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[GreenYes] Automating MRFs
    Doug and Michelle have asked whether the New York Times' John Tierney
has a point worth considering in his claim that MRFs need to be more
automated before recycling can make sense.

    The answer is quite complex and does not lend itself to such a broad
brush treatment.

    To parse out the factors of critical importance to recycling's
economics, and for the reasons explained below, we first need to break down
auto sortation techniques that are low cost from high cost, and techniques
which are more expensive than simple package redesigns at the front end.
This is said in order to avoid our being loaded up with expensive and
obsolete equipment which we can ill afford, and that puts us worse behind
than we are now.

    The reason I say this is that automation is not free and does not
"automatically" make sense. Automation means a capital investment is made to
substitute for manual labor.  As with any capital investment, it will
typically have a life time longer than one year over which it can be
"depreciated," although, in a dynamic world, a capital asset can become
obsolete in the marketplace before it is worn out.  Whatever the useful life
is, the fact that durable items have a high price tag does permit it to
properly be amortized over that life, thereby reducing its annual cost by
spreading out its purchase price over that lifetime.  In the abstract, when
the annual amortization payment is less than the cost of the labor it
displaces, there may be a case made that the investment should be made.

    Other factors generally also weigh in. Biasing a decision toward capital
investments are those cases where the throughputs that are involved cannot
physically be processed fast enough by manual labor, or where labor strife
exists.  Biasing a decision against capital investments is that the
uncertainties and risks of the market -- will stand-up pouches displace
rigid bottles, for example -- lead many firms to demand that the investment
be highly profitable over a two-year writeoff (the so-called hurdle rate),
even if there is a reasonable expectancy that it will be useful for a longer
period of time.

    But, all of this is generalizations. Now it is important to talk turkey
about recycling itself.  I would actuallly agree with Mr. Tierney that
residential curbside recycling is only marginally economic in most cases as
recorded on the books of account that are used to measure such things.  One
of the major fallacies with this whole predicate is that the thing against
which diversion is being compared -- namely landfilling -- is priced
appropriately for the costs that it imposes on society.  I won't belabor the
issue here, except to note that this is the biggest fallacy.

    Essentially, EPA landfill regulations intended to protect groundwater
are fatally flawed in that the barriers are man made and "will ultimately
fail...in decades" while the waste load remains a hazard for "many thousands
of years" (their own words!). The companion rules intended to protect
against toxic and greenhouse gas air emissions are really directed at the
bare minimum to prevent landfill fires and are woefully inadequate to
protect air quality.  For those who want to delve into this more, you can go
to the websites where many detailed reports are placed for the Grassroots
Recycling Network (www.grrn.org) and the National Recycling Congress
(www.nrc-recycle.org).

    What this means is that, on the accountants' books recycling is
competing against dirt cheap $20/ton landfills (plus hauling). However,
although no engineering has been done to determine the true cost of
landfilling, the true costs are certainly more than $60 ton, and probably
much more.

    That means if the public demanded that the current rules be fixed, base
level recycling would be financially healthy and the prospects for many
advances into RMP, expanded organics, C&D, etc., would suddenly cost out as
cash positive.

    I mention all this in relation to the MRF question that began this note
because of a phrase I have taken to heart from the civil rights movement --
"keep your eyes on the prize."

    The issues of further MRF automation are enormously complex, and, even
after they are all understood, the answer from choosing one option or
another are exceedingly difficult to anticipate as to their ultimate effect
on curbside recycling's economics (case in point: much of the touted
ultra-automation in plastics sortation are envisioned to be done in
mega-sized reclamation plants that by definition would be 1-2 cents more per
pound to ship to because they'd be further away, and because there would be
fewer buyers, the net margins gained by automation would probably be
captured by them and not shared, and most of that ultra-automation is only
needed because packagers have not felt any pressure to design for
recyclability which would be far cheaper to do than to process with high
tech optical equipment).

    For that reason, I'd highly recommend that we keep our eyes on the prize
and not let ourselves get side tracked by highly dubious tangents.
Eliminating landfill subsidies is the brass ring here... and it can be
seized if enough of us commit ourselves to awakening the public to the
terrible travesty being perpetrated by rules that have been shamefully
compromised by the worst politics that America is so well known for.


Peter



______________________________
Peter Anderson
RECYCLEWORLDS CONSULTING Corp
4513 Vernon Blvd. Suite 15
Madison, WI 53705
Ph:    (608) 231-1100
Fax:   (608) 233-0011
Cell:   (608) 345-0381
email: anderson@recycleworlds.org
web:  www.recycleworlds.org

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