Waste Management 2014 Annual Report Download - page 97

Changes in regulations applicable to oil and gas drilling and production could adversely affect our Energy
Services business.
Energy Services business demand may also be adversely affected if drilling activity slows due to industry
conditions beyond our control, in addition to changes in oil and gas prices. Changes in laws or government
regulations regarding GHG emissions from oil and gas operations and/or hydraulic fracturing could increase our
customers’ costs of doing business and reduce oil and gas exploration and production by customers. Recently,
there has been increased attention from the public, some states and the EPA to 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 oil and gas exploration and production 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.
Increasing customer preference for alternatives to landfill disposal could reduce our landfill volumes and
cause our revenues and operating results to decline.
Our customers are increasingly diverting waste to alternatives to landfill disposal, such as recycling and
composting, while also working to reduce the amount of waste they generate. In addition, several state and local
governments mandate recycling and waste reduction at the source and prohibit the disposal of certain types of
waste, such as yard and food waste, at landfills or waste-to-energy facilities. Where such organic waste is not
banned from the landfill or waste-to-energy facility, some large customers such as grocery stores and restaurants
are choosing to divert their organic waste from landfills. Zero-waste goals (sending no waste to the landfill) have
been set by many of North America’s largest companies. Although such mandates and initiatives help to protect
our environment, these developments reduce the volume of waste going to our landfills which may affect the
prices that we can charge for landfill disposal. Our landfills currently provide and, together with our divested
waste-to-energy facilities, have historically provided our highest income from operations margins. If we are not
successful in expanding our service offerings and growing lines of businesses to service waste streams that do
not go to landfills and to provide services for customers that wish to reduce waste entirely, then our revenues and
operating results may decline. Additionally, despite the development of new service offerings and lines of
business, it is possible that our revenues and our income from operations margins could be negatively affected
due to disposal alternatives.
Developments in technology could trigger a fundamental change in the waste management industry, as
waste streams are increasingly viewed as a resource, which may adversely impact volumes at our landfills
and waste-to-energy facilities and our profitability.
Our Company and others have recognized the value of the traditional waste stream as a potential resource.
Research and development activities are on-going to provide disposal alternatives that maximize the value of
waste, including using waste as a source for renewable energy and other valuable by-products. We and many
other companies are investing in these technologies. It is possible that such investments and technological
advancements may reduce the cost of waste disposal or the value of landfill gas recovery to a level below our
costs and may reduce the demand for landfill space. As a result, our revenues and margins could be adversely
affected due to advancements in disposal alternatives.
If we are not able to develop new service offerings and protect intellectual property, or if a competitor
develops or obtains exclusive rights to a breakthrough technology, our financial results may suffer.
Our existing and proposed service offerings to customers may require that we invest in, develop or license,
and protect, new technologies. Research and development of new technologies and investment in emerging
technologies often requires significant spending that may divert capital investment away from our traditional
business operations. We may experience difficulties or delays in the research, development, production and/or
marketing of new products and services or emerging technologies in which we have invested, which may
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