Waste Management 2014 Annual Report Download - page 92

applicant’s or permit holder’s compliance history. Some states, provinces and local jurisdictions go further and
consider the compliance history of the parent, subsidiaries or affiliated companies, in addition to the applicant or
permit holder. These laws authorize the agencies to make determinations of an applicant’s or permit holder’s
fitness to be awarded a contract to operate, and to deny or revoke a contract or permit because of unfitness,
unless there is a showing that the applicant or permit holder has been rehabilitated through the adoption of
various operating policies and procedures put in place to assure future compliance with applicable laws and
regulations.
Foreign Import Regulation
Enforcement or implementation of foreign regulations can affect our ability to export products. In 2013, the
Chinese government began to strictly enforce regulations that establish limits on moisture and non-conforming
materials that may be contained in imported recycled paper and plastics as well as restricting the import of
certain other plastic recyclables. The higher quality expectations resulting from initiatives such as “Operation
Green Fence” can drive up operating costs in the recycling industry, particularly for single stream MRFs. Single
stream MRFs process a wide range of commingled materials and tend to receive a higher percentage of non-
recyclables, which results in increased processing and residual disposal costs. Despite these increased costs, we
believe we are well positioned among our potential competitors to respond to and comply with such regulations.
We are revising our service agreements to address these increased costs and are working with stakeholders to
educate the general public on the need to recycle properly.
Hydraulic Fracturing Regulation
Our Energy Services line of business provides specialized environmental management and disposal services
for oil and gas exploration and production operations. Recently, there has been increased attention from the
public, some states and the EPA on the alleged potential for hydraulic fracturing to impact drinking water
supplies. There is also heightened regulatory focus on emissions of methane that occur during drilling and
transportation of natural gas, as well as protective disposal of drilling residuals. Increased regulation of hydraulic
fracturing and new rules regarding the treatment and disposal of wastes associated with exploration and
production operations could increase our costs to provide oilfield services and reduce our margins and revenue
from such services. On the other hand, we believe the size, capital structure, regulatory sophistication and
established reliability of our Company provide us with an advantage in providing services that must comply with
any complex regulatory regime that may govern providing oilfield waste services.
Emissions from Natural Gas Fueling and Infrastructure
We currently operate the largest compressed natural gas (“CNG”) fleet in the waste industry, and we plan to
continue to transition a significant portion of our collection fleet from diesel fuel to CNG. We have constructed
and operate 72 natural gas fueling stations, 25 of which also serve the public or pre-approved third parties, in
28 states and three Canadian provinces. Concerns have been raised about the potential for emissions from the
fueling stations and infrastructure that serve natural gas-fueled vehicles. We have partnered with the
environmental organization Environmental Defense Fund, as well as other heavy-duty equipment users and
experts, on an emissions study to be made available to policy makers. We anticipate that this comprehensive
study of emissions from our heavy-duty fleet may ultimately result in regulations that will affect equipment
manufacturers and will define operating procedures across the industry. Additional regulation of, or restrictions
on, CNG fueling infrastructure or reductions in associated tax incentives could increase our operating costs. We
are not yet able to evaluate potential operating changes or costs associated with such regulations, but we do not
anticipate that such regulations would have a material adverse impact on our business or our current plan to
continue transitioning to CNG vehicles.
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