Future of Waste Burning Cement Kilns:

Cement kilns are a growing concern of many environmental organizations not only in
volume but type of emissions.  The cement manufacturing process is an energy
intensive chemical manufacturing process that uses large industrial kilns, with counter
current flow, to convert ground limestone and shale or clay into Portland cement.

Very large quantities of fuel are required to produce the required temperatures to
achieve the associated chemical reactions that are necessary to occur. This process
lends itself to the utilization of non-traditional fuels including refuse derived fuel, tires,
auto battery casings, wood chips, rice hulls, tear off roofing tiles, diaper ends, and
solid/liquid hazardous waste (HWF).  Throughout the country there are approximately
100 cement kilns of which approximately half utilize some type of hazardous waste as a
fuel source. 

The term "hazardous waste" as used in this paper means a waste material which is
classified and regulated as a hazardous waste under the Federal Resource Conservation
and Recovery Act (RCRA). RCRA regulations define hazardous waste as a solid waste
which is either listed as a hazardous waste under 40 CFR Part 261 Subpart D, or
exhibits any of the four characteristics of a hazardous waste found in 40 CFR Part 261
Subpart C. These characteristics are ignitability, corrosivity, reactivity or toxicity (based
on the Toxicity Characteristic Leaching Procedure (TCLP)).

Hazardous wastes used by cement kilns include spent and off-specification industrial
solvents from paint and coatings, auto and truck assembly, solvent reclamation, ink and
printing, cosmetics, toy, medical, electronic industry operations and many other
manufacturing activities. Paint thinners, waste oils, and other petrochemical byproducts
are also burned due to the high BTU content of those streams.

Kilns are classified under the category of Boiler Industrial Furnaces or BIF. It is
important to note that not all hazardous waste is directly suitable for use as Boiler
Industrial Furnace (BIF) fuel. Many waste streams negatively affect the life of the brick
or are not eliminated sufficiently to meet current emission standards.

The cement industry claims that the high temperatures and oxidizing conditions
necessary for cement production are ideal in the destruction of the organics in
Hazardous Waste Fuel (HWF), far better than commercial incinerators.  However,
cement kilns have not been required to utilize similar gas management pollution control
equipment or dispose of cement kiln dust similar to that of a commercial hazardous
waste incinerator.  In essence, the cement kilns perform the same function as a
hazardous waste incinerator without abiding by the same gas discharge standards.
There are approximately 23 waste-burning cement plants in the U.S., each with
multiple Kilns operating. These facilities are receiving and burning the very same toxic
waste that goes to more state-of-the-art commercial incinerators. In total, current
estimate of the number of commercial facilities within the US with active permits to
dispose of hazardous waste is 56, which include both industrial facilities and captive
boilers. In the U.S., cement and aggregate kiln incinerators are the least regulated and
cheapest type of thermal treatment for combustible wastes.

Simplified Historical Context:

As hazardous waste legislation moved forward in the 1970's and early 1980's, and as
disposal options became more limited, it was recognized that the intense heat of
cement kilns could be used to incinerate certain types of combustible wastes, such as
solvents, waste oils, printing inks, old tires, and materials recovered during remediation
activities.  Such an option was particularly attractive for wet process kilns, since their
fuel costs were the highest to begin with, and since they could offset their lower
efficiencies with revenues derived from accepting the wastes for disposal, as well as the
decreased fuel costs. 

In 1984, Congress and the USEPA amended the Resource Conservation and Recovery
Act (RCRA) to address the fact that most hazardous waste landfills were leaking. This
action was meant to ban certain toxic industrial wastes from land disposal. The Land
Ban may have been directed to correct one issue, but created another, which was what
to do with the waste streams still being generated that could no longer go to landfills?

In order to meet time constraints and requirements of the U.S. Congress in removing
these hazardous wastes from leaking landfill “ground storage” and also being unable to
permit hazardous waste incinerators fast enough to meet the disposal demands, the
EPA made the decision that they would instead allow cement and aggregate kilns to
burn hazardous wastes as an alternative disposal method. In the U.S., many cement
companies have now been burning hazardous waste for more than a few decades.

In 1990, amendments were made to the Clean Air Act (CAA) regarding regulating HAPs,
so that National Emission Standards for Hazardous Air Pollutants (NESHAPs) are now
established based on the "maximum achievable control technology" (MACT) for an
industry group or source category (for example, hazardous waste combustors). These
standards are mostly based on emission levels that are already being achieved by the
“better-performing” sources within the group.

In 1991, under a court order, the EPA created regulations that were to bring waste-
burning cement and aggregate kilns into compliance and parity with the same
regulations that govern other combustion (BIF) devices. There was a defined timeline
proposed to meet the new regulations.
As of 2005, only one cement plant burner, Ash Grove Cement in Chanute, Kansas, had
received a full part B RCRA permit. That permit has been vigorously challenged to the
EPA Environmental Appeals Board by Chanute citizens, along with various industry and
environmental groups.

In January 2009, new MACT standards came into effect limiting stack emissions to
tighter standards and forcing capital upgrades to pollution control equipment, such as
bag houses, scrubbers, and afterburner equipment.

On May 6, 2009, the EPA proposed a new rule that would establish a new NESHAP for
cement kilns. 4 The rules proposed would cover all US cement manufacturing facilities
and would further tighten the grip on emissions, thus making it much more difficult to
achieve MACT standards. In the case of this NESHAP proposal, because the EPA rule
would not go into effect until 2013, there is far less time to plan for future events that
will affect the industry and subsequently the hazardous waste disposal outlets. See
http://www.envinfo.com/July2009/Portland_Cement.pdf 5

Cement kiln technology is fairly rigid and has remained virtually unchanged since the
turn of the century. A cement kiln can only be modified, refitted, or retro-fitted to a
minimal degree to improve internal toxic waste destruction and removal efficiency
(DRE), and still produce a quality cement product. Technology exists to support
downstream gas management, but at a substantial cost. Newer hybrid kilns have been
designed that are more efficient than older technologies and allow for the better mixing
while consuming less total fuel.

Cement Manufacturing - Wet vs. Dry methods

There are two different types of process methods, referred to as "wet" and "dry".   The
essential difference between the two types is the medium used to mix the powdered
raw materials prior to heating, and the consequent degree of moisture in the materials
entering the kiln.  In the wet method, water is added to the raw materials after milling
to promote thorough mixing, and the mixture is added to the kiln as slurry, containing
30-40% water.  In the dry method, the powders are generally blended in a silo using
compressed air. 

Cement kilns are large installations.  A kiln generally consists of a cylindrical outer steel
shell, lined with refractory brick.  They can range from 10 to 25 feet wide, and from 150
to 750 feet long.    According to the Portland Cement Association (PCA), the cement kiln
is the "world's largest piece of moving industrial equipment". 

A typical Kiln is laid out with its axis close to horizontal, but with a slight slope.  The
powdered and mixed raw material is introduced at the higher end, and gradually rolls
down to the lower end.  The fuel is blown into the lower end, producing an intense
flame (heat).  As the material passes down through the kiln, it gets continually hotter. 
First it loses any remaining water, then it loses the carbonate component, which comes
off as carbon dioxide and finally it begins to fuse together into “clinker nodules”.  The
clinker emerges from the lower end of the kiln and falls into the cooling unit.  Material
typically spends several hours passing through the kiln.

If the material entering the kiln is wet, it stays cooler relatively longer.  This in turn
requires a longer kiln, to provide sufficient residence time.  In addition, more fuel is
consumed driving off the water.  One reason to choose the wet process over the dry
process is if the starting materials have high moisture content to begin with.  The wet
process was the dominant technology, because, in the age of abundant cheap energy,
it was cheaper to burn more fuel and add length to the kiln than to add extra devices.

Newer kilns use the dry method.  There is substantial energy savings involved, as well
as a higher throughput.  Several subtypes of the dry method have evolved in recent
years.  In the earlier versions, the kilns were shortened to take advantage of the
shorter residence time required.  Since hot air emerged from the upper end of the kiln
at a higher temperature than was the case with the wet method, it became
advantageous to capture the heat and use it to run utility boilers to generate electricity,
resulting in a cost savings for the plant as a whole. 

Trends - Liquids vs. Solids Fuels:

As noted, liquid hazardous wastes are combusted at the lower or "hot" end of the kiln.
Solid hazardous wastes have an advantage and can enter the kiln at one of several
locations, most commonly in the calcination zone, but also directly into the pre-
calcinator vessel or preheater inlet in pre-calcinator or preheater kilns, or by projection
devices into the hot end of the kiln. Liquid fuels are easier to control than solids and
provide a degree of constancy from a BTU control standpoint and therefore hold an
advantage in that regard. Both types make good sources of inexpensive fuel. If
cement kilns continue to operate in this country, then both types of fuels will be
consumed.

The trend in hazardous waste consumption by the cement industry here in the U.S. has
been steadily declining since 2002 and will continue to decline as tougher regulations
are introduced. There are four underlying factors affecting hazardous waste today.
The first is that the number of facilities available to utilize the waste as a fuel has
significantly reduced in recent years; while secondly the current economy and plant
utilization has affected demand and utilization of fuels at the individual facilities.
Thirdly, the EPA is adding to the list of materials which are considered hazardous
wastes. Items such as fly ash and bottom ash materials from the power industry are
making competition for outlets more critical. Lastly, competition from non hazardous
alternative fuels is increasing steadily at double digit rates as cement producers begin
to migrate from hazardous options.
The Essential Arguments:

Since fuel costs are such a significant part of the cost of producing cement, wet-process
facilities are now under even great pressure to further reduce total fuel costs (Gas,
Coal, HWF). Critics of the use of hazardous waste fuel by the cement industry argue
that “energy savings through the use of hazardous waste fuel are illusory because the
waste is burned by less energy-efficient facilities to begin with, and that the practice will
render the U.S. cement industry less competitive in the long run by slowing the phase-
out of older, less efficient wet-process facilities”. 2

These types of arguments are very detrimental to the economics of producing cement
in the United States. Less expensive importers from countries with less stringent
environmental standards are putting US cement producers at great risk and hence will
negatively affect the U.S. hazardous waste industries ability to dispose of a good source
of fuels (BTU’s). 2

Since kiln temperatures of approximately 1500°C are required to produce the main
constituent of Portland Cement, it has been considered an ideal environment for the
destruction of a large number of flammable and hazardous wastes. According to a
quote from the Portland Cement Association, “today, especially in Europe, most kilns
make as much money from hazardous waste destruction as they do producing cement”.

Other conflicting economic factors are also present. In the United States, at the same
time as the American Recovery Act (ARRA) and other current economy stimulus policies
are being implemented, the US Environmental Protection Agency (EPA) is perceived as
developing environmental regulations that adversely affect the ability of future
infrastructure investment to deliver the “promised economic stimulus”. For example,
the EPA is developing air regulations that will further force the cement industry to
spend heavy capital funds to meet the excessively stricter standards of CO2 or other
chemical stack discharge or be forced to close their production facilities here in the US.
Cap and Trade is another example. The net result will be the replacement of
domestically-produced cement with more imported product and a reduction of the
outlets for the hazardous waste fuel materials.

“Economic data from the recent past demonstrates that the cement industry is highly

sensitive to import penetration, particularly in specific regions of the United States with
waterborne freight access and appropriate distribution channels. Consumption of
cement increased rapidly between 1998 and 2006 as the economy boomed and the
new records were set for residential and non-residential construction. But because of
limitations in domestic production capacity and certain environmental regulatory
constraints on production expansion, cement shortages occurred and reliance upon
imported cement became more prevalent, accounting for about one-fourth of total
consumption by 2007 as quoted by the Portland Cement Association. 1 According to
PCA estimates, U.S. cement plants achieved an average capacity utilization rate of
82.0% in 2008. Even at this operating rate, domestic production alone does not satisfy
total United States cement consumption. The gap between domestic production and
consumption was filled in 2008 by 11.5 million metric tons of imported cement and
cement clinker. About 90.2% of cement and clinker imported in 2008 came from five
major countries: China, Canada, Columbia, Mexico, and the Republic of Korea. 2, 14

This conversely affects the ability to dispose of hazardous waste, creating a viscous
cycle for the EPA, Government, manufacturers, and consumers to contend with.

Regulations for Boilers and Industrial Furnaces (BIFs) – (Kilns)

BIFs are typically used to burn hazardous waste for the significant energy and material
recovery potential, with waste treatment being a secondary benefit. Boilers typically
combust waste for energy recovery, while industrial furnaces burn waste for both
energy and material recovery.

A boiler is defined as an enclosed device that uses controlled flame combustion to

recover and export energy in the form of steam, heated fluid, or heated gases.

An industrial furnace is a unit that is an integral part of a manufacturing process and

uses thermal treatment to recover materials or energy. The following units are
considered industrial furnaces:

 Cement kilns
 Lime kilns
 Aggregate kilns
 Phosphate kilns
 Coke ovens
 Blast furnaces
 Smelting, melting, and refining furnaces
 Titanium dioxide chloride process oxidation reactors
 Methane reforming furnaces
 Halogen acid furnaces
 Pulping liquor recovery furnaces
 Combustion device used in the recovery of sulfur values from spent sulfuric acid

RCRA regulations governing boilers and industrial furnaces can be found at 40 CFR Part
266, Subpart H-Hazardous Waste Burned in Boilers and Industrial Furnaces.

Hazardous waste combustors also are regulated under the Clean Air Act (CAA). The
CAA protects human health and the environment from the harmful effects of air
pollution by requiring significant reductions in the emissions of the most dangerous air
pollutants. These pollutants are known or suspected to cause serious health problems
such as cancer or birth defects, and are referred to as hazardous air pollutants (HAPs).

As originally enacted, the CAA required that EPA establish National Emission Standards
for Hazardous Air Pollutants (NESHAPs) on a chemical-by-chemical basis. Under this
mandate, EPA established NESHAPs for seven HAPs.

As noted, in 1990, amendments were made to the CAA regarding regulating HAPs, so
that NESHAPs are now established based on the "maximum achievable control
technology" (MACT) for an industry group or source category (for example, hazardous
waste combustors). These standards are based on emission levels that are already
being achieved by the “better-performing” sources within the group.

The NESHAP for hazardous waste combustors was developed in two phases. Phase I,
which addresses hazardous waste burning incinerators, cement kilns, and lightweight
aggregate kilns, was originally promulgated on September 30, 1999 (64 FR 52828).

Hazardous waste burning industrial boilers, process heaters, and hydrochloric acid
production furnaces, were addressed in Phase II, which was signed September 14,
2005.

Gas Emissions:

Cement plants utilize a wide array of state-of-the-art technologies to control the

emissions that result from cement manufacturing.

 Particulate Matter: the technologies for capturing the dust that is created in a
cement kiln include fabric filters—often make from high-tech materials such as
Goretex—and electrostatic precipitators, which use an electric charge to attract
dust particles to a collector.  While collected dust used to be disposed as cement
kiln dust, most plants now recycle this material back into the process.
 Nitrogen Oxides: many plants are able to control emissions of nitrogen oxides
(NOx) through careful monitoring and adjustments of kiln heat and other
factors.  Some plants also utilize special low-NOx burners.  Perhaps the most
promising NOx-control technology is the use of waste tires as a fuel.  This
practice removes tires from landfills—where they pose dual risks of mosquito
breeding and accidental fires—and uses them to supplant the use of fossil fuels,
but it has the added appeal of reducing NOx emissions from the kiln.
 Sulfur Dioxide: while many cement plants are not significant emitters of sulfur
dioxide (SO2) others utilize scrubbers to remove this gas from the emission
stream.  Some of these scrubbers have the added benefit of producing synthetic
 gypsum that can then be used to make cement, thereby reducing the amount of
virgin materials that must be mined.
 Dioxin: all cement plants are required to maintain annual dioxin emissions
below emissions below 0.4 nanograms per dry standard cubic meter of air, and
most plants have no trouble maintaining levels far below this negligible
standard.  Dioxin production is eliminated by monitoring and adjusting the heat
level at the input to the air pollution control device. 12

Future of the Cement Industry: By Bernard L. Weinstein, Ph.D. Associate Director

Maguire Energy Institute. 3

“The United States economy is to a somewhat major extent, literally built on concrete.
Homes, office buildings, industrial parks, shopping malls, streets and highways, and
virtually the entire built environment utilize concrete in the construction process.
Though down from its peak two years ago, construction spending nonetheless accounts
for almost $1 trillion of annual spending, or about one-fourteenth of gross domestic
product. Cement is the critical ingredient that holds concrete together and is itself a
major industry. As with construction spending, cement consumption has declined in
tandem with the nation economic downturn over the past several years. With 167
cement kilns and 116 clinker producing plants located across the United States, the
Portland cement industry has a huge impact on the national economy.

With the enormous downturn in the U.S. economy, a significant decrease in demand
resulted in declining cement imports between 2007 and 2009, followed by a similar
reduction in domestic production, as supply continued to exceed domestic demand. But
though long-term commitments to capital funding to increase domestic production
capacity (due to the extensive regulatory, permitting and construction timeframe to
bring new production online) have risen in recent years—a trend expected to continue
through 2012 or 2013—beyond that date, the industry is expected to face enhanced
regulatory constraints that will inhibit further capacity expansion. In a worst-case
scenario, all incremental cement consumption after 2013 could be from foreign sources,
due to the combination of U.S. production closure and further investment for capacity
expansion ceases. This will devastate US outlets for hazardous waste fuels for anyone
without a dedicated outlet source or a long term contract in place. 3

Increased regulatory pressure on the cement industry makes imports all the more likely
as a mechanism to address any new cement demand attributable to new infrastructure
investment. The industry currently operates about 125 import terminals with a capacity
of approximately 45 million metric tons. Because weak global economic conditions have
reduced freight rates and increased ship availability, relatively modest increases in cost
of operations, coupled with deferral of capital investment resulting from regulatory
constraints, could result in significant increases in reliance upon foreign sources of
supply. When critical commodity production is increasingly outsourced, as the example
of petroleum production and the Organization of the Petroleum Exporting Countries
(OPEC) amply demonstrates, both economic and security interests are severely
undermined.

The industry has invested millions of dollars in targeted environmental programs over
the past several years, including technologies to reduce CO2 emissions and other air
pollutants, minimize waste production, recycle and recover inputs, enhance energy
efficiency, and conserve natural resources. For example, Lafarge has improved
efficiency by decreasing emissions from 763 to 655 pounds of CO2 for each ton of
cement since 1990 and believes it can bring the number down to 610 pounds by the
end of 2010.

Other manufacturers have similar programs designed to retrofit their kilns with newer
technology. However, because cement manufacturers in some other countries have not
made the same commitment to CO2 and other emission reductions, they are able to
produce at a lower cost and increase their market share in the U.S. 9
Without substantial use of the flexibility authorized under the Clean Air Act, however,
an additional threat to the long-term viability of U.S. manufacturers may well be the
recently proposed “NESHAP” rule for Portland cement. Looking to 2010 and beyond, the
likelihood that Congress and/or EPA will impose restrictions on greenhouse gas
emissions will increase. The EPA has already commenced actions that will lead to the
regulation of CO2. These factors mean that the domestic cement industry will find itself
facing additional competitive pressures vis-à-vis foreign manufacturers.

Promulgated by the EPA, NESHAP rules cover particular air emissions for which the
Agency determines a level of pollutant reduction that is achievable with existing
technology. The resulting standard is known as the MACT, or “maximum achievable
control technology.” On May 6, 2009, the EPA proposed a new rule that would establish
a new NESHAP for cement kilns. 3 The rules proposed would cover all US cement
manufacturing facilities. While it is beyond the scope of this report to evaluate all of the
technical burdens related to the proposed NESHAP, or to conduct a legal analysis of the
rule, even a cursory examination of the comments docketed by EPA discloses significant
concerns regarding the extent to which the proposed rule is achievable in practice by
the vast majority of the US cement industry. Concerns have been raised regarding
achievability, regional disparities, technological constraints, and even the
environmental benefits attributable to the proposal.

"EPA's proposed regulatory scheme would devastate the alternative fuel market in the
U.S. which will ripple across the entire fuels market infrastructure," says Tracey
Norberg, RMA senior vice president. "Worse, the proposal will drive hazardous waste
costs to sky rocket and drive items such as scrap tires back to stockpiles and illegal tire
dumps after two decades of success in cleaning up stockpiles and promoting safe,
viable, effective markets for scrap tires." (Source: www.wastebusinessjournal.com) 15

It is not the purpose of this report to evaluate technical details of the proposed rule.
However, even a cursory examination of expert comments filed with EPA indicates that
requiring every U.S. facility to implement proposed control strategies to achieve
simultaneous compliance with stringent standards could endanger the viability of the
industry particularly in certain regions and localities.

Adoption of the proposed rule would make it difficult to raise the capital or maintain
sufficient business confidence to modernize existing kilns. The construction of new
plants could also be stymied. Even EPA estimates that adoption of the rule will result in
$340 million of new costs to the industry and an almost certain 10 percent drop in U.S.
cement production. 3 The EPA estimates probably understates the true compliance
costs, because there is no experience on which such estimates can be based—i.e., no
cement manufacturing plant has ever attempted to meet these four distinct emission
standards simultaneously.

There can be little doubt that regardless of the total impact of the NESHAP rule,
substantial pressure to rely upon foreign sources of cement supply will result. A recent
review of the literature by the respected environmental economics group Resources for
the Future declared flatly that, "several studies suggest a link between pressure on
firms in industrialized countries to reduce emissions and the outsourcing of production."

In another recent review, the Congressional Research Service found that industries that
"face a competitive market (sometimes international in scope) both in terms of
producers of the same products and producers of substitute products…are price
sensitive" and "therefore any increase in manufacturing costs hurts the
competitiveness" of such industries”. Expert testimony from construction, building
materials, and cement industry sources offered at recent EPA hearings all confirm the
concern that the proposed rule "would drive…the industry offshore." This prediction
seems fully consistent with reports on the impact on the cement industry of past
regulatory initiatives. For example, as one consumer organization told EPA, Business
Week listed factors that "exacerbate the high prices and shortages" for cement and
concrete products: high among them were "regulations that make it tough for cement
manufacturers to increase capacity." Some studies have shown that the overall impact
of regulations can add as much as 20 to 35 percent to the price of end-use projects. 3

In the case of the NESHAP proposal, because the EPA rule would not go into effect until
2013, domestic cement manufacturers are unlikely to make capacity-enhancing
investments until the rule is finalized. If that process takes two years, manufacturers
will wait until then to make decisions about expanding capacity. In the interim, no new
investments are likely to occur. Based on current NESHAP standards, PCA estimates
compliances cost to the cement industry of $4.7 billion with investments made at 78%
of all plants. This investment excludes 30 cement plants expected to shutdown due to
inability to meet standards. All told, 20 million metric tons of capacity is expected to be
removed from the market thus increasing dependence on foreign cement imports. 13, 14

Second, it is hoped that by 2011 the national economy will be firing on all cylinders.
Once economic recovery begins to stimulate demand in the building-materials sector,
and as domestic supply is reduced, builders may then have little choice but to rely upon
increased purchases from abroad. In a worse-case scenario, domestic producers would
then lose pricing power and consumers would become potentially subject to cartel-like
pricing. The nascent national economic recovery has already started to swell America’s
perennial trade deficit. Increasing our reliance on cement imports in the years ahead
will only serve to worsen this serious economic imbalance.

Not only would enhanced import reliance undermine economic recovery, it would also
greatly diminish environmental benefits. To the extent the NESHAP rule pushes
production of cement out of the United States to countries whose kilns have greater
carbon footprints and higher emissions of conventional pollutants, the result would be a
net increase in the global emissions of CO2 and other pollutants. In addition, because
transporting the product to the U.S. will require the use of fossil fuels, the amount of
carbon emissions per unit of cement used in this country would increase significantly. At
the same time, increased releases of mercury and hydrocarbons from less-controlled
facilities overseas will simply add to the global pool of these substances in the
biosphere, thereby subverting the purported goals of the proposed EPA rule.

Summary and conclusion

It is a belief that corporate sustainability and a long term view are much more
important now than ever before. Sustainability will remain crucial to business even
during economic downturn. It is my belief that stronger emphasis on sustainability will
ensure a positive future and that strategic steps must be taken now to ensure that
future.

As quoted, the cement industry is one of the many pillars of America’s economy.
Cement is the essential ingredient in concrete, a building material that is the second
most consumed product globally after water. Concrete is utilized in the construction of
roads, homes, commercial buildings, dams and levees, and many other building
elements.

Cement manufacturing by itself generates more than $27 billion annually in economic
activity while supporting 153,000 jobs across America. But the total economic footprint
of the cement industry, combined with construction projects made viable by affordable
and reliable cement supplies, probably accounts for millions of jobs and more than $1
trillion of the nation’s output.

As discussed above, the proposed rule from May 2009 has the potential to decimate the
industry by forcing the closure of numerous cement kilns that will be unable to comply
with the costly new directives that take full effect in 2013. 3 Thousands of jobs could
easily be lost and cement production would likely be outsourced to overseas production.
The employment impact of the infrastructure component of future economic stimulus
programs can be impaired by as much as 40 percent if construction materials are
produced abroad. The proposed rule would undermine the balance between
environmental protection and economic viability of the cement industry. Hazardous
Waste burning in cement kilns will be severely impeded and force permitting and
construction of more expensive hazardous waste incinerator type technologies.

The EPA should rethink its approach by designing a rule that more closely approximates
what is achievable in practice and in all regions of the United States. Such a rule better
achieves the balance of environmental and economic protections contemplated by the
Clean Air Act. It is doubtful that the EPA under the current administration will be
obliged to review the total impacts of this issue and make changes at this time,
therefore strategic plans need to be made today to plan for this new future.
"EPA's proposal turns common sense on its head and would harm the environment
while causing potentially thousands of jobs to be lost in the scrap tire industry,"
Norberg says. 15

As specifically related to United Industrial Services (Norlite) and to Alcoa, the tougher
air rules will be imposed. The original MACT rules were established based on the best
practices of incinerators such as Norlite. Brian Mabley, of United Industrial Services,
claims to already have taken steps to achieve the standards and is increasing its
capability to burn a wider range of fuels in the future. This topic will be crucial to be
reviewed during the due diligence process for UIS. Alcoa, claimed “to have no
knowledge of any new rules that would affect them”. They already have an after
burner installed which manages gas discharges to incinerator standards. That aspect
will need to be reviewed and assessed. At the end of the day, back end equipment will
be required for Norlite and some additions may be needed by both opportunities. The
exact costs of the equipment can only be determined by an engineering feasibility study
performed by engineering firms who are experts in this type of pollution control
equipment.

Strategic Notes:

It is clear at this juncture that any company in the hazardous waste industry must
strategically plan for its future and secure its sustainability.

From a “40,000 foot perspective”, Tradebe has the following choices:

1. Status Quo – take no action at this time and wait to see what occurs in the
cement industry. This is an option though this alternative is not a recommended
one since business, economy, and regulation impacts are causing a definite
change to the future of the cement industry and causing a downstream shortage
of hazardous waste fuel outlets in the future. This alternative will subject
Tradebe to unplanned costs and loss of revenue if fuels do not continue to be
moved efficiently through its facilities. Under the scenario of imminent future
cement Kiln closures by 2013, some definite planning is required.

2. Long term contracts with cement companies – One option is to further tie
into long term contracts to solidify relationships and attempt to guarantee outlets
for fuels in the future. The downside to this alternative was seen by Safety Kleen
when its “long term take or pay” contract with Giant was destroyed when Giant
abruptly shuttered one of its facilities and refused to take in any waste streams
declaring a Force Majeure type situation. Veolia, another competitor was also
frozen out at other cement kilns recently when fuels sources became greater
than demand. Thus proving there is no true guarantee to allow for sustainability
if this occurs. The majority of US cement plants are foreign owned and
controlled. A financial decision to import versus manufacture here can be readily
 made overseas without knowledge of local management such as with Cadence or
TXI. One element of this alternative that makes sense to guard against is that
cement kilns have not raised pricing in a number of years and have not reacted
to the hazardous waste market declining outlets.

3. Negotiate a strategic relationship with permitted incinerators – Under

this option, Tradebe would need to attempt to negotiate a long term fixed price
relationship with incinerators such as Ross, Veolia or Clean Harbors. This
alternative does not appear practical since all are direct competitors of Tradebe
and it would be in their better interest to wait and raise rates as the number of
hazardous waste burning cement kiln outlets decreased.

4. Build additional SDS units – This alternative would help with solid waste
streams, but currently would not be able to manage significant volumes from
liquid streams. A lengthy permitting process would be required to achieve this.
This should be started as it would ultimately divert some waste from a declining
cement kiln outlets and from high incinerator price levels. It would also allow
Tradebe to source solids from competitors and position itself to control a larger
portion of the future market share.

5. Locate and procure an alternative outlet to solidify a sustainable

future. Under this scenario, permitted facilities such as Norlite and Alcoa
become key critical strategic outlets for waste fuel volumes for Tradebe in the
U.S., as long as the cost of the required pollution control equipment does not
outweigh the opportunity gains. Pricing would obvious need to float to match
costs. Under this alternative, Tradebe would be in a position to source fuel
streams from other environmental companies at below incineration price levels.
Companies such as Veolia, Safety Kleen, Rineco, Perma Fix and many others
would be available as potential clients.

Derald R Bogs
Bibliography:

1. Overview of the Cement Industry

Concrete Basics Home > Cement Industry - Portland Cement web site.

2. Economics of the U.S. Cement Industry-Paper

Information on aspects of the U.S. cement industry including imports, exports,
ownership, economic cycles, employment, and trends. (Updated December
2009.)

3. Future of the Cement Industry: By Bernard L. Weinstein, Ph.D. Associate

Director: Maguire Energy Institute.

4. MACT Standards updates – Environmental Protection Agency National

Archives & Records Administration: 40 CFR Parts 60 and 63 National
Emission Standards for Hazardous Air Pollutants From the Portland Cement
Manufacturing Industry; Proposed Rule. Wednesday, May 6, 2009

5. Web site article: MACT Standard changes

http://www.envinfo.com/July2009/Portland_Cement.pdf

6. MACT Standards updates - EPA Federal Register / Vol. 73, No. 68 /

Tuesday, April 8, 2008 / Rules and Regulations –

7. Web site article: Haz waste fuels

http://www.cement.org/manufacture/man_fuels.asp

8. Web site article: Cement Kilns Burning Haz waste

http://www.mindfully.org/Air/Cement-Kilns-Burning-Waste4.htm

9. Web site article: Haz waste fuel & Cement Kilns

http://www.gcisolutions.com/HWF&CKS.htm

10. Web site article: Clean Air & emissions report

http://www.cement.org/exec/Appendices%20to%20Clean%20Air%20Report.pdf

11. Web site article: Cement America – The future of the US Cement
Industry
http://cementamericas.com/mag/us-cement-industry-20091101/

12. Web site article: Portland Cement – Clean Air

 http://www.bipac.net/page.asp?g=pca&content=issue_clean_air&parent=PCA

13. Web site article: Economic impact of new NESHAP rules

http://www.cement.org/econ/pdf/NESHAP.pdf

14. Web site article: Cemex Future of Green Cement

http://ehstoday.com/environment/ehs_imp_35552/

15. Web site article: Proposed EPA rule will hurt fuels market
http://www.wastebusinessjournal.com