Scrap vs. Waste: What’s the Difference? with ISRI’s Scott Horne

July 1, 2015

 
John Shegerian: Welcome back to Green Is Good. This is the ISRI edition of Green Is Good in downtown Vancouver, British Columbia, at the Vancouver Convention Centre, and we’re so excited to have back on Green Is Good Scott Horne. He is the Vice President of Government Affairs. Welcome back to Green Is Good, Scott. Scott Horne: Thank you, John. It’s a pleasure to be here. John Shegerian: We’re happy to have you on. And for our audience that has never met you before or heard you on Green Is Good or seen you speak, can you share a little bit of what you do at ISRI and what did you do before leading up to your joining ISRI? Scott Horne: Well, sure. I’ve spent the last 20 years at ISRI. I originally was the Director of State and Local Programs, and 30 years later, I became General Counsel and Vice President of Government Affairs, which means that I head up both departments. The legal department, we have four lawyers in-house and we have several lobbyists. We all work together. Prior to that, I was actually in the industry for 18 years. I spent 15 years running scrap processing facilities and three years I had a small consulting and legal firm that was dedicated to the industry. John Shegerian: So you’ve been in the industry pretty much your entire professional career? Scott Horne: Close to it. John Shegerian: Got you. And with ISRI for 20 years? Scott Horne: Yes, sir. John Shegerian: Wow. You know, I was reading about you and reading about some of the things you’re directing at ISRI and how you like to message, and I came across one of your biggest messaging and mantras and I love this. I’m going to share this with our audience, but I want you to just talk about it. Scrap is Not Waste and Recycling is Not Disposal. What does that mean to you and why is that such an important mantra at ISRI? Scott Horne: Well, it’s interesting because those nine little words hold the future of the industry in their collective hands, if you can. John Shegerian: Right. Scott Horne: The confusion between scrap and waste has caused a host of legal regulatory licensing problems, and it’s a misnomer. It’s a carry-over from the days of the junkman and Sanford and Sons. John Shegerian: Right. Scott Horne: Most people don’t realize that today’s scrap processing facility, whether it be a great electronics one like ERI or it be a big ferrous yard, these are professional industrial manufacturing operations where they are making commodities and specification great commodities. They have value. Waste doesn’t have value. And that is the big key. If people recognize that there is an intrinsic value in the scrap material, whether it be for the component, metals or whatever. John Shegerian: Right. Scott Horne: Or whether it be savings and landfill costs. Or especially the environmental savings that are typically the result of using recycled materials in lieu or virgin or raw ores. John Shegerian: Right. Energy savings, resource retention, it’s just massive across the board. So recycling is not landfilling. Recycling is not incineration. Scott Horne: For sure. Absolutely not. John Shegerian: Absolutely not. So when we talk about scrap and recycling, are those words really now almost interchangeable? Scrap and recyclables? Scott Horne: Yes. To me, yes. I think the general public understands recyclables more so than scrap. Scrap is a word that’s been around for a long time, but I think one of the big keys here is that whether you call it scrap or whether you call it recyclables, this all didn’t start in 1988. John Shegerian: Right. Scott Horne: In the U.S., it actually goes back to the days of Paul Revere. John Shegerian: Wow. Scott Horne: He used to collect scrap copper to make his new products. John Shegerian: Wow. Scott Horne: And recycling goes way back beyond that. Thousands of years actually. John Shegerian: So at this ISRI edition of Green Is Good, we’ve had so many great leaders from ISRI but also from your industry and some crossover people – like Doug Kramer who is your current Chairman but also in the industry – come on and what we’re hearing over and over again is that the industry is wreaked in legacy and history, and it’s really, though, a futuristic industry. Everyone gets all the headlines of Tesla and of Solar City. Wonderful companies. But truly the members of ISRI make up an industry that is as cool as Tesla and as cool as Solar City, because really they are doing the whole new green collar economy themselves. Scott Horne: Absolutely. It’s an incredible experience when we have the opportunity to take somebody through a scrap recycling facility. We often have a member of Congress or their staff visit and they have a preconceived notion typically, and when they get there, it’s the “wow” factor. I hate to say it, but the equipment that we use tends to be big and tough and the term “boy toy” comes to mind. These guys are like, “Whoa.” John Shegerian: Impressive stuff. Scott Horne: Absolutely. You look at a shredder and the fact that it can take an automobile and rip it apart in less than a minute into fist-sized pieces of steel, of copper, aluminum, of plastics, of circuit boards, that’s amazing. John Shegerian: Got you. Yeah, it makes sense. Talk a little bit about – for our audience out there, it’s such a fascinating nine words: Scrap is Not Waste and Recycling is Not Disposal. If we’re talking about disposal explain the differential, scrap from waste, just so our audience gets this theory and gets this reality so they can hopefully work in concert with the great members of ISRI to recycle more material. Scott Horne: Well, it starts with the person who has whatever it is. John Shegerian: Right. Scott Horne: If it’s something that has a value as a potential raw material for making a new basic material – say you have an old aluminum chair or an old computer. An old computer. Let’s use that as the example. John Shegerian: OK. Scott Horne: The case is often steel. The frame inside may be steel. It may be aluminum in some instances. You’ve got some plastic in there. You’ve got those valuable circuit boards. Now most people, I think, have finally figured out that that has value and you can recycle it. But there are still people that don’t realize that and would otherwise dispose of it at a landfill. Now that’s a waste. John Shegerian: Right. Scott Horne: It’s a waste in the true sense of the word and it’s a waste in the fact that, you know, why are you doing that when you could be helping the Earth, the environment and our kids’ future? John Shegerian: Right. Scott Horne: So while I talk about value, it can be significant value. I don’t know what circuit boards are these days, but they’re pretty expensive. John Shegerian: Right. Of course. Yeah. Scott Horne: Or it could be of a nominal value to the person selling it, the homeowner or whatever that takes out an old dishwasher. But it still has value. And although it may be nominal to them, by the time we process it and make it into a new material, it often has significant value that approaches that of something you would otherwise mine, or if it’s paper, it would approach the value of the trees you’re taking down. John Shegerian: So on a scale basis – such as some of your great members like Doug Kramer, like George Adams or Texas Recycling, so on – paper and in metals the more you scale them, the more people who act and stop throwing things away that have value and getting it to the recyclers, their local recyclers, and they’re able to aggregate and then process this stuff better for the environment, better for making the entire world a better place, less resources are depleted, more resource retention, less energy is used, everything you talked about. Scott Horne: Absolutely. John Shegerian: Everybody in the chain wins. Why would the EPA and other officials in this country who are – we want to believe – of right mind allow incineration to even be an option in this country now, which has its own negative environmental impacts and nonetheless burns waste? Scott Horne: I will say that we at least acknowledge that burning for energy recovery is a beneficial use. John Shegerian: OK. Scott Horne: The problem is that when you burn that material is lost forever. You get the BTU value, but if it’s plastic, you’re losing that basic oil-based polymer. John Shegerian: OK. Scott Horne: It’s gone. John Shegerian: Gone. Scott Horne: If it’s paper, it’s gone. John Shegerian: Gone. Scott Horne: That is a problem in and of itself. It’s interesting, because we are seeing a small movement back to the pre-1988 days, where localities are talking about putting everything, recyclables and waste, back in the same container and then taking it to what they call a “material recovery facility.” Quite frankly, I call it a “dirty MRF,” because that’s what it is. Can you imagine when somebody puts the baby diapers in there and they put the soda bottle that hasn’t been fully emptied and that gets onto the paper and it gets onto the plastic bottles? Our consumer members, consuming industries, they’re making food-grade paper board to hold your cereal. Do you want something – it’s ridiculous. John Shegerian: Contamination is beyond repair, and we’re going to backslide if this one-bin phenomenon continues to grow. Scott Horne: Exactly. The problem is that these are often being co-located or very close to waste to energy facilities. John Shegerian: Oh boy. Scott Horne: So that while they say they can recover it, if it doesn’t meet specification then “Oh gee, we’ll just burn it for energy.” John Shegerian: Wow. For our viewers and audience that just joined, we’ve got Scott Horne. He is the Vice President of Government Affairs at ISRI. This is the special ISRI Green Is Good edition here in beautiful downtown Vancouver, British Columbia, at the Vancouver Convention Centre. We are in the west pavilion, which is the newer pavilion. It’s gorgeous. We talked about it earlier today with Dan Lee. He is the director of this whole center here, which is the first Platinum LEED convention center in the world. You know, Scott, thank you for being with us. We’re talking about this one-bin system now that is potentially – as you said – taking us four steps backward, pre-1988. What do you see? You have been in the business long enough to have a lot of history. How are we going to push back against that and actually do more separation and have less contamination and get the recyclables so they are more liberated and stay cleaner, so they are more recyclable by the great members of ISRI? Scott Horne: I think it’s going to take an effort not only on the part of the industry, but I think that the general population, all Americans, need to realize that the benefits of recycling far exceed burning, and that to take, as you said, four steps back is absolutely ridiculous. We are just now making some headway in getting recycling bins at stadiums, at airports, at gasoline stations. They weren’t there as little as two or three years ago. John Shegerian: Right. Scott Horne: And here we are now looking at a concept, because some cities say to themselves, “Oh, I can save some collection money.” They don’t look at the whole picture. We can cite examples of municipalities or counties that are still today doing dual-stream collection and large percentages of recovery and are making money on it. John Shegerian: Wow. Wow. I’m going to change topics now. You’re a lawyer by profession. Scott Horne: OK. John Shegerian: And it doesn’t come up a lot, but let’s talk a little bit about the Constitution with regards to the recycling industry. You’re the Vice President of Government Affairs, so you are dealing with both national, state, city, municipalities and communities across the United States. The issue of different governmental entities now claiming – as you just pointed out – that, hey, maybe they want to save some money and dump it into this dirty MRF. Aren’t they claiming what is really our recyclables, which have value as theirs, and then directing on how they’re going to be handled and then disposed of by fiat almost? Is this constitutional or does this run up against the Constitution? What’s going on with these governmental entities? Scott Horne: Well, it’s interesting, John, because you have hit upon a point. Some of these municipalities are not forcing you to put it in that bin, but they’re not giving you an alternative other than to possibly drive 10 or 15 miles to somewhere where you can recycle it. John Shegerian: So it’s a de facto forcing. Scott Horne: In essence. John Shegerian: OK. Scott Horne: But there are also programs that we refer to as flow control, where in fact, by fiat, the governmental entity says, “All recyclables collected within our jurisdiction must be delivered to facility A.” And whether it is generated by a householder or by a retail store like Wal-Mart or whomever or by an industrial manufacturer, now yes, you are talking about a takings clause problem, because most people who do recycle are getting some sort of value out of that and when that government takes it away from you that’s a takings problem under the Constitution. John Shegerian: So if I’m a business in that area or if I’m Wal-Mart or an industrial manufacturer and I want to hire one of the recyclers that are here at the ISRI convention and one of your members to do on a net basis a share program on the value of the metals in what I am disposing of, you’re saying the governmental entity is actually intermediating my free market process and maybe breaching the Constitution in the process of that. Scott Horne: Well, yeah. Not to mince words. They’re not disposing of it; they’re recycling it. John Shegerian: Right. Recycling it. Scott Horne: That’s the whole thing with disposal when we confuse that. John Shegerian: Right. Scott Horne: But yeah, the governmental entity is in fact taking away your property. And we have seen a number of ordinances written that would do just this, and fortunately, ISRI, wherever it has been made aware of this, has been able to push back and thus far we are not aware or any jurisdiction that has been able to – say – take Wal-Mart’s corrugated. John Shegerian: Right. Scott Horne: I use them as an example, because their corrugated is a profit center for them now. John Shegerian: Right. Scott Horne: It’s not a cost center. John Shegerian: Right. Scott Horne: And in fact, there was a case that hit the California Supreme Court back in the ‘90s and that one upheld the whole concept that you can’t take a homeowners property by fiat. John Shegerian: So really, you wear many hats. One of the hats you wear is really to push back and protect your ISRI members and the industry as a whole from the government getting in the way of responsible and good recycling between the recyclers and their client base. Scott Horne: Absolutely. And you just made a point that’s important. We often will get involved. We would love for every recycler to be a member, but we have actually gotten involved where a non-member was facing a similar situation, because we don’t want to see any kind of precedent set that would disrupt the flow of recyclables. John Shegerian: Right. So you work on a macro level. Even for a non-member, you’re protecting them because that would be an erosion of the rights of your members, which is the great majority of recyclers out there are members of ISRI. Scott Horne: Exactly. John Shegerian: So if a scrap recycler is not a waste company, how do you refer to them? Scott Horne: Scrap recycler or a manufacturer. John Shegerian: OK. Scott Horne: Our point is that scrap processors, scrap recyclers are manufacturing a specification-grade commodity. John Shegerian: Right. Scott Horne: And we should be regulated as any other manufacturer is. John Shegerian: Got you. I want you to have the final words. Scrap is Not Waste and Recycling Is Not Disposal, how is that more important today than almost 20 years ago, when you joined ISRI, and where is the industry going in the future? You’re young enough to see a great future and have great visibility, Scott, but you’re old enough to have that great history behind you. Where are we going now? Scott Horne: We are making progress, John. Four years ago, the EPA promulgated a proposed definition of solid waste regulation under their hazardous waste rules. Quite frankly, they captured all the metals that the industry handles. We were able to make the cogent arguments that we should not be regulated in that manner, that our finished products should be excluded from the definition and the inbound products should be exempt from hazardous waste regulation but yet be regulated as a manufacturer’s raw materials. John Shegerian: Wow. Scott Horne: We’re seeing today movement. That was a big one when EPA acknowledged that. I think we’ve made a lot of headway, and I think they see the light now and we hope that the rest of the country will. John Shegerian: Scott, just make me one promise that you come back on Green Is Good. You’re always inspiring when you come on. You’re obviously a recycling rockstar, but in the process you’re always making the world a better place for all of us. Thank you so much for joining us today. You are so much appreciated. This has been Scott Horne and John Shegerian from the ISRI edition of Green Is Good.