March/April 1996
The recycling industry often views environmental regulations as burdensome, but a number of recyclers have found that some compliance requirements can lead to useful and, at times, unexpected payoffs.
By Paul Belden
Paul Belden is associate editor of Scrap.
When General Metals of Tacoma agreed to pave its plant—not just the turnings beds or the shredder site, but the whole 26-acre facility—it wasn’t a matter of its employees complaining about mud on their boots. The decision was a matter of survival for the Tacoma, Wash.-based ferrous processor.
The reason? The company’s location on a waterway within the ecologically sensitive Commencement Bay—a Superfund site—put General Metals squarely on the radar screen of state environmental officials overseeing the Superfund cleanup.
Although the scrap firm bore no responsibility for contamination of the Superfund site, its proximity to the bay prompted the state to conduct a thorough inspection of the soil and surface water at General Metals (as well as at other nearby businesses). And what the inspectors found wasn’t pretty. The property tested positive for elevated concentrations of a variety of contaminants and heavy metals.
The company figured it had two options: wait for the regulators to decide just how it should clean up the property and prevent further contamination, or take the bull by the horns and develop its own solution.
The firm chose the latter, negotiating a state-of-the-art environmental plan that included construction of a storm water treatment system, removal of contaminated soil, and paving of the entire plant.
So far, the result has been a ten-strike. Regulators who earlier were threatening shutdown have practically erupted into spontaneous applause, presenting General Metals with a national excellence award from the EPA for industrial storm water management programs. And while the project cost millions, General Metals remains on solid financial footing.
So everybody’s job is safe. Plus, they don’t have to get so muddy anymore.
That might seem unimportant, until you look at it from a mechanic’s point of view. “Who wants to have to lay down in a mud puddle to work on a truck?” asks Dennis Griffith, the company’s general manager.
He’s not asking for volunteers. His point is that nobody wants to have to lay down in a mud puddle. And, at General Metals, they don’t have to. Not anymore. “There’s no mud, there’s no mess—everybody’s pretty happy with how clean the yard is these days,” says Griffith.
Improving Mobility and Morale
General Metals is not alone in the scrap industry in taking extraordinary measures to ensure environmental compliance. In a climate of ever-more-stringent requirements—a climate in which a good-enough attitude now could prove to be a million-dollar mistake later—recycling companies across the country are going the extra mile to make sure their operations are as environmentally sound as possible.
And, while they’re at it, many are also finding that their efforts can have useful side effects.
“We’re still learning about all the operational benefits [of having a paved plant],” says Griffith. Still, he points out, some of the values were immediately obvious. Take mobility within the plant. It’s a lot easier to move people, machines, and material around on pavement than on the bare ground—especially when it’s raining—Griffith notes.
“Our ability to move around within this yard is just awesome,” he says. And, with greater freedom of movement, his mechanics have found themselves better able to maintain and repair difficult-to-reach equipment.
Together, these benefits have worked to boost morale at the facility. “I don’t think that anyone, given the choice, would choose to work on dirt or gravel,” Griffith says.
The company’s new look also has not escaped the notice of customers. For one thing, the paved plant is much more presentable to local townspeople bringing in household scrap—a big plus in terms of community relations. In addition, small, tire-puncturing pieces of metal scrap can be easily spotted and swept up on the pavement, whereas on the old surface they tended to become embedded and hidden. That means all of General Metals’ scrap suppliers are not as likely to fall victim to flat tires when pulling their trucks into the facility.
‘More Important Than Cost’
Easing the concerns of customers is, indeed, perhaps the most tangible benefit of running as clean an operation as possible. After all, in today’s era of Superfund liability fears, many scrap generators, processors, and consumers are looking carefully at the environmental records and capabilities of the processors who receive or provide their scrap.
Last year, for instance, when Ford Motor Co. abandoned its former method of selling prompt scrap to the highest bidder and instead hired seven recycling firms to manage its regional scrap operations in North America, the recyclers’ environmental practices weighed large in the automaker’s choice of those seven firms. In fact, says Chris Hamm, a buyer in Ford’s raw materials division who was closely involved in the evaluation of recyclers expressing interest in the contracts, “To me, the environmental factor was more important than cost.”
As part of his evaluation, Hamm visited the plant of every recycler that was in the running for a contract. Among the things he wanted to see: sealed roll-off containers, concrete drain-off platforms, equipment such as radiation detectors in working order, organized and differentiated piles of scrap, and complete environmental inspection records.
Among the things he didn’t want to see: “Big, unsorted piles of smoking scrap and environmental equipment just sitting around, obviously not being used.”
It hasn’t been lost on General Metals that the company’s award-winning storm water management plan can make for an excellent marketing tool. “We’re very proud of the success we’ve had in controlling our impact on the environment, and you bet we use that in talking to our industrial customers,” Griffith says.
Large generators of industrial scrap aren’t the only ones whose environmental concerns matter a great deal to scrap processors. There are also scrap consumers to think of. If anything, consumers are even more concerned about environmental issues than generators are.
“The environmental aspects of a scrap yard are very important to me as a scrap purchaser,” says Jim Nuckels, executive vice president of Birmingham Steel Corp. (Birmingham, Ala.). “In my experience, the product is no better than the yard it comes from. A trashy yard will just give you a lot of trash. That’s why we like to visit our suppliers.”
It’s understandable that mills, foundries, smelters, and other consumers would be interested in the environmental records of their scrap suppliers. After all, consumers themselves are under considerable pressure to ensure that their own operations are environmentally sound.
“If the scrap we use is oily or greasy, we’re apt to be polluting the air ourselves and creating problems,” says Nuckels. And, just as consumers face many of the same pressures that processors face, consumers also share some of the positive side effects of cleaning up their operations.
Last year, for instance, Franklin Smelting & Refining Corp. (Philadelphia) constructed a $2-million structure to enclose a blast furnace and related operations. The main purpose of the enclosure was to provide better control over fugitive emissions from the furnace.
Since then, however, the company has found that not only have emissions decreased, but overall operations have become more efficient and reliable, says Michael Saltzburg, the company’s president.
For example, before it built the enclosure, Franklin required reasonably good weather to operate its blast furnace at maximum efficiency. Rain, snow, high winds, or extreme temperatures all added up to lost productivity in terms of both machinery and manpower.
That’s changed now that the company’s blast furnace is indoors. For instance, the furnace’s cooling pipes aren’t expected to freeze up anymore the way they used to at least once a winter.
Considering all of the economic benefits that the enclosure will provide, Saltzburg says that “over time, I think the building will pay for itself.”
Spreading the Message
The economic benefits of environmental compliance is a message that Dale Thompson has spent the last two years spreading throughout the scrap industry in the state of Minnesota. A supervisor at the Minnesota Pollution Control Agency, Thompson has traveled around the state conducting training sessions aimed at helping scrap recyclers set environmental goals and develop programs for reaching those goals.
In his sessions, Thompson stresses that environmental compliance can lead to increased property values, improved community relations, and added income from the sale of recoverable contaminants such as freon.
“One of the things that we were trying to show people is that environmental compliance shouldn’t be seen as something that’s valuable only to someone else or to society at large,” Thompson says. “It actually can be in your own best interest, too. Being environmentally conscientious doesn’t have to be a liability.”
Marsha Serlin, owner of United Scrap Metal Inc. (Cicero, Ill.), is a strong believer in the philosophy that money spent on environmental controls today is bound to bring economic benefits tomorrow. She believes this so strongly, in fact, that six months after installing an expensive system to recover water used to clean the copper coming from her wire-reclamation furnaces, she ripped the system out in order to install better equipment that had become available in the meantime.
“I’m just trying to stay ahead of the curve,” she says. “In my experience, if you spend money now, you avoid conflict tomorrow. It’s all preventive medicine.”
The Downside: Small Firms Taking Hits
Of course, for all their positive effects, environmental protection measures do also have their downsides. As scrap executives know, the cost to the industry of environmental compliance is enormous and growing. This burden can land on a recycling company with the force of a dropped piano, and not everyone can survive the hit. Griffith, for instance, estimates that General Metals spent about $10 million developing and implementing its storm water management plan.
What’s more, environmental expenditures don’t end with installation of equipment because it costs money to maintain and operate that equipment. Griffith says it takes three full-time employees and about a quarter of a million dollars a year to maintain the paved yard and treatment plant at General Metals.
Indeed, many in the industry cite the spiraling cost of environmental compliance as one of the most important reasons why the recycling industry is finding itself more and more dominated by large companies at the expense of small and mid-sized firms.
“You can’t be little anymore because it costs so much money,” says Serlin.
Chris Hamm of Ford agrees that environmental compliance is something that is making life especially difficult for smaller recycling firms. “There are several smaller companies out there that are really a step ahead in terms of keeping up with the regulations and laws affecting the environment. Unless other smaller companies are able to plan ahead and absorb this type of cost, they’re not going to have the ability to compete.”
For better or worse, Hamm believes the pressure to control pollution in the scrap industry won’t be ending anytime soon. “It’s all part of what I call the legitimization of the industry,” he says. “And this isn’t limited to the environmental aspects of running a scrap company. It’s something that’s affecting companies’ plants, their corporate structures, their equipment, and their financial knowledge as well.”
Serlin also recognizes that the recycling industry in the 21st century will be very different from the one in which she started out nearly 20 years ago. “The regulations are stricter now than they were five years ago, and they’re getting stricter all the time. You’ve just got to get used to it because it’s the wave of the future.” •
The recycling industry often views environmental regulations as burdensome, but a number of recyclers have found that some compliance requirements can lead to useful and, at times, unexpected payoffs.