Airspace Is Where the Money Is
Protecting your investment starts before you first put pencil to paper and doesn’t end until the final cap is in place. In between, look for ways to sweeten it with additional airspace.
Airspace is a landfill’s only sure commodity. Oh sure, a landfill might sell compost material or crushed rubble or landfill gas or some other recyclables, but when you get down to it, it’s the sale of airspace that turns the crank.
The difficulty today is that our model that we’ve use for so many years isn’t working as well as it used to. Historically, we’ve created airspace at a certain cost and sold it for a certain price. The difference between those two—or the margin—was sufficient to operate the landfill, cover all of the capital costs, set some money aside for closure and post-closure maintenance, and maybe even stash a little money for those unexpected things or bank some profit. In many situations, this also funded various diversion activities, establishing those that were viable…and subsidizing those that were not.
But that financial model we are talking about, providing a good margin between cost and price, isn’t working anymore. Costs continue to increase. The cost of diesel, one of the main factors of a landfill’s operating cost, is up and down…but mostly up over the past few years. At the time of this writing, diesel is selling for an average national price of $3.86 per gallon (clear diesel). That’s an increase of approximately 100% since 2005. In 2007 landfill tonnage peaked in the United States. Shortly thereafter, tonnage began a steep decline as the recession yanked the rug out from under landfill tonnage. Now, years into a hard recession, the rug is long gone and the sub-floor is sagging. But still, if you’re in the landfill business, managing airspace is the key. So, if like most landfill managers, your margins aren’t what they use to be, you have two choices.
The first choice is to raise the price. Increase your tipping fees to the point that the margins will work. The trouble is, if all the other landfills in your region don’t do the same thing, you could end up chasing a lot of your tons to other landfills that haven’t raised their price. The truth is, in a recessionary time like this, when money is tight, raising the price is not a very good option.
Your second choice is to find some way to reduce costs. The most obvious ways to reduce costs (and sometimes, some of the best ways) are to use your equipment longer. That means fine tuning your maintenance, keeping an even closer eye on the major components of your machines to make sure they last as long as possible. Along that line, you’ll want to be watching for ways to reduce or eliminate unnecessary activities.
Another—almost too obvious—way to extend machine life is to reduce the hours the machines are used on a daily basis.
No, I’m not wasting ink stating some true-but-pointless fact, such as “When it rains the ground gets wet.” I’m referring to the concept of eliminating unnecessary effort on tasks we think are necessary. Chances are, your landfill—like most others—wastes machine resources on tasks that simply are not necessary. To save those resources, focus strictly on necessary, value-added activities; zeroing in on the basic tasks that landfills do: push, pack, and cover.
Reducing cost may also mean reducing staff through layoffs, furloughs, or attrition. But don’t be confused by the numbers thinking that a 30% decrease in tonnage means you can decrease your equipment and labor by 30%. As illogical as it seems, the relationship between tonnage and resources is not a direct, straight-line relationship. So, even though tonnage may be down by 30%, it still takes whole tractors and whole people (though perhaps fewer hours) to run that landfill.
And most of your capital (fixed) costs remain—regardless of any drop in tonnage. You still have an infrastructure including: entrance facility, scale, management team, gas collection system, groundwater, and gas monitoring network.
Of course, some of your variable costs will decrease—but these are minor costs overall.
In these dogged recessionary times, when tonnage drops, so can your costs, just not as much. So, where does this leave us? Should we sell the landfill and retire? Not necessarily. If necessity is the mother of invention, then the offspring of this recession should be some pretty creative solutions. Where is this line of thinking pointed? Didn’t we start off talking about managing airspace? We did, and so we shall.
Airspace—A Hidden Asset
While we’re talking about reducing costs, you’ll be glad to hear that one of the most significant cost drivers—airspace—is also an underutilized asset that can be tapped into during hard economic times. Unused airspace is a bit like a forgotten rich uncle that shows up at just the right time.
A large number of landfill managers, or shall we say “airspace managers” would be surprised to see just how much forgotten airspace they have lying around, available for little or no cost. Think about it. What would it mean to your bottom line if you could find an extra month, year, or five years of capacity that you could sell and that wouldn’t cost you a dime?
How would you like to take that multimillion-dollar liner construction project that you have scheduled for next summer and shove it off into the future a few more years?
Even under the limitation of today’s relatively low interest rates, deferring a few million bucks for a few more years can do wonders for your cash flow.
Increasing Landfill Capacity
Vertical Expansion—A vertical expansion can provide additional airspace and defer lining of future waste cells. From a political and regulatory standpoint, vertical expansions are typically much easier than a lateral expansion—and they are likely to cost less. Expect additional engineering/design costs.
Lateral Expansion—Lateral expansions are an effective way to increase airspace, but will generally cost more and require a longer review/approval period than a vertical expansion. Expect additional engineering/design and hydro-geo costs. Lateral expansions may also trigger additional environmental studies.
Creating a Buttress Fill—Placing a buttress fill (typically of soil) along the perimeter of the landfill can be an effective way to increase landfill capacity without a lateral expansion.
Steepening the Design Slopes—Steepening the perimeter slopes of the landfill can be a relatively simple way to increase landfill capacity. While still requiring some re-engineering in regard to slope stability, final cover, etc. steepening the slopes is probably the simplest of the above-listed design change options.
Filling an Existing Right of Way—Some landfills are bisected by a utility right of way. And during the initial design process it may have been easier—and more cost effective—to simply fill around the utility path. But as things change, it may be worthwhile to relocate those utilities in order to create additional airspace. Over the years, we’ve evaluated a handful of such landfills and found—in every case—that the benefits of filling that space outweighed the cost.
Rebuilding Settled Slopes—The most economical way of extracting more capacity from your existing landfill is to rebuild existing perimeter slopes. Over time, all landfills settle, the amount of settlement varying based on site-specific factors that include age, depth, waste type, initial density, and moisture content. By going back in and rebuilding those slopes, many landfills gain significant capacity. We’ve seen landfills gain years of additional filling by rebuilding existing slopes and filling out the existing capacity of their current waste footprint.
Finding hidden airspace at your landfill is not always easy. Get your operations and design teams involved. Question every assumption related to the design and construction of the facility. And don’t overlook the wastestream when you’re looking for ways to save airspace. Remember: That inbound waste is what’s filling up the landfill.
|Photo: Neal Bolton
A buttress fill allows for increased landfill capacity. The drawing below shows how a
|Photo: Neal Bolton
Space along a utility right of way can provide additional airspace.
|Additional airspace using a buttress
Wasting Airspace Just to Look Good
Take a look at the wastestream. Identify anything that comes into the landfill that takes up space and doesn’t generate full revenue. First thing on everyone’s list is soil. But for many landfills this also includes various types of ADC, rubble, or other non-MSW materials. Some landfills take in excessive quantities of ADC materials that generate no revenue yet consume valuable airspace. They tout it as a victory because, “Hey, it’s recycling!”
Recycling is a good thing in many ways, but those of us in the waste business recognize that recycling certain materials doesn’t always generate revenue.
Wasting lots of money in the form of valuable airspace and then trying to cover it up with bright green wallpaper just doesn’t make good sense in economic times like these. If the facts are on the table it’s likely that constituents and politicians would agree. So, examine your wastestream, and run those materials that don’t generate revenue through a tough line of questioning and see how they hold up.
Do Your Assumptions Make Sense?
Next, schedule a working meeting with your landfill designer and tell him or her to come prepared to justify the design and answer some tough questions. Be sure to have a set of design plans and a recent topographic map of the landfill.
Every landfill design is based on assumptions. There’s a good chance that the assumptions for your landfill were made during a different economic and environmental climate. Get a white board and a stack of sticky notes and roll up your sleeves.
Start by asking the designer what assumptions were used in the design of your landfill. The following are some examples of important things you will want to evaluate.
How deep can we excavate? Was that an arbitrary elevation, or was it based on soil conditions, groundwater conditions, or simply minimizing startup costs by shallow excavation rather than deep?
How high can the landfill be? What’s the top elevation? Let’s get specific. Was that based on seismic stability, loading capacity of the underlying soil, or was it some arbitrary elevation based on aesthetics or political negotiation?
Take a look at how the site balances in terms of available airspace and available cover soil. Did the designer balance the landfill based on the industry standard of numbers (1,200 pounds per cubic yard of waste density and 3:1 cover ratio?) While there is nothing wrong with that from the standpoint of making an estimate, one guess is as good as another at that level. For many years, numbers like that were industry standards. As the solid waste industry has become more sophisticated, those assumptions need to change as well.
What happens if we dig deeper? We’ve asked this question many times and we often have push back. The designer and the landfill manager will say, “Hey, our site was balanced, and now, because we are using ADC so effectively, we have too much soil. Why in the world would we want to dig deeper and generate even more?”
Today, a changing wastestream, increasing acceptance of adding moisture to landfills even to the point of creating bioreactor landfills, larger compactors, and myriad ADC options all serve to make those initial assumptions obsolete. So, examine each assumption in detail. What was the initial assumption? What is it now? What can be done to improve it?
When doing this kind of brainstorming, cause-and-effect diagrams, sometimes referred to as fishbone diagrams, can be a great tool for stimulating discussion (see Figure 1).
Take this time to go through every aspect of your landfill’s design that could potentially affect airspace. Don’t take this lightly—small improvements multiplied across the extent of the landfill can produce huge benefits. Talk with your designer about the cost benefit of these various factors.
The answer is simple. Landfill airspace is worth a whole lot more than the cost of excavating and stockpiling soil. So consider buying property adjacent to the landfill, excavating that excess soil and stockpiling it outside of the landfill footprint. Take that extra soil and build some contoured hills, create a soccer field, construct a golf course, or build a big, square stockpile. Because whatever you do with the soil is almost certain to cost much less than the value of the airspace you create.
Put your designer on the spot and ask him to brainstorm. We aren’t looking for exact figures, but does an exercise like this make sense? Is this something that should be evaluated? If so, ask your designer to prepare a proposal. Most designers can come up with a pretty quick on-the-spot estimate of how much airspace could be generated and what it would likely cost to do so. If there is no clear benefit, step back and do more thinking, but very often the decision will be a no-brainer.
One way to gain capacity without changing the footprint is to steepen the slopes and build higher. This is a question for your design team. They know your site and can best evaluate the engineering and regulatory limitations.
The same thing applies to the final grades of the landfill. Can they be extended; can you get a vertical expansion? If so, what are the costs and benefits? After evaluating the option of expanding the landfill downward and upward, the third step is to look at a lateral expansion. A lateral expansion is often more politically difficult and costly because it’s likely to trigger major permit changes, perhaps a new permit, along with all the environmental, geological, and political pitfalls.
Here’s an interesting combination of these things that we have seen used at many landfills. Typically, the outside or perimeter of a landfill ties in at ground level. When looked at in cross-section, it’s clear that no matter what depth the landfill has in the center portion, it feathers down to zero at the edge.
|A cause-and-effect diagram depicts landfill design assumptions.
However, by building a buttress of soil along the perimeter of the landfill, we can raise the tie-in elevation at the edge of the footprint without laterally expanding the landfill. Steepen excavation and fill slopes of the landfill. Along the lines of steepening the fill slopes, we might also look at older portions of the landfill, older slopes that were constructed sometime in the past and have likely settled significantly. There may be an opportunity to go in and remove whatever soil is there and steepen those slopes, raising them up and, in some cases, even using different waste types—maybe using a C&D material that could go up steeper, although we would have to examine revenue for that to see if we can get the same revenue for C&D material. Steeper slopes gain more capacity. Look at wedge or additional layers of fill capacity across the entire landfill.
Set Appropriate Tipping Fee
First, we’ll look at materials that come into the landfill, consume airspace, but don’t generate revenue—or at least not as much revenue as other waste types. Common examples include clean soil, rubble, or material that may be used as ADC. Usually, this practice begins innocently enough. The landfill needs a bit of clean rubble to construct a wet-weather tipping pad, so a decision is made to take that material for free. As time goes on, the material continues to come in—without revenue.
The real problem occurs when the landfill begins to receive more of that “free” material than is needed. At that point—as crazy as it sounds—the landfill is giving airspace away…for free.
Wouldn’t it be better to charge a fee and still receive all the rubble needed? Of course it would.
The trick is to set the tipping fee as high as possible, while still being competitive enough to attract the required volume of rubble.
In Figure 2, the dashed line shows how much material we expect to receive at various gate rates. This is market data. To determine the relationship between the gate rate and inbound tonnage will require some price testing—unless the alternative (competitor’s) prices are known.
Even so, it’s likely some testing will be required to determine actual market dynamics. So in this example, in order to receive say, 30,000 tons of rubble, the price should be set at approximately $63 per ton.
This type of approach applies to materials that are needed only in limited quantities. Many municipalities seem to shy away from this type of price adjustment—often for political reasons. Sometimes it’s just too much of a hassle to ask for—and receive—upper management approval. But let’s not miss the boat on this one. There’s too much money and airspace at stake.
Now, we’ve adjusted our gate rate so that we receive just the amount of rubble we require…and no more. But does this really maximize our revenue? Here’s how to find out.
Figure 3 shows the same information, but with the addition of gross revenue. This shows that setting the gate rate at $63 per ton—which yields the minimum quantity of rubble—also generates approximately $1.9 million in gross revenue.
But, we aren’t finished yet. No doubt, you also see that there is more revenue to be gained by accepting additional rubble. If we were to reset the gate rate to $40 per ton, we’d receive 66,500 tons of rubble…and gain another $800,000 in revenue.
So, what would you do with the extra 35,500 tons of rubble? How about stockpiling it for the future—in a location where it could surcharge the underlying waste. Or maybe hire a contractor with a portable crusher to generate a usable (marketable) aggregate product. An extra $800,000 in gross revenue can generate a lot of problem-solving creativity.
Clearly, there is more to this analysis than just arbitrarily setting a gate rate. These are big decisions with big consequences, but the benefits can be tremendous. In this example, we started off trying to minimize wasted airspace…and ended up saving airspace and finding a new source of revenue.
Balancing the gate rate and inbound tonnage for non-MSW wastes can make a big difference on a landfill’s bottom line. This same type of analyses could be applied to every waste type entering the landfill.
Additionally, it’s important to look at materials that could increase revenue and provide other benefits—such as maximizing the waste compaction rate. Sludge, cannery waste, or other high-moisture waste could literally pay its own way twice—once at the gate, and again by increasing waste density. A little moisture can do wonders for a landfill’s compaction rate.
This issue deserves a closer look. Here’s an example. If a landfill receives 1,000 tons per day of MSW and achieves a waste density of 1,200 pounds per cubic yard, the compacted waste will consume 1,667 cubic yards of airspace every day. But what if the landfill could add another 200 tons per day of high-moisture sludge, mix it into the regular MSW, and increase the overall waste density to 1,400 pounds per cubic yard?
Is this possible? Yes. We see high-moisture landfills achieve densities that are much greater than dry landfills—sometimes as much as 50% greater.
In this example, by adding 200 tons of sludge and increasing the overall density from 1,200 to 1,400 pounds per cubic yard, the compacted waste would occupy 1,714 cubic yards of airspace per day.
Bottom line: Tonnage (and revenue) goes up by nearly 17%...but airspace consumption increases less than 3%.
So here again we’re increasing gate revenue—and improving the utilization of airspace.
Most landfills have hidden airspace assets that have been accruing for years. There’s never been a better time to find those assets and cash them in. Brainstorm with your operations and design team. Question everything. Chances are you’ll come up with some pretty good answers.