Fortune
 by Marc Gunther
February 6 2008: 9:56 AM EST
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The greening of Waste Management

The famed garbage collectors are reinventing themselves as an environmentally conscious company. Is it real or hype? Marc Gunther goes on a tour.

By Marc Gunther, senior writer

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Waste Managment makes money from landfills by capturing and burning methane, a potent greenhouse gas created when garbage decomposes.
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Recycling is more labor-intensive than either the landfill or the waste-to-energy plant.
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In 2007, landfills generated an estimated $3 billion in revenue.
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New landfills are graded and covered with a plastic liner so that they don't pollute nearby land and water.

POMPANO BEACH, Florida (Fortune) -- Most people who travel to Florida in winter visit the beach or Disney World. I spent a day looking at garbage.

Have you noticed that Waste Management, the nation's largest waste disposal company, has adopted "Think Green" as its slogan? The $14-billion-a-year firm gave me a guided tour of a landfill, a waste-to-energy plant and a recycling facility to learn more about "Think Green" - and so I could see for myself what happens to our garbage when we throw it away.

There's no such place as "away," of course. Although big-city waste is sometimes trucked hundreds of miles to its final resting place in an out-of-the-way locale, all garbage ends up somewhere. Here's a report on my trash tour:

The landfill

Bryan Tindell, the 39-year-old manager of the Central Landfill in Pompano Beach, doesn't have to read the business pages of the newspaper to know how the local economy is doing. During a boom, people build new houses, tear down old ones and throw more stuff out - and so the waste piles up quickly at this 350-acre landfill.

During the current slump, people aren't tearing down homes to build new ones and so the flow of trash declines. That's particularly the case for what's known in the trade as "C-and-D" waste, meaning construction and demolition debris. So Tindell can't be sure about how much life is left in this landfill. (Don't call it a "dump," at least not within earshot of the Waste Management people.) It could have another decade of life, or more. It's been taking in trash since 1965.

"You're now standing on 40 years of solid waste," Tindell tells me, after we ride up a series of twisty makeshift roads to the 225-foot peak. "Isn't that amazing?"

The views are superb - we can see a nearby lake, and the Fort Lauderdale skyline. Birds circle over an area about the size of a football field where fresh garbage is being dumped. "Look at the seagulls," he says. "It's almost like being at the beach."

Well, not quite. I can't smell fresh ocean breezes. But I can't smell the garbage either, even though a steady stream of trucks arrives at the site. About 600 to 700 trucks a day dump here. As soon as they unload waste, it is covered with dirt. At the end of each day, trucks bring in more dirt. Birds have to act fast or they won't find a meal.

Tindell obviously takes pride in his work, and why shouldn't he? Imagine what America would look like if Waste Management shut all its landfills - it runs nearly 300 of them - for a month. No, don't. Landfills like this one are the core of Waste Management's business. (Wayne Huizenga, who started the company, once owned Central Landfill.) Last year, landfills generated an estimated $3 billion in revenue. Trash collection, the company's biggest business, brought in roughly $8.6 billion. The cost of dumping garbage at landfills varies widely, but here in Pompano Beach, the posted tipping fee for trucks that just show up at the gate is about $75 a ton. Cities, towns, counties and businesses negotiate their own contracts with Waste Management.

The company also makes money from landfills by capturing and burning methane, a potent greenhouse gas created when garbage decomposes. Vertical pipes are sunk deep into the landfill, and vacuums suck the methane out of the ground. It's then burned to make electricity, although not much - about seven megawatts from Central Landfill are fed back into the grid. Because electricity generated by burning landfill gas is classified as renewable energy, Waste Management sells not only the electricity but also so-called renewable energy credits, which other companies buy to demonstrate their support for clean energy.

Old-fashioned landfills often polluted nearby land and water. That's not a worry at Central Landfill, the company says. Pindell shows me how a new section is being prepared to accept waste. It's covered with a plastic liner and graded so that leachate - the yucky liquid that's created when it rains on old trash - remains inside, and can then be treated. Since the early 1990s, strict federal laws have governed landfills; they seem to be working okay because across the street from Central Landfill is a condo development and marina. Some old landfills have been turned into nature preserves.

Still, most of Central Landfill isn't "green." It's a wasteland, and a costly one. People, after all, have paid for most of this garbage twice, once when they bought it and again to have it trucked away. Unnecessary packaging, paper or bottles that could have been recycled, yard waste, uneaten food - they all wind up here. South Florida's flat. This pile of trash is the tallest hill in sight.

Waste-to-energy

Christopher Carey, a 38-year-old Waste Management vice president, never knows who or what's going to show up at the company's waste-to-energy plant in Fort Lauderdale. Mostly, it's just trucks of garbage - about 180 to 200 a day. The day Fortune visited, a drug company had sent over barrels of pharmaceuticals that had to be destroyed; you can't just discard those at a landfill.

This being south Florida, the Drug Enforcement Agency is a regular customer. "They come in with an army," Carey says. "We burn more cocaine than anybody." Two guys with the coolest jobs in the garbage industry take it all in - literally. They sit high above the floor of a vast dumping ground where trucks unload, scoop up the garbage with giant iron claws and drop it into a chute where it slides into the furnace. (It's like those vending machines you see at a carnival, where you try to grab a toy or stuffed animal by maneuvering little metal cranes.)

The garbage is burned at a high temperature - about 2,500 degrees Fahrenheit - after which all that's left is a gray ash. It's reduced in volume by 90%, saving lots of landfill space. This is a good business for Waste Management, too, generating an estimated $850 million in revenues last year. The company owns or operates 16 waste-to-energy plants and wants to build more.

Their predecessors were called incinerators and they simply burned garbage, without making energy. By contrast, these plants operate under strict limits for the pollutants that cause smog or acid rain and they create electricity, 24 hours a day. The Fort Lauderdale plant generates about 60 megawatts of electricity, enough to power 50,000 homes.

Waste-to-energy plants do emit carbon dioxide, an unregulated greenhouse gas. Waste Management won't say how much, it says, because there's no agreed-upon methodology for measuring it. In fact, despite its "Think Green" mantra, the company has yet to measure and disclose its carbon footprint. That is, admittedly, a very complicated task because every system of collecting and disposing of trash is different.

Is burning waste more environmentally friendly than putting it in a landfill? The company says there's no simple answer to that question. "If cities are lucky enough to have a choice, they've got to select based on their preference and budget," says Lynn Brown, the company's vice president for communications and my tour guide. "But they are both green solutions to managing waste."

I'm puzzled. Wouldn't a company that wants to Think Green have a better answer than that?

The recycling center

Bob Herzog has strong opinions about garbage. He likes aluminum cans and milk jugs. He's got no problems with newspapers, cardboard boxes and plastic bottles. And he can't stand plastic bags. Herzog, 46, runs Waste Management's Materials Recovery Facility, or MRF (pronounced Murf), in Pembroke Pines, a Miami suburb.

Last spring, this facility upgraded its equipment to allow what is called "single stream recycling" - meaning that it can separate paper, cardboard, glass, plastic and metals using advanced sorting equipment that includes forced air, magnets, and other Rube Goldberg-like contraptions. Single-stream recycling is the wave of the future because more people recycle more stuff when they can toss all their recyclables into one bin. Waste Management operates about 166 recycling facilities that currently manage about 8 million tons of recyclables. The company has a goal of driving the volume up to 20 million tons by 2020.

The economics of recycling depend on the price the company can get for the commodities it ships out of here after they are sorted and bundled. "Aluminum gets us the highest price," Herzog says. But paper makes up the biggest share of recyclables, and so bundles of used paper and cardboard leave this facility every day. Some go to paper plants in the southeast, and some are shipped all the way to China, where the paper is made into packing materials and used to package things the Chinese make and sell back to us.

Recycling is more labor-intensive than either the landfill or the waste to energy plant. People are needed to pick out, by hand, materials that can't be recycled, stuff like mixed-plastic containers used in supermarket delis and plastic bags. "I would really prefer that grocery stores go back to the old paper bags," says Herzog.

Although this is the grubbiest of the three plants on the tour, it's also the least wasteful. Nearly 90% of what comes in the door goes back out again. Waste Management will generate more than $1 billion in revenues from recycling, primarily from selling commodities.

So is Waste Management (WMI, Fortune 500) thinking green? It's hard to say after a tour of three plants, but the company is moving in the right direction - promising not only to recycle more but to improve the efficiency of its fleet (by 15% by 2020) and to create more wildlife habitat. Whether it intends to move far enough and fast enough - well, you can take a look at the company's new environmental website and see for yourself.

If nothing else, my day reminded me what a waste-ful society we are. It's one thing to read EPA estimates that American creates an average of 4.6 pounds of solid waste a day; it's another to watch all that trash pile up - and up and up.  To top of page

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