Business can't afford it. Government can't enforce it. But this month a new law regulating the hazardous wastes of small companies goes into effect anyway.
YOU MAY REMEMBER BACK IN THE 1970s when the Clean Air Act and the Clean Water Act went into effect -- all that confusion and paperwork and angst in corporate boardrooms all across America. Well, you ain't seen nothing yet.
Meet the Resource Conservation and Recovery Act, better known as RCRA (Reck-Rah). What the Clean Air Act did for smog, and the Clean Water Act did for fetid rivers, RCRA is supposed to do for contaminated drinking water.
Passed by Congress in 1976, RCRA was fashioned to crack down on the 15,000 largest generators of hazardous waste in the country, which were required to keep exacting records of their waste materials from the time they were produced to the time they were disposed of at a licensed wastemanagement facility. These newly regulated companies were the source of nearly all of the 250 million metric tons of hazardous waste produced in the country every year. And almost everyone thought the regulations were a good idea.
Soon, however, evidence began to gather that even small amounts of hazardous waste, if improperly disposed of, could cause long-term environmental damage. Public fears of toxic contamination and environmental cancer increased, and pressure mounted to do something more. So in 1984, the federal government broadened its RCRA coverage, to companies putting out as little as 220 pounds of toxic waste a month -- about half of a 55-gallon drum. The new regulations take effect this month.
Mind you, this is not just any federal government -- this is Ronald Reagan's federal government.The President came to Washington saying he never met a regulation he really liked, and promised to get government off industry's back. But now his conservative, probusiness, deregulation-minded Administration finds itself in the awkward position of extending a burdensome new law to as many as 175,000 additional businesses, most of them small. Civil fines can be as high as $25,000 a day for each violation. For willful (criminal) violations, the fines double, and executives can go to jail.
Compliance won't be easy -- or cheap. Nationwide, there are a shrinking number of disposal sites licensed to handle hazardous waste even as demand increases (see box, "Where Will All That Gunk Go?" page 68). That situation is forcing prices up. And it has meant that many companies must ship their waste over long distances, often at astronomical cost. To varying degrees, compliance will also increase business costs for day-to-day operations. And insurance costs and legal fees are likely to ise as well.
Unfortunately, the burden of enforcing the new law comes at a time when federal deficits are squeezing regulatory budgets. The U.S. Environmental Protection Agency says it will be relying on state environmental agencies to monitor compliance. But most state agencies lack the money and the manpower to give the new RCRA regulations any teeth.
All in all, RCRA has all the makings of a political and bureaucratic disaster. "It's going to be a nightmore," predicts Ernie Neal, director of state government affairs at Browning-Ferris Industries Inc., one of the largest international waste-disposal firms.
To get an idea of how the RCRA program might work, or not work, nationwide, we traveled to Louisiana, where the highest cancer death rates in the country make hazardous waste disposal a matter of general concern. Like a handful of other states, Louisiana already regulates small generators of hazardous waste, so its businesses have had a chance to assess the costs and hassles of compliance -- or the risks of ignoring the law. Louisiana officials, as well, have already learned of the difficulties in enforcing a tough environmental law that requires keeping tabs on so many small firms.
The first obvious problem with any new hazardous waste-disposal law is that many businesses don't even know about it, or know whether it affects them. To find out, a manager must wade through a document as thick as a city telephone book and written in language only a lawyer could love. Already, consultants have appeared on the scene to translate the law into plain English and advise businesses on compliance.
As a general rule, a substance is classified as hazardous if it is ignitable, reactive, corrosive, or toxic, or if it's included on the EPA's list of 400 chemical villains. Among the general categories of businesses covered are auto dealerships, service stations, and body shops, which have to be careful in disposing of lead-acid batteries, paint thinners, paint wastes, and spent solvents. Drycleaning plants are another large category. Metal manufacturers, paper mills, pesticide companies, wood refinishers, and even supermarkets all have to account for their leavings (supermarkets because of outdated medicines they throw away). Even high school chemistry labs are suspect.
Until recently, these outfits had gotten rid of their waste rather cheaply. "I think most of them put it straight into their dumpsters, or down the drain like any other liquid" says Robert Axelrad, an EPA hazardous waste official in Washington. Weed control out in back of the plant was another popular use.
Tom Simmons can't remember what he used to do with most of the hazardous wastes generated by his shop. Simmons is the director of parts and services at Coleman Olsdmobile Inc., the largest automobile dealership in Baton Rouge. On an average day, his 24 mechanics service about 120 cars -- doing everything from engine transplants to fixing squeaky doors. But it was only last year, six years after the Louisiana hazardous waste law took effect, that Coleman, through a business associate, learned that it existed and that his shop was in violation.
"State officials are putting out all these rules," he complains, "but they never get with the people affected and tell us what we're supposed to do." As part of the contract with his supplier, Simmons had been paying to have somebody haul away a solvent known as Naptha that his mechanics use in washing the grease from engine parts. As for paint thinner and anything else that may be hazardous -- well, who knows?
After his discovery, Simmons contacted the Louisiana Department of Environmental Quality, got an "EPA generator identification number," and, as he was instructed, began storing his paint thinner waste in 55-gallon drums while searching for a firm that could haul the drums away. A Chevrolet dealer across town with 10 drums recently paid about $4,000 to have them disposed of by Rollins Environmental Services Inc., which runs a big waste-management plant in Baton Rouge. Shocked by the price, Simmons called around until he stumbled upon Hazco International Inc., a Virginia environmental services company specializing in the automotive industry. Hazco offered a flat $650-a-year fee to take care of all Coleman's spent thinner.
The $650 figure, however, turns out to be just the ante. There is also the cost of the extra time taken by mechanics and managers in dealing with the waste and paperwork; the special insurance; and the safety equipment used by workers in handling the hazardous goop. Redmond Clark, executive vice-president of Hazco, estimates that the average car dealership will lay out as much as $5,000 a year to comply fully with all the appropriate hazardous-waste laws.
That figure will be higher if the EPA finanly decides to list spent motor oil as a hazardous waste, as has been suggested by its staff. Service station lobbyists in Washington have been fighting against the proposal, but should they fail, gas stations and dealerships across the country could be forced to dig up tens of thousands of leaking underground waste oil tanks and install more secure containers in their stead.
Still, it's not the money that most bothers Tom Simmons. It's the uncertainty involved in the whole process. "We still don't know how we're supposed to handle it," he says. "Even the forms. We got a letter from DEQ the other day saying we were in violation for not turning in an annual waste report. We didn't know anything about it. Nobody's telling us these things."
Bob Israel, executive vice-president of the Louisiana Automobile Dealers Association, says Coleman Olds is fairly typical. "The reaction among auto dealers is absolute confusion," he says. "The state regulators were sending our members stacks of regulations literally three inches thick. Now, you know small-business people. They take one look at that and throw it in the trash and say, 'I'll comply when they catch me."
Kean's the Clearner is the largest dry-cleaning chain in Baton Rouge, with 26 storefronts and 12 cleaning plants, staffed by some 150 employees. Managing the operation is Frank Kean, a lawyer by training, whose grandfather opened his first shop in 1900.
To his employees, Kean is "Mr. Frank." But to the Louisiana Department of Environmental Quality, he is a small-quantity generator of hazardous waste. The oozy gunk that drips from the back of his dry-cleaning machines is actually perchloroethylene, a chlorinated hydrocarbon used to leach soil from clothing. And as a suspected cancer-causing agent, it is a RCRA-regulated substance.
Frank Kean discovered he was a waste generator at a dry-cleaning convention last year in New Orleans, and he quickly grasped the implications. "We're too big and visible here in Baton Rouge," he says. "We had to comply."
Kean declines to say what he used to do with his spent "perc." When he began inquiring of disposal firms, he couldn't find any that were interested in his business. "They said we were too small to fool with," Kean remembers. "If the laws had been enforced back then, we would have been out of business. We had no way to dispose of it other than by breaking the law, really."
Eventually, Kean found a national firm, Safety-Kleen Corp., that handles dry-cleaning wastes. Cheap it isn't. Operating with a major share of the market, Safety-Kleen has been able to charge what it wants -- in 1986 alone, rates doubled. Kean expects to pay $6,000 before the year is out. And because Louisiana is in the midst of an economic slump, Kean doubts he can raise his rates to recover the costs. "I'll have to eat it," he says.
Dry cleaners and auto shops are the lucky ones: because they are among the largest industries covered by the new regulations, specialized disposal outfits have emerged to solve their waste problems. For smaller firms in other industries, it won't be so easy, or so inexpensive. The first trick will be to find a company licensed to haul the stuff away.
Virginia Eastwood is director of hazardous wastes for St. Joseph Motor Lines of Atlanta, a $2-million firm that serves Baton Rouge and most other places in the United States. Eastwood is now actively looking for "less than truckload" customers, but the rate card above her desk gives little sign of eagerness for the business. St. Joseph's charge for transporting one drum 300 miles, an average haul, is $138.40. By contrast, the charge for shipping 80 drums the same distance is $12.60 a drum. What's more, the company tacks on a $20 charge to lift one drum onto a truck.But if you have more than 20, the charge is only $8.
Eastwood defends the fees as a fair reflection of the relative cost of serving different-size customers. And they are costs, she is quick to point out, that have been very much on the rise. St. Joseph, for instance, now needs permits for all states that require them, running as high as $200 per year in some states for each of the company's 20 trucks. Then there are insurance requirements, set by the U.S. Department of Transportation: St. Joseph is paying $300,000 this year for $5 million in coverage -- the bare minimum.
"People gasp when they hear our prices," she says. "They think they're being taken advantage of. But by the time you buy these permits and the insurance, you're just about working for the regulatory and insurance outfits. It's not the piece of cake it sounds like."
Just outside Baton Rouge, on a 345-acre site, is one of the most comprehensive waste-management sites in the nation. Rollins Environmental Services's Baton Rouge operation grosses around $20 million each year, about a fifth of the company's revenues nationwide. And every day, trucks roll in from all over the country, bringing material to be buried in landfills or burned in a massive incinerator. To date, however, very few of its customers are small generators of hazardous waste, despite the seven-year-old Louisiana law.
"We have a gigantic backlog right now," explains Tom Lohouse, Rollins regional sales manager, as he sits drinking a cup of coffee in his office trailer. "My sales organization doesn't have to go out and sell to small waste generators. We just have to coordinate how fast we can take it in. We are backed up, and so is everybody else. For small fiber drums of incinerables -- the kind of thing you normally get from small guys -- I don't need any at all. For years."
What small customers Lohouse has pay top dollar. Landfill, the cheapest form of disposal, runs about $120 a drum; drums with too much liquid in them, however, must be emptied and the fluid mixed with fine dust, bringing the cost to around $160. And then there are the hazardous substances that can't be buried at all. They must be incinerated at a cost of $275 to $950 for 55 gallons.
"I've received inquires from only 5 or 10 companies in the Baton Rouge area," admits Mary James, a Rollins sales rep who is still looking for less expensive ways to serve small companies. "When they're quoted prices, they're usually shocked."
Too many waste generators seeking too few waste processors -- that is one reason why hazardous waste disposal is so expensive. But only one.In addition, the cost of processing is going up as government standards get more rigid and the technologies needed to meet them get more expensive. And, perhaps as important, companies that invest in new technologies don't really know how long they will be allowed to operate with them.
For one thing, there are the neighbors to consider, and in the case of Rollins's Baton Rouge plant, the neighbors aren't very friendly. They don't like heavy trucks with hazardous materials passing along their streets. And they don't much like the unpleasant smells that drift over their houses -- smells they claim come from the plant but Rollins claims come from nearby petrochemical complexes. The full effect of the neighbors' hostility was demonstrated last year when Rollins sought a permit to burn PCBs at its incinerator, and some 2,000 angry citizens swarmed to a public hearing. "It was a very ugly scene," recalls Patricia Norton, who heads the Louisiana DEQ. "Finally, the company backed off."
But Rollins has not seen the last of its neighbors. As part of the RCRA legislation, all hazardous waste-disposal plants must be relicensed over the next few years by state or federal regulators. To Rollins, that means at least one more public hearing before the DEQ, and this time Rollins is taking no chances. Its permit application to the DEQ now runs to nine volumes, containing a complex environmental impact statement and tedious details about all current and projected operations at the site, down to the brand of protective gloves workers will wear. In addition, Rollins has launched a massive public relations blitz, contributing heavily to local projects and charities and sponsoring bowling and Little League teams. In local television commercials, public appearances, and radio talk shows, Rollins employees hammer home the technological improvements made in hazardous waste disposal: incinerators that destroy 99.99% of the materials; wastewater that is treated until it is drinkable; landfills that are now lined with triple layers of compacted clay and seamless plastic, backstopped by complex leachate collection systems and groundwater monitoring stations. By industry and government standards, Rollins says its Baton Rouge plant is state of the art. Many of the neighbors, however, are not impressed.
Rollins also has had its problems with state regulators who will soon decide if the Baton Rouge plant will receive a permanent RCRA permit. Last summer, DEQ officials ordered the massive Baton Rouge incinerator shut for three months following an accident. But Rollins thinks it was much ado about nothing, and now is suing DEQ for $150 million, claiming the shutdown unnecessarily caused Rollins stock to decline in value. Recently, DEQ began playing some hardball of its own, fining Rollins $1.7 million for allegedly failing to correct a leak of contaminated materials under its landfill. "Its a war we have going down in Baton Rouge," says Darrell M. Trent, chairman of Rollins.
Thomas Patterson, 37, runs the hazardous waste-enforcement division at Louisiana DEQ from an office in downtown Baton Rouge. Patterson says that although the state has supposedly been regulating small generators since 1979, enforcement has ranged from poor to nonexistent. His agency estimates that fewer than 10% of the generators even have an EPA identification number, the most rudimentary form of compliance.
"My whole staff is eight people," Patterson explains. "We are responsible for all hazardous waste material in the state, everything in RCRA, including civil and criminal work, all land disposal, site cleanups, investigations, transporters, complaints, and so on.
"The bottom line is that, with eight people, I simply cannot afford to spend much time on the small guys. We're all environmental scientists and regulators, and we're committed to the program. But I don't have the manpower to go out and inspect all the dry cleaners and small shops that produce a minimal hazard. It's a question of keeping somebody from dumping five drums down the drain versus somebody mismanaging hundreds of tons a year -- you have to go for the most bang for the buck."
Patterson has asked for more staffers, more times than he cares to remember. But with oil-dependent Louisiana in the midst of a recession and state government threatening to lay off some 7,000 employees, his chances of getting much more help are pretty slim.
Nonetheless, it is to the already overburdened state environmental agencies like the Louisiana DEQ that the Reagan Administration proposes to turn for enforcement of RCRA. This is not simply a reflection of the conservative preference for state, as opposed to federal, regulation. It is also a preference for getting somebody else to pay the bill.
At EPA headquarters in Washington, the agency has budgeted $26.5 million for RCRA enforcement for the fiscal year that begins next month, enough to maintain a nationwide staff of some 425 people. That's roughly the same as last fiscal year, during which the staff inspected about 900 disposers, waste haulers, and large-quantity generators. During the same period, regulators from the 50 state environmental agencies managed to inspect around 5,000 businesses on top of that, for a total of less than 6,000 nationwide. If that pace is maintained, small generators can expect a visit from a hazardous waste inspector about once every 50 years.
EPA officials seem resigned to the fact that they will be ushering in an important new law without the means to enforce it. "We're just waiting to see what will happen," admits J. Winston Porter, a chemical engineer who heads the hazardous waste program. "Frankly, I'm not sure what we'll do if we see that it's not working out."