[GRRN] Landfill Financial Assurance Requirements - WMI

RecycleWorlds (anderson@msn.fullfeed.com)
Fri, 5 Nov 1999 11:50:49 -0600

According to the 11/5/99 Wall Street Journal "Waste Management Says It
Keeps One or More Dumps Open to Avoid Reserves"):

"Waste Management is keeping open one or more of its dumps that serve
the depressed
hazardous-waste market to avoid having to immediately set up big
environmental reserves it had planned to fund gradually over decades. ...
The hazardous waste-handling business has become so depressed that, on an
operating basis, it wouild make economical sense for Waste Managment,
Houston, to close some of its dumps that serve that market. But, under
accounting and regulatory rules, a closure triggers requirements to have
reserves to pay for the capping and monitoring of the dump for at least 30

If a $12 billion company can't afford to absorb post-closure costs (in
the sense of can't afford without seeing it's stock pummeled into
submission by Wall Street), then that
would seem to make not only balance sheet financial assurance worthless,
but even external funds that aren't very heavily front-ended worthless as

Moreover, if consolidation succeeds in locking up landfill control by
the major consolidators which have taken the pledge to not compete amongst
themselves, then the higher tipping fees that would likely be imposed could
create the economic incentives for doubling diversion from landfills.

While it is unclear whether their control over the waste stream would
succeed in preventing an increase in diversion, in the event diversion is
not impeded and it takes off, then the same stretch out of MSW landfills'
lives as has occurred in HW facilities would follow as well. Where would
the funds come from to pay for postclosure, nonetheless remediation for the
inevitable discharges due to liner containment failures? This would be
compounded further under the current weak to meaningless financial
assurance regulations which record funds ostensibly collected for
postclosures as an accounting entry while actually utilizing the funds as
cash flow to pay bills and fund acquisitions.


Peter Anderson
RecycleWorlds Consulting
4513 Vernon Blvd. Ste. 15
Madison, WI 53705-4964
Phone:(608) 231-1100/Fax: (608) 233-0011