tempted to determine how the data could be organized for a national information service, or what it might cost to do so.

Considering the future critical decisions on materials and mineral availability, shortages, leasing, I support the conclusions and recommendation of the Commission that:

It is feasible and desirable for the U.S. Government to establish a national inventory and information center on minerals, including mineral fuels capable of serving national and industrial needs.

In addition to the recommendations of the Commission, I recommend:

That the information be creditable; that is, that procedures be established for obtaining the data; that methods be devised for evaluating the data; and that qualified personnel operate the system.

That objectives and formats be predetermined before the system is implemented; that is, a determination be made of the users of the system, procedures of data collection, verification, and so forth.

That the system be installed at a level within the Federal system that allows for adequate flow of information among all offices or bureaus involved, and that appropriate emphasis be placed on obtaining people to implement the system. Consequently, I recommend that implementation occur under the Secretary of the Interior.

Ι

That Congress specifically request the opinion of the Secretary of the Interior as to this matter, and the possibility of implementation. If implementation occurs, future status should be reported through the Secretary of Interior's annual report for a 3-year period.

9. Gordon J. F. MacDonald, Testimony Before the Subcommittee on Minerals, Materials, and Fuels, Committee on Interior and Insular Affairs, U.S. Senate (Nov. 1, 1973), pp. 262–264:

If you look at the situation today, with the obvious environmental advantages to reusing materials, I think we should ask the question— and the Commission has asked that question-why is it that there has been a decreasing use of secondary resources, percentagewise, over the last 20 years.

That is, we are using less recycled aluminum, recycled steel, recycled glass, in terms of percentage of the total amounts, and I think there are three barriers, all of which are discussed within the Commission's report. One is a technological barrier, how can we do this technologically; second, there are some institutional barriers that I will touch up briefly; and third, there is a severe economic barrier and that is what I want to address myself to and to present to you a recommendation for legislative action.

If we persist in our present policies, which are municipalities basically responsible for the disposal of the waste that we use, land disposal as our major use, I doubt very much that recycling will increase. My own feeling is that if present policies are continued, resource recovery will decrease in terms of the total percentage of goods used.

If we are to change this about, we must recognize and do something about the basic economic facts; and these are recycling must become an integral part of the complex production, consumption and disposal

cycle, and the cost of recycling or resource reuse must be favorable at each of these critical elements.

For a municipality or business the net cost of the recycling system must be less than the cost of disposal. For the paper or steel producer, that is, the person who will be making use of the recycled material, the waste paper or steel must be as cheap or cheaper than the trees or the iron ore from which he would ordinarily obtain his raw materials.

Finally, if the private sector is to be involved in the recycling of urban waste, there must be a sufficient rate of return to make investments in that area competitive with investments in other areas of opportunity.

If one looks at recycling, the many, many variables in an urban community, the cost of disposal will in part depend on how far the waste must be transported before it is disposed. If the waste must be hauled for long distances, the cost goes up very significantly. A new element in the situation has been the passage of the ocean dumping legislation and our adherence to the International Convention for Ocean Dumping, which makes it clear that coastal cities can no longer look to the ocean as the ultimate receptable for their urban waste. They have to find other ways of disposing of them.

I think if you look at the current state of technology in recycling, the current cost of disposal, that even under the most advantageous circumstances that it costs more to recycle than to dispose; that the basic elements of our other marketplace today are such that a municipality or an industry would seek a way of disposing of its materials through landfill, ocean dumping, if permitted whatever other way, rather than an attempt to reuse those resources contained within the waste products.

Even in the case where recycling might be competitive—and I will take San Francisco as an example, where the waste products are hauled for a substantial distance and the waste disposal cost approximates about $7.80 a ton today-if we could say that there was a recycling system that could get rid of those wastes at $7.80 a ton, there would still be strong pressures to use the existing system, that is, the waste disposal system, because there is experience with that system. It has worked in the past, we know how it works. We are very uncertain about how a recycling system would work, what the market would be for the products produced for that recycling system, and how effective such a resource recovery system would be in the end.

There are also institutional barriers-I mentioned this to begin with-technological, economic institutional barriers.

Let me just say that the industries for literally 100, 150 years, have depended upon virgin materials and have improved the techniques for extracting the virgin materials and converting them into the final products. As a result, we have developed highly complex, highly efficient processes, many of which are near the source of the raw materials I refer to Pittsburgh, to the glass plants, the phosphate plants down in Florida, and so forth-that are nearer the source of materials and are really vertically integrated total industries.

There has never been a sufficient quantity of waste of adequate quality to represent a major resource input into these industries.

Furthermore, these industries do not have the incentive to take into account the many external costs of production, such as waste disposal, pollution, other environmental advantages, and as a result the market for waste material has declined rather than increased.

I will argue that present Federal policy has favored the use of virgin resources over secondary materials in a number of ways. The most striking advantage arises from the mineral depletion allowance. Mineral producers not only receive a percentage depletion allowance on their resources for extracting metals, but they can also elect to recoup certain capital costs as a current deduction and thereby reduce their current tax liabilities.

One can treat resources developed from a property as capital gains, which has a lower tax rate than ordinary corporate tax rates. There are also, in my mind less significant, but still existing, tax incentives for exploration and development activity for virgin material.

I will just note that at present the depletion allowance for iron is 15 percent, aluminum is 22 percent, glass is 14 percent, and coal is 10 percent.

I would just like to illustrate what this means to the secondary industry by considering income of $100 from property under resource development. Under regular tax provisions, without a depletion allowance, the taxable income would be $100. Let's say that the rate is 50 percent, so the Government gets $50 and the industry or the resource developer gets $50 gain after taxes. With the depletion allowance of 20 percent, he starts out with $80, the tax is then $40 of the $80 on a 50-percent basis, and therefore his income after taxes is $60, or 20 percent greater than the virgin developer.

This means, basically, that the seller of a virgin resource can sell products at a lower price. In this specific case, he can make the same profit after tax, $50 on $100 to begin with, by selling his product at $83 while the secondary materials person will have to sell his product at $100. That means there is a $17 differential built in by the very existence of the depletion allowance.

10. Arsen Darnay, Jr., Testimony Before the Subcommittee on Minerals, Materials, and Fuels, Committee on Interior and Insular Affairs, U.S. Senate (Oct. 30, 1973), pp. 122–123:

Energy recovery is only one aspect of the recovery of value from solid waste. The practical potential of resource recovery to meet our national annual material needs is similarly substantial. For example, 7 percent of the iron, 8 percent of the aluminum, 5 percent of the copper, 3 percent of the lead, 19 percent of the tin, and 14 percent of the paper consumed annually could be met by materials recycled from postconsumer solid waste.

In the case of aluminum and tin, this represents quantities greater than the annual raw materials derived from domestic sources. In addition to the direct material savings, material recycling results in indirect energy savings as recycling appears to require less energy than virgin material production, when all the stages of material acquisition, transportation, and processing are considered.

In fact, it appears that postconsumer waste recycling could result in industrial energy savings as large or larger than that directly obtain

able from the utilization of mod was appears that significant virgia 2012. fossil fuels, mineral ores, and fores sesun of a nationwide resource recovery.

In general, over the past few ia cycled materials has declined relatives the Those recycled materials that were susimet e te from industrial fabrication processes. Eve, been signs of increased interest ʼn postecammer so it There are several reasons for the

First, EPA, through its resort program. onstrated that it is technical feasible to marry out ranna repensa at costs comparable to and over dan mera, 18238 44 m) waste disposal. The EPA has since en grasta mnder* & * three energy recovery systems and time narra, namun A second factor which has st

materials is the current high rate of extors

price pressures on all istral mesotra má kromina s material areas.

The Federal Reserve Board indar how it ༡༣ མ༠༡༧ ༡སྩལ་ཚེ capacity by producers of major indurmal Turfum 85 percent at the end of 1971 % i pemer highest level of capacity st

With output trailing demann vorm word va qaya, wat Therefore, many manufam va proven ** WrOA MIZIN ing alternative material supplies from wuurA VL & YALE SVET solid waste. Finally, rising wild rate management orsts Cue to trad decreased availability of land for dances staa, tre prep for treatm eir messed out of of wastes over longer distances for danos. A incineration due to air pollution, reglat ve tate ra and stirs and States to consider resources resterar a tornative,

As a result of these factors, TE DATA COROmed a retantial progress in resource recovery in the past 15 months. It le ossions that there is a high level of serious interest in resource pecovery at the State and local level as well as by the private sector.

Now I would like to turn to the lee of material conservation through increased efficiency of material see and attempt to identify some of the opportunities that exist in this area. Our studies indicate that nearly 60 percent of the solid waste stream consists of discarded consumer products.

It is this 75-80-million-ton portion at which proposals designed to reduce consumption of materials and products are directed in order to reduce waste generation. The largest single consumer product category is containers and packaging, which accounts for 42 million tons or one-third of the total waste stream.

In terms of individual materials, packaging accounts for over 90 percent of the glass, 75 percent of the aluminum, and approximately 50 percent of the ferrous metals, paper, and plastics discarded annually.

In addition to being the largest class of products in waste, packag ing and container consumption has been growing rapidly both in volume and in proportion to the products which are packaged. Therefore,

it appears that methods of delivering products and goods have become more material intensive and although there is yet no consensus as to the techniques to be employed or the tradeoffs involved, we should begin to give serious attention to the need for conservation of materials in this sector.

There are several options that might be available to improve the efficiency of materials use, including: One, the use of reusable products such as refillable bottles; two, increasing the lifetime of products and decreasing the use of "throwaways," and three, increasing package sizes, thereby reducing the amount of material to deliver a quantity of goods.

We have not yet been able to determine the existing marked acceptance of options such as these.

11. National Association of Recycling Industries, Inc., "Statement Before the Subcommittee on Transportation and Aeronautics, House Interstate and Foreign Commerce Committee on H.R. 6637," March 12, 1974, pp. 7, 13-14.

The Bureau of Mines, however, warns that by the end of the century, U.S. demand for metals will have quadrupled, and that unless we recycle more, we will need imports at 7 times the present rate to satisfy our needs. In a recently-released 722 page volume, the U.S. Geological Survey of the Department of the Interior explained the situation as follows:

The fact is that the future drain on our mineral supplies will become enormous. Even with a leveling off in growth in per capita consumption, it will be necessary to build a "second America" within the next three decades in the sense of having to duplicate or replace the physical plant built during all our history.

Accordingly, the USGS Report emphasizes, "our ability to meet projected needs to the end of the century will depend largely on recycling and conservation in mineral production and use, and imports from foreign sources."

In the economic sector, the United States, once the world's strongest exporting nation, recently suffered a very disturbing, unfavorable negative balance of payments, and today the situation is not much better. That predicament arose, in part at least, from our country's growing reliance on imported copper, aluminum, lead, zinc and other critical metals when there are available, here in the United States, vast quantities of recyclable metals which could be utilized in place of these foreign imports, or at least to limit the size of those imports in the future. As stated above, however, increased domestic metals requirements in the years immediately ahead promise to make the present balance of payments problems in this particular area far worse than they are today unless Congress does something immediately to unshackle the recycling forces here at home. In this regard, the Deputy Assistant Secretary of the Interior for Mineral Resources recently described the situation as follows:

In the case of metals, the forecast dictates a continuing rapid rise in demand, but at the same time, a very small increase in supply from domestic sources.