Home This Week Front-Page Story Waste-to-energy project in Arecibo will give big boost to Puerto Rico economy
Issued : Wednesday, June 27, 2012 12:00 AM
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Waste-to-energy project in Arecibo will give big boost to Puerto Rico economy

By : JOHN MARINO
Edition: June 28, 2012 | Volume: 40 | No: 25

Waste-to-energy, recycling of garbage to jolt Puerto Rico’s economy

The time for garbage talk in Puerto Rico is over.

After decades of discussion and little action about an impending solid waste crisis, Puerto Rico is finally cleaning up its own garbage. That's not only great news for the environment but for the economy as well.

A proposed waste-to-energy (WTE) plant in Arecibo promises to create 3,800 jobs over the next two to three years, and increased recycling will create an additional 1,300 jobs in that sector, according to official estimates. Meanwhile, a functioning WTE plant in the northwest will allow authorities to shutter landfills in the ecologically sensitive karst region, which will help protect the island's largest supply of underground water.

By October 2014, most of the island's landfills could be shuttered, with only the few able to meet federal operating standards expected to remain open, according to an order issued last fall by the Puerto Rico Environmental Quality Board (EQB).

The order followed years of threats by the U.S. Environmental Protection Agency (EPA) to close down Puerto Rico's municipal trash sites because of shoddy management, substandard design and disappearing storage capability that has made them among the island's greatest environmental threats, blamed for polluting underground water supplies and the air, and for devouring acres of precious land on this 100-by-35-mile island, acreage that remains unfit for most activity even decades after closure.

The local Solid Waste Management Authority (SWMA) says that unless something is done, Puerto Rico will run out of space to dispose of its trash by 2018. There are currently 28 landfills on the island, with four in the process of being closed. Most of the remaining landfills are expected to be shuttered over the next three years.

Meanwhile, Puerto Rico's recycling rate remains a miserably low 11.31%, despite a law calling for a 35% recycling rate by 2006, six years long past. Over the years, there have been numerous private-sector proposals for new, state-of-the-art landfills and waste-to-energy plants, but few new solid waste management infrastructure projects have been built over the years, a result of a lack of political will and the "not in my backyard," or Nimby, opposition that such projects generate.

Moreover, the federal and commonwealth governments have clashing views as to the best way to resolve the situation, which is increasing tensions between U.S. and Puerto Rico officials as a number of important infrastructure projects are being reviewed by stateside regulatory agencies.

Such a bleak landscape prompted Guaynabo Mayor Héctor O'Neill, one of the few mayors to begin a mandatory recycling program, to warn recently that the solid waste management situation in Puerto Rico could become the island's next major crisis.

"Puerto Rico's worst problem won't be its economic downturn in the next 10 years," he recently told CARIBBEAN BUSINESS. "It won't be its water and sewer system or its roads, either. The worst problem will be waste management and disposal."

The good news, however, is that cleaning up its garbage problem will be a boon to Puerto Rico's economy. It will spark a $2.5 billion investment in solid waste infrastructure over the next 20 years, according to the SWMA, and should double the size of the island's recycling market, which accounts for $500 million annually and 1,300 jobs.

Economic Development & Commerce Secretary José Ramón Pérez- Riera said that waste management and recycling are priorities within his agency's plan for achieving sustainable long-term economic growth for Puerto Rico.

"These businesses will certainly help support economic growth and complement the re-ignition of manufacturing in Puerto Rico by creating value-added products that can be either used locally or exported," he said.

Moreover, there is a plan to manage the island's trash problem in the future, after the next wave of landfill closings, and it appears to have strong support. It was written by the previous Popular Democratic Party (PDP) administration of former Gov. Aníbal Acevedo Vilá, and has been left largely intact by its successor, the current New Progressive Party (NPP) administration of Gov. Luis Fortuño. Such bipartisan support for the plan will be necessary for its implementation.

Most importantly, big steps to implement the plan are finally being taken, with the biggest being the move to establish a waste-to-energy (WTE) project in Arecibo.

On the drawing board for some three decades, the $500 million Energy Answers Arecibo LLC WTE project has won the approval of local government agencies and received a preliminary endorsement from the EPA, which is overseeing a public hearing process on its draft permit this month. The project is expected to create 3,800 jobs in Arecibo during the construction phase and 150 permanent jobs once in operation (see related story on page 20).

DUELING PUBLIC POLICIES

Under the current administration of President Barack Obama, the EPA now officially opposes WTE for Puerto Rico after embracing it as a panacea for the island's trash problem for years under the previous administration of former President George W. Bush.

EPA Regional Administrator Judith Enck told CARIBBEAN BUSINESS that while WTE projects are legal, they may not be the most cost-efficient or environmentally beneficial approach to solid waste management for the island.

"The question is: Is it a sensible move for Puerto Rico? There have been proposals for upward of 30 years for WTE facilities, and none of them have been built," Enck said. "We are putting huge time and resources into promoting alternatives to both burying and burning. We would like to see a much more serious commitment to waste reduction, recycling and composting. We think the majority of Puerto Rico's waste stream can be handled that way. Then, for the things you absolutely can't reduce, recycle or compost, we would envision some limited landfilling."

"That strategy is not only environmentally sustainable, but it is cheaper for taxpayers and businesses," she added.

That view is in direct contrast to that of Enck's predecessor, former EPA Administrator Alan Steinberg, and the solid waste management plan of the Puerto Rico government through both NPP and PDP administrations.

EQB President Pedro Nieves Miranda said WTE has been part of Puerto Rico's official long-term solid waste management plan under the previous two administrations.

Nieves Miranda said the government is banking on at least one of as many as four proposed WTE projects being in operation before the next wave of landfill closings takes place, so Puerto Rico can continue handling its solid waste.

"Puerto Rico is still 35 miles by 100 miles. It isn't growing," Nieves Miranda said. "This waste-to-energy plant is part of the solution to handling our solid waste problem, along with increased waste reduction and recycling."

There are 87 waste-to-energy plants operating in the U.S., but more than 400 such plants in densely populated Europe, and proponents say Puerto Rico's limited size makes it a great candidate for the technology.

SWMA Executive Director Antonio Ríos said the Dynamic Itinerary, the island's long-term solid waste management plan, calls for two WTE plants in the northwest karst region, a unique geologic formation forged from underground rivers cutting through soluble limestone bedrock. Typical features include the "haystack- shaped" hills, known locally as mogotes, extensive caves and underground rivers and aquifers.

The region contains the island's most extensive freshwater aquifer and the largest remaining expanse of mature forest. It covers 27.5% of the island, accounts for the production of 105 million gallons of water daily and is home to more than 75 bird species, many of which are endangered.

In fact, Energy Answers explored 36 environmentally impacted sites on the island to locate its project and decided on the Arecibo location because seepage from its landfill was contaminating Tortuguero Lake and the vast underground water supplies of the karst zone, said Energy Answers Project Manager Mark Green.

"This will dramatically lessen Puerto Rico's reliance on its severely limited landfill space, make a significant positive impact on the island's recycling rate and reduce the environmental impact on the water, land and air resources of Puerto Rico," he added.

INCREASING TENSIONS

The EPA, under Enck, has also clashed with the Fortuño administration over the proposed Vía Verde natural gas-pipeline project, Puerto Rico Electric Power Authority (Prepa) operations and other issues.

During a visit in April, the regional administrator criticized the local government for the amount of public review granted to Vía Verde, and the governor shot back, publicly accusing Enck of being detached from the reality in Puerto Rico and of foot-dragging on several energy project permits. The EPA reviewed the Energy Answers project for seven months before granting the draft permit in May, after it won endorsements from local agencies.

There was also dissent within the EPA over these issues, and concerns that the agency's approach could make it more difficult for Puerto Rico to comply with a host of federal environmental regulations, sources said. This led to the exit of longtime EPA Puerto Rico Office Director Carl Soderberg, who took a leave from the EPA to head up an environmental compliance initiative with the Puerto Rico Aqueduct & Sewer Authority.

Several industry sources, speaking privately, also criticized the EPA for being too focused on Puerto Rico's air quality, while overlooking many of the violations at island landfills.

"I have seen things in Puerto Rico that they would throw you in jail for in New Jersey," said one industry source, pointing to unfenced and uncovered landfills, and others that allow contaminated liquids to leech from landfills through concrete conduits that drain into adjacent land or surface water.

Others critics say the EPA is establishing a false choice between WTE and recycling. They note that recycling just provides the raw material for an industrial process that must take place somewhere for the material to be reused, and that the process would produce the same emissions as a WTE project.

"What's wrong with incremental change? Why do you have to go from zero recycling to 35% in one fell swoop?" another source asked.

Ríos said the WTE plant should complement, rather than hinder, efforts to boost the level of recycling done here on the island.

"There are concerns about the impact WTE can have on recycling programs, but experience has shown the opposite to be true," states the SWMA Dynamic Itinerary. "Many communities using these technologies have achieved recycling and reuse rates that are higher than in areas that don't use these technologies."

The Arecibo plant will separate bulky waste, such as car batteries and tires as well as objects made of glass and ferrous and nonferrous metals, from the waste stream, and deliver it directly to recycling companies.

LANDFILL CLOSURES ADD URGENCY

Commonwealth and EPA officials say recycling will finally get off the ground in Puerto Rico because it has to, given the impending closure of most of the island's remaining landfills.

EQB President Nieves Miranda said he wouldn't just be ensuring landfill operators are complying with federal regulations, but also that they have the financial resources to continue operating the landfill and then to close it properly, in compliance with those regulations.

In the past, private operators would simply leave the landfill to the cash-strapped municipal government that owns it, which in turn would look to the commonwealth government to close it properly.

In fact, among the few productive uses for former landfills are to generate methane gas from the existing garbage or install solar power projects. Nieves Miranda said four deals between solar developers and municipalities should be signed before the year is over.

SWMA's Ríos wouldn't offer an estimate on the number of landfills to be closed, saying several could comply with federal regulations, but federal and industry officials expect all but a handful to be shuttered.

"All of Puerto Rico's noncompliant landfills are going to close. Recycling is inevitable," EPA's Enck told CARIBBEAN BUSINESS. "These companies will have a steady stream of glass and other materials."

"The majority of Puerto Rico's landfills are scheduled to be closed within the next couple of years," added Pérez-Riera. "As part of an interagency, integrated strategy, the effective management of existing and future waste streams—and the significant reduction of these streams either through reuse, recycling and/or conversion of waste to energy—from the perspectives of environmental protection and economic development, is clearly an important objective for DDEC [Economic Development & Commerce Department]."

Ríos said Puerto Rico's official recycling rate remains at the 11.31% it registered in 2008, but added he expects to see an improvement when a new recycling analysis is completed in the coming months. The target to reaching a 35% recycling rate by 2006 has since been pushed back to 2016.

The SWMA has been pushing municipalities to embrace recycling through training and a $7 million incentives program. Ríos said the agency is encouraging and supplementing the development of a "single-stream curbside recycling system," which has been proven the most effective in increasing recycling rates in many U.S. jurisdictions, as well as in the municipality of Guaynabo.

The commonwealth agency also has an $8 million annual fund to help landfills take measures to ensure compliance with EPA standards. The SWMA also recently implemented a scale program that is helping identify the volume of both waste generated and recyclable materials recovered on a monthly basis.

Meanwhile, with the help of American Recovery & Reinvestment Act (ARRA) funding, the SWMA was also able to buy 26 new trucks for municipal governments to use in recycling programs. Towns that have received, or are about to receive, the trucks are Aguada, Cabo Rojo, Las Marías, Ponce, Yauco, Aguas Buenas, Aguadilla, Barceloneta, Ciales, Cidra, Comerío, Guayama, Juana Díaz, Orocovis, Salinas, San Lorenzo, Trujillo Alto, Dorado, Guayanilla, Manatí, Canóvanas, Toa Baja, Arroyo, Aibonito, Yauco, Hormigueros, Florida, Vieques, Santa Isabel, Culebra, Adjuntas, Barranquitas, Naguabo, Villalba, Jayuya and Guayama.

The EPA's Enck, however, said Puerto Rico must get more serious about recycling. As part of the effort, the federal agency has established a Puerto Rico Recycling Partnership, which has held seven meetings. The group brings together business, the environmental community and municipal, local and federal government officials.

"We want every municipality in Puerto Rico to have a mandatory, convenient, easy recycling program for residents, and we are going to get there," Enck said.

RECYCLING GETS REAL

Convinced the lack of markets for recycled material is one of the primary reasons recycling hasn't taken off in Puerto Rico, the commonwealth government and the EPA are reaching out to attract recycling businesses here, with some success.

Recycling giant Hugo Neu Americas is establishing an operation in Guaynabo, which the company expects will create hundreds of jobs. Additionally, once fully rolled out, its recycling program may lead to the creation of ancillary service jobs, and its establishment will place Puerto Rico in a leadership position in the region, officials say.

"These types of companies not only support the creation of new jobs, but also support the development of local and regional markets, advancing our efforts to increase the level of products and services exported from Puerto Rico," Pérez-Riera said.

Recyclers may provide raw material to manufacturing entities that would otherwise have to import that material, Pérez-Riera explained. In this way, recycling supports and fortifies the local manufacturing supply chain and, therefore, manufacturing's job creation capabilities. Providing a robust supply chain to the local manufacturing sector and economy in general is another priority for DDEC.

Scrap metal firms on the island include American Micro Steel and Schintzer Steel, while other prominent firms in the field are Battery Recycling Co. (TBRC), a secondary lead smelter that recycles batteries, and Sofscape, which makes rubberized products from shredded tires.

Other companies such as Plastic Home Products, Jael Plastics, Agroambiente, Caribbean Composting, Caribe Recycling, Héctor Caro, Wooden Pallets, J. Torres Wooden Pallets, Demolition Pallets, Puerto Rico Pallets, Soil & Mulch, Edelcar, and Borinquen Scrap Metal and Comercial La Pino operate under a complete-cycle recycling framework, according to DDEC.

Local and federal government officials are also in conversations with a "major glass recycler" to open up on the island. The island has been without a glass operation since Owens-Illinois of Puerto Rico shut down its Vega Alta plant in 2008, with management attributing the move to the high cost of energy and the inability to find an affordable supply of silica, a principal raw material needed in the glass recycling process.

The plant also confronted operational issues such as an oven explosion in 2007, DDEC officials said. The plant was purchased by an investor from the Dominican Republic, who eventually transferred the Puerto Rico operations to that country, where a significant local supply of silica is available.

"Glass is also a priority for DDEC and the administration. As Prepa transitions to natural gas, this procurement-and-promotion effort should come into fruition and would continue to be a top priority for the next four years," Pérez-Riera said. "Puerto Rico has enough raw material in the form of nonrecycled glass to meet local demand. However, some silicate may need to be imported to produce higher-quality material as may be required by bottlers and the life sciences industry."

A NEW SYSTEM FOR OLD TIRES

Last year, the administration also revamped the system to oversee and incentivize the recycling and reuse of used tires.

The big change was the introduction of the TeleGoma telephone touch system (1-855-444-GOMA), which replaces a former paper manifest system, used by industry players and the government to both input data regarding used tires and track the trail of used tires through their purchase, pickup and ultimate disposal or reuse.

Paper receipts were used by tire stores, truckers and the businesses that process, recycle or export used tires whenever they received or delivered the tires. That paper trail was delivered in duplicate to both the commonwealth Treasury Department and the EQB, which would use the receipts to issue payments to the different players from a tax imposed on new tires, with the revenue going toward a used-tire fund held by Treasury.

The paper-intensive process delayed payments, was impossible to enforce and made it easy to cheat the system. The new system has improved the speed of payments and brought greater transparency to the system, officials said.

Moreover, the incentives were restructured to encourage the recycling and reuse, rather than just the disposal, of used tires. Up until now, most used tires have been exported to China, which burns them for energy or converts them into diesel fuel.

"This law now prioritizes the creation of employment and businesses related to the recycling and processing of used tires," Nieves Miranda said.

One of the more controversial aspects of the law is that it takes an incentive away from truckers and grants it entirely to processors, recyclers, exporters and related firms that undertake the "final disposal" of the used tire, ideally through productive reuse.

Truckers will then be paid by these firms for delivery via rates set by the free market.

The used tires can be used by island asphalt manufacturers to pave roads. Meanwhile, Sofscape Caribe, which makes rubber pavers from used tires for playgrounds, horse farms and other businesses, is investing several hundred thousand dollars to be able to process local used tires for its products. It has been importing more than 2.4 million pounds of crumb rubber a year.

"The waste management field has big business opportunities in the recycling of used tires, glass and a host of other materials, and the recent revamp of the tire recycling incentives should only add to the opportunity for those businesses," Pérez-Riera said.

EPA must respond to waste-to-energy firm by October

Proponents say Arecibo project will be a ‘big step forward’ for Puerto Rico

The proposed Energy Answers waste-to-energy (WTE) plant in Arecibo would have the capacity to burn more than 2,000 tons of trash daily, producing some 80 megawatts (MW) of energy in the process. The project would be constructed on about 40 acres of the site and will include fully enclosed waste receiving and processing, energy recovery and ash processing operations.

The company has said the plant could be in service in the next three years and would establish an advanced materials recovery & recycling operation.

The U.S. Environmental Protection Agency (EPA) issued its tentative endorsement after months of rigorous review, against a backdrop of increasing tensions between commonwealth and federal officials during the review process of a number of projects of major importance.

The EPA told developer Energy Answers in May that it had made a preliminary determination to approve the company's Prevention of Significant Deterioration permit subject to public review. A final decision must be made by October 2012, which will be one year after the developer submitted all its paperwork to the federal regulator and addressed all its initial requests for additional information.

EPA officials held a 45-day public comment period, which concluded with a formal public hearing June 25, on the agency's draft permit.

The EPA has already spent months evaluating the Energy Answers application. In granting the preliminary approval, the agency evaluated the potential impact of the facility on air quality by comparing it with EPA air-quality standards established to protect public health.

The EPA's evaluation also included assessing the impact of the facility on nearby low-income communities. Based on information available to date, the EPA has concluded that operation of the facility won't cause any health standards to be exceeded or any communities to be disproportionately or adversely impacted.

To obtain the EPA permit, Energy Answers was also required to demonstrate that the pollution controls on the plant are as strict or stricter than those of any other plant being built in the U.S. today. The EPA has included these pollution controls, which are considered the best pollution-control technology available, as requirements in the proposed permit.

The proposed permit also requires Energy Answers to test the pollution it releases into the atmosphere. Before the facility can begin full operation, it must demonstrate it meets the pollution limits the EPA is proposing to establish. The permit requires pollution levels to be measured and reported to the EPA during operation. Failure to meet any of these standards would subject the facility to EPA enforcement actions.

Energy Answers officials said the project's passing the intensive EPA review shows it is "safe and complies with the strictest U.S. air standards."

"This is a big step for the handling of solid waste in Puerto Rico, and for the island to leave behind antiquated practices that have done so much harm to our natural resources and communities," said Rafael Toro, an environmental consultant with Energy Answers.

Opponents' basic concern about the Energy Answers project is about its potential to pollute the air.

Concerns over air pollution stem from fears about old municipal waste-combustion units, known for their soot and smog, which operated stateside before the EPA began establishing emission limits back in the 1970s, Energy Answers officials say. Since then, new technology has reduced the emission of toxins such as dioxin/furan, mercury, cadmium and lead by 94% to 99% since 1990, according to the EPA.

"Opposition has been based on cherry-picked data from plants that don't even operate today," said Energy Answers Project Manager Mark Green. "Emissions-wise, it would be like comparing a 1965 lead-burning car to a modern-day hybrid."

Energy Answers uses patented processed- refuse-fuel (PRF) technology involving semi-suspension combustion using a spreader-stoker boiler, instead of the heat-recovery boiler used in a traditional mass-burn incinerator. PRF technology leads to more effi- cient energy production—800 kilowatt- hours (kWh) compared with 500 kWh under previous systems and to ash quantities that are 30% less than in mass-burn incineration. Water and stabilizer is added to the fl y (airborne) ash resulting from the combustion to turn it into a solid that can be used to produce construction material.

The technology was employed in the Southeastern Massachusetts Resource Recovery Facility (Semass) in Rochester, Mass., which the company developed and opened in January 1989. The plant, which processes about 1.2 million tons of solid waste a year and provides up to 80 MW of power, allowed the orderly closing of 16 landfills and the protection of groundwater reserves in the Cape Cod area, some eight miles from the plant, officials said.

The technology that will be used in Arecibo will also be employed by another company project slated for Baltimore, Green said. The EPA has already approved that project, although negotiations with area utilities have delayed it.

Other critics worry that a WTE plant will divert materials in the island's waste stream that could be used for recycling, undercutting efforts to start a robust recycling industry on the island. Officials say this assertion is wrong, and the Energy Answers project will sort materials for recycling as well as convert trash into energy.

Green said the construction of the Semass plant in Massachusetts increased recycling in Cape Cod to 34%, above the state rate of 28%. Some 115 tons of ferrous metals recovered by the plant each day are sold to a nearby steel mill. Some 15 tons of nonferrous materials that can't be recycled are recovered daily. The Arecibo project should have the same impact, he said.

"This may not be the ultimate solution, but the [Energy Answers] plant provides a vision for an alternative-energy source for the 10,000 tons of trash a day we generate here, and of which barely 10% is recycled," added Alexis Molinares, another project environmental consultant.

Molinares said the EPA's analysis shows the Energy Answers proposal will use the "most modern and technologically advanced" system available.

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