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41 <br />4.0 Recent Research/ Procurements for Waste <br />Processing Technologies by Others <br />The most recently constructed MSW- processing WTE facility in the U.S. commenced <br />operations in 1996.5 Since that time, no commercial plant has been implemented. <br />Several reasons account for this lull of activity in the WTE field: <br />1. Loss of Tax Credits - The 1986 Tax Reform Act eliminated the significant tax <br />benefits for project owners /developers, contributing to the pipeline of <br />projects. <br />2. Environmental Activism - Misinformation about air pollution and ash impacts, <br />and preferences for recycling, created public resistance. <br />3. U.S. Supreme Court's Carbone Decision (1994) - Effectively ended legislated <br />flow control, creating uncertainty in the revenue stream for projects. <br />4. Megafills - Large landfills with low tipping fees and no put -or -pay waste <br />supply requirement out - competed WTE for the market. <br />5. Amendment to the Clean Air Act (1998) - New regulations required retrofit on <br />existing plants and drove up WTE costs, effective as of December 2000. <br />6. Lack of Federal Leadership (1990 - 2005) - Visible opposition by U.S. EPA to <br />combustion and preference for waste reduction /recycling sent negative <br />message about WTE. <br />7. Moderate Fossil Fuel Costs - The rapidly increasing fossil fuel costs of the <br />1970s and '80s stabilized, reducing the value of the energy products from <br />WTE facilities, which were key drivers in facilities developed earlier, and <br />making overall project economics less attractive. <br />In the past few years, however, interest in WTE and waste conversion has begun to <br />grow again. This renewed interest in waste processing technologies is due to several <br />factors: <br />1. Proven WTE Track Record - superior environmental performance, reliability, <br />advancements in technology and successful ash handling strategies have <br />made WTE an acceptable option to consider as part of waste management <br />planning. <br />2. Increasing Fossil Fuel Costs - With the price of oil now over $120 per barrel, <br />the cost of transportation fuels is making MSW hauling and landfilling more <br />expensive. In addition, the cost of electricity from fossil fuels is increasing, <br />making electricity from waste more valuable and making WTE more <br />competitive. <br />3. Growing Interest in Renewable Energy - Many States are requiring utilities to <br />generate a portion of their electricity from renewable sources, which <br />sometimes includes WTE; the Federal government has included WTE in its <br />definition of renewable energy. <br />4. Change in Approach by U.S. EPA - In 2006, the U.S. EPA revised its waste <br />management hierarchy to include WTE explicitly as the third priority after <br />waste reduction and recycling /composting. <br />5 Covanta's 2,250 TPD plant in Niagara Falls, NY. <br />6 C & A Carbone, Inc. —v. Town of Clarkstown, 511 U.S. 383 (1994). <br />GBB/C08027 -01 12 August 15, 2008 <br />