Mr. George Dreckmann's Page 10, Feb. 17 Perspective suggesting we boycott PET bottles shows a lack of understanding of the supply-and-demand forces of capital-intensive industries like PET resin.
The cost of building a grassroots PET plant, including monomer, is on the order of $350 million. A grassroots plant takes at least three years to build.
Given the long lead time to build new capacity, large increments of capacity for new plants and imprecise market forecasts, it is not reasonable to expect capacity to match market growth. However, once built, the money is spent! The only way to begin to recover the capital cost is to sell product even if it means dramatically lowering the price.
U.S. PET demand is growing from 2.87 billion pounds in 1994 to a forecast of 5.07 billion pounds in 2000. The PET market will need new capacity if increased demand is to be met. Yes, the market price swings when the sales forecasts do not meet capacity. That's freedom to invest in the industry and the freedom of purchasers to decide to buy the product! In a free market, there are no guaranteed winners!
Mr. Dreckmann is suggesting government dictate what product we can buy! Would he also have government decide when and who could build capacity to prevent the ``boom-bust cycle''? How long before we understand that minimum-content laws are nothing more than failed socialism?
The recycling business is not as fundamentally sound as environmentalists would like you to believe. Collection and landfill disposal costs of trash in the United States are about 5 cents per pound. Collection, sorting, cleaning and selling of plastic trash costs are between 26 and 46 cents per pound. No minimum-recycled-content law will save this industry! Only government subsidies will save plastics recycling!
It's time we gave up on recycling plastic and use it for its energy. Most plastics in the waste stream have 17,000-20,000 British thermal units, just under fuel oil's 20,900 Btu. Trash-to-steam technology safely generates electricity while reducing the weight of garbage by at least 80 percent.
The American Plastics Council funded a demonstration that converted a mixture of post-consumer plastics into petroleum products in a petroleum refinery coker unit. In Japan and Germany, companies are experimenting with mixed plastics to replace part of the coke used to reduce iron ore to iron in a blast furnace.
Economics is a major issue in obtaining the energy value of plastics. The value of a metal-free plastic source to a petroleum coker is only about 0.5 cents per pound. Kerosene sells for only 10-15 cents per pound. Finally, plastic replacing coke is only worth 2.5 cents per pound.
Densification at collection, or limited cleaning and no sorting will cut collection costs. The energy use of post-consumer plastics is not a guaranteed better economical use of trash vs. a landfill. The technology offers a potential at lower government cost to remove trash from our landfills. There are no easy answers!
If there is a way to accomplish economic conversion of plastic waste to energy, an entrepreneur will find it! That's a free market!