, in which case "the 16-inch ammo becomes excess," he says. "Or if we built up stockpiles [of weapons] to use in the Cold War, and we don't need that many anymore."
The items in the stockpile are constructed largely of ferrous and nonferrous metals. In a typical year, the program demilitarizes about 85,000 tons of its stockpile, generating nearly 13 million pounds of steel, 1.2 million pounds of aluminum alloy, 800,000 pounds of copper alloy, 125,000 pounds of copper, and smaller amounts of aluminum, brass, lead alloy, stainless steel, and zinc alloy. Eventually, the program hopes to sell other items of interest to scrap recyclers, including electronic components and "exotic" metals like tungsten and titanium. The demil process also generates substantial quantities of packaging materials: corrugated cartons, various plastics, wood, fiber containers, pallets, and rubber.
The Profit Motive
Until recently, the abandoned munitions and related materials piled up in depots because no one had an incentive to sell them—the proceeds from any sales vanished into the bottomless pit known as the U.S. Treasury. Not understanding the material's value, some storage depots agreed to "sweetheart" deals with local scrap dealers, who could "drive their trucks up to the gate, load them up, [and] not even pay" for the scrap, Carr says. Some depots even paid people to take the material off their hands, he adds.
All that changed with the passage of the John Warner National Defense Authorization Act for FY07 (NDAA 07). The law authorizes the Army, which is charged with disposing of conventional ammunition for all five branches of the military, to establish and operate a recycling program to offset the costs of demil operations. In other words, the Army now can sell the scrap it generates through the demilitarization process and pump the proceeds—an estimated $2 million to $3 million annually—back into demil operations.
The demil program now takes the perspective of any scrap supplier: It wants to get the best deal possible for its scrap, considering factors such as price per ton, material segregation, and size reduction. But the program also faces some unique challenges, notes Orest Hrycak, an engineer with PM Demil. First, it processes more than 7,000 different items; second, the material is disbursed among eight high-security military bases that can be difficult to access. Scrap processors mention a third, significant challenge: They want to be sure the material isn't going to explode or otherwise harm their workers or processing equipment.
Safety First
That last concern has deterred several companies that have looked into this processing niche. "Most scrap people don't want to deal with it," says a government liaison for a Western scrap company that has processed such material. "As soon as you say munitions, people say, 'I'm not blowing up my shredder.'"
Those concerns have some justification. In 1997, a worker in a Fontana, Calif., scrapyard was killed processing an anti-tank shell from Fort Irwin, about 100 miles away. An army employee had certified the 1.4 million-pound scrap shipment as free of explosives, but the shell that killed the 22-year-old worker contained the equivalent of two pounds of TNT, according to news reports. The investigation following the death uncovered 55 other explosive items in the shipment.
"People think back to the Fontana explosion...that's what has scared a lot of people off," says this scrap processor. He notes that a session on the subject at the 2007 ReMA convention in New Orleans attracted only a few attendees.
Other explosions and injuries caused by processing military scrap have occurred over the years, says Scott Horne, ReMA's vice president of government relations. A particular problem has been range scrap, "like a tank that was out on the range that [soldiers] were shooting at," he says. "They may have fired something into that tank that didn't explode... So it's still in there and it's live, and the problem is, it can go off during processing." Unexploded ordinance can injure employees, damage machinery, and shut down operations while the police, fire department, military ordinance experts, and other parties investigate what went wrong, Horne says. "It causes a whole mess."
To allay these fears, the demil program pledges to make scrap material that has been directly exposed to explosives safe before it puts it on the market. Demilitarization "is an industrial process, kind of like reverse manufacturing," Potter says. "There are specific definitions—and the regulations are being reviewed and rewritten—but the common references are 3X and 5X." The 5X standard is the cleanest—"like you can eat off it," Potter says. The 3X standard means the scrap could contain traces of explosive material, and you need to be knowledgable about handling explosive contaminated material to recycle it.
One common way to bring munitions to the 5X standard of cleanliness is to place the material in a furnace and heat it until the explosive residue burns off—an expensive and time-consuming process. Consequently, one of the demil program's main objectives is to attract additional customers for 3X material. "The scrap industry has used 3X material very successfully and very safely," Carr says. When purchasers know what they're buying, he says, "they can handle it very well. So if more buyers understand what 3X [material] is and use it effectively, the government saves money from not having to take it to 5X, we save the taxpayer money, and everybody benefits."
Incineration isn't the only way PM Demil renders its munitions safe for scrap processing. A 10-minute video on its Web site (www.pica.army.mil/pmjointservices/Demil/pm Demil Index.htm) depicts about 20 alternative or complementary techniques, from the obvious (open burning, pulling apart) to the exotic (autoclave, cryofracture). All these technologies serve the same purposes: to make demil materials safe for scrap processing and to spare the government embarrassment and liability. Materials that come through this "government-managed and -controlled program" are safe, Carr says. Problems arise, he says, with "guys who sneak onto these bases and then try to sell the stuff to their local scrap dealer."
According to Carr, "Every incident that has happened involves unauthorized people who get ahold of some piece of ammo and it gets into a scrap dealer's hands." This past February, for example, two workers at a scrapyard in North Carolina suffered minor injuries during an explosion that occurred when they were baling a load of scrap that, unbeknownst to them, contained military anti-tank shells allegedly stolen from nearby Fort Bragg. The Fontana incident, however, was caused by scrap legitimately purchased from the military.
ISRI has worked with "a variety of different groups within the military" to share its concerns about processing demil scrap, Horne says, and "there has been ongoing dialogue over the years. In some cases there have been improvements; in some cases it drags on," with the military making promises but not taking much action. "The severity of the issue doesn't seem to make its way up the chain of command," he says, though he notes that "certain bases have some very strong [safety] programs in place, especially for range scrap." In general, though, "there has to be far better oversight."
For a scrapyard thinking about processing demil scrap, Horne offers these suggestions: "Be very cautious, and know what you're buying. Be cognizant of the risks, and carefully inspect the inbound material." In addition to the explosion hazards, he points out, there are liability issues if unexploded ordinance makes it through the scrapyard and ends up at a mill. Further, if military material gets exported without proper and sufficient processing, that could be a violation of various export laws. "There's a whole host of issues to be aware of in dealing with this scrap," he cautions.
Let's Make a Deal
From its offices at the Picatinny Arsenal in northern New Jersey, the PM Demil program's five-person staff provides central oversight of the demil process and works with the Army to establish guidelines and promulgate rules for transactions involving demil scrap. It leaves the deal-making to the individual installations that house the material. "We don't mandate a cookie-cutter approach for each depot" in terms of marketing and awarding contracts, Potter says. "We just said, 'Here are the simple rules to execute this program'" based on the new law, "'and if you don't follow these rules, you're breaking the law.'"
Rule No. 1, under NDAA 07: The depots must award the scrap to the highest bidder. "You can't just go to your best buddy and offer it to him," Potter says. It needs to be "a competitive process." Beyond that, the depots can make just about any kind of a deal they want. "We've left that totally up to each of the installations because their situations are substantially different," Potter says.
The eight depots are in Alabama, Indiana, Kentucky, Nevada, Oklahoma, Pennsylvania, Texas, and Utah. (See "Uncle Sam's Scrap" on page 87 for contact information for these bases.) They advertise their offerings in local publications and on FedBizOpps (cbd.cos.com), a list compiled daily by the U.S. Government Printing Office that contains proposed government procurement actions, contract awards, sales of government property, and other information about all transactions worth more than $25,000.
The demil depots seem less interested in one-shot transactions than in contracts for an indefinite quantity of material on a per-pound basis over a specified period of time. "The scrap dealer knows he has a continuing flow of the stuff and can count on a continuing stream of revenue," Carr explains, "and the local installation does not have to go through the complicated government procuring thing every time it has a pile of stuff it wants to get rid of." A contract "could be for a year [or] three years," or any other length of time, Potter says, though he doubts any facility would want to solicit bids more than once a year.
Each depot produces a different mix of scrap materials. Anniston Defense Munitions Center (Anniston, Ala.) and Letterkenny Munitions Center (near Chambersburg, Pa.) both specialize in missiles, which yield aluminum, titanium, and electronics. Crane Army Ammunition Activity (Crane, Ind.), McAlester Army Ammunition Plant (McAlester, Okla.), and Hawthorne Army Depot (Hawthorne, Nev.) handle artillery projectiles and bombs, which generate large quantities of steel. Hawthorne and Blue Grass Army Depot (Richmond, Ky.) are top sites for copper alloys, while McAlester and Tooele Army Depot (Tooele, Utah) process the greatest quantities of brass.
Regardless of what you buy and where you buy it, certain guarantees apply, according to PM Demil: If the material is certified 5X, all explosive residue has been removed from any scrap material that has been directly exposed to explosives. All material has been inspected carefully to ensure that no unique hazards exist. In effect, the program's representatives say, there should be no difference between demil scrap material and the same material you obtain elsewhere, and your workers will require no special training to handle it.
Cutting Through Red Tape
Despite strong markets for the metals coming out of the demil program, scrap dealers haven't exactly beaten a path to the depot gates. Some of their qualms have less to do with exploding shredders than with dealing with the federal government.
The West Coast scrap processor says it can be frustrating to deal with some of the depots. "It's just the red tape—trying to get through the government so they can give us the munitions and we can give them the money," he says. He believes his company can—and eventually will—provide the depot with the service it needs: total destruction. "Once you see our shredded material, you can never recognize where it came from. If I took two of our piles and told you to pick out the one that's munitions, you would have a very hard time."
This year Bedford Recycling (Bedford, Ind.) signed a five-year contract to purchase steel, brass, iron, aluminum, and possibly some plastic from its nearest depot, Crane Army Ammunition Activity. "The value of the material will far outweigh the cost of our coming on base," Bedford President Larry Parsons told the Bedford Times-Mail. "And CAAA will be getting money for all the material coming off the base, which is something [they] haven't been able to do in the past."
To fulfill the contract, CAAA will separate recyclable demil material (accompanied by proper documentation) into roll-off containers Bedford provides. When the containers are full, CAAA contacts Bedford, which picks up the container, processes the material, sells it, and pays CAAA an amount based on the materials' scrap value.
One company with several years' experience handling demil munitions—particularly 3X materials—is Demil Metals (Glencoe, Ill.). In recent years it has recycled 3X scrap generated by the McAlester, Hawthorne, and CAAA depots as well as the Naval Surface Warfare Center (Crane, Ind.). Its current projects include joint ventures and team agreements with BedÂford Recycling and Gradient TechnolÂogy (Elk River, Minn.). "Gradient does high-pressure water-jet processing that basically scours out the interior of the munitions" to decontaminate them from 3X to 5X, says Barry R. Schaffer, principal of Demil Metals. "Bedford handles the scrap processing, preparing the steel for the mills. And I do program management and systems integration—I keep all the records straight for the government—and sell the scrap to the steel mills."
Has Demil Metals been stuck in the dreaded red tape? "I wouldn't call it so much red tape as legitimate security and safety concerns," Schaffer says diplomatically. "We feature complete chain of custody and cradle-to-grave documentation on the material. We're accountable for every round and every pound of material, how it's processed, where it's processed, and where it's finally smelted." Since the Sept. 11, 2001, terrorist attacks, concern for security "has only increased," Schaffer says, "because the government does not want anything unaccounted for floating around" that might become an improvised explosive device.
Schaffer does caution would-be competitors that there may be less here than meets the eye. "The government thinks they have a lot [of material]—and they do have a lot of projectiles in terms of numbers," he says. "But in terms of tonnage of material that's going into the market, it's relatively minor." And he echoes Horne's cautions: "You have to manage the risks associated with recycling explosive contaminated ordnance. You have to have the people with the knowledge and the skills required for this material, and they have to perform flawlessly. You can't make any mistakes, or you are going to get seriously hurt."
The risks and hassles of recycling demilitarized munitions notwithstanding, it's an opportunity to procure more scrap. "The bottom line is, the military needs to get rid of a lot of munitions, and the government won't give them enough money to do it, so the stockpile keeps getting bigger and bigger and bigger," says Jim Lawrence of ELG Metals (Houston), who has advised the demil program. "I told them, 'If anyone can solve this problem, the scrap industry can.' But right now, it's in its infancy, and it hasn't really taken off for them yet." •
Theodore Fischer is a writer based in Silver Spring, Md.
The U.S. military wants to scrap its stockpile of old and obsolete munitions, but scrap processors question whether the material is worth the risks and headaches of processing it.