technical options for conservation of metals: case studies

Technical Options for Conservation ofMetals: Case Studies of Selected Metals and

Products

September 1979

NTIS order #PB80-102619

—

Library of Congress Catalog Card Number 79-600172

For sale by the Superintendent of Documents, U.S. Government Printing Office

Washington, D.C. 20402 Stock No. 052-003-00705-3

Foreword

The shortages in many critical metals and other materials that the United Stateshas experienced in recent years, along with its increasing dependence on foreignsources of supply for those materials, has intensified interest in the prospects formaking less wasteful and more efficient use of materials.

This study explores the kinds and amounts of waste that occur in this Nation’suse of eight critical metals and the technical options for reducing that waste. Theeight metals studied are: iron, copper, aluminum, manganese, chromium, nickel,tungsten, and platinum. In their levels of import dependence and in other respects,these metals are a representative sample of commercially important metals.

This study was requested by the Committee on Commerce, Science, and Trans-portation of the U.S. Senate. It should provide useful technical information for all in-terested in more efficient use of materials.

JOHN H. GIBBONSDirector

—— —

OTA Materials Advisory Committee

James Boyd, ChairmanMaterials Associates

Earl H. Beistline Julius HarwoodUniversity of Alaska Ford Motor Company

Seymour L. Blum Franklin P. HuddleNorthern Energy Corporation Congressional Research Service

Lynton K. Caldwell Elburt F. OsbornIndiana University Carnegie Institution of Washington

Robert L. Coble Richard B. PriestMassachusetts Institute of Technology Sears, Roebuck and Company

Lloyd M. CookeEconomic Development Council of

New York City, Inc.

Frank FernbachUnited Steel Workers of America (retired,)

James H. GaryColorado School of Mines

Edwin A. Geelnternational Paper Company

Bruce HannonUniversity of Illinois at Urbana-

Champaign

N. E. PromiselNational Materials Advisory Board

Lois SharpeLeague of Women Voters (retired)

Raymond L. SmithMichigan Technological University

Simon D. StraussASARCO, Inc.

George A. WatsonFerroalloys Association

OTA Project Advisory Panel

N. E. Promisel, ChairmanIndependent Consultant

Seymour L. Blum Farno GreenNorthern Energy Corporation General Motors Company

James Boyd Paul LermanMaterials Associates Fairleigh Dickinson University

Edwin A. Gee Richard B. PriestInternational Paper Company Sears Roebuck and Company

Julius J. HarwoodFord Motor Company

NOTE: The Advisory Panel and the Materials Advisory Committee provided advice and comment throughout the assess-ment, but do not necessarily approve, disapprove, or endorse the report for which OTA assumes full responsibility.

//

OTA Conservation of MetalsProject Staff

Lionel S. Johns, Assistant Director

Energy, Materials, and Global Security Division

Albert E. Paladino, Materials Group Manager (through December 1.978)Audrey Buyrn, Materials Group Manager- (from January 1979)

Marshall Peterson, Project Director

Materials Group Staff

Fred B. Wood Patricia L. Poulton Raymond B. GavertWilliam M. Fitzgerald William Flanagan Barry D. Lichter

Materials Group Administrative Staff

Carol A. Drohan Bernadette BalakitJacqueline Robinson Elizabeth Al bury

OTA Publishing Staff

John C. Holmes, Publishing Officer

Kathie S. Boss Joanne Heming

.———.

Acknowledgments

This report was prepared by the Office of Technology Assessment Materials Group. Thestaff wishes to acknowledge the assistance and cooperation of the following contractorsand consultants in the collection of information.

Battelle Columbus Laboratories

The George Washington UniversityProgram of Policy Studies in Science and Technology

Rensselaer Polytechnic Institute

Pugh Roberts Associates, Inc.

The staff also wishes to acknowledge the contributions of the following individuals, ondetail to OTA in the early stages of the assessment.

Martin Devine, Naval Air Development Center

Elio Passaglia, National Bureau of Standards

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Contents

Chapter!

1. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . .Technical options for Reducing Waste. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Technical options for Reducing Losses From the Materials Cycle . . . . . . .Technical options for Reducing Excess Metal in the Materials Cycle . . . . .

Summary of Technical options for Reducing Losses and Reducing Excess MetalPreliminary Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Materials Objectives and Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Illustrative Implementation options . . . . . . . . . . . . . . . . . . . . . . . . . . . .Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

II. Congressional Interest and Scope of Assessment. . . . . . . . . . . . . . . . .

Original Congressional] Request . , . . . . . . . . . . . . . , . . . . . . . , . . . . . . . . . .Definition of Materials Waste and Conservation . . . . . . . . . . . . . . . . . . . . . . .Scope of the Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Selection of Materials for Detailed Study ... , . . . . . . . . . . . . . . . . . . . . . . . .

III. Quantification of Losses From the Materials Cycle. . . . . . . . . . . . . . . .

Iron and Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Aluminum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... , . . . . . . . . . . . . . . . . .Platinum-Group Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Manganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chromium ., . . . . . . . . . . . . ... , ... , . . . . . . . . . . ... , . . . . . . . . . . . ,Nickel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tungsten. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Summary of Losses for Selected Metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

IV. Identification of Technical Options for Reducing LossesFrom the Materials Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unrecovered and Unknown Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Losses in the Postconsumer Solid Waste Stream. . . . . . . . . . . . . . . . . . . . . . .Losses in Dissipative Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Losses in Exports. . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Losses in Milling and Concentrating ofLosses in Metal Processing . . . . . . . .Losses in End-Product Manufacture. .Losses in Corrosion and Wear. . . . . .Losses in Nonmetallic Uses of Raw MaSummary of Technical Options. . . . .

Ores. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

erials . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

V. Design Review of Technical Options for Reducing Excess Materialin the Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Design Review of Selected Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

3

3446

1()13131316

19

19192020

25262830323436384042

47

474848494950505151,51

55

5556

I II

VI.

VII.

Analysis of the Most Significant Technical Options forReducing Excess Metals Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Substitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Product Recycling (Product Rework and Reuse, Component Remanufacture )..Substitution in the Construction Industry . . . . . . . . . . . . . . . . . . . . . . . . . . .Eliminate Unnecessary Metal in Products . . . . . . . . . . . . . . . . . . . . . . . . . .Extend Product Life..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Extend Product Life of Refrigerators: An Example of Systems

Dynamics Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Reduced Use of Materials-intensive Systems, Such as Alloys. . . . . . . . . . . . . .Summary of Options and Potential Savings . . . . . . . . . . . . . . . . . . . . . . . . . .

Preliminary Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction: Materials Conservation Objectives. . . . . . . . . . . . . . . . . . . . . . .Materials Availability Problems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chronic Lack of Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Import Dependency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Energy Conservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cyclical Instabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Environmental Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Long-Term Depletion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Technological Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Matching Conservation Options to Materials Availability Problems . . . . . . . . .Illustrative implementation Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Establish a Governmental Contingency Planning Function. . . . . . . . . . . .Establish a Public Data System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Establish a Market for Contingency Shares Certificates. . . . . . . . . . . . . . .Research and Development on Metal Substitution . . . . . . . . . . . . . . . . . .Improve Product Aftermarket. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Establish Scrap Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendixes

A. Proceedings of a Workshop on Wear Control to Achieve Product Durability , . . . .B. Conservation in World War II: 1933-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C. Conservation and Shortages: 1946-77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .D. Glossary of Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E. List of Working Papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63

6364676770

737580

83

838384848484868686878989909192939797

101107118124125

i ///

LIST OF FIGURES

Figure No.1.2.3.

4.5.6.7.

8.9.

1 0.11.12.13.14.15.16.17.18.19.20.21.22.23.24.25.26.27.28.29.

30.B-1 .B-2.c-1 .

Metals Selected for Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Typical Materials Cycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Estimated Metal Losses for Each Loss Category, Expressed as a Percentage ofDomestic Mill Shipments . . . . . . . ..., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Technical Options for Reducing Losses in the Materials Cycle . . . . . . . . . . . . . . . . . . . . . . . .Classes of Excess Metal in the Materials Cycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Products Selected for Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Potential Savings From Technical Options by Reducing Excess Metal Usage, Expressed as aPercentage of Domestic Mill Shipments . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Summary of Technical Options for Reducing Losses and Reducing Excess Metal . . . . . . . . . . .Ability of Conservation Options to Meet Selected Materials Objectives . . . . . . . . . . . . . . . . . .Energy Intensity at Each Stage of the Materials Cycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Context of Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . .Typical Materials Cycle. . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iron and Steel Cycle: Flows and Losses, 1974 ......, . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Aluminum Cycle: Flows and Losses, 1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Copper Cycle: Flows and Losses, 1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cycle for Platinum-Group Metals: Flows and Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . .Manganese Cycle: Flows and Losses, 1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chromium Cycle: Flows and Losses, 1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nickel Cycle: Flows and Losses, 1974. . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . .Tungsten Cycle: Flows and Losses, 1974 . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . .Recycling of Obsolete Scrap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Technical Options for Reducing Losses in the Materials Cycle . . . . . . . . . . . . . . . . . . . . . . .Methodology for Evaluating Options for Reducing Excess Material in the Cycle . . . . . . . . . . .Typical Disposal Pattern for Refrigerators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Refrigerator Weight Reduction for Different Models as a Function Time . . . . . . . . . . . . . . . . .Overview of Refrigerator Model Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Refrigerator Model: Longer Mechanical Lifetime Case, Refrigerator Lifetime Over Time. . . . . .Refrigerator Model: Longer Mechanical Lifetime Case, Employment and Sales Over Time . . . .Refrigerator Model: Longer Mechanical Lifetime Case, Aluminum and Copper ConsumptionOver Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Energy Intensity at Each Stage of the Materials Cycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Gross National Product, World War Il. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Conservation Policies During World War II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Metal Shortages 1939-77 ....., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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9111415212527293133353739414752556671747677

7885

108111119

ISummary

. ’

ISummary

INTRODUCTION

The shortages in many critical metals and othermaterials that the United States has experienced inrecent years, along with its increasing dependenceon foreign sour-cm of supply for those materials,has intensified interest in the prospects for makingless wasteful and more efficient use of materials.This report explores the kinds and amounts ofwaste that occur in this Nation’s use of eight criti-cal metals and the technical options for reducingthat waste. The eight metals studied are: iron, cop-per, aluminum, manganese. chromium, nickel.tungsten, and platinum. In their 1evels of importdependence and in other respects, these metals area representative sample of commercially importantmetals.

Metals are wasted, or lost, in two different ways:1) amounts of metal are not productively used atvarious points along the materials cycle, from min-ing of ore to product disposal, and 2) excessamounts of metal are used in the materials cyclefor product manufacture. The study identifies, foreach of the eight metals, the levels at which eachkind of waste occurs at major points of the materi-als cycle. In general, the study finds that the great-est waste occurs in product use and disposal ratherthan in metal extraction and processing or productmanufacturing.

Of the many options available to reduce lossesand reduce the use of excess metal, the study con-cluded that product remanufacturing, reuse, andrepair (collectively known as product recycling)offer the greatest leverage for saving materials andenergy. Product recycling already exists in severalareas, such as auto parts, furniture, typewriters,and aircraft. But additional incentives are neededto encourage development of the aftermarket in-dustry necessary for widespread recycling.

Perhaps of even more interest at this time, how-ever, are options to improve materials availabilityduring critical situations, such as import embar-gos or disruption of transportation facilities or sup-ply shortages. Options considered include the es-tablishment of a governmental contingency plan-

ning function, a public data system, a private sec-tor contingency market for essential metals, andresearch and development on metal substitution.

* * * * *

This study was requested by the Committee onCommerce, Science, and Transportation of theU.S. Senate. The request was prompted by thefollowing three factors:

First, the 1973 OPEC oil embargo demonstratedthe risks of U.S. dependence on foreign energy re-sources and focused attention on the possibility ofsimilar problems with mineral resources for whichthe United States is also heavily import-dependent.Second, in 1973-74, the increased demand for ma-terials due to economic recovery from the 1969-70recession led to supply shortages for a wide rangeof metals, thus generating concern among U.S. in-dustrial consumers about the reliability of futuresupplies. 1 Third, U.S. per capita consumption ofminerals has grown to more than four times theworld average, prompting renewed attention onhow to reduce consumption through conservation.

The study focused only on metals. Other mate-rials might well have been considered, such aschemicals, wood, and plastics. But at the time thisstudy was initiated, metals were shortest in supply.The eight specific metals selected for detailedanalysis are listed in figure 1. The three major cri-teria used in selecting these metals were: level ofimport dependence, degree of importance toAmerican industry, and the nature of use (e.g., vol-ume, price, product applications). As a group, theeight constitute a reasonable cross section of com-mercially important metals. Most are substantiallyimported, as indicated in figure 1. However, whilethe group of eight is representative, other metals,such as tin and cobalt, constitute important omis-sions.

This report does not include detailed discussionof conservation options for recovery of metals frommunicipal solid waste, the subject of another OTA

I S<.(l ~~)p, C for a d~(~i]ed discussion.

3

4 . Metal Losses and Conservation Options

and Energv From Municipal give detailed consideration to the full range of im-OTA-M-93, Nor does this report pacts of conservation options.

Figure 1 .—Metals Selected for Study

Metal s :

iron . . .CopParAtumhwn

‘1. .

“Mtinganka - ‘9!%%’Ctuemwt ““’-?W%

,Nkkel “ > ‘m%Tun#Mn -.;-

Ia Net I m port rel lance = I reports ml nus exports plus adjustments for government and

industry stock changes 1978 data from U S Department of theInterior, Bureau of Mines, Mineral Commod/ty Summaltes1979 pp 45

b Refers t. the P[atlnum group metals, which Includes platinum Palladlum rhodiumru then IU m, urld turn and osmium

SOURCE OTA based on data from U S Bureau of Mines

TECHNICAL OPTIONS FOR REDUCING WASTE

Technical Options for Reducing LossesFrom the Materials Cycle

Losses from the materials cycle represent a ma-jor potential for waste. A typical materials cycle isshown in figure 2, which illustrates the total flow ofa metal beginning with its extraction from theground and processing of the ore to its manufac-ture, use. and disposal in the form of products.Losses can occur at each step in the cycle and par-ticularly in the disposal stage where ultimately theproduct must be either stored, recycled, or dis-carded.

By tracing the flows of the eight metals throughthe materials cycle—from mining to disposal—thetotal losses for each metal were identified. Losseswere calculated by subtracting the output at eachstage of the materials cycle from the input. For ex-ample, the losses in processing aluminum werecalculated by subtracting the output, mill products(7.2 million short tons) and mill scrap (5.8 millionshort tons), from the input. The input in this case isthe sum of imported ingot and alloy elements,bauxite and alumina, and recycled scrap for a total

of 13.4 million short tons. The difference is 0.4 mil-lion short tons, which represents the loss of alumi-num during processing. All losses were verifiedthrough discussion with the appropriate industry.Almost 100 percent of every metal was accountedfor.2

Figure 3 gives estimates of losses expressed as apercentage of domestic shipments of mill productsof the metal (e. g., steel shipped by steel mills). Inother words, these loss figures are expressed as apercentage of the amount of mtetal flowing at oneplace in the cycle, shipments of mill products,which is the traditional industry measure of pro-ductive output.

Excluding platinum and manganese, the totallosses of the selected metals range from 55 to 78percent. These losses occur over the life of theproducts containing the metal, which may rangefrom 1 to 50 years. In reality, losses during mining,processing, and manufacturing occur during the

‘For a [olnplctc dis([issioll of how 10ss(+ ~~(’r(~ (j[]alltifi(d,s(’f_’ (’11 Ill.

Ch. I—Summary 5

Figure 2.—Typical Materials Cycle

TL

Milling &concentrating

Notes:

Metal recycling

Metalexports I

Product remanufacturing

Product reuse

+1Metal Metal / Product Product

extraction processing manufacture utilization disposal

TranSpoti & processing Nonmetallic Corrosionhandling & wear Post

use of Dissipative consumer Unrecoveredraw materials uses solid

waste

vL=

vL

vL

first year. Losses during use

Maximum losses for any of the metals studied exceeds20% of 1974 domestic mill shipments.

Maximum losses for any of the metals equals 10 to 20%of 1974 domestic mill shipments.

Maximum losses are less than 10%

The triangles are intended to give only an approximate indication of therelative level of losses. Generalizations are difficult due to the widevariability of losses for individual metals. See figure 3 for metal-specific data.SOURCE. OTA, based in parrt on data from Working Papers One and Two.

and disposal stretchover - the lifetime of the product, from 1 year forcans and 15 years for refrigerators to 50 or moreyears for buildings.

The loss of platinum is only 15 percent, due tothe very high recycling rate for this precious metal.on the other hand, the loss of manganese exceeds1()() percent, due to the primary use of this metal insteel production. More manganese is lost in thesteel making process (e.g., as slags) than is con-tained in the steel products actually shipped.

For each metal the total loss is a sum of a largenumber of smaller losses that occur at every stageof the materials cycle. This dispersal of losses is amajor harrier to effective overall waste reduction.

However, some stages of the materials cycle expe-rience greater loss than others, as illustrated infigure 3. The four largest loss categories are:

Unrecovered metals in obsoleteproducts . . . . . . . . . . . . . . . 5-37% lostDissipative uses of metals as alloys,powders, pigments (e.g., catalysts,paints, fertilizers) . . . . . . . . . . . . .4-23 % lostMilling and concentrating losses priorto metal smelting . . . . . . . . . . . . Nil-19X lostMetal losses through export of scrapand mill products . . . . . . . . . . . 0-17 % lost

The technical conservation options with thegreatest leverage in reducing each category of lossare shown in figure 4. The most highly leveraged

.-

6 ● Metal Losses and Conservation Options

Figure 3.—Estimated Metal Losses for Each Loss Category, Expressed as a Percentage ofDomestic Mill Shipments (1974) -

40

30

IMn = 122%

Ni

Cu

w

‘e Mr

Cr

41 Pt

Fe = IronCu = CopperAl = AluminumMn = ManganeseCr = Chromium

= NickelI’ = TungstenPt = Platinum gro Jp

(n

I

Ni

Cr

w

Cu

Pt

AlI

~Fe

JMn

=.-E 20

10

0

Fe

Cu

Al

w

dn N

EalviiQ

Mn

w

Al

Al W

FeMn

Cu

Mn

Al Cr

c.-

Cr

w

Al

Fe

Cu~i Pt mm

Loss category

NOTE See chapter Ill, tables 20 and 21 for data on which flqure 3 IS basedSOURCE OTA based on data from Working papers One an-d Two

options are metal recycling, product remanufactur- constant demand). This will elimi nate the losseshat would havehat amount of

ing and reuse, R&D on substitute materials and (e.g., milling and concentrating tprocesses, and R&D on metal recovery from low- been associated with producinggrade ores. metal.

Metal recycling and product remanufacturinghave multiple leverage because, in addition to the Technical Options for Reducing Excessdirect reduction in losses of unrecovered metals in Metal in the Materials Cycleobsolete products, these options lead to an addi-tional savings in future years. For example, if Losses from the materials cycle, as discussedthrough product recycling an additional 10 percent above, represent one of two major classes of waste.of obsolete office equipment in a given year is re- The second class of waste is the use of excessmanufactured, 10 percent less metal will be re- metal in the materials cycle. The different types ofquired for next year’s production run (assuming excess metal usage are shown in figure 5.

Ch. l—Summary ● 7

Figure 4. —Technical Options for Reducing Losses inthe Materials Cycle

Loss category Range of losses* Technical conservation option

Unrecovered metals 5-37% Metal recyclingProduct remanufacturing and reuse

Dissipative uses 4-23% R&D on substitute materialsand/or processes

Milling & concentrating Nil-19% R&D on metal recovery fromlow-grade ores, e.g. fine particletechnology

Exports of scrap & mill o-17% Export controlsproducts

Postconsumer solid waste 5-1470 Product recycling

Metal processing 0.5-1 2% Capital replacement(Mn=122%) Alternative desulfurization process

(for Manganese)

Nonmetallic uses of raw Nom-11% R&D on substitute metalsmaterials & processes

End-product manufacture Nil-3% Improved management controls

Corrosion and wear Nil-3% R&D on improved corrosion andwear resistant treatments

Transportation & handling Nil-3% Improved management controls

● Range of losses for the eight metals in percent of 1974 domestic mill shipments.See figure 3 and tables 20 and 21 in chapter Ill for metal-specific data.Nom = small but undetermined amount of losses.Nil = amount of losses close to zero.

SOURCE OTA based in part on data from Working Papers One and Two

The seven major products listed in figure 6 were that contained the metals under evaluation. Thus,selected as case examples in order to evaluate 25options for reducing excess metals These productswere selected as typical of five major U.S. indus-tries that collectively account for about 60 percentof total metal consumption in the United States.4

As a group, these products use the selected metalsin amounts typical of many metal products. Anal-ysis of additional products was conducted wherenecessary. For example, office equipment, pipe-lines, and television sets were included in the anal-ysis of product recycling.

Estimated metal savings for the case exampleswere then generalized to a whole range of products

‘IJ( )1 1 I)(’ ( ( )1111 )1(’t(’ Il\t ot 01)[ lolls (’i (Illlilt(’(i, \(’(’ tiit)lt’ 21, [’t)

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if 10 percent of the steel used in automobiles couldbe saved by a stress-optimized design, that per-centage was applied to the amount of steel used inall transportation products.

Figure 7 shows the percent of 1974 domesticmill shipments of each metal that could be savedby each conservation option listed.

These numbers are engineering judgments ofthe overall conservation potential for the listed op-tions. The numbers are interdependent in that im-plementation of one option will reduce the savingspossible with another option. Also, the percent-ages shown indicate the savings that are technical-ly possible. Economic and other factors may se-verely limit the actual savings.

51-680 0 - 79 - 2


Figure 5.—Classes of Excess Metal in the Materials Cycle

Type of excess metal use Reasons for excess metal USe

tUse of a—scarce metal

I I

I 1 b =*~=Excess metal

in cycle—

●

,

I

Inadequate repair facilitiesLackof a second-hand

Lack of product - -reuse i

Inadequatedisposal options

7

Excess inventory and production— ,Lack of standardized partsOverstock invertoriesProduction overruns

Use of materials- Materials-intensie approachesintensive systems Complex alloy systems

*SOURCE OTA

Figure 6.—Products Selected for Study

I Product ‘ I Industry ID

I Automobile I Transportation ‘ IRefrigeratorBuildingBridgeLatheTractorCan

AppliancesConstruction

Machinery

Fabricated metal products

Three additional categories have been added tofigure 7 for comparison purposes: major redistribu-tions, minor redistributions, and use of stocks. The

major redistributions option is based on experi-ence with use of allocations during World War 11.The use of stocks option is based on the amount ofmetal that went into stocks during 1974. Although1974 may not be a typical year, these numbersgive some basis for comparison. (See pages 10 and11 for an explanation of these categories).

Metal substitution, product remanufacturing andreuse, and savings through some sort of redistribu-tion or allocation system, offer the largest potentialfor reduction of excess metal usage.

Ch. l—Summary ● 9

Figure 7.— Potential Savings From Technical Options by Reducing Excess Metal Usage, Expressed as aPercentage of Domestic Mill Shipments (1974)

co$Enim

90

<

60

50

40

30

20

10

0

.

.

.

—

AlCu

Cr

MnN I

Fe

cl,

FeAl

Mn

Cr

NI

w

F/In

rl,

AlNI

Pt

.

Fe = IronCu = Copper

Al = AluminumMn = ManganeseCr = ChromiumNi = NickelW = TungstenPt = Platinum group

(-L

Fe

Al

[

LL

Al

Fe

Ni

Cr

NI

Cr

7Ni Al Ni

FeCL rl,

Al Cr CLFe

FeCr Pt Cr Ni

Al

Technical options for reducing excess metal usage

NOTE See ch VI table 36 for data on which figure 7 IS basedSOURCE: OTA based on data from Working Paper Three


SUMMARY OF TECHNICAL OPTIONS FOR REDUCINGLOSSES AND REDUCING EXCESS METAL

A summary of the technical conservation op-tions is presented in figure 8, which includes op-tions for reducing losses (designated by ‘L’) as wellas options for reducing excess metal (’E’). The per-centages shown give the range of potential savingsfor the eight metals studied, rounded off to thenearest 5 percent. These percentages are nonaddi-ctive, since many of the options are mutually exclu-sive, such as product recycling and metal recy-cling. The purpose of figure 8 is to show which op-tions offer the most potential for conservation ofmetals.

The percentages shown in figure 8 represent themaximum technical potential for conservation.The actual amounts may be considerably less dueto various barriers to implementation and undesir-able impacts and costs. Only options with 10 per-cent or more potential metal savings for at leastone metal have been included.

The conservation options are, of course, metalspecific as indicated by the wide range of percent-ages. A metal like platinum, which costs over$2,000 per pound, offers only limited additionalopportunities for conservation. Metals used pri-marily for alloys (such as manganese and chromi-um) require different options than do the basicstructural metals (iron, copper, aluminum). How-ever, in this summary, the options are discussedonly in general terms. s

Each of the technical conservation optionspresented in figure 8 is discussed below.

Major redistributions.—A review of theWorld War 11 experience (see appendix B) showedthat from 50 to 90 percent of several of the metalsstudied were diverted from their then current use.During wartime, when flexibility became absolute-ly necessary, major metal savings in the civiliansector were accomplished with a very tight alloca-tion system that drastically reduced the domesticproducts that could be manufactured and con-sumed. Production was diverted to war products,so severe economic consequences were averted.

5For the complete metal-specific discussion 0[ options, see[’tls. Iv, v, and V1.

This would not necessarily be the case in peace-time. The World War 11 experience indicates theupper limit for conservation in the civilian sectorunder crisis conditions.

Metal substitution.–Con:iderable potentialflexibility enters into materials use via the substitu-tion option. However, several major impedimentsmust be overcome. First, a successful substitutioncan often take years to implement. Second, manyproducts are manufactured with a highly special-ized production process that is costly to change. Ifthe substitution option is to be acceptable, greaterflexibility must be built into the production processso that alternative metals can be used. Third, everysubstitution involves a risk that will add to theproduct cost. Strong financial incentives will be re-quired to overcome these barriers.

A special case is the construction industry,which uses 10 to 20 percent of metals. This indus-try is not tied down to a specific production proc-ess. For example, considerable dollar savings (onthe order of $15 million out of a total cost of about$60 million) are found to be possible by substitut-ing concrete, plastics, and fiberglass for iron andcopper in the construction of a typical 40-story of-fice building. Substitution is a common practice inthe construction industry, particularly where locallabor practices and customer preferences are favor-able.

Use of nonmetallic coatings.--A substantialpercentage of certain metals (cadmium 60 percent,chromium 5 percent, cobalt 18 percent, nickel 13percent, tungsten 8 percent) is used to coat steel oralloys for corrosion and wear resistance. Use ofnonmetallic coatings could save considerablemetal. However, additional R&D is required to suf-ficiently develop such coatings.

Metal recycling.—Some industrial scrap is ef-fectively recycled. Estimates of the potential for ad-ditional recycling of obsolete scrap (from products)range from 5 percent for platinum to 40 percent forcopper.6 Unfortunately, obsolete scrap metal has alimited market and competes with virgin ore of

‘lFor the detailed estimates. see fiqure 11, ch IV,

Ch. I— Summary ● 11

Figure 8.— Summary of Technical Options for ReducingLosses and Reducing Excess Metal

OptionPotential metal savings(%o of 1974 shipments)

E Major redistributions (e.g., through 50-90allocations)

E Metal substitution 15-60

E Use of nonmetallic coating 5-50”

E Product remanufacturing 10-45

L Metal recycling 5-40

E Product reuse 5-30

E Use of stocks 5-30

L Reduce dissipative uses 5-25

L Reduce milling and concentrating losses 0-20

E Metal substitution in construction 0-20

E Minor redistributions (e.g., through 5-15allocations)

L Reduce post consumer waste 5-15

L Export controls on scrap and mill products 0-15

E Eliminate unnecessary metal in products 5-1o

E Increase product life 5-10

E =Promis ing opt ions fo r reduc ing excess meta l used in the mater ia lscycle See figure 7 for metal specific data

L =Promis ing opt ions for reduc ing meta l losses f rom the mater ia ls cyc leSee figure 3 for metal specific data

“ For cadmium

SOURCE: OTA based on data from Working Papers One, Two and Three

Materials and EnergyFrom Municipal Waste (Washington,D.C. : U.S. Congress Office of Technology AssessmentI July:1 9 7 9 ) . O T A - M - 9 3 .

ject,8 this option offers major potential for conserv-ing metal, saving the energy already invested inproducts, and reducing the environmental pollut-ants associated with the manufacturing process.One major barrier to product remanufacturing andreuse is the lack of the necessary industrial infra-structure.

Another major barrier is economic. To be eco-nomically attractive, a product must be remanufac-tured at a cost that will allow a resale price at areasonable discount under the price of a new prod-uct. For many current products, this discount aver-ages 60 percent. However, for other products thereis no difference between new and reworked prod-uct pricing.

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Product remanufacturing is not a new conceptand is extensively carried out for a wide range ofproducts and components. Automotive parts areprobably the best example of what can be accom-plished when the economic conditions are favor-able. Products that are most likely to be remanu-factured are those with higher initial costs, whereappearance or styling is not a problem, and wherethere is an abundant supply of used products to re-manufacture.

For products where remanufacturing is feasiblebut economically marginal, two major barriers ex-ist. First, the concept of a “used” product runscounter to established traditions and even regula-tions. The second major barrier is the lack of estab-lished industries to remanufacture and resell thatproduct. The recycling business is labor-intensiveand may not have as high a rate of return asothers. Therefore, if product remanufacturing is tobe encouraged, some additional investment incen-tives may be necessary, such as low-interest loansor tax benefits for plant and equipment, and per-haps tax credits or deductions for leased productsmade of recycled parts and materials.

Reduce dissipative uses.—Dissipative usesinvolve the dispersal of metals and alloys by chem-ical action or physical dispersion during use. Forexample, aluminum pig and aluminum scrap areoften used during the deoxidation of steel. The alu-minum is lost as an oxide in the slag. Relativelyfew options are available to reduce waste here.Most technical options have significant perform-ance penalties, or increased costs, or both. In somecases, R&D programs to find substitute materialsand/or processes might be successful.

Reduce milling and concentratinglosses.–Althougth relatively large quantities ofmetal may be lost in the milling and concentratingstages, the value of the material lost is low and thecost of further recovery is high.

One option is to increase imports of high-gradeore concentrate. But this raises serious questionsabout the amount of risk associated with importdependence versus the increased costs of energyand environmental controls that would be re-quired in domestic processing of lower grade ores.Another option is to invest in a major R&D pro-gram, perhaps building on current U.S. Bureau of

Mines research, directed toward increased recov-ery of metal values from lower grade ores.

Minor redistribution (through, e.g., allo-cations, export controls, use of stocks).—During emergency situations, these options couldreduce metal usage with relatively minor effort, forexample, allocations that encourage the use ofproven substitutes in industries where changes inproduction equipment would not be necessary.The exact percentage saved would depend on thetiming and specific metal, but could be as high as30 percent.

Reduce postconsumer waste.—Options forreducing postconsumer waste are discussed inanother OTA report, Materials and Energy FromMunicipal Waste, July 1979, OTA-M-93. However,once metals enter the municipal solid waste (MSW)stream, their recovery is generally more difficultand at present is limited to aluminum cans and fer-rous metals (along with paper and glass). Optionssuch as product recycling may offer significant en-ergy conservation and environmental quality ben-efits when compared to sources separation and cen-tralized recovery from the MSW stream.

Eliminate unnecessary metal in prod-ucts.—Strong economic incentives already existfor careful design to avoid unnecessary uses ofmetal, for example, material costs, shippingweights, and handling costs. A though some fur-ther elimination of excess metal is possible, the dif-ficulties include increased manufacturing costs, in-creased cost of investment in engineering andequipment, decreased durability. and reduced safe-ty.

For example, for the refrigerator, an estimated11 lbs of steel could be saved of the 70 lbs nowused in the outer shell. However, this would add$30 to the manufacturing cost for a plasticsubstitute and related adhesive and finishing, andwould create moisture and flammability problems,among others.

Increase product life.—Technically, longermechanical life can be designee into many prod-ucts. But longer life can often be more costly andmay not result in a significant increase in the ac-tual average lifetime. Many products are retireddue to obsolescence, appearance style changes, orother reasons not related to mechanical condi-


Figure 9.—Ability of Conservation Options to Meet Selected Materials Objectives

Mostpromisingtechnicaloptions(fromfigure 8)

Illustrativeimplementationoptions

SOURCE: OTA.

Selected materials objectives

Improve materialsavailability duringcritical situations

Major redistribution (e.g.,through allocations)

Metal substitutionUse of stocksMetal substitution in the

construction industryMinor redistributionsExport controls

Public data baseContingency planning

functionMarket for contingency

shares certificatesResearch and development

on metal substitution

after market busi -

ish a scrap inven-

in recycled prod-

Reduce waste ofmaterials andconserve energy

Increase metal recyclingIncrease product

remanufactureingIncrease product reuseReduce dissipative usesReduce milling &

concentrating lossesReduce postconsumer wasteEliminate unnecessary metal

in productsIncrease product life

Public data baseImprove product aftermarket

(e.g., establish a scrapinventory, encourageproduct leasing, provideloans to establishaftermarket businesses)

availab]e to Congress is to centralize a materialscontingency planning function in the Government.This organization would be responsible for evalu-ating the severity of perceived threats to materialssupply, and developing contingency plans on acommodity by commodity basis. Such a functioncould be an extension of the scope of work now performed by various existing offices and bureaus.

Public data systems. A public data base on mate-rials would help to improve the quality and quanti-ty of information available to Government and to industry for better analysis and forecasting on ma-terials supply and demand problems. It would alsohelp identify R&D needs for solving or alleviatingtechnical problems in the materials cycle.

These two implementation options, contingencyplanning and a public data tree, have been studiedin detail in an earlier OTA report on Information

Ch. I—Summary 13

tions. Up to 50 percent of all products removed together account for 12 to 28 percent of metalfrom service are still in working condition, ac- usage, depending on the metal. Even if the max-cording to one recent report on the subject.9 imum savings per product (27 percent)10 were ap-

Longer product life would best apply to transpor- plied to the maximum base of 28 percent, this

tation and consumer durables (appliances) which would result in only a 7.5-percent metal saving.I l~~d~e(j (j[l I tle dIIIOU rlt Of IIwtd WY’WI per product per l’(’~~r

W’, David Corm, F{ICIC)KS Aftw[[ng Product Lifet[rws, NSF/ with a 50-percent increase in mec ]a[lical I ifetime, See ch-. V],RA Report 780219, August 1978. ttible 32 and related discussion.

PRELIMINARY POLICY CONSIDERATIONS

As summarized above, the primary focus of thisstudy was the assessment of technical options forconserving metal. However, preliminary consider-ation was given to materials objectives and prob-lems and a range of possible implementation op-tions that should be taken into account in policydiscussions on materials conservation.

Materials Objectives and Problems

Conservation is a response to a real or imaginedthreat or condition. Conservation options are im-plemented in attempting to accomplish some ob-jective. The primary objectives of concern in thisassessment have been reducing the volume ofwaste and improving materials availability. Thereare a number of other objectives that might be rel-evant to public policy, such as conserving energy,stabilizing materials markets, protecting the en-vironment, or promoting a resource-conservingsociety.

Materials availability, either short term duringcritical situations or long term with respect toresource depletion, is a vital concern to both in-dustry and society. Without the proper materials,many industries would be forced to close unlessalternative plans were made well in advance. Asshown in appendix C, materials shortages havebeen commonplace for many years and will un-doubtedly continue in the future. Conservation is apossible response to these problems.

Energy conservation can affect the availability ofmaterials. Since metals refining consumes about 9percent of the energy budget and all materials con-sume about 20 percent, materials conservationcould be a response to the need for energy conser-

vation. More realistically, in the foreseeable future,energy conservation will probably be more impor-tant than materials conservation.

Materials conservation may be an appropriatestrategy to deal with a large number of other prob-lems that threaten materials availability, such as:chronic lack of capacity in the metals industry, im-port dependency for essential metals, cyclical in-stabilities in supply and demand for metals, andenvironmental restrictions on the mining andprocessing of metals.

Illustrative Implementation Options

This study briefly considered several methodsfor implementing the more promising technicalconservation options. Both technical and imple-mentation options are listed in figure 9 as optionsto improve materials availability during criticalsituations and/or to redue waste and conserveenergy. The impacts of these options were notassessed in detail.

Improve product aftermarket. Product remanu-facturing, reuse, and repair I collectively known asproduct recycling) offer significant leverage forconserving materials and energy. Improved after-market (the market for recycled products) wouldhelp to reduce the mixing of scarce materials withthe landfill waste stream as well as to improve therate of recovery of the major metals—iron, steel,aluminum, and copper.

Improved product recycling to capture theresidual value in products through a strengthenedaftermarket would eventually have implicationsfor the entire materials cycle. Twenty possible

— —

Ch. l—Summary 15

Figure 10.— Energy Intensity at Each Stage of the Materials Cycle

Keyx Cement, clay, glass

● Iron & steelO Aluminum

❑ C o p p e r

A Other materialsi- All, whenever appropriate

Average energy

intensity/ailsectors

●

\o

A

M i n i n g R e f i n i n g F a b r i c a t i n g I n d u s t r i a l C o n s u m e r P r o d u c t

products products maintenance

Market for contingency ShareS certificates, in thisimplementation option, a private sector market forcontingency shares certificates would be estab-lished between materials suppliers and industrialcustomers of basic materials. This option would bea private allocation system.

R&D on metal substitution. Substitution prom-ises substantial savings for specific metals. Discov-


ering the available substitution options is in part aproduct of Government-sponsored R&D. Researchprograms to develop practical substitutes for scarcematerials, with particular emphasis on productswith high metal use, nonmetallic coatings for cor-rosion and wear resistance, and dissipative usescould be established.

Summary

The implementation options presented aboveavoid Government intervention in private decisionprocesses to a large extent. Instead, they enablethe private sector to more efficiently deal with theirown needs while reducing the uncertainties andvulnerabilities for all parties. These means of im-plementation are to a great extent self-correcting.They do not require constant Government adjust-

ment of standards or regulations in order toachieve a balance of interests. Nor do they involveexcessive costs for administration, monitoring, en-forcing, or recordkeeping.

This set of illustrative options is mutually rein-forcing. The contingency planning and public database support all other options. The contingencyshares certificate market would moderate the ex-tremes of materials supply and demand fluctua-tions. Substitution is very much the result of aprivate sector decision process. But through Gov-ernment R&D, substitution can also be an impor-tant instrument of national materials and energypolicy. Improvements in the product aftermarketwill contribute to greater efficiency in materials usebut could also provide an institutional mechanismto advance many other objectives such as energyconservation and environmenta protection.

1 1 .

Congressional Interest andScope of Assessment

II m

Congressional Interest and Scope of Assessment

ORIGINAL CONGRESSIONAL REQUEST

This report is in response to a request from theSenate Commerce Committee in 1975 and sincereaffirmed by the Subcommittee on Science, Tech-nology, and Space Of the Senate Committee OnCommerce, Science, and Transportation. This re-port also responds to interest expressed by theHouse Committee on Science and Technology andseveral other House and Senate committees con-cerned with conservation of natural resources inthe U.S. domestic economy.

This report focuses on one major aspect of re-source conservation, namely, the conservation ofmaterials—and more specifically metals— throughreduced waste in the materials cycle.

Following the congressional request, this reportaddresses:

● the kinds and amounts of materials wastage,Q techniques or technical options for reducing

wastage,. technical and institutional impediments to ap-

plying these techniques.

At the time this study was requested, the thenrecent (1973-74) shortages of many materials andthe threat of future shortages were of particularconcern to the Nation. Thus, emphasis in thisstudy was placed on identifying conservation op-tions that can improve materials availability—thatis, the degree to which materials can be acquiredon a timely basis.

DEFINITION OF MATERIALS WASTE AND CONSERVATION

Waste has two connotations: 1) residual materialleft over from processing, manufacture, and use;and 2) useless or unnecessary consumption, thatis, materials use for which there is no adequatejustification. The first definition of waste is precisein that it refers to specific losses that could berecovered if there is sufficient economic justifica-tion. The second definition is judgmental anddepends on the conditions and incentives underwhich consumption takes place.

For example, under the conditions of an embar-go on imported copper, it might be consideredwasteful to use copper for plumbing since substi-tutes are available. On the other hand, during con-ditions of oversupply, it might be consideredwasteful not to use copper.

In addition to changing conditions, there arechanging incentives. Thus, for products containingexcess metal, it may be the judgment of the manu-facturer that the cost of waste is less than the costof its elimination. But if there are sufficient eco-nomic, social, or political incentives, in many in-stances the excess metal can be removed. Here,

the incentives, rather than the material scarcity,drive the elimination of unnecessary consumption.

Since the conditions and the consequences ofconsumption are difficult to define, the approachchosen in this study was to document losses fromthe materials cycle or losses that result from excessmaterial in the cycle. The primary question thenbecomes: where are the losses that could beavoided should the need for conservation arise?

In traditional thinking, conservation has, likewaste, two connotations: reducing usage as a re-sponse to an immediate or current shortage, or re-ducing usage to ensure that future needs will beadequately satisfied. In both cases, the concern iswith the adequacy of supply, although the timing isdifferent (short v. long term). Studies of conserva-tion traditionally have almost always dealt with thelong-term mineral supply and demand condition.

The definition of conservation used in this re-port is a more general one: reduced usage of re-sources as a response to either short-term supplyinterruption or long-term depletion. The important

19


aspect of this definition is that the reduced usagebe for some “cause” or to meet some societal ob-jective. It is these “causes” or objectives that

SCOPE OF THE

The context of this assessment is illustrated infigure 11,

Materials availability is subject to short-termthreats and conditions and long-term depletion forwhich some response, either public or private, isrequired. Possible short-term threats and condi-tions include:

●

●

●

●

●

●

●

●

chronic lack of capacity,import dependency,energy shortages,cyclical materials shortages,environmental restrictions,international cartel actions,deteriorating U.S. balance of payments, andescalating U.S. inflation.

These threats and conditions are discussed inmore detail in chapter VII.

As shown in figure 11, a variety of strategies areavailable to cope with materials availability prob-lems, not all of which are materials strategies. Onematerials strategy is conservation. Others include,for example, stockpiling and expanded domesticproduction.

Literallyined in an

A variety of options are available to

distinguish reduced usage for conservation fromreduced usage due to normal supply/demand fluc-tuations.

ASSESSMENT

conserve materials (substitution, recycling, use ofless metal in product design etc.). For conve-nience, these options may be classified as thosethat reduce the losses from the materials cycle(e.g., reduce wastes) or those that reduce theamount of material in the cycle (e.g., reduce theexcess material designed into products or unneces-sary inventories).

While materials availability is the concern inthis study, it is only one of several that can moti-vate conservation. Other concerns might includethe equity of world distribution of resources or theenvironmental impact of materials consumption.These are not considered as objectives in thisassessment.

In addition, while technical options for conserv-ing materials receive major attention, public pol-icies for implementing these options are givenonly preliminary consideration Finally, this reportdoes not assess the impacts of either the technicalor implementation options on the economy, ener-gy conservation, environmental quality, employ-ment, and the like.

SELECTION OF MATERIALS FOR DETAILED STUDY

hundreds of materials could be exam- the metal is won from its ores, and the nature of itsassessment of materials conservation. uses.

Two criteria were used for selecting the specificmaterials to be analyzed in this assessment: 1) eco-nomic and strategic criticality and 2) the nature ofthe materials and their usage. In the last severalyears, five major reports have been published deal-ing with supplies and uses of critical materials.Each of these reports developed a list of criticalmaterials, as summarized in table 1.

In addition to criticality, a variety of character-istics relating to each material were examined: vol-ume, price, import dependence, ease with which

On the basis of these characteristics, eightmetals were selected: chromium, manganese,nickel, platinum group, aluminum, copper, tung-sten, and iron and steel. This selection represents areasonable sample of metals that are commerciallyimportant.

For example, iron and steel, aluminum, andcopper are basic metals to which minor amounts ofalloying elements are sometimes added. Manga-nese and chromium, on the other hand, are usedprimarily for their properties as alloying elements

Ch. 11—Congressional Interest and Scope of Assessment ● 21

Figure 11 .—Context of Assessment

I Objective I

Materialsavailability

? fLong-range Short-termb* w

trends threats & conditionsJ

w

Materialsproblems

tMaterials4 1

strategiesf

v 1●

Materials ExpandStockpiling conservation domestic

strategy production+ I m

To reduce To reduce

Iosses fromamount of

materials cycle materials usedin cycle

Implemental ionoptions

t

I lmpacts I

SOURCE: OTA


in otherboth asalloying

basic metals. Nickel and tungsten are usedbasic metals in nonferrous alloys and aselements in other basic metals. Platinum-

on the other hand, are often embodied in smallcomponents of end products, and salvage is more—difficult.

group metals are representative of precious metals.With respect to the way metal products are used in Otarticles of manufacture, at one end of theare iron, copper, and aluminum. These

spectrumoften are

major elements in finished products, and thus arereadily salvageable. Precious metals and tungsten,

ered,her materials might well have been consid-such as chemicals, food wood, industrial

and plas-gases, paper, rubber, textiles, ceramics,tics. However, in the context of materials availabil-ity, metals represent the most critical materials.

Table 1 .—Critical Materials

Army War MetalsMaterials Dyckman a SRlb College c Battened Stockpile e selected

Petroleum . . . . . . . . . . . . . . . . xChromium . . . . . . . . . . . . . . . . x x x x x ●

Manganese . . . . . . . . . . . . . . . x x x x x ●

Titanium. . . . . . . . . . . . . . . . . . x

Nickel. . . . . . . . . . . . . . . . . . . . x x x x x ●

Platinum group . . . . . . . . . . . . x x x x ●

Aluminum . . . . . . . . . . . . . . . . x x x x x ●

Columbium . . . . . . . . . . . . . . . x xAntimony. . . . . . . . . . . . . . . . . x xCobalt . . . . . . . . . . . . . . . . . . . x x x x xThorium . . . . . . . . . . . . . . . . . . x

Vanadium . . . . . . . . . . . . . . . . x xCopper. . . . . . . . . . . . . . . . . . . x ●

Mica . . . . . . . . . . . . . . . . . . . . . x

Florine . . . . . . . . . . . . . . . . . . . xGraphite. . . . . . . . . . . . . . . . . . xTungsten . . . . . . . . . . . . . . . . . x x x x x ●

Asbestos . . . . . . . . . . . . . . . . . x xTin . . . . . . . . . . . . . . . . . . . . . . x x x x xMercury . . . . . . . . . . . . . . . . . . x x xTitanium. . . . . . . . . . . . . . . . . . x xTantalum . . . . . . . . . . . . . . . . . . x xMagnesium ... , . . . . . . . . . . . xIron. . . . . . . . . . . . . . . . . . . . . x ●

aEdward J Dykman, “Review of Government and Industry Studies on Materials Supply and Shortages, ” in Syrnposium of Critical Materials, Proceedings, U S Depart.ment of Defense, Dec 16, 1974

bMark D. Levine, Department of Defense Materials Consumption and the Impacf of Material and Energy Resource Shortages, November 1975, prepared by StanfordResearch Institute and available from U S. Department of Commerce, NTIS #AD-A018-613.

cU.S. Army War College, A Study of Critical Materials, May 1976.dA.M. Hall, A Survey of Technical Actlvities and Research Opportunitie Affecting the Supply of Metallic Structural Materials, September 1974, prepared by Battelle,

Inc and available from NTIS # PB 246106.eNational Materials Advisory Board, A Screening for Potentially Critical Materials for the National Stockpile, 1977 NMAB -329.

SOURCE: OTA, based on reports cited above.

Ill.Quantification of Losses From

the Materials Cycle

HI

Quantification of Losses From the Materials Cycle

MNng&concentrating

Notes:

Figure 12.—Typical

rectly (from a knowledge of the amount of material en-tering and leaving a given stage) From these data, themajor loss categories were identical.

Losses from the 1974 materials cycle were estimatedfor eight metals: iron and steel, aluminum, copper,platinum-group metals, manganese chromium, nickel,and tungsten. Data on materials flows and losses for1974 were used. The year 1974 was chosen for severalreasons. First, that year represented a high level ofeconomic activity and resource usage. The followingyear, 1975, was a recession year when resource usageand flows were depressed and possibly distorted. Fur-ther, when this assessment was initiated, only fragmen-tary data were available for 1976.

The estimates presented here are given in summaryfashion. Substantially more detail is available in VolumeII—Working Papers. In particular. Working Paper One* (vol. II-A) providesbasic data in support of the estimatesof losses from the materials cycle and materials con-sumption by end use. These data provide the basis forestimating the quantities of wastage.

Materials Cycle

Metal recycling

t t +Metal ~ Metal End product ~ Product ~ Product

extraction processing manufacture utilization disposalJ

handling PoetDissipative consumer Unrecovered

raw materials useswaste

vL= Maximum Iosses for any of the metals studied exceeds

20% of 1974 domestic mill shipments.

vL = Maximum losses for any of the metals equals 10 to 20%

of 1974 domestic mill shipments .

I

25

IRON AND STEELDomestic iron and steel plants in 1974

shipped about 124 million tons* of iron andsteel products to manufacturers and fabri-cators. In addition, 16 million tons of ironand steel mill products were imported andnearly 6 tons were exported. Of the morethan 134 million tons of iron and steel millproducts used by end-product manufactur-ers and fabricators, nearly 111 million tonsof iron and steel were embodied in endproducts in 1974. The remainder was re-turned to iron and steel plants and foundriesin the form of prompt scrap.

Iron and steel mill products represent byfar the largest tonnage of basic metal used inthe United States. The tonnage of iron andsteel used is roughly 20 times that of thenext largest metal—aluminum. It is impor-tant to consider the conservation options foriron and steel because of the sheer sizethe iron and steel industry, the magnitude

*All data are given in short tons (2,000 lbs).

Table 2.–1974 Distribution of ProductsManufactured From Iron and Steel

(millions of short tons of iron and steel alloys)

ofof

—Market category Quantity- .Automotive ... ., 17.2 ‘Machinery, including equipment 18.5R a i l t r a n s p o r t a t i o n 56All i r o n a n d s t e e l c a s t i n g s 12.3Construction, including maintenance 152C o n t r a c t o r s p r o d u c t s 12.0E l e c t r i c a l m a c h i n e r y 5.0S h i p b u i l d i n g a n d m a r i n e .Agricultural 3.0Appliances ~ 3.9O t h e r d o m e s t i c e q u i p m e n t 3.8C o n t a i n e r s 9.3O r d n a n c e a n d m i l i t a r y 1.0M i n i n g , q u a r r y i n g , e t c . 1.0O i l a n d g a s d r i l l i n g 075Aircraft and aerospace o.15

T o t a l . 1108SOURCE Working Papers One and Two

its use of energy, and its importance in themanufacture of almost every product.

Estimates of flows in the iron and steel cy-cle and summary losses from the cycle aregiven in figure 13. The total losses shown infigure 13 amount to about 79 million tons.This is nearly three-quarters of the totalamount of iron and steel embodied in prod-ucts in 1974.

Estimated amounts of ferrous materialsentering useful life in 1974 are given in table2. Table 2 provides a broad market break-down of the amount of iron and steel em-bodied in end products in 1974. By usingestimates of the useful life of iron and steelproducts and data on past production anduse of iron and steel, amounts of iron andsteel that became obsolete in 1974 wereestimated. Table 3 gives a breakdown, bymarket category, of the estimated 72.5million tons of iron and steel that becameobsolete in 1974. Estimates of the amount ofobsolete iron and steel scrap that was recov-

Table 3.–Obsolescence of Iron- andSteel-Containing Products in 1974(millions of short tons in ferrous materials)

Assumed average —

useful IifeMarket category (years) Quantity.—A u t o m o t i v e 13 12.3Machinery, including equipment 9.0Rail transportation 3.0 6.5AH iron and steel castings 10.0Construction, including maint. 30 7.5Cont ractors products 27 4.2Electrical machinery

Shipbui ld ing and mar ine 30 0.8Agricultural 20Appliances 11 2.8Other domestic equipment 12Containers <1 9.6Ordnance and military 15 10Mining, quarrying, etc. 04Oil and gas drilling 30Aircraft and aerospace 20 0.1

T o t a l 725SOURCE Working Papers One and Two -

ered and recycled in 1974 are given in table4, classified by broad category of productfrom which the scrap was derived. The losscategory designated “unrecovered and un-known” (in figure 13) represents the dif-ference between the calculated value of ob-solete products (72.5 x 1 06 tons) and thatwhich is accounted for by recycling, post-consumer solid waste, corrosion and wear,and dissipative uses.

From the preceding data, estimates of thetotal losses from the domestic iron and steelcycle in 1974 were as follows:

Nature of loss

Milling, concentrating, and handlingUnrecovered and unknownPostconsumer solid waste.S c r a p e x p o r t s

Processing in iron and steel plantsD i s s s i p a t i v e u s e sCorrosion and wearManufacturlng losses

T o t a l

Table 4.–Recycling and Recovery of Ironand Steel in 1974

Millions of Per-short tons centage

Market category of metal recycledA u t o m o t i v e - - 1 0 . 9 ‘-89Machinery, including equipment 69R a i l t r a n s p o r t a t i o n 5.6 86All iron and steel castings 24 24Construction, including maint. 22 29Contractors products 16 38Electrical machinery 11 42OL -1. 8>d(llpuutlu(((y Clllu IIlcll IIIG 0.6 75Agricultural 04 25A p p l i a n c e s 02 7Other domestic equipment 02 7Containers. 0.2Ordnance and military 02 20Mining, quarrying, etc 01 25Oil and gas drilling 01Aircraft and aerospace 0 0 _

Total .32.7 45SOURCE Working Papers One and Two

Ch. Ill—Quantification of Losses From the Materials Cycle ● 27

b

coUi

.02 (0

0)

u)

L%-1

(nc0Q

za.(uz(n

In 1974, the aluminum industry producedabout 7.2 million tons of aluminum. It ex-ported about 0.5 million tons, placed instock about 0.4 million tons, and shippedabout 6.3 million tons to end-product manu-facturers, of which 5 million tons were em-bodied in end products. Except for minormanufacturing losses, the remainder wasreturned to primary aluminum plants, sec-ondary smelters, or aluminum foundries inthe form of prompt scrap.

ALUMINUM

is given in table 5. Table 6 presents esti-mates of the amount of aluminum and alu-minum alloys contained in products that be-came obsolete in 1974. The breakdown bymarket category is based on assumptions ofuseful life in each of the product categories.Table 7 indicates the amount of obsoletescrap recovered from obsolete products in1974 classified by market category. A total ofabout 343,000 tons of aluminum was recov-ered and recycled.

lion tons of aluminum content. This loss issizable, particularly in relation to the 5 mil-lion tons of aluminum that were embodiedin useful products in 1974.

Nature of losses Millions of tons

Postconsumer sol id wastes 1.0O t h e r u s e s o f a l u m i n a 0.5Exports of ingot and mill products () 5U n r e c o v e r e d a n d u n k n o w n ().4Losses in bauxite mining and

a l u m i n a p r o d u c t i o n 0.4A l u m i n u m p r o c e s s i n g 0. 4

Figure 14 presents a summary of the Losses from the domestic aluminum cycle Dissipative uses of scrap 0.4flows of aluminum in the U.S. economy and in 1974, based on data in the foregoing para- O t h e r u s e s o f b a u x i t e 0.3

the losses from the aluminum cycle in 1974. D i s s i p a t i v e u s e s . ().2

Figure 14 indicates that 5 million tons ofgraphs are shown to the right. Losses in end-product manufacture 0.1

aluminum were embodied in end products The total losses from the domestic alumi- Total ., ... ., 4.2

in 1974. A market breakdown of this figure num cycle in 1974 amounted to over 4 mil-

Table 5.–Products Manufactured Table 6.–Obsolescence of Aluminum Table 7.–Recycling and RecoveryFrom Aluminum in 1974 Products in 1974 of Aluminum in 1974

(millions of short tons of aluminum alloys) (millions of short tons of contained aluminum) (millions of short tons of aluminum alloys)

Market category QuantityBuildings and construction . . . ., ... ., 1.43Electrical products . . . . . . . . . . . ., . . . . . 0.85Transportation products 0.80Containers and packaging. . . . . . . ~ . . . . 0.78Consumer durables . . . . . . 0.44Machinery and equipment. ., ... ... 0.40Other . . . . . . . . . . 0.30

Total.. ~ . . . . . . . . . . ~ . . . . . . . . 5.00

SOURCE: Working Papers One and Two

Assumeduseful life

Market category (years) QuantityBuilding and construction 30 0.1Electrical products ... ~ ~ ~ 30 0.013Transportation products, . . . . . 10 0.5containers and packaging . . . . <1 0.78Consumer durables . 10 0.3Machinery and equipment ., . . 20 0.1Other. ., . . . . . . . . . . . . 10 0.1

Total . . . . . . . . . . . . 8 1.893

Percent QuantityMarket category recycle recovered

Building and construction. 15Electrical products . . . . 92Transportation products. ... 34Containers and packaging ... 7Consumer durables. . . 14Machinery and equipment 25Other. ... . . . . . . . 29

Total 18

0.0150.0120.1690.0520.0420.0250.028

0.343SOURCE: Workinq Papers One and Two

●

.

Ch. IIl—Quantification of Losses From the Materials Cycle ● 29

u

OJh’

00m I

IL

qw

C70

The production of copper in 1974 fromdomestic, primary, and secondary opera-tions amounted to about 2.7 million tons.About 2.2 million tons of copper and copperalloys were embodied in end products in1974.

The tonnage of copper used in the UnitedStates is third largest, after steel andaluminum, of the basic metals consumed. Ofthe basic primary metals, copper also ranksthird in consumption of energy.

Estimates of the flows of copper in thedomestic materials cycle are given in figure15.

Table 8.–Distribution of Copper EndProducts to Major Use Categories in 1974

(millions of short tons of copper and copper alloys)

Market category Quantity

Buildings and construction ... 05Transportation. ., . . . . . ., ., 0.2Consumer and general ., 0.5I n d u s t r i a l m a c h i n e r y . . . . . , 0.4E l e c t r i c a l a n d e l e c t r o n i c s . 0.6

Total. ... ., ., . . . . 2.2


COPPER

An estimate of the copper embodied inend products in 1974 by major end-use cate-gory is given in table 8. This end-productdistribution has not changed significantlyfor the past several years. The estimatedamounts of copper and copper-base alloysthat became obsolete in 1974 are given intable 9. The quantities shown are based onthe shipment data available for prior yearsand on an average estimated useful life foreach of the product market categories. Esti-mates of obsolete copper and copper alloys,which were recovered as scrap in 1974, aregiven by end-use market category in table10. The total amount of obsolete scrap recy-

Table 9.–Obsolescence of Copper-Containing Products in 1974

(millions of short tons in ferrous materials)

Assumedaverage

useful lifeMarket category (years) Quantity

Buildings and construction. 30 0.2Transportation . . 12 03Consumer and general. . . . 10 0.5Industrial machinery ., . . . . 20 0.3Electrical and electronics . 10 0.7

T o t a l 2.0

SOURCE Working Papers One and Two

cled in 1974 amounted to about 0.56 milliontons.

From the foregoing data and estimates,losses from the domestic materials cycle in1974 were estimated as follows:

Nature of lossesU n r e c o v e r e d a n d u n k n o w nM i l l i n g .D i s s i p a t i v e u s e sPostconsumer sol id wastesS m e l t i n g a n d r e f l n i n gBrass m i l l s , w i re m i l l s , e t cE n d - p r o d u c t m a n u f a c t u r i n g

T o t a l

Table 10.–Recycling and Recovery ofCopper and Copper Alloys in 1974

(millions of short tons of copper andcopper alloys)

PercentMarket category recycle QuantityBuildings and construction. . . 25 0.05Transportation ., . . ., 57 0.17Consumer and general. ... 20 0.10Industrial machinery ., 13 0.04Electrical and electronics ... , 28 0.20

Total ... ., 0.56


Ch. III—Quantification of Losses From the Materials Cycle ● 31

.

■

o

‘No

m

—

A

L AY

)

Af=N

N0

&al>

mo

1

PLATINUM= GROUP METALS

The six metals included in the platigroup, in order of annual consumptionplatinum, palladium, ruthenium, rhod

inumare

ium,

iridium, an-d osmium. Prices for all six met-als of the group are very high—between $50and $450 per troy ounce. The platinumgroup metals are used primarily as catalystsand in electrical and electronic applications.The flows and losses of platinum-group met-als are considered to be representative ofone class of precious metals.

A simplified flow diagram is given in fig-ure 16 showing the flows of platinum-groupmetals in the domestic materials cycle andlosses for the year 1974. As shown in figure16, about 3 million troy ounces of platinum-

Table 11 .–Products Manufactured FromPlatinum-Group Metals in 1974

(millions of troy ounces of platinum-group metals)

Market category QuantityChemicals. . . . . . . . . . . . . . . . . . . ... 0.58Petroleum ., . . . . . . . . . . . . . . . ., . . . . 0.73Glass . . . . . . . . . . . . . . . . . . . . . . 0.19Electrical. . . . . . . . . . . . . . . . . . 0.80Automotive ... . . . . . ., , ... . . . . 0.50Dental, medical, jewelry, and misc. 0,25

Total. . . . . . . . . . . . . . ., ., 3.05


group metals are used by end- product usersand fabricators with only a minor manufac-turing loss; essentially the same amount wasembodied in end products in 1974. Table 11shows a breakdown by market category ofthe products manufactured from platinum-group metals in 1974. Most of the usage ofplatinum-group metals in chemicals and pe-troleum was in the form of platinum cata-lysts. The practice of toll refining for thesemajor users of catalysts is very large. Nearly1 million troy ounces per year are toll-re-fined. Table 12 gives estimates of theamount of platinum in products that becameobsolete in 1974. As with the previous met-als, these estimates were based on the

Table 12.–Obsolescence of Platinum-Group Products in 1974

(millions of troy ounces of containedplatinum-group metals)

Assumedaverage

useful lifeMarket cateqory (years) Quantitv

Chemicals . . . . . . . . . . . . . . . . . c 1 0.72Petroleum . . . . . . . . . . . . . . <1 0.69Glass . . . . . . <1 0.19Electrical. 20 0.31Automotive ., . . . . . . . . . . . . . . 6 –Dental, medical, jewelry, and

misc. . . . . . . . . . . . 20 0.13

Total ., . . . 2.04


assumed average life for each of the cate-gories. About 1.64 million troy ounces ofplatinum-group metals were recovered fromobsolete products in 1974 and recycled. Abreakdown by market category of thisamount is given in table 13.

From the above, the losses of platinum-group metals from the domestic cycle in1974 were as follows:

Millions of

Loss troy ounces

Dissipative . . . . . . . . . (),25P r o c e s s i n g . . 0.015Unrecovered and unknown 0.014End-product fabricators and users 0,009

Total ... ., . . 0.288

Table 13.–Recycling and Recovery ofPlatinum-Group Metals in 1974

(millions of troy ounces of platinum-group metals)

Estimatedpercentageof obsoleteplatinum-

group metalsMarket category recycled QuantityChemicals . . . . . . . . . . ... 85 0.61Petroleum ... ., . . . . . . 97 0.67G l a s s . . 9 8 0.19Electrical. ~ ., . . . . . . . . . . . . . 45 0.14Automotive . . . . . . . . 0 –Dental, medical, jewelry,

and misc. . . . . . . . . . . . . , 20 0.03— —Total ., ., . . . . . . 80 1.64


Ch. III—Quantificatjon of Losses From the Materials Cycle . 33

(n

. .

IA

\

uu.

0mom I

I ‘.

m

08

1

- u+

o0

Dcm

About 90 percent of the domestic usage ofmanganese is in the production of iron andsteel. Although manganese, in amountsusually on the order of one-half to 1 percent,is important to steel properties, the predomi-nant use of manganese is as an inexpensivechemical reagent in the desulfurization (andsulfur control) and deoxidation of steel. Theother major domestic use of manganese isprimarily as a chemical reagent.

The flow of manganese and losses fromthe domestic manganese cycle are given infigure 17. About 1.5 million tons of con-tained manganese were used by the metal-lurgical industries, while about 0.12 milliontons were used in chemical processing. Ofthe 1.9 million tons of contained manganeseentering the metallurgical industries, only0.8 million tons remain in the metal that isshipped to metal fabricators. The loss of 1.1million tons occurs in processing (steel).

MANGANESE

Referring again to figure 17, the net manga-nese content in end products entering usefullife in 1974 was about 0.7 million tons. TO afirst approximation, the analysis of obso-lescence and losses from the consumer cy-cle for manganese would be similar to thatfor steel. Estimates of the amounts of man-ganese that became obsolete in 1974 werebased on the end-use pattern of steel, esti-mates of the amount of iron and steel thatbecame obsolete in 1974, and on theamounts of iron and steel that were recov-ered and recycled in 1974. On those bases,it was estimated that 0.5 million tons of con-tained manganese became obsolete in 1974,and of that, 0.2 million tons of obsoletemanganese were recycled in 1974.

The pattern of losses from the domesticmanganese cycle is different from the pat-terns of losses from other materials cycles,mainly because of the high processing

losses. As has been mentioned, the loss isassociated with the use of manganese as aninexpensive chemical reagent in the desul-furization (and sulfur control) and deoxida-tion of steel. These high processing lossescan be reduced technologically by an orderof magnitude or more through the use ofhigher cost reagents and processes. Thelosses from the domestic manganese cyclein 1974 were estimated to be as follows:

Nature Of losses

P r o c e s s l o s s e sUnrecovered and unknownPostconsumer solid wasteD i s s i p a t i v e u s e sC o r r o s i o n a n d w e a rTransport and handlingMilling losses of domestic oresManufacturing and fabricating

Milliosn of tons

1.1 0.150.080.050.030.0230.0120.009

T o t a l 1454

Ch. III--Quantification of Losses From the Materials Cycle ● 35

I1

CNt0

Q(uGa

I-.

In?“

t

U-I00

cd

0- t

Lc

Chromium is used primarily as an alloy-ing element in stainless and heat-resistantsteels; in chemicals, including those re-quired for plating; and in refractories.Although chromium is expensive as a metal($2.60 per lb), it is as low-priced as ferro-chrome (30 cents to 45 cents per lb of con-tained chromium) or as the ore (28 cents perlb of contained chromium). Figure 18 pre-sents the flows and losses in the 1974domestic chromium cycle. About 840,000tons of contained chromium in the form ofchromite, ferroalloys, and scrap are con-sumed in materials processing and manu-

CHROMIUM

facturing. Figure 18 indicates that of the724,000 tons of contained chromium usedby end-product manufacturers, 639,000 tonswere embodied in end products in 1974.Table 14 lists end products manufactured in1974. Table 15 gives estimates of theamount of chromium contained in the endproducts that became obsolete in 1974.These estimates of obsolescence were basedon assumed values of useful life for each ofthe product’s market categories. Table 16presents estimates of the amount of obsoletechromium that was recovered and recycledin 1974. Most of the 51,000 tons of con-

tained chromium recycled in 1974 was re-covered from transportation equipment andindustrial machinery.

Based on the foregoing, losses from thechromium cycle in 1974 were as follows:

Losses Thousands of tons

Dissipated uses . . . . . . . . . . . . . . 113Unrecovered and unknown . . . 110Process losses . ... 83M a n u f a c t u r i n g l o s s e sCorrosion and wear . . . . . . . . . . . . N i l

Total ., . . . . . . . 311

Table 14.–Products Manufactured From Table 15.–Obsolescence of Chromium- Table 16.–Recycling and Recovery ofChromium-Containing Materials in 1974 Containing Products in 1974 Chromium in 1974

(thousands of short tons of contained chromium) (thousands of short tons of contained chromium) (thousands of short tons)

Market category QuantityConstruction ., . . . . . . . . . . . . . . . 128Transportation ... ., . . . . . . . . . . . 102Machinery. ., ... 85Refractories. ., ., 71C h e m i c a l s a n d p l a t i n g . . . . 77Fabricated metal products . . . . . . 77Other ., . . . . . . . . . . . . 99

Total . . . . . . . . . . . . . . . . . . . . ., . 639


Assumedaverage

useful lifeMarket category (years) QuantityConstruction ., 30Transportation . . 13Machinery. ., . . . . . ., 16Refractories. ., . . . . . . . 1 ½Chemicals and plating. ., 10Fabricated metal products ., ., 10Other ., . . . . . . . . . ., 15

Total Ulii . .

29392055583934

274


Estimatedpercentageof obsoletechromium

Market category recycled QuantityConstruction ... ., . . . . 10 3Transportation . . . . . . . 60 23Machinery. ., . . . . . . . . . . . 55 11Refractories. . . . . . . ., . . . – –Chemicals and plating. ., . . . . . – –Fabricated metal products 10 4Other . . . . . . . . . 30 10

Total . . . . . . . . . . . . . . 51


●

Ch. Ill—Quantification of Losses From the Materials Cycle ● 37

m

NICKEL

Nickel is a relatively high-priced ($1.74per lb in 1974), moderate-volume (250,000tons industrial demand in 1974) specialtymetal. About half the annual consumption isby the steel industry in the manufacture ofstainless and heat-resisting steels and inalloy steels. One-fourth is consumed in themanufacture of heat- and corrosion-resistantnickel-base alloys and superalloy. Aboutone-eighth is used in electroplating, and theremainder is used as an alloying element inother nonferrous alloys and in variouschemical and miscellaneous uses.

Estimates of the flows and losses from thetotal domestic nickel cycle are given in fig-ure 19. Referring to figure 19, about 252,000

tons of contained nickel were used by end-product manufacturers, of which about211,000 tons of contained nickel were em-bodied in end products in 1974.

The estimated amount of nickel em-bodied in end products in 1974 by productcategory is given in table 17. From aweighted average of product life for thevarious broad market categories, the overall“life” of nickel-containing products is prob-ably about 18 years. In the year 1956, anestimated 170,000 tons of nickel in endproducts entered service. Hence it wasestimated that this amount would becomeobsolete in 1974.

Table 17.–Estimated Nickel Embodiedin End Products in 1974

(thousand short tons)

Market category Quantity

A p p l i a n c e s . 13Other domestic equipment ., ... ~ ~ 9Ordnance and military . . . . . . . . . 5C o n s t r u c t i o n . , . . . . , 7Contractors products. . . . . . . . . . . 16Automotive ... . . . . ... . . . 40Rail transportation . . . . . . . . . . . . . 5S h i p b u i l d i n g a n d m a r i n e 12

Aircraft ... 18Oil and gas. ., 10Mining, quarrying ., . . . . . . 5A g r i c u l t u r a l e q u i p m e n t . . . 3Machinery and industrial equipment 49Electrical machinery ., . . . . . . . . . . 19

Total . . . . . . . . . 211

itOn the basis of fragmentary information,was estimated that about 25,000 tons of

nickel in obsolete products were recycled in1974. From the foregoing, losses of nickelfrom the materials cycle in 1974 were esti-mated as follows:

Losses Thousands of tons

Unrecovered and unknown 86Dissipative . . . . . . 53W e a r a n d c o r r o s i o n 6E n d - p r o d u c t m a n u f a c t u r e . 6Alloying and mill product

m a n u f a c t u r i n g 3Domestic ferroalloy manufacturing 2

T o t a l 156


Ch. III—Quantification of Losses From the Materials Cycle 39

c.-(J-J(n

3u.


m

c mam.

tnml

0 0

‘ml=c+-

-Ln

v

..

.oc9co Ln-ov- - -

. . . . .. . . . . .. . . . . .. . . . . .— . .

..

.,..

m.

-—

Ch. III—Quantification of Losses From the Materials Cycle . 41

1-

Cci‘1

0’)0

L

zm

03

1-

SUMMARY OF LOSSES FOR SELECTED METALS

A summary of the losses in physical termsis shown in table 20. The losses are listed inthe sequence of materials flow—from min-ing through processing and manufactureand then through usage and recycle. As in-dicated in table 20, the largest quantities oflosses in physical terms are those associatedwith the high-volume basic materials—ironand steel, aluminum, and copper. Quanti-ties classified as unrecovered and unknownare significant because of their size andbecause they represent losses that one wayor another enter the environment in theform of gaseous, liquid, or solid waste.

In order to develop a better perspectiveon the various kinds of losses, table 21 gives

estimates of losses in percentage terms. Ineach case, the losses are expressed as a per-centage of domestic shipments of mill prod-ucts of the metal. In other words, these per-centages are expressed as a percentage ofthe amount of metal flowing at one place, ar-bitrarily selected, in the cycle–shipments ofmill products.

As shown in table 21, the most significantlosses take place at the end of the materialscycle (unrecovered material, postconsumerwaste, dissipative uses). If there are to besubstantial reductions in metal losses, tech-niques must be developed and imple-mented with emphasis placed on the end of

the materials cycle. The end of the materialcycle is important for another reason: foreach pound of material saved at the end ofthe cycle, the accumulated losses associatedwith the production and use of that pound ofmetal are also saved. For example, referringto the steel flow diagram in figure 13, 110.8million tons of steel were embodied in pro-duction in 1974. Direct losses associatedwith the production of that amount of steelare 39 million tons of processing losses.Thus for each pound of material in a prod-uct, 0.35 lb has been lost in reaching theproduct stage. This means that 1 lb of metalsaved at the end of the cycle translates into atotal of 1.35 lbs saved.

Table 20.—Quantities Lost From the Materials Cycle of Selected Metals, 1974

Quantities lost from cycleIron and

steel Aluminum Copper Platinum Manganese Chromium Nickel Tungsten(million (million (million (million (million (thousand (thousand (thousand

Nature of loss from cycle short tons) short tons) short tons) troy ounces) short tons) short tons) short tons) short tons)

Milling and concentrating . . . . . . . . .Transportation and handlinga. . . . . . .Nonmetallic uses of raw materials.Metal processing . . . . . . . . . . . . . . . .End-product manufacture. . . . . . . . . .Exports (net)

Mill products. . . . . . . . . . . . . . . . . . .End products . . . . . . . . . . . . . . . . . .Scrap. . . . . . . . . . . . . . . . . . . . . . . . .

Dissipative and quasidissipative usesCorrosion and wear . . . . . . . . . . . . . . .Postconsumer waste. . . . . . . . . . . . . .Uncovered (and unknown). . . . . . . . . .

—.

23.3(c)

Nomd

6.81.1

(10.2)e

7.85.44.0

11.019.4

0.20.20.80.40.1

0.6nao0 . 6“ . ”

Nil1.00.4

a These losses from the materials cycle are in nonmetallic form and low invalue. Such losses cannot be compared directly with other losses of metal-Iics later in the cycle.

bNil = amount of losses close to zero.cIncluded in “metal processing Iosses.“


0.4 Nil b 0.012 0. Nil 0.023 Nil0.1 Nom 0.12 710.074 0.015 1.1 830.006 0.009 0.009 5

(0.1) (2.1) (0.1) ona na nao 0 0.05 o“.s U.cd U.ud t Id

Nil 0.01 0.03 Nil0.2 (h) 0.08 (h)0.9 0.14 0.15 110

—— .dNom = small but undetermined amount of losses.e() = net imports.fna = data not obtained.gIncluded in “dissipative losses “hlncluded in ‘unrecovered and unknown losses.“

2.1 0.35Nit Nil

Nom Nom3 1.06 Nil

o 2.3na nao b

5s 1.9(9)

(h) 2.186 2.5

Table 21.— Percentage Losses From the Materials Cycles of Selected Metals, 1974

Losses as a percentage of 1974 domestic shipments of contained metala

Nature of losses from cycle

Milling and concentrating . . . . . . . . .Transportation and handlingb. . . . . . .Nonmetallic uses of raw materials.Metal processing . . . . . . . . . . . . . . . .End-product manufacture. . . . . . . . . .Exports (net)

Mill products. . . . . . . . . . . . . . . . . . .End products . . . . . . . . . . . . . . . . . .Scrap . . . . . . . . . . . . . . . . . . . . . . . . .

Dissipative and quasidissipative usesCorrosion and wear . . . . . . . . . . . . . . .Postconsumer solid waste . . . . . . . . .Unrecovered (and unknown) . . . . . . . .

. .

Iron andsteel

19d

Nom e

41

(8) Inal

6439

16

Aluminum

33

1151

8nao60

145

Copper

15—431

(4)nao

11Nil7

33

Platinum Manganese Chromium Nickel

NilC 1 Nil 1 –

Nil 3 Nil NilNom 13 11 Nom0.5 122f 12 10.3 1 1 3

0 11 0 0na na na nao 6 0 09 4 16 230.4 3 Nil 3

9 9 9 g

5 16 15 37

Tungsten

2d

Nom7

Nil

15na9

13h

1417

aAll losses are expressed as a percentage of 1974 domestic mill shipments of mill products containing the metal. For reference purposes, the total 1974 domestic millshipments for each metal were as follows, in millions of short tons Fe (124 3), Al (7.2), Cu (2 7), Pt (3 9 million troy ounces), Mn (O 9), Cr (O 724), NI (O 274), W (O 0148~

bThese losses from the materials cycle are in nonmetallic form and low in value Such losses cannot be compared directly with other losses of metallics later in the cy--,.

clec Nil = amount of losses close to zerod Included in “metal processing Iosses“eNom = small but undetermined amount of lossesfLosses of manganese exceed 100 percent because more manganese is lost as a slag in the Sseelmaklng process than iS contained in the steel products actually

shippedglncluded in “unrecovered and unknown losses“h Included in “dissipative losses“

1( ) = net ImportsIna = data not obtained

SOURCE: Workinq Papers One and Two

. .

* IV.Identification of Technical Options

for Reducing Losses From theMaterials Cycle

.

Iv ■

Identification of Technical Options forReducing Losses From the Materials Cycle

This chapter reviews each of the loss categories discussed in chapter III in order to identifytechniques for reducing these losses.

UNRECOVERED AND UNKNOWN LOSSES

As shown in the flow charts (figures 13 to 20),most industrial scrap is effectively recycled. On theother hand, estimates of unrecovered and un-known losses range from 5 to 37 percent of ship-ments (table 21). Regardless of estimating errorsincluded in these figures, such losses are substan-tial. Figure 21 shows current levels of obsoletescrap recycling as a percentage of 1974 mill ship-ments. The data is from figures 13 to 20. With theexception of platinum, current recycling of obso-lete scrap ranges from 5 to 26 percent. The poten-tial for additional recycling is calculated as the sumof the unrecovered materials and postconsumerwaste (from table 21), and ranges from 5 to 40 per-cent. However the extent to which this obsoletescrap can actually be recovered is a matter of con-siderable controversy.

The Institute of Scrap Iron and Steel contendsthat there is a large inventory of obsolete iron andsteel scrap that has accumulated over the years.This view has been substantiated by two studies,the most recent of which places the inventory atover 600 million tons. ] On the other hand, someeconomic studies indicate that this scrap may notbe available even with much higher scrap prices.2

In order to gather further information on thisquestion, the flow of obsolete products (and themetals and other materials contained in them) totheir “final resting place” was evaluated for sixkinds of products (buildings, lathes, office equip-

I R~bert Nathan Associates, h’on and Stee/ SCrUp.’ [ts Ac -

cumulation and Aljai[abi’lifv as of .?1 December 19 7’S, pre-pared for The Metal Scrap Research and Education Founda-tion, August 1977.

~wi]l iam T, Hogan and Frank T. Koelble, Purchased Ferrous

Scrap: US. Dernund and SuppljI Oulkmk, Industrial Econom-ics Research Institute, Fordham Universityr, June 197’7,

Figure 21 .— Recycling of Obsolete Scrap

24

61

50

Al Cu Pt

;25;

25

Mn

22

Cr

4 6

23

NI w

51 potential recycling


rapidly find their way to landfills even though theybypass the municipal solid waste system. Whilenot completely conclusive because of the limitedrange of products examined, the results do indicatethat the amount of obsolete scrap available forrecycling is smaller than previously calculated.However, this only reinforces the need for addi-tional recycling to prevent materials from beinglost forever.

The barriers to obsolete scrap recycling havereceived detailed study.3 Obsolete scrap has alimited market and competes with higher qualityvirgin ore and industrial scrap that has a knownconsistency and presents fewer collection diffi-culties. Options for increasing obsolete scrap recy-cling include: industry goal-setting, investment tax

credits, tax deductions for usage, product charges,reduction of freight rate chages, and additionalresearch. Several of these options are included incurrent energy legislation and have been studiedin detail in another OTA assessment.4

One final option is product rework and reuse.Most obsolete scrap is available in the form of aproduct. And as a product (with workable compo-nents), the scrap has more value than the metalalone. The main reason that products are not re-used is the lack of a well-established institutionalframework for collecting obsolete products and in-troducing them back into service in one form oranother. Product rework and reuse as a recyclingoption are discussed in detail in chapter VI.

~Econ~mic and Technological Impediments TO RecyclingObso/efe Ferrous So/id Was/e, NTIS report PB-223034, Oc-tober 1973.

dMa[eria/s and Energy From Munici/)al waste (Washington,D. C.: U.S. Congress, O-ffice of Technology Assessment, July1 979), OTA-M-93.

LOSSES IN THE POSTCONSUMER SOLID WASTE STREAM

Postconsumer solid waste includes beverage all probability, there are substantial quantities ofand food containers, worn-out residential and com- other metals in postconsumer solid waste, roughlymercial hardware, obsolete and worn-out small ap- in proportion to this general usage.pliances, toys, sporting goods, automotive parts, Options for solid waste handling and resourceetc. Such obsolete parts become a minor but signif-icant part of the total refuse stream of kitchen recovery from the postconsumer solid waste

waste, paper, glass, and plastics. As shown in table stream are the subject of another OTA assessment,

21, large quantities of basic metals are in the and are therefore not discussed in this reports

postconsumer solid waste stream, representing 7to 14 percent of domestic shipments of the metalsstudied. The total ferrous content of solid wastes is 51,1s CoIlgreSS, office of Technology Assessment, ~alerialsabout 11 million tons of iron and steel (which in-

. .and Energy From Municipal Waste: Volume 11 Working

eludes manganese and other alloying elements). In Pape~, July 1978.

LOSSES IN DISSIPATIVE USES

Dissipative uses involve the dispersal of metals munitions. Similarly, uses of steel such as in rein-and alloys by chemical action or physical disper- forcing bars or as nails are considered dissipative.sion during use. For example, aluminum pig andaluminum scrap are used in the deoxidation of As another example, large quantities of alloyingsteel. The aluminum is lost as an oxide in the slag. elements are used at low levels in the productionAnother dissipative use of aluminum is as a pow- of high-strength low-alloy steels. These steels withder in the manufacture of aluminum paint or in low levels of alloy content are difficult to identify

Ch. IV—Identification of Technical Options for Reducing Losses From the Materials Cycle ● 49

and segregate from the ferrous scrap stream. As aresult, alloying elements such as chromium, nick-el, and tungsten are diluted and lost in the normalrecycling of iron and steel scrap.

Referring to table 21, from 4 to 23 percent of thedomestic shipments of the selected metals is lost indissipative uses. A number of technical and eco-nomic barriers make it difficult to reduce this formof waste. In cases where metals and alloys are dis-persed by chemical action, performance and costconsiderations dictate their use over other materi-als and processes. For example, aluminum is usedin the deoxidation of steel because aluminum is areactive metal at the temperature of molten steel

LOSSES IN

Of the metals studied, none has a large net ex-port. On the contrary, imports of metals are a ma-jor problem for domestic producers. A largeamount of material does leave the United Statesthrough exports of fabricated products. However,specific quantities are not known since data on im-ports and exports of fabricated products are avail-able only in terms of dollars and number of items.A detailed analysis would have to be made tocalculate the total metals contained in such prod-ucts. As shown in table 21, a significant amount ofaluminum and manganese is lost from the domes-tic materials cycle through exports of iron and steelscrap.

Losses through exports differ from other kinds

and is more effective and lower in cost than otheralternatives.

In cases where metals and alloys are physicallydispersed as nails, hairpins, etc., the costs of theircollection would be very high in relation to thevalue of the metal they contain.

If there is to be conservation here, it will bethrough the development of substitutes on a caseby case basis. Research and development on sub-stitute materials and processes is underway andwould be accelerated by any threat to supply. How-ever much of this work is uncoordinated and spo-radic.

EXPORTS

of losses becauseseveral years thecrease exports in

of foreign policy concerns. ForUnited States has needed to in-order to reduce an unfavorable

balance of payments. Further increases in exportsand imports are an integral part of U.S. foreignpolicy and relations with all countries in the freeworld. Any change in the pattern of exports, andparticularly through overt imposition of exportcontrols, would likely have severe political reper-cussions and invite counter restrictions. In addi-tion, controls on fabricated product exports wouldbe a high price to pay for metal, since products onthe average have a value of from 2.5 to 5 timestheir contained metal, During an emergency, how-ever, this approach could be and has been used asa materials conservation measure.

LOSSES IN MILLING AND CONCENTRATING OF ORES

After mining, ore is usually beneficiated beforesmelting. Beneficiation involves milling of the rawore and processing to separate the desired mineralfrom the rock associated with it. Although largequantities may be lost in the milling and concen-trating steps, the value of the material lost is lowand the cost of further recovery is high.

This report has focused on losses from thedomestic materials cycle. Any losses from milling

and concentrating in a foreign country are outsideof the domestic materials cycle and the scope ofthis report. The low level of milling and concen-trating losses for aluminum, platinum, manganese,chromium, nickel, and tungsten reflects U.S. de-pendence on imported concentrates and semi-refined products of these metals. In this case,much of the waste occurs overseas.

With respect to beneficiation of iron and copperores, the level of losses is fixed by the technology


and economics of processing taconite (iron orecontaining about 25 percent iron) and low-gradecopper ores (containing 0.4 to 0.8 percent copper).Presently available technology cannot significantlyreduce the losses shown in table 21. In addition,processing of lower grade ores incurs increasingenergy and environmental costs.

One obvious option is to increase imports ofhigh-grade ore concentrate. Higher grade depositsof iron ore and many other metals are availableoutside the boundaries of the United States. But in-creasing U.S. dependence on imports raises seri-ous questions about the amount of risk associatedwith dependence on foreign supplies. This must bebalanced against the increased costs of energy and

environmental controls that would be required indomestic processing of lower grade ores.

Another option for reducing losses during mill-ing and concentrating is to invest in a major R&Dprogram directed toward increased recovery ofmetal values from low-grade ores. Most experts inthe field point to the need for research in fine-particle separation, since a considerable portion ofthe losses during milling and concentrating are inthe form of fine particles and slimes. A major ad-vance in fine-particle technology might bringabout significantly increased recovery rates andreduced losses. In this way, a higher proportion ofthe mineral values in the ground might be eco-nomically converted to usable concentrates.

LOSSES IN METAL PROCESSING

The metal-processing stage of the materials cy-cle includes smelting, refining, and producing millproducts. These operations are generally capital-intensive. As shown in table 21, losses in metalprocessing range from less than 1 to 12 percent ofdomestic shipments of the selected metals—exceptfor manganese. The use of manganese in steel-making is unique. A substantial portion of themanganese functions as a reagent in removingoxygen and in controlling sulfur in steel.

The major barriers to waste reduction in theprocessing of metals are technological and eco-nomic. Current technology is the average technol-ogy of all plants in operation. Average technologyshows improvement only as new plants with newtechnology are brought online and old plants withold technology are either upgraded or dismantled.

Substantial time and financing are required to turnover the capital stock in any of these basic materialindustries.

Besides capital replacement using new technol-ogy, few options are available for making a signifi-cant reduction in the losses associated with metalprocessing. One exception is the use of alterna-tives to manganese for controlling sulfur in steel-making. Materials such as magnesium and calciumcarbide can be used in external desulfurizationprocesses. The economics of alternative desulfuri-zation processes depend on many technical factorsand the availability and cost of manganese. Thusfar, manganese has a clear-cut cost advantage overavailable alternatives. Nonetheless, significantchanges in availability of manganese and or costsof the alternatives could change this picture.

LOSSES IN END-PRODUCT MANUFACTURE

The losses in end-product manufacture for the losses are associated with literally hundreds of dif-selected metals range from less than 1 to 3 percent ferent types of fabrication processes. Since theof domestic shipments of mill products. These rela- losses are so small, opportunities for conservationtively low levels of loss occur as metals are fabri- are limited to marginal improvements in manage-cated into end products, such as automobiles, ap- ment controls over the manufacturing process.pliances, electrical equipment, and buildings. The

Ch. IV—Identification of Technical Options for Reducing Losses from the Materials Cycle ● 51

LOSSES IN CORROSION AND WEAR

As indicated in table 21, losses of materialdirectly associated with corrosion and wear aregenerally small and range from essentially O to 3percent of domestic mill shipments. These aredirect losses from corrosion and wear and do notinclude indirect losses from the effects of corrosionand wear on product life, which are discussed inchapter V. Thus, promoting improved corrosionand wear resistance is not an efficient way to re-duce material losses, but there can be substantial

economic benefits through improvements in reli-ability, durability, and performance.6 In addition,as is shown later, the development of improvedcorrosion and wear resistant treatments can beused to build a great deal of flexibility into materi-als usage.

6L. H. Bennett, Econ{)rnic Effects of Metallic Cor~c).si(m ir) theUniled States, A Report to the Congress, National Bureau ofStandards, March 1978.

LOSSES IN NONMETALLIC USES OF RAW MATERIALS

The nonmetallic use of raw materials varies sub- would not receive separate consideration exceptstantially. Significant quantities of aluminum, for the fact that many of such uses are dissipative.chromium, and manganese raw materials are used Because of this, the same options for reducingin ceramics, abrasives, refractories, and chemicals. losses would apply to nonmetallic uses as wouldThese are generally accepted uses of metals and apply to dissipative uses.

SUMMARY OF TECHNICAL OPTIONS

The technical options that have the greatest lev-erage in reducing each category of loss are shownin figure 22. The most highly leveraged options arescrap and metal recycling, R&D on substitute mate-rials and/or processes, and R&D on metal recov-ery from low-grade ores.

Metal recycling and product remanufacturinghave multiple leverage because, in addition to thedirect reduction in losses of unrecovered metals in

obsolete products, these options lead to an addi-tional savings in future years. For example, ifthrough product recycling an additional 10 percentof obsolete office equipment in a given year isremanufactured, 10 percent less metal will be re-quired for next year’s production run (assumingconstant demand). This will also eliminate thelosses (e.g., milling and concentrating) that wouldhave been associated with producing that amountof metal.

—.

52 “ Metal Losses and Conservation Options

Figure 22.—Technical Options for Reducing Losses inthe Materials Cycle

L O Ss category

Unrecovered metals

Dissipative uses

Milling 8 concentrating

Exports of scrap& miltproducts

Postconsumer solid waste

Metal processing

Nonmetallic uses of rawmaterials

End-product manufacture

Corrosion and wear

Transportation & handling

Range of losses”

5.14%

0.5”12%(Mn=122%)

Wrn-11 %

Nit-3%

Nil-3%

Nil-3%

Technical conservation option-.

Metal recyclingProduct remanufacturing and reuse

R&D on substitute materialsand/or processes

R&D on metal recovery fromlow-grade ores, e.g. fine particle

technology

Export controls

Productr recycling

Capital replacementAlternative desulfurization process(for Manganese)

R&D on substitute metals& processes

Improved management controls

R&D on improved corrosion andwear resistant treatments

Improved management controls

● Range of losses for the eight metals in percent of 1974 domestic mill shipmentsSee figure 3 and tables 20 and 21 in chapter III for metal specific dataNom = small but undetermined amount of losses.Nil = amount of losses close t o zero.SOURCE: OTA based in part on data from Working Papers One and Two

v ■

Design Review of Technical Optionsfor Reducing Excess Material in the Cycle

v.Design Review of Technical Options

for Reducing Excess Material in the Cycle

METHODOLOGY

The second major class of waste is the use of ex-cess materials in the materials cycle. This chapteridentifies technical options for reducing materialsusage in the design, manufacture, and use of prod-ucts.

Table 22 presents a list of options grouped in sixbasic classes or categories:

● use of less metal in products,● substitution for critical metals,. product rework and reuse,● extended design life and durability,● reduced inventories and overproduction, and

Table 22.—Options for Materials Conservationin Product Design, Manufacturing, and Use

Use of less metal● Reduce size● Stress optimizationc Better manufacturing techniques. Eliminate unessential components. Functional changes in product● Standardization of componentss Design for recycle. Decreased scrap generation● Powder metallurgy manufacture

Substitution for critical materials● Use of less critical materials● Use of renewable resources. Recyclable materials for nonrecyclable

Extended life through rework and reuse● Product rework. Reuse of components. Remanufacture of components

Extended design life and durability● Reduced obsolescence. Failure avoidance● I reproved maintenance proceduresc I reproved corrosion and wear resistance

Reduced inventories and production● Combined inventories. Production control

Use of less-intensive materials systemsand products

● Use of coatings for alloys. Reduction of alloy contents Combined usage of products

● use of less intensive materials systems andproducts.

These are technical options that, if imple-mented, would reduce metal usage. The list doesnot include implementation options such as educa-tion, increased R&D, and regulations, which couldbe used as a means of implementing a given tech-nical option. Implementation options are consid-ered in chapter VII.

The overall approach of this chapter’s analysis isshown in figure 23. For selected products, the po-tential material saving for each option was esti-mated by conducting a design review. The designreview was carried out on a product-by-productand component-by-component basis for each ofthe eight metals studied in chapter IV.

Figure 23.— Methodology for Evaluating Options forReducing Excess Material in the Cycle

Select products as case examples1

Select detailed options toreduce usage of the

eight selected metals

* v +Quantify material-saving potential

for each option, each metal,and each product II

k? Choose major metal-saving option

IGeneralize materials savingsby applying results from case

examples to major productuses of each metal

Identify impedimentsto applying these approaches

SOURCE: OTA, based on Working Paper Three SOURCE: OTA

55

51-680 0 - 79 - 5


Estimated material savings were then general-ized to a whole range of products that containedthe metals under evaluation. For example, if 10percent of steel used in automobiles could besaved by a stress-optimized design, that percentagewas applied to all transportation products contain-ing a given amount of steel.

Because of the great variety of products and thelarge variations in material usage in each product,only a few products could be selected for review oftheir design, manufacture, usage, and disposal.The products are listed in table 23. These products

Table 23.—Products Selected as Case Examples

Industry ProductTransportation . . . . . . . . . . . . . . . . . . . . . . . AutomobileAppliances. . . . . . . . . . . . . . . . . . . . . . . . . . . RefrigeratorConstruction. . . . . . . . . . . . . . . . . . . . . . . . . Buildings

BridgesMachinery . . . . . . . . . . . . . . . . . . . . . . . . . . . Lathes

TractorsFabricated metal products. . . . . . . . . . . . . . Cans

SOURCE: OTA.

were selected because they are typical of the specif-ic industries indicated and because each productuses a relatively large amount of metal.

DESIGN REVIEW OF SELECTED PRODUCTS

In order to quantify the amount of material thatcould be saved using the technical options listed intable 22, a design review of each of the productslisted in table 23 was carried out. The details of themethodology are described in the Working Papers(vol. II-C); an example of the methodology for re-frigeration is given in chapter VI. Basically, eachproduct and component were reviewed for alterna-tive designs that would use less metal. The metalsavings would be the difference in metal usage be-tween the present and the proposed design.

The potential metal savings of every option isshown by product in table 24, The numbers in thetable represent the percentage of the total weightof the product that could be saved or substitutedfor. For substitution options, the numbers repre-sent the percentage saved of the second metal bysubstituting the first. A hyphen (dashed line) in thetable indicates the savings are small but that noquantitative estimate has been made. NA indicatesan option is not applicable to the product.

These numbers are engineering judgments ofthe overall conservation potential for the listed op-tions. The numbers are interdependent in that im-plementation of one option will reduce the savingpossible with another option. Also, the percent-ages shown indicate the savings that are techni-cally possible. Economic and other factors mayseverely limit the actual savings. Finally, the pur-pose of these numbers is only to identify the mostpromising options, not the practicalities of imple-mentation.

As shown in table 24, the potential metal sav-ings are generally small for options that would useless metal. Removing excess metal through im-proved manufacturing techniques shows signifi-cant potential for metal cans, but not for otherproducts. Stress optimization or “design to stress”is generally applicable and could save up to 30 per-cent of the metal depending c n the product. Otheroptions save insignificant amounts of metal eitherbecause they represent the current practice orbecause they cannot be implemented. Design forrecycling is not an effective strategy at presentbecause it is not the design that limits the recy-cling, but rather ineffective methods of disposaland metal separation. This situation may improvein the future, but the net effect on material savingscannot be ascertained at this time (as indicated byan “X” in table 24).

Initially, standardization of components ap-peared to be a desirable option for saving metalthrough a reduction of inventory. However, this in-vestigation showed that standardization could leadto increased, rather than decreased, use of metalsbecause all components would have to be de-signed for the maximum usage condition. To be ef-fective, standardization would have to be com-bined with component recycling so that the built-inexcess durability could be fully utilized.

Substitution as a general option has the widestapplicability and offers the largest potential sav-ings. A substitution of one metal for another doesnot reduce the overall use of metal nor would sub-stitution be an effective option if all materials, in-

Ch. V—Design Review of Technical Options for Reducing Excess Material in the Cycle ● 57

--

Table 24.—Potential Metal Savings of Conservation Options for Selected Products

Product

FabricatedCans and metal

Cars Refrigerators Tractors Lathes containers structures-. — —Use of less metalReduce size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Better manufacturing techniques . . . . . . . . . . . . . .Stress optimization . . . . . . . . . . . . . . . . . . . . . . . . . .Eliminate unessential components. . . . . . . . . . . . .Functional change. . . . . . . . . . . . . . . . . . . . . . . . . . .Standardization of components. . . . . . . . . . . . . . . .Design for recycle . . . . . . . . . . . . . . . . . . . . . . . . . . .Decrease scrap in manufacturing . . . . . . . . . . . . . .Powder metallurgy. . . . . . . . . . . . . . . . . . . . . . . . . . .

Product recyclingProduct rework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Reuse of products or components . . . . . . . . . . . . .Remanufacture of components . . . . . . . . . . . . . . . .

3-45 10 11-6 < 1 2

5-16 30 2< 1 — —< 1 — —< 1 — —< 1 x —

2 1-2 < 13-5 1-2 < 1

NA88

—1-21-2

NA

{ }23-33

NA—NAx—

100

NANANA

—10x—

15 80 NA NA NA NANA NA NA NA 0-80 10-8015 1 50 5 NA NA

Substitution’Al/steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 74 < 1 2 100 40Plastic/steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-20 31-85 < 1 2 40 NAAl/Cu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 100 100 100 NA 100HSLA/St . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 NA 2 1 NA 30Steel/Al . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 75 NA NA 100 100Wood/steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA NA NA NA < 3 0Concrete/steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA NA 50 NA < 3 0Composites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0-90 0-84 <1 4 NA NAGlass/St . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA NA NA 40 NAGlass/Al . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA NA NA 91 NALead/steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA 30 NA NA NAPlastic/Al . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA NA NA 91 NA

Increase product lifeIncrease component life . . . . . . . . . . . . . . . . . . . . . . 50-60 60 3 3 NA —

Numbers indicate percentage of metal, by weight, that could be saved for each option and product studied A dash means negligible metal could be saved. NA means thatoption is nonapplicable X means savings cannot be determined at thls time.The substitutions should be interpreted as follows, for example

Al/steel = substitution of aluminum for steel.Al/Cu = substitution of aluminum for copperHSLA/St = substitution of high-strength Iow-alloy steel for steel.

SOURCE: Working Paper Three.

eluding plastics, were in short supply. However,where a supply crisis develops with a particularmetal (or material), substitution would be the mosteffective option if there were sufficient time to im-plement it.

Product recycling appears to be an effective op-tion. A product reaching the end of its life (as de-fined by its owner) maybe returned to useful life ina variety of ways. It may be used again in its cur-rent state (reuse). Either the whole product or itsindividual components can be repaired, reworked,or remanufactured. Repaired means that the prod-uct is made operable. Reworked means that the

product is returned to its orginal state or close to itby adding new parts, repairing parts, painting, etc.(overhaul). Remanufacture means essentially thesame thing as rework except that in remanufactur-ing the original parts are not reassembled (seeglossary, appendix D).

Product rework appears to be technically possi-ble for most products except cans (which only haveone life) and structures. The potential of this optionis limited for automobiles since most of the auto-mobile is now effectively recycled, but wouldamount to about 80 percent (the same as refriger-ators) if this were not the case. The rework option


does not apply to tractors and equipment that arealready used almost to the limit of their usefullives.

Reuse of products or components offers somepotential savings for containers and fabricatedmetal structures. The amount of metal savedwould depend on the amount of metal used. Final-ly, remanufacturing of components is already ex-tensively used for automobiles and could be ap-plied to a wide variety of other products.

Increasing product life by increasing the lifetimeof life-limiting components would save consider-able metal, but only for certain products. A moredetailed analysis is necessary to determine ifenough products are involved to realize a substan-tial savings.

In sum, based on these selected products, thetechnical options that offer the greatest potentialfor saving metal are the following:

●

9

●

●

substitution,stress-optimized designs,rework and reuse of products and compo-nents, andextended product life.

The following section presents estimates of thetotal savings possible if each of these options wasapplied to all products, not just the ones listed intable 24.

In table 25, the results from the specific case ex-amples presented in table 24 are generalized to theindustry as a whole. The numbers in table 25 arethe percent of 1974 domestic shipments that couldbe saved by each option listed. The detailed meth-odology used to develop these percentages is de-scribed in volume II-C of the Working Papers. In

brief, the percentages derived for the individualproducts were applied to all o the products withina given industry.

More specifically, the flows of materials were dis-aggregate into all major end-use products for eachof the eight selected metals. Then each of the end-use products was placed in one of the followingcategories:

●

●

●

●

●

●

●

●

transportation,electrical equipment,building and construction,industrial machinery and equipment,off-the-road equipment,commercial equipment,domestic equipment, andcans and containers.

Based on the data from table 24 and engineeringjudgments as to their applicability, the followingmetal-saving percentages were applied to the end-use products in each category.

1. For substitution, metal savings ranged from 2to 100 percent with the following roughbreakdown: (variations were also made on ametal-by-metal basis)

●

●

●

●

●

●

●

2 percent for metalworking and manufac-turing equipment;10 percent for tractors and related machin-ery;40 to 100 percent for building and con-struction materials;40 percent for electrical machinery;70 percent for appliances;70 to 100 percent for automotive; and100 percent for containers.

2. For using less metals, both manufacturingtechniques and stress optimization were con-

Table 25.—Potential Metal Savings of Conservation Optionsa

Substitution Increase Reuse ofin construction Use of product Remanufacture products or Product

Metal Substitution industry b less metalc life of components components rework

Aluminum. . . . . . . . . . . . . . . 60 6 8 5 1 15 30Copper . . . . . . . . . . . . . . . . . 59 23 6 6 4 32Iron and steel . . . . . . . . . . . . 29 6 9 8 3 11 30Chromium. . . . . . . . . . . . . . . 16 — 4 5 2 6 12Nickel . . . . . . . . . . . . . . . . . . 20 — 8 9 2 15 12

aNumbers indicate percent of total 1974 end use of each metal, generalized from product to industry.bIncluded in substitution.CBy better manufacturing techniques and stress optimization.

SOURCE: OTA, based on Working Paper Three.

Ch. V—Design Review of Technical Options for Reducing Excess Material in the Cycle . 59

sidered together. Where appropriate, thefollowing numerical values were applied:

● 8 percent for machinery and manufactur-ing equipment;

● 10 percent for electrical machinery; ands 10 to 20 percent for appliances, construc-

tion, containers, and automotive.

3. For increased product life, computations werecarried out as follows: A factor of 50 percentwas applied to automobiles, some appliances,household products, domestic and office fur-niture, and air-conditioners. Three percentwas applied to some industrial equipment.

4. For remanufacture of components:15 percent for automotive, appliances,watches, clocks, motors, generators, trans-formers, and air-conditioners;50 percent for locomotives, tractors, andagricultural machinery; and

● 5 percent for industrial materials-handlingequipment.

5. For reuse of products and components:●

●

●

For

50 to 80 percent for architectural productssuch as windows, doors, screens, awnings,canopies, plumbing, and other builders’hardware; reusable containers such as bar-rels, pails, domestic and office furniture;wire and cable;10 percent for limited other categories suchas cabinet sheet stock; andThe percentages shown for product reworkwere based on an independent study of theproducts for which rework was made possi-ble and a determination of the amount ofmetal contained in these products.

each technical option and metal, the totalpotential metal savings as a percentage of endusage is given in table 25.

VI.

Analysis of the Most SignificantTechnical Options for Reducing

Excess Metals Use

VI m

Analysis of the Most SignificantTechnical Options for Reducing

Excess Metals Use

Based on the design review in chapter V, the most significant technical options in terms ofpotential metal savings as a percent of domestic shipments are listed below:

● substitution (16 to 60 percent),● product rework (12 to 43 percent),● product reuse (6 to 32 percent),● substitution in construction (O to 23 percent),● eliminate unnecessary metal (4 to 9 percent),● increase product life (5 to 9 percent), and● component remanufacture (1 to 4 percent).

All of these options are discussed in more detail in this chapter, along with one general optionnot included in the design study (reduced use of materials-intensive systems). Particular attention isgiven to identifying the impediments or barriers to implementation of the technical options.

SUBSTITUTION

In theory, substitutes of one material for anotherare easily made, in a variety of ways, to cope withsupply shortages. In practice, however, it is muchmore difficult; substitutes are not always available.[n product design, materials are selected based ona wide variety of criteria and specifications such as:strength, corrosion resistance, fatigue resistance,thermal expansion to match mating parts, damp-ing capacity, strength to weight ratio, wear resist-ance, dimensional stability, modulus of elasticity,weldability, appearance, and, of course, cost. Thus,the selection of materials is always a compromiseamong a number of factors, and the necessity tosubstitute may make the product design inade-quate or the product itself uncompetitive. Second-ly, substitutes may not be available when needed;substitutions can take many years to implement,often longer than the duration of the shortage.

For these reasons, new product substitutions arerelatively straightforward compared with the com-plexities of substitution for products already de-signed and in production.

The ease of making substitutions depends pri-marily on the type of production. Some productsare made to order by assembling purchased mate-

rials and components (e.g., home construction).Under these circumstances, materials substitutionscan be made with relative ease. To make a compo-nent from plastic instead of metal means selectinga different subcontractor who has the appropriateproduction equipment. Other products (e.g.,lamps) are made with general production equip-ment (lathes, drill presses, etc.), which is eitheradaptable to various metals or is relatively inex-pensive and can be changed as the need arises.

However, with many mass-produced products(e.g., autos, refrigerators) all the input elements, in-cluding materials, are optimized, and very special-ized equipment is utilized.

Here, the material used is integral with the pro-duction method, including the form in which themetal is purchased (sheet, wire, powders, etc.) andthe method of scrap salvage. In most cases, theparticular talents of the labor force (welders, grind-ers, etc.) are also integrated with the materials andmethods of production, and material changes aretherefore expensive and slow to implement.

For example, a new engine or a new transmis-sion in an automobile might require capital invest-

63

—


ments of $200 million to $500 million, a new body Thus, if substitution is to be considered a work-shell from $100 million to $500 million, and a new able alternative, greater flexibility must be builtcar between $500 million and $900 million. Just into the production process. Secondly, a new sub-changing a single component can run into millions stitution involves a risk that will add to the productof dollars. One automobile manufacturer reports cost, even if no problems develop. Strong financialthat the introduction of a plastic tailgate would incentives will be required to speed up the substi-alone cost $300,000. Even if accepted and intro- tution process.duced into limited production in 1979, the plastictailgate would not be in full production until 1990.

PRODUCT RECYCLING (PRODUCT REWORK AND REUSE,COMPONENT REMANUFACTURE)

Product and part recycling may be viewed on acontinuum ranging from full-scale remanufactur-ing to minor repair at the consumer level. In all in-stances, the life of the product is extended bybringing it back up to some useful functioninglevel of performance. An additional category “re-use” might be added to this continuum to implyreuse without any repair, refurbishing, or remanu-facturing effort applied to the product or part. Thereturnable container is an example of productreuse.

Product remanufacturing is a process in whichreasonably large quantities of similar products arebrought into a central facility and disassembled.Parts from a specific product are collected by parttype, cleaned, and inspected for possible repairand reuse. Products are then reassembled, usuallyon an assembly-line basis, using recovered partsand new parts where necessary. Product remanu-facturing is a rather high-volume factory arrange-ment similar to new product manufacturing, ex-cept that the parts flowing to assembly lines aremostly reconditioned parts.

Product rework is a process where products areusually also brought back to some central facilityfor processing. However, on disassembly a prod-uct’s component parts are kept together and aftercleaning, inspecting, and replacing with new partswhere necessary, the original product is reassem-bled with most of its original parts. Rework (alsoknown as “refurbishing” or “reconditioning”) isnot as amenable to mass-production methods as isremanufacturing.

Lack of recycling of obsolete products does rep-resent a major metal loss. Quality, cost, and otherbarriers have limited metal recycling. As a result,the use of obsolete scrap has increased only mar-ginally during the past 20 years. Component andproduct recycling is a possible alternative that of-fers several distinct advantages over metal recy-cling.

Product recycling and reuse does have consider-able potential to save metal, and it can be appliedto a wide range of products. Indeed, product recy-cling is already taking place in a variety of forms.For example, automobile parts are extensively re-worked and reused; aircraft are reworked on aperiodic basis; some construction firms separateand reuse building components; and certain con-sumer durables like refrigerators are reworked andsold overseas.

In this assessment, a review was made of a vari-ety of products that are currently recycled in orderto determine if any common elements of success-ful recycling existed. The results are outlined inthe following paragraphs:

1 Trucks: Several companies rebuild and selltrucks, and there is a strong demand for suchvehicles. For automobiles, recycling is doneonly by the military and certain fleet owners.Product recycling is not practical for mostautos because of the detail work that must bedone (trim, upholstery, etc.) to restore the ap-pearance to a level acceptable to the custom-er. In any case, an effective recycling systemalready exists. A major portion of the incomeof auto wreckers is from parts salvaged from

Ch. VI—Analys\s of the Most Significant Technical Options for Reducing Excess Metals Use ● 65

vehicles of all ages. Auto wreckers know themarket for salvaged parts, and delay the finalscrapping of auto hulks until the valuableparts have been removed. One of the marketsfor components, including engines and trans-missions, is remanufacture of such compo-nents. The institutional problems and rela-tionships in automobile manufacture, repair,and components salvaging make it difficultfor any one institution to develop assuredsupplies and management control over alloperations.

2. Copying Equipment: One of the major

3.

4.

manufacturers of copying equipment has es-tablished a components and products salvageand remanufacturing operation for its mainlines of copiers. In this case, the supplies ofcomponents and products and managementcontrol are all within one institution. This isbecause copying equipment is not sold but in-stead is leased and therefore remains underthe control of the manufacturer. In this case,sophisticated diagnostic tools and high-tech-nology repair facilities can be developed. Allservice and parts are the responsibility of, andin the control of, the manufacturer. As a re-sult, the manufacturer has a better knowledgeof service problems and is able to modify thedesign so that products are returned in bettercondition. The manufacturer can also modifythe design to make the product easier to recy-cle.

Off-the-Road Equipment: One of the majorproducers of off-the-road equipment has asimilar program of component salvage and re-manufacture. Unlike copying equipment,most off-the-road equipment is sold to theuser, and maintenance is the responsibility ofthe user. The off-the-road manufacturer hasdiscovered that he can provide a valuablecustomer service in the form of a componentsalvage and rework operation. This service isprovided at lower cost than could be achievedwith new parts and components.

Typewriters: Extensive recycling of the IBMelectric model C typewriter is carried out,both by private industry and by the Govern-ment. The General Services Administration

5.

(GSA) maintains a repair facility that repairsand reworks the IBM model C. Typewritersare collected during the repair process. Thecost of rework is one man-day of labor plusmiscellaneous parts cost. These typewritersare then resold to Government agencies atabout one-half the cost of a new typewriter.The ingredients of success include: an exist-ing collection pipeline, favorable economicsof repair, and most important, a popular prod-uct. GSA rebuilds only this model because ofthe large volume and high demand. Reworkis not done for other typewriters, which in-stead are sold as is or for scrap.

Aircraft: Aircraft are extensively refur-bished. A study of the costs of rework for onemilitary aircraft showed that a $6 millionplane could be reworked for $120,000. How-ever, this was done on a production-line basiswith a well-developed system of parts inspec-tion, inventory, and control. Each part is re-worked in a prescribed manner and on a pre-scribed schedule.

Some examples of other recycled products in-clude:

● machine tools,● mattresses,● diesel engines,● auto bumpers,● furniture,● motors, and● air-conditioning compressors.

From these examples, it can be seen that themajor ingredient of success is the existence of a“pipeline” for pickup and resale where a close rela-tionship has been established between repair orleasing facilities. Where appearance or style is im-portant, the trend seems to be to salvage the partsand scrap the body of the product. To achieveeconomies of scale, it appears to be essential to useproduction-line methodology. Products reworkedon a one-by-one basis are almost always more cost-ly than the new models. Very complicated prod-ucts with many features are also difficult to recycle.The major barrier to more widespread product re-cycling is economic. To be economically attractive,used products must be reworked or remanufac-tured at a cost that will allow a resale price at a rea-


sonable discount over the price of the new prod-uct. Products for which recycling is most likely tobe economic are those with large volume, whereappearance or styling is not a problem, and whichcan be recycled on a production-line basis. Forthose products where recycling is economicallysound, the major barrier is the lack of establishedindustries to recycle that product.

Another impediment is the consumer’s desirefor new products. This barrier was identified in asurvey of consumers carried out by Corm where“25 percent of the respondents disposed of theirproducts because they preferred new ones.”1 Thisconsumer behavior pattern is in part encouragedby Government regulations that require the label-ing of recycled products.

In order to better understand the product dis-posal pipeline, patterns of disposal were identified

~wi Da\,id Corm, FaCIOr.y Affectinq Product Lifetime, NSF/RA Report 780219, August 1978. ‘

for selected representative products in widelyseparated geographic areas (see Working PaperFour, vol. II-D, for details). The products covered inthis part of the study include buildings, lathes, of-fice equipment, pipelines, refrigerators, and tele-vision sets. The cities selected were: Ashland,Ohio; Dodge City, Kans.; Knoxville, Term.; Pitts-burgh, Pa.; and Phoenix, Ariz.

A typical disposal pattern for refrigerators isshown in figure 24. A summary of the results ofthis investigation for each of four products and fourlocations is shown in table 26. The patterns ofdisposal are very similar with a few exceptions.The major finding is that most of these productswhen discarded do not go directly to landfills butare first collected or traded in. An effective collec-tion pipeline already exists. Unfortunately, reman-ufacturing facilities do not exist. This prevents theeffective rework and reuse of used products andcomponents.

Figure 24.—Typical Disposal Pattern for Refrigerators

I

.

P cSOURCE Working Paper Four

Ch. VI—Analysis of the Most Significant Technical Options for Reducing Excess Metals Use ● 67

Table 26.—Disposal Patterns of Selected Products in Percent of Total Disposals

SOURCE Working Paper Four

SUBSTITUTION IN THE CONSTRUCTION INDUSTRY

Of the industrial sectors that account for muchof the metal usage (construction, transportation,machinery, appliances, and electrical), the con-struction industry is the most flexible. At almostany time during the construction process, metaland nonmetal substitutions can be made for anygiven component. Tables 27, 28, and 29 show thesubstitutions possible for aluminum, copper, andsteel, respectively. The potential material savingsare 6 to 23 percent, as shown earlier in table 25.These numbers are quite large, given that only oneoption and one industry are involved.

In order to get an estimate of the cost of this sav-ing, the construction cost of a 40-story office build-

ing was estimated with and without reduced metalusage. For this building, all uses of metal werereviewed and cost estimates for reasonable substi-tutes were prepared. This data is shown in table30. The building with reduced metal costs about$14.5 million less than the total cost of $60 millionwithout substitution, and would save 4,020 tons ofsteel. The only questionable item in this saving isthe sprinkler system that would have to be demon-strated to be fireproof. Thus, the economics of con-struction are in favor of using less metal. However,other factors work against substitution in the con-struction industry, such as the lack of necessarylabor skills and customer preferences for tradi-tional building materials.

ELIMINATE UNNECESSARY METAL IN PRODUCTS

As shown in table 25, the elimination of excess 70 lbs in the shell, 16 lbs in the doormetal in products might save between 5 and 10 the inner liner for a total of 135 lbs.

and 49 lbs in

percent of metal consumption. In order to deter-mine whether this could be realized in practice at areasonable cost, a detailed analysis was made ofthe metal uses in a variety of products and thepotential for conservation. A summary of the re-sults for refrigerators is presented below to illus-trate the problems involved.

The typical metal usage in a refrigerator isshown in table 31. [t consists of 161 lbs of steel, 12lbs of aluminum, 6 lbs of copper, and 0.5 lb ofchromium for a total of 179.5 lbs of metal. A ma-jority of the metal is in the box, which consists of

If the refrigerator sides and top are made of steelwith holes cut in the sheet and covered with aflame-retardant plastic, a considerable weight sav-ings will be realized. An estimated 11 lbs of steelcould be saved of the 70 lbs now used. However,this metal savings results in manufacturing andcost penalties. First of all, a manufacturer esti-mates that this would add $30 to the cost of mak-ing the refrigerator, including the cost of the plas-tic, the adhesives, and some method of finishingthe edges. Also, the use of plastic on the exteriorposes a moisture and flammability problem. In ad-


Table 27.—Opportunities for Saving Aluminum in the Construction Industry

Fiberglass

HSLA

Reinforcedconcrete

SteelWoodWood/coating

Surfacecoatings

—

●

●

✎

●

�

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

● ●

●

●

●

●

●

●

�

s

c

●

●

●

●

●

●

●

●

●

—

●

�

�

SOURCE” Working Paper Three

Table 28.—Opportunities for Saving Copper in the Construction Industry

Steel

Wood

Wood/coating

Fiberglass

Aluminum

Plastics

●

●

●

●

SOURCE: Working Paper Three.


Table 29.—Opportunities for Saving Steel in the Construction Industry

AluminumCopperFiberglassHSLAPlastics

Reinforcedconcrete

WoodWood/coating

●

●

●

●

●

●

●

●

●

●

●

—

●

SOURCE Working Paper Three

Table 30.—Construction Cost Estimates for a Metal-Free Building*

Building component

Structure . . . . . . . . . . . . . . . . .

Skin . . . . . . . . . . . . . . . . . . . .

Ductwork. . . . . . . . . . . . . . . . .Plumbing. , ... , ... , . . . . . . .

Sprinkler . . . . . . . . . . . . . . . . .Electrical . . . . . . . . . . . . . . . . .Curtain walls. . . . . . . . . . . . . .

Metal saved

(Fe) 2,117 tons

(Fe) 200 tons

(Fe) 1,300 tons(Cu) 3 tons(Fe) 16 tons(Fe) 125 tons(Fe) 18 tons(Fe) 1,100 tons

Substitute

Reinforced concrete(706 tons steel used)

Sand-blasted concrete(20 tons steel used)

Plastics (130 tons steel)Plastics

PlasticsFiberglassBlock wall

Savings

($1,903,293)

14,041,963

1,587,500391,420

406,250——

Total. . . . . . . . . . . . . . . . . (Fe) 4,876 tons 856 tons steelNet savings . . . . . . . . . . . (Fe)4,020).tons $14,523,840

. Forty stories, 1.3 million ft2 of floor space, total cost of $60 million without substitution.SOURCE: OTA, based on Working Paper Three

dition, plastics do not age as well as steel. The other applications), but, that something else mustmanufacturing process would be somewhat more be added to take its place. This would probably becomplicated since the steel would have to be han- true for any application where the metal is used fordied in the conventional way. Then, instead of “containment .“enameling or coating in a single process, the plas-tic would have to be attached by hand. Thus, the If the refrigerator sides are made of thinner steelprimary barriers to the use of less steel are the in- (0.010 inch) and ribs are added to bring the stiff-creased manufacturing cost and the uncertainty of ness up to the original level, approximately 58 lbsthe results. The increased cost results from the fact of steel can be saved. The cost of the materialthat metal is not just removed (as it could be in saved would be $10.88. This would be counterbal-


Table 31 .—Summary of RefrigeratorMaterials Content

Material

Steel

Copper

Aluminum

Chromium

Total

Part

Total. . . . . . . . . . . . . . . . . . . . . . . . .

Outer shell without door . . . . . . . .Door only. . . . . . . . . . . . . . . . . . . . .Inner foodliner. . . . . . . . . . . . . . . . .Compressor shell . . . . . . . . . . . . . .Other compressor parts. . . . . . . .Condenser. . . . . . . . . . . . . . . . . . . .Shelving. . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . .

Condenser (coating) . . . . . . . . . . . .Tubing for interconnections . . . . .Motor and wiring. . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . .

Compressor and motorCompressor. . . . . . . . . . . . . . . . .Motor . . . . . . . . . . . . . . . . . . . . . .

Evaporator. . . . . . . . . . . . . . . . . . . .Handles and trim. . . . . . . . . . . . . . .

Total. . . . . . . . . . . . . . . . . . . . . . . . .

Plating . . . . . . . . . . . . . . . . . . . . . . .

Refrigerator. . . . . . . . . . . . . . . . . . .

Wt. (lbs.)

161

701649

72

116

6

114

12

6321

1/2

1/.

SOURCE Working Paper Three

anced by increased handling, reject, and manufac-turing costs. If current tooling is used (welding) forattaching the ribs, then the side would have to berefinished before the acrylic finish could be ap-plied. Excessive finishing to remove a ’’bad spot”could drastically weaken that spot so much thatdamage could result from handling and usage.Thin metal is, of course, more damage prone.More dents in the metal sides would result in in-creased reject rates and scrapage. Although these

costs were not estimated, they would surely belarger than the costs of the metal saved.

In addition, for many products a certain amountof “extra” weight is required for stability or someother important reason. This is particularly true forrefrigerators. The danger of a child tipping over therefrigerator by hanging on the door must be recon-ciled with the saving of metal. This same generalconcern applies to almost every other piece ofequipment studied. In machine tools, extra metalis added for damping out vibrations that wouldshorten the life of the equipment and affect thequality of the work. In tractors, the weight of extrametal is considered necessary for adequate trac-tion. This excess weight need not be metal, andsubstitutes such as concrete and water have beenused with some success. These substitutes werenot reflected in the 5- to 10-percent calculation.

The results presented for refrigerators apply gen-erally to the other products of this report. That is,although elimination of some excess metal is pos-sible, the difficulties include increased manufactur-ing costs, increased cost of investment in engineer-ing and equipment, decreased durability, and re-duced safety. This is a large price to pay for thesmall savings of metal possible. And, if there wereadequate recycling, this small amount would be ofno concern since the metal would be reused. Fur-thermore, strong economic incentives already actto encourage the minimum possible use of metalin the manufacturing process. The fact that thesefactors do operate in the interests of conservationis demonstrated by the data of figure 25. As shown,the weight of specific models of refrigerators hasdropped substantially in the past, and will un-doubtedly continue to do so in the future. Suchdata have not been assembled for other products,but the same considerations would apply.

EXTEND PRODUCT LIFE

Extension of product life was first thought to be The approach used was to (a) determine thea method of saving a considerable amount of mate- amount of aluminum and copper that could berials. However, the design study did not indicate saved by a 50-percent increase in the mechanicalthat extended life would save very much (5 to 10 life of refrigerators, automobiles, and shipping con-percent). In order to further check this option, a tainers; (b) apply these results to a range of high-more detailed study was conducted. metal-use products for which life extension was


Figure 25. —Refrigerator Weight Reduction for Different Models as a Function of Time

400 -I 1 J I I 1

Single Door

380 --- — 2 D o o r

- 38

360

340

320

300

280

260

240

220

200

180

160

\ 20SXS\\\\\\

16T \\

1 oft3 \14T’ \ \

\ \\ \

\ \\ \

\ \

- 36

- 34

- 32

- 30

- 28

- 26

- 2417T

1 5 T- 22

- 20

- 18

46 50 55 60 65 70 75 77Year

SOURCE: Data supplied to OTA by a refrigerator manufacturer

considered possible; and (c) identify the practical-ity, benefits, and costs of product life extension.

The detailed methodology is discussed in thenext section. Basically, a quantitative model wasdeveloped that described the chain of cause and ef-fect underlying each product’s sales, discards, con-sumption of copper and aluminum, and mechani-cal lifetime. With this model, a change in one vari-able (lifetime) allows an estimate to be made ofchanges in other variables (copper and aluminumconsumption).

These models were used to estimate the amountof material that could be saved per year with a 50-percent increase in mechanical life, as shown intable 32. For refrigerators, increasing the lifetimefrom 15 to 23 years would result in a 15-percentsaving of both aluminum and copper. These re-sults are similar to that found in the design studyfor automobiles and refrigerators.

Table 32.—Percent of Metal SavedPer Product Per Year*

Metal saved per productProduct per year

Refrigerator . . . . . . . . . . . . . . . . . . . . . . . . 1 50/0

Automobile. . . . . . . . . . . . . . . . . . . . . . . . 9 0 / o

Aluminum vans . . . . . . . . . . . . . . . . . . . . . 25°/0Air freight containers . . . . . . . . . . . . . . . . 2 7 %

*With a 50-percent Increase in mechanical Iife

SOURCE: OTA, based on Working Paper Five

Although a 50-percent increase in mechanicallifetime is quite large and more dramatic resultsmight have been expected, the impact has beenlimited by a number of factors. First, nonreplace-ment refrigerator sales, which arise from the grow-ing number of households, are not affected. Sec-ondly, it takes many years before the new, longerlived refrigerators gradually replace the large num-ber of older, shorter-lived refrigerators currently in


use. As a result, the discard rate does not changefor a number of years. Third, the continuing de-mand for refrigerators with more up-to-date fea-tures implies that some refrigerators are being re-placed before they physically wear out. Thus, theactual average lifetime of refrigerators does notkeep pace with the increasing mechanical lifetime,but only rises from the present 15 years to about20 years by 1990. Finally, the saving of 4,000 to5,000 tons of aluminum and copper must be bal-anced against the 15-percent reduction in salesand employment that the analysis indicated wouldresult from the longer life.

In sum, increasing the mechanical lifetime by 50percent reduces 1990 sales and materials con-sumption of refrigerators by only 15 percent andautomobiles by only 9 percent, largely becausethese products are subject to voluntary scrappingbefore they reach their full mechanical lifetimes.The impact of increased durability is greater for in-dustrial products, however, because these goodstend to be pushed to the limits of their useful life-times. For example, a 50-percent increase in thelife of airfreight containers reduces airfreight con-tainer sales and materials consumption by 27 per-cent by 1990. Based on this analysis, industrialproducts with short service lifetimes have greaterpotential for metal savings than do consumer prod-ucts with long lifetimes.

To explore the conservation potential of in-creased product life, a workshop was held inWashington, D. C., on February 23, 1976. (A sum-mary of the findings is given in appendix A.) Wearcontrol was chosen as an example of a technologyto increase product durability. Experts from thefield along with representatives from industry dis-cussed the status of wear-control technology andits application in the design and maintenance of arange of products (railroad equipment, automo-biles, aircraft propulsion, naval aircraft structures,metal-cutting machinery, tools, and heavy con-struction equipment). The workshop concludedthat technology is not a limiting factor for increas-ing product durability. Almost any desired lifecould be obtained. Improved product durability isavailable if the consumer wants it, demands it, andis willing to pay for it.

Secondly, the workshop found that product lifeis often not limited by the mechanical condition of

the equipment. For almost all of the products con-sidered, obsolescence was the most importantreason for removal from service, not mechanicallife. For household products and appliances, cus-tomer preferences are vital in determining the lifeexpectancy of products. A recent study of small ap-pliances showed that 50 percent of the productsremoved from service were still operable.2 Thus,many consumer products are discarded regardlessof their mechanical conditions. This occurs for avariety of reasons, such as rising service costs, af-fluence, appearance, style changes, populationmobility, availability of disposable income, or in-ability to locate adequate repair facilities or parts.

In sum, the workshop concluded that technical-ly longer mechanical life can be designed into aproduct. But a longer mechanical life will probablycost more, may not result in a significant increasein the actual average lifetime (due to the fact thatmany products are retired because of reasons hav-ing nothing to do with lifetime, as listed above),and at best would take many years to accomplish(since only the replacement market would be af-fected).

Furthermore, product life extension is a prac-tical materials-saving strategy for only a limitednumber of products, particularly those which havea short life and are not disposed of, or consumed inuse. Table 33 shows the 1974 distribution of theeight metals by industry. Product life extensionwould apply to transportation and consumerdurables (appliances), which account for 12 to 28percent of metal usage, depending on the metal.Even if the maximum savings from the previousproduct analysis (27 percent in table 32) were ap-plied to the maximum base of 28 percent, thiswould result in only a 7.5-percent metal saving.

However, table 33 shows 43 percent of the ironin the remainder column and therefore unac-counted for, along with large amounts of manga-nese, chromium, and nickel that are used primar-ily as alloys in steel. Accordingly, a second ap-proach was used to doublecheck the results. Fromdata on metal distribution into end-use products, alist was compiled of all products for which life ex-tension was even remotely possible. By adding the

ZW. David Corm, Op. Clt

Ch. VI—Analysis of the Most Significant Technical Options for Reducing Excess Metals Use . 73

Table 33.—Distribution of Metal Flows by Industry Sector (percent of 1974 metal shipments)

Al Fe Cu Pt Mn Cr Ni W

Construction 23a 12 2 0 Nil 11 21 9 –

Transportation 18 19 11 2 8 21 17 21 12

Machinery 8 16 19 Nil 16 14 7 71

Appliances 9 2 3 Nil 2 – 7 –

Packaging 17 8 - Nil 7 – —

Electrical 13 2 8 2 8 5 – 13 11

Remainder 12 4 3 19 4 4 3 8 4 3 4 3 6

Alloying & plating 3 - — — 9 7 8 2 6 4 8 4

Amount of metal to whichproduct life extension 2 7b 21 14applies

Nil 2 3 17 2 8 12

Amount of metal to whichproduct life extensionapplies (product-by-product 19 2 6 2 4 Nil 19 5 11

analysis)aPercentage of aluminum used in construction IndustrybDetermlned from sum of transportation (18 percent) and appliances (9 Percent)

SOURCE: OTA, based on Worktng Paper Two

amount of metal in each of these products, a sec- domestic shipments). These estimates are includedond estimate was calculated (as a percent of 1974 in the bottom row of table 33 and are quite similar.

EXTEND PRODUCT LIFE OF REFRIGERATORS:AN EXAMPLE OF SYSTEMS DYNAMICS METHODOLOGY

As summarized in the previous sections, a sepa-rate study was conducted to determine the materi-als saved by a 50-percent increase in mechanicallifetime. Systems dynamics, an analytical method-ology, provided a conceptual framework and math-ematical technique for investigating the materialssavings and impacts of product life extension. Inthis section, the refrigerator case is described indetail to illustrate the approach. The details of thisstudy are given in Volume II— Working Papers,and Working Paper Five (vol. II-E) in particular.

To assess the impact of extended mechanicallifetime on materials consumption, a quantitativemodel was developed that described the chain ofcause and effect which underlies refrigerator sales,discards, consumption of copper and aluminum,and mechanical lifetime. The model developed isshown in figure 26. The materials consumption ofthe refrigerator industry is determined by refrigera-tor sales and the metal content of aluminum andcopper per unit. Sales of new refrigerators can be

divided into two components: nonreplacementsales that arise from population growth and an in-creasing number of units desired per family; andreplacement sales which replace the refrigeratorsthat are discarded. The difference between thetotal number of refrigerators desired and the actualstock of refrigerators in use is what drives non-replacement refrigerator sales. The scrapping ofrefrigerators that are worn out or that are simplydiscarded is what motivates replacement sales.

Based on this description of the refrigerator salesand materials consumption system, a mathemati-cal representation of the system was developedusing the DYNAMO computer simulation lan-guage. Equations were written to represent thequantitative relationships that determine refrigera-tor sales and copper and aluminum usage. Numeri-cal parameters used to quantify the model were ob-tained from a variety of sources (such as Bureau ofthe Census reports, journal articles, and industrydata).


Figure 26.—Overview of RefrigeratorModel Structure

{ ~::::ita\ ~ HouseholdsSize, features \/desired ~ Refrigerators

/ F

Materials

/

per unit

Copper,

[

aluminumconsumption

>Employment

desired

\

/~

ReplacementAverage sales Imechanical

IReplaced

lifetime

\s c r a p p e d ~

refrigerators

refrigeratorsAb Used i

// Price,operating, /

Householdmoves

SOURCE: Working Paper Five.

The quantified refrigerator model was then sim-ulated by computer over the period from 1960 to1990. Starting the simulation in 1960 allows acomparison of model behavior with the actualcourse of events, thus providing one check on thevalidity and accuracy of the model. Sensitivity test-ing, that is, varying the base case assumptions,provided insights into the critical factors governingthe behavior of the system. Finally, the model wasused to examine the impacts on refrigerator sales,materials consumption, and employment of poten-tial conservation policies such as increasing prod-uct lifetime.

The results of this analysis showed that materi-als consumed in the production of refrigerators hasgrown through the 1960’s and early 1970’s. Thisgrowth of sales and associated materials use is dueto two factors. First, the number of households wasgrowing rapidly because of the relatively high rateof population growth and especially because of thecoming of age of the postwar “baby boom” genera-

tion. Secondly, the price of refrigerators was de-clining relative to disposable personal incomes,tending to increase the average number of refrig-erators desired per family. In the future, the fore-casting model developed indicates that refrigeratorsales, and thus materials consumption, will in-crease only slowly. This is due to several factors.First, census projections indicate that the numberof new households will increase much more slowlysince the postwar generation has already largelyestablished their own households and populationgrowth has slackened. Second, there will likely belittle increase in the number of refrigerators de-sired per family, even if it is assumed that therelative price of refrigerators continues to decline.The model indicates that the combination of thesefactors will cause the reduced growth rate.

In the forecast, the average lifetime of refrigera-tors in service remains close to 15 years. Thisvalue is in close agreement with results of severalconsumer surveys of appliance lifetimes conductedsince the late-l 950’s. This average service life is,however, 2 years less than the average mechanicallifetime of refrigerators. This occurs because somerefrigerators are discarded when their ownersreplace them to get larger ones or units with moreup-to-date convenience features. This process con-tributed to the historical growth of sales, for as in-comes rose, people desired larger refrigerators andreplaced their old ones. In the future, the averagedesired refrigerator size is not foreseen to increaseas rapidly as in the past. As a result, the model in-dicates that refrigerator sales will lose some of thisadditional source of replacement sales.

Aluminum, due to its cost advantages, has beenmaking inroads into refrigerator heat exchangerand some electrical uses that have been held bycopper. Thus, aluminum consumption in refrigera-tor production increased from about 20 million to45 million lbs between 1960 and 1974, while cop-per consumption only increased from 20 million to35 million lbs. Direct employment in the produc-tion of refrigerators grows only slowly in thefuture, again due to the slow growth in sales.

Increasing the mechanical lifetime of refrig-erators would reduce materials consumption in thefuture by reducing the refrigerator discard rate tosome degree and thus the attendant replacement

Ch. VI— Analysis of the Most Significant Technical Options for Reducing Excess Metals Use ● 75

sales. The model was used to test the impacts of (see figure 27). By 1990, refrigerator sales, coppersuch a policy by assuming that the average me- and aluminum consumption, and employment arechanical lifetime of refrigerators produced after 15 percent lower than they would be without the1977 is increased by 50 percent, to about 23 years longer refrigerator lifetime (see figures 28 and 29).

REDUCED USE OF MATERIALS-INTENSIVE SYSTEMS,SUCH AS ALLOYS

In part, because of the relatively low cost ofmaterials, the United States has become “materialsintensive” and has chosen the use of systems thatuse a large amount of material. Examples might bethe use of private vehicles instead of public trans-portation, larger homes rather than small apart-ments, private equipment ownership rather thanrental, and large sizes rather than small. As metalresources are depleted, it may be necessary forsociety to become more resource-conserving as itis now attempting to do with energy. One aspect ofthis approach was investigated in detail in thisassessment, the use of alloys.

Over the years, the development and use ofalloys has proliferated to meet the needs of in-creasingly stringent product and manufacturing re-quirements and specialized production machinery.A large number of metals are used almost exclu-sively as alloy additives or coatings. The technicaloption explored in this section is the reduced useof alloys or the reduced-use of metals used inalloys. In considering this option, it must be recog-nized that a small change in the alloy ingredientscan drastically change the resulting properties ofthe alloy.

The use of metals in alloys is shown in table 34.This table shows the percent of each metal listed inthe vertical column that is used in each alloy listedin the horizontal column. This table accounts for alarge percent of metal usage as indicated by thecolumn totals. The only items not included arechemical uses of metals and the use of certainmetals, for example, zinc, in their own alloys. Inregard to conservation of alloying metals, the ma-jor conclusions using this table are as follows:

● The amount of metal used in any given alloyis small. Only under very critical circum-stances would it be justifiable to conserve thealloy in order to conserve a few percent of itsingredients.

● A large amount of metal is used with steel,either as an alloy or as a coating; the totalpercentage is shown in table 35.

If these metals are to be conserved, reductions orchanges in their use with steel will be more effec-tive than reductions or changes in the use of thesteel products themselves.

Two major options are available—use of substi-tute coatings or substitute materials in alloys. Alarge percentage of many metals are used as coat-ings to protect steel from corrosion and wear. Inaddition, a significant percentage of stainless steelalloys, tool steels, copper alloys, and carbides areused for corrosion and wear prevention. If nonme-tallic coatings (e.g., ceramic or plastic) could besubstituted, appreciable metal would be saved.This approach would reduce demand for metalsthat the United States must import, and would in-crease the demand for steel, which is in adequatedomestic supply.

A wide variety of nonmetallic coatings are usedfor corrosion and wear resistance, although theydo have certain technical limitations such as brit-tleness, lack of electrochemical effects, etc. A ma-jor benefit of the use of substitute coatings is flexi-bility. It is much easier to change a coating than tochange the whole material. A more detailed inves-tigation of metallic and nonmetallic coatings isneeded.


30.0

22.5

15

7

.0

.5

0

Figure 27.— Refrigerator Model: Longer Mechanical Lifetime Case,Refrigerator Lifetime Over Time

1960 1970 1980 1990SOURCE Working Paper Five.

—


Figure 28.— Refrigerator Model: Longer Mechanical Lifetime Case,Employment and Sales Over Time

1 9 6 0 1970 1980

I 20

30

60

30

01990

SOURCE: Working Paper Five


Figure 29.— Refrigerator Model: Longer Mechanical Lifetime Case,Aluminum and Copper Consumption Over Time

Q

a

7 2

5 4

36

18


Table 34.—Materials Usage in Alloys (percent)

Cr 50

co 3

Cu

Cb 4 - .

Fe 3

Mg

Mn 3

Mo 2

Ni 3 5I

Pb

Sb

Fn

Ti

W 1

V .5

Zn

+8 1.2

-+-1.3 9

+

.— 9 5 -

16 24

I

*

51 2

1 2

1

,I

+

3

24 1

SOURCE: OTA based on Working Paper Three

Product

I r o n I

Table 35 .—Metals Used With Steelas Alloys or Coatings

Percent usagein or on steel

. . . . . . . . . . . . . . . . . . . . 9 3 ‘-

Manganese. . . . . . . . . . . . . . . . . . . . .Columbium. . . . . . . . . . . . . . . . . . . .Molybdenum . . .Chromium. . . . . . . . . . . . . . . . . . . . . .Vanadium . . . . . . . . . . . . . . . . . . . . .Cadmium . . . . . . . . . . . . . . .Nickel . . . . . . . . . . . . . . . . . . . . . . . . . . .Zinc, . . . . . . . . . . . . . . . . . . . . . . . . . .Tin . . . . . . . . . . . . . . . . . . . . . . . . . .Cobalt . . . . . . . . . . . . . . . . . . . . . . . . .Tungsten . . . . . . . . . . . . . . . . . . . . . .Magnesium. ., . . ..., ..., .

9695736666605841343122

8

6

I

I 3

SOURCE: OTA based on table 34.


SUMMARY OF OPTIONS AND POTENTIAL SAVINGS

Table 36 summarizes the technical options andthe potential metal savings for each. Three addi-tional categories have been added to this table forcomparison purposes. The first category “savings-minor” indicates the reductions in metal usagethat could be accomplished with relatively minoreffort, primarily through the use of proven substi-tutes in cottagetype industries where changes inproduction equipment would not be necessary.The “saving-major” category is based on WorldWar II experience and indicates the amount ofmetal diverted from the civilian sector to war pro-duction (for details see appendix B). These percent-ages show the range of flexibility in metal usage.

During wartime when flexibility became abso-lutely necessary, major metal savings in thecivilian sector were accomplished with a very tightallocation system that drastically reduced the con-sumer products that could be manufactured. Pro-duction was diverted to war products, so severe

economic consequences were averted. This wouldnot be the case in peacetime. Table 36 also in-dicates the amount of metal that went into stocksduring 1974. Although 1974 may not be a typicalyear, these numbers given some basis for compari-son with the other options.

Clearly, the largest potential savings apply tothree options: substitution, product reuse and re-manufacturing, and during wartime or crisis condi-tions, some sort of an allocation system. The elim-ination of excess metal would decrease the use ofsteel by 9 percent but would save relatively little ofthe other metals. The use of nonmetallic coatingsyields potential savings of 13 percent for nickel butwould increase the use of steel by approximately 4percent. By comparison, the other options (compo-nent remanufacturing, reduced product size, andincreased product life) offer very small potentialsavings.

Table 36.—Potential Savings From Technical Options by Reducing Excess Metal Usage

Savings as percentage of 1974 shipments

Technical options Iron/steel Aluminum Copper Platinum Manganese Chromium Nickel Tungsten—. . . ————Metal substitution; . . . . . . . . . 29 60 59 24 — 16 20 32Metal substitution in

construction. 7 6 20 — — —Product reuse. . . . . . . . . . . . 11

— —15 32 — — 6 15

Product remanufacturing . . 30—

30 43 — 24 12 9Component

—

remanufacturing . . . . . . 3 1 4 — — 2 2Eliminate unnecessary

—

metal . . . . . . . . . . . . . . . 9 8 6 — — 4 8Reduce size . . . . . . . . . . . . 3

—3 2 — — 1 4

Increased product life . . . . . 8—

5 9Nonmetallic coatings . . . . ( 4 ) _ _ _ _

—5 13

Other options—

(for comparison purposes)Savings—minor. . . . . . . . . . 11 14 18 — — 4 8Savings—major . . . . . . . . . 52

—90 90 57 60 57

Use of stocks . . . . . . . . . . . . ——

6 13 3 17 — 6 32— —

SOURCE: OTA. based on Working Paper Three

—

VII.

Preliminary PolicyConsiderations

. .—

Vll ●

Preliminary Policy Considerations

INTRODUCTION: MATERIALS CONSERVATION OBJECTIVES

In the previous six chapters, the technical op-tions were evaluated for their potential to conservemetal. Several promising options were identified.However, these options must also contribute insome meaningful way to the solution of current oranticipated materials problems, or to the accom-plishment of some recognized materials objectives.In this chapter, the technical options are evaluatedin terms of materials objectives and problems.Through the use of systems analysis, the technicaloptions are matched with materials problems. Andfinally, illustrative methods of implementing themore promising options are presented and brieflydiscussed.

Conservation is a response to some real or imag-ined threat or condition, and conservation optionsare implemented in attempting to accomplishsome objective. The primary objective of concernin this assessment has been materials availability,either short term or long term. However, there area number of other objectives that might be rele-vant to materials conservation, such as conservingenergy, reducing the volume of waste, stabilizingmaterials markets, protecting the environment, orpromoting a resource-conserving society. These

objectives are not independent of each other butare merely different “end points” which may beachieved through materials conservation.

Materials availability, either short term (duringcritical situations) or long term (with respect toresource depletions), is a vital concern to both in-dustry and society. Without the proper materials,many industries would be forced to close unlessalternative plans were made well in advance. Asshown in appendix C, materials shortages havebeen commonplace for many years and will un-doubtedly continue in the future. If these problemsbecome severe enough, conservation is a possibleresponse.

Likewise, energy conservation can affect theavailability of materials. Since metals refining con-sumes about 9 percent of the energy budget and allmaterials 20 percent, materials conservation couldbe a response to the need for energy conservation.Indeed, for the foreseeable future, energy conser-vation will probably be more important than mate-rials conservation because energy availability is aprerequisite for materials production and use.

MATERIALS AVAILABILITY PROBLEMS

Conservation is one appropriate strategy to deal conservation measures and whether conservationwith a large number of materials problems that is the best among available strategies.threaten materials availability, such as the follow-ing conditions:

●

●

●

●

●

●

●

chronic lack of capacity,import dependency,energy conservation,cyclical instabilities,environmental restrictions,long-term depletion, andtechnological changes.

Energy and environmental considerations areintroduced here not as objectives for materials con-servation but rather as factors that could and prob-ably will affect materials availability. For example,weight reduction in vehicles to conserve energywill affect both steel and aluminum availability.Use of catalytic converters has greatly increasedthe demand for platinum. And installation of solar

This report does not attempt to judge which, if any, energy units in homes will most likely increase theof these problems are serious enough to justify demand for certain specialty metals.

83


Chronic Lack of Capacity

Chronic lack of capacity occurs when new do-mestic plant capacity is not built due to lack of suf-ficient investment incentives. As demand in-creases, the margin between capacity and averagedemand shrinks. Shortages increasingly becomethe “rule” rather than the exception. This shortagecondition encourages customers to buy the materi-als from foreign sources at inflated prices, whichthen encourages new capacity overseas. Once in-stalled overseas, strong incentives work to keepthis capacity operational, even if it means oper-ating at a loss. A trend towards shrinking U.S. ca-pacity and growing foreign capacity is thereby es-tablished.

Import Dependency

import dependency is a potentially critical prob-lem. Currently, the United States imports approx-imately 30 percent of its metal needs. Some na-tions are completely import-dependent and havelearned to live with this situation. However, theUnited States is in a unique position as a worldleader and may not find import dependency to bein the national interest. Even if import dependencycan be tolerated now, it may not be acceptable inthe future under changed world conditions. Someargue that the United States is import-dependent,and there is very little that can be done to changethat fact. This is true to a degree. However,changes in materials usage through conservationcan reduce this dependency to a minimum oreliminate the use of import-dependent materialsfrom critical applications. If the supplier countriesbecome less economically dependent on minerals,they may become “conservationists” and no long-er encourage the exploitation of their naturalresources. Furthermore, import dependency aggra-vates the U.S. balance of payments, and leaves usvulnerable to possible supply disruptions from po-litical or military activity.

Energy Conservation

The current campaign for energy conservationcan strongly affect the availability of materials byinfluencing the cost, demand, and relative use ofmaterials. Metals refining consumes about 9 per-

cent of the total U.S. energy budget; ail materials20 percent. The energy intensity (1,000 Btu/$) ateach stage of the materials cycle is shown in figure30. Refining and fabricating require several timesthe national industrial average. Thus, materialsand energy are intimately associated.

Theoretically, with unlimited energy, any mate-rial could be obtained from common rocks as low-grade ores or from nuclear chemistry. In morepractical terms, the “energy materials’ ’—such asnatural gas, oil, and coal, on which the UnitedStates has come to depend—are being depleted atrates greater than the materials from which prod-ucts are made. For the foreseeable future, there-fore, energy conservation will be more importantthan materials conservation because energy avail-ability is a prerequisite for materials use, andenergy sources are almost universally in shortersupply than materials for making products. A moredetailed discussion of the energy-materials rela-tionship is included in Working Paper Six. (vol.11-F.)

In the short run, energy conservation, as well asthe effort to increase energy supplies, will lead to agreater use of materials rather than reduced de-mand. This will happen in spite of increasing ma-terials prices, and will aggravate other problemssuch as import dependency. Further reduction ofmaterials losses from industrial processes would inmany cases be energy intensive. On the otherhand, recovering materials by recycling and pre-venting loss of sunken energy investments in prod-ucts and their components through remanufactur-ing promises to save large amounts of energywhile simultaneously conserving materials.

Finally, the flexibility offered by materials sub-stitutions will likely be necessary to improve over-all energy efficiency and meet the changing de-mands for energy supply while maintaining rea-sonable standards of environmental quality. Mate-rials substitution will more likely be driven by theneed for energy conservation than for materialsconservation or the reduction of materials “waste.”

Cyclical Instabilities

Short-term availability problems occur as supplyshortages and/or price fluctuations. In 1973, a

Ch. VII—Preliminary Policy Considerations ● 85

L


combination of factors made cyclical shortagesunusually severe. At that time, contrary to thepopular notion, certain metals were not availableto some customers at any price. Because of over-commitment, these suppliers would not take neworders. Since shortages can manifest themselveswithin relatively short periods of time, the normalmarket responses are not available and severe im-pacts can occur. Unlike the other problems, thisone is less predictable and could occur at any time,with any metal.

During the period from 1946 to 1977, interrup-tions in supply were constantly occurring for theeight metals analyzed in this study. Factors affect-ing the supply of such metals include: governmen-tal regulations, capacity limitations, raw materialsshortages, strikes, transportation disruption, im-port limitations, unusual demand surges, and actsof nature, for example, severe weather conditions.While a tight supply situation can result solelyfrom the general fluctuations of the business cycle,the occurrence of supply disruptions adversely af-fecting industry usually involves the combinationof several factors, for example, unusual demandcombined with capacity limitations, and/or de-mand surges combined with raw materials short-ages.

Tight supply situations or actual disruptions insupply occurred as follows:

●

●

●

●

●

●

●

aluminum was in tight/short supply in1950-53, 1966, 1972-74, and early 1976;ferrochromium alloys were insufficient tomeet peak steel demand in 1973-74;copper was in tight/short supply in 1946-48,1954-56, 1959, 1965-68, and 1972-74;nickel was in short supply during 1950-57,1966, and 1974;supply shortages of scrap were apparent in1948, 1952, 1955-57, 1969, and 1973-74;steel was in short supply in 1947-57, 1959-60,1969-70, 1972-74, and the first quarter of1977; andthe supply of tungsten was interrupted during1972-74.

Thus, the facts indicate that tight/shortage situa-tions in regard to these seven metals did constant-ly occur over the past 30 years. Since the factorsthat combined to cause such supply disruptions

were not metal specific or time specific, the proba-bility of shortage conditions occurring in the futurein regard to such metals is quite high. (See appen-dix C for further discussion.)

Environmental Restrictions

Concern for the environment may favor the useof certain materials and restrict the use of others.Some metal-processing techniques discharge morepollutants to the atmosphere than others. Since thedamage done to the environment is often not re-flected in the metal cost, conservation may bemandated. The environment is a major considera-tion and any conservation options should be eval-uated for environmental impacts. Municipal solidwaste is a special environmental and economicproblem. Any options that could effectively reducethe amount of material entering the waste streamwould be beneficial, both from an environmentalas well as a conservation standpoint. Thus, the re-duction of the amount of municipal solid waste is astrong driving force for conservation of those mate-rials that find their way into this waste system.

Long-Term Depletion

The depletion of natural resources is an area ofmajor materials concern. However, there is littledanger of actual physical exhaustion over the next 20 to 50 years. This is not to say there are no prob-lems. Old mineral deposits are being worked outand new ones are being discovered, But levels ofore quality are declining. If new mining technologydoes not increase the accessibility of low-gradeores, then prices will rise and supply shortagesmay develop. This will come sooner for materialssuch as gold, mercury, silver, tin, lead, and tung-sten than for other metals such as iron, aluminum,and nickel.

Technological Change

Technological changes will require shifts inmaterials usages. No unusual technologicalchanges are expected to radically alter demandover the next 25 years. However, these estimatesare based primarily on historical data and expected


growth in the gross national product (GNP) and reduce demand for structural metals such as steelpopulation. Probably the major technological and aluminum. Deep sea mining, if itchange, other than in energy, would be the wide- economically feasible, could increase thespread use of composite materials. This would certain metals by an order of magnitude.

MATCHING CONSERVATION OPTIONS TOMATERIALS AVAILABILITY PROBLEMS

becomessupply of

If a specific materials problem arises (for exam-ple, a threat to the supply of nickel), then specifictechnical conservation options to address the prob-lem could be selected from table 24 (reducinglosses) or table 36 (reducing excess metal usage).These tables identify options with the greatestpotential to save metal, but do not indicate the ap-plicability of the options to specific materials avail-ability problems. Given the many possible materi-als availability’ problems, a technique or approachis needed to match conservation options to materi-als problems.

The approach used in this assessment was a sys-tems analysis that classified the problems and thepossible solution (options) in terms of their overallimpact on the parameters that describe the behav-ior of the system. [n this case, the system is thematerials cycle, and the parameters are efficiency,stability, and adaptability.

Thus, the systems analysis concepts of materialsefficiency, stability, and adaptability were used to

establish a linkage (or matching) between techni-cal conservation options and materials problems.These concepts are summaried below and in table37, and discussed in more depth in Working PaperSix, (vol. II-F).

Improved efficiency means better utilization ofresources or making the best use of what one has.It means making products with a minimum ex-penditure of materials consistent with other ac-cepted values of society. Efficiency does not ratematerials saving as the only priority, but tries tooptimize usage based on a whole spectrum of cri-teria. Options to improve efficiency attempt toreduce the total material usage and usually dealwith losses. Efficiency is one appropriate responseto resource depletion, that is, a gradual reductionin losses and usage over the remaining resourcelife.

Improved stability is an attempt to assure amore adequate and consistent amount of materialsin the material cycle to satisfy demand. It means

Table 37.—Systems Analysis Concepts of Materials Efficiency, Stability, and Adaptability

——.Goals”. . . . . . ,‘. . . .

Resource emphasis .

Resource management

Resource flows(a long cyc le ) . .

SOURCE Working Paper SIX

Efficiency .Optimize according to

recognized goals andobjectives.

Reduction of wastes; makesure all resources are fullyutilized (labor, equipment,energy, capital, materials).

Reduce operating margins(excess capacity, labor,inventory, and stockpiles).

Assume predictable controlledtransactions; establishminimum number of source:and markets.

Stability

Make sure that all actions will –

suffice in satisfying recognizedgoals.

Protect/on against all possiblefailure modes or malfunctions;build in redundancy andsafeguards.

Increase operating margins toallow for errors or contin-gencies; provide standbycapacity.

Reduce variability and diversity;establish overlapping but stablesources and markets.

Adaptability

Evaluate appropriateness ofexisting goals under changingconditions; identify new goalsor objectives.

Rapid adjustment to change,capability to cope withvariability, innovation, searchfor new opportunities.

Provide substitutes andalternatives (materials,processes, facilities, sourcesof supply).

Provide fall-back options anddecision mechanisms forrapidIy redirecting flows underchanging circumstances.


taking actions to protect market participantsagainst possible failure modes, to reduce the cy-clical variabilities, and to remove market instabil-ities. Options consistent with stability are increas-ing standby capacity, use of multiple sourcing,economic stockpiling, and improved informationon materials supply and demand.

Improved adaptability, on the other hand,means more rapidly adjusting to change andcoping with problems as they arise. It means devel-oping the capability to deal with and overcomeproblems, difficulties, threats, or conditions as theyoccur.

Unfortunately, some options can lead to con-flicts among materials efficiency, stability, andadaptability. That is, all-out efforts to improve effi-ciency can reduce the slack in the system and leadto a destabilization of the market and reduced abil-ity of industry to cope with materials problems asthey arise. Moves by the Government to stabilizemarkets can reduce efficiency and adaptability.Finally, efforts to become more adaptive may com-promise both efficiency and stability.

For example, options to improve efficiency willreduce the amount of material used. But as a re-sult, there will be less slack in the system to absorbunforeseen shortages, and companies will be lessable to adapt. As companies exercise the limitednumber of options to reduce the amount of mate-rial used in product manufacture, these options arethen no longer available to stabilize sup-ply/demand or cope with unforeseen events,

On the other hand, actions to become adaptiveinclude developing substitutes, establishing avariety of sources, multiple ordering, having extramaterial on hand, and, in general, developing apattern of usage that gives the user a variety ofchoices to cope with all uncertainties. All of theseactions are, by nature, materials inefficient. Fur-thermore, this ability to adapt can be exercised atthe discretion of the materials user for any reasonhe chooses. If he is a major user, his action and thecounteractions by other stakeholders might causea very unstable market. Materials suppliers mightnot be able to predict from year to year what thedemand would be and plan production. Theywould either overproduce or underproduce. Over-production would lead to lower prices and ineffi-

cient use. Underproduction would lead to short-ages and greater instability.

As indicated earlier, materials problems can beclassified as requiring improved materials efficien-cy, stability, and/or adaptability. As shown in table38, all problems cited—except for chronic lack ofcapacity and long-term depletion—appear amen-able to options that improve adaptability. Balanceof payments, energy conservation, environmentalrestrictions, and long-term depletion problems callfor options to improve efficiency. Finally, lack ofcapacity and cyclical instabilities suggest options toimprove stability.

Table 38.—Materials Problems Require ImprovedEfficiency, Stability, and/or Adaptability

Improved Improved ImprovedMaterials problems efficiency stability adaptability

Chronic lack of capacity. . — @ —

Import dependencyBalance of payments . . K — /Threat of disruption . . . — — /

Energy conservation. . . . . K — #

Cyclical instabilitiesStable prices/shortages — / @Unstable prices/steady

demand. . . . . . . . . . . . — @ @

E n v i r o n m e n t a l r e s t r i c t i o n s z — @

Long-term depletion . . . . . ~ — —

Technological changes . . — — /

SOURCE: Working Paper Six.

Thus, based on this analysis, most future mate-rials problems seem to be more amenable to im-proved industrial adaptability rather than to im-proved efficiency or efforts to stabilize the mate-rials markets. This does not mean that industryshould become less efficient or that marketsshould be destabilized. It also does not mean thatadaptability should be stressed to the exclusion ofefficiency and stability. Rather, it does suggest thata balance between efficiency, stability, and adapt-ability should be maintained. And at this time con-servation options that increase adaptability requireprimary consideration. However, at the same time,care should be taken that this increased adaptabili-ty does not sacrifice efficiency or stability to anygreat degree.

Thus, the analysis suggests that competitionamong organizations and alternative technologies

Ch. VII—Preliminary Policy Considerations ● 8.9

will continue to produce relatively great efficiency,including materials conservation. The greater needat present is for options to better anticipate societalvulnerabilities, to devise strategies to cope withrecognized uncertainties, to establish norms fororderly interactions among organizations, and toassess the need for better adaptability in the face offuture contingencies. Under these conditions, pri-vate stakeholders would be able to plan for effi-ciency with a clear understanding of the opportuni-ties and attendant risks.

In table 39, some of the more promising techni-cal conservation options are classified according totheir ability to improve materials efficiency, stabili-ty, and adaptability. These options—with the ex-ception of major savings (allocation) —apply to im-proving efficiency and/or adaptability. Also in-cluded in table 39 are illustrative methods of im-plementing some of the technical options. Theseimplementation options are discussed in the nextsection.

Table 39.—Ability of Conservation Options to Improve Efficiency, Stability, and Adaptability

Improved efficiency Improved market stability Improved adaptability

Technical Options -

— — .

Increased metal recycling Metal savings (e.g., through Major savings (e.g., throughallocations) allocations)

Increased product remanufacturing Metal substitutionIncreased product reuse Use of stocksReduced dissipative uses Export controls

Illustrative Implementation OptionsPublic data base Public data base Public data baseImprove product after-market Contingency planning Contingency planning market for

contingency shares certificatesEstablish scrap inventory Market for contingency shares R&D on metal substitution.

certificates—..

SOURCE: OTA, based on Working Paper SIX\

ILLUSTRATIVE IMPLEMENTATION OPTIONS

In the previous sections, preliminary considera-tion was given to options with respect to their abili-ty to solve materials problems that may arise in thefuture. The purpose of this section is to briefly pre-sent illustrative methods of implementation appli-cable to the most promising options.

However, this report does not assess in detailthe impacts of the options on the economy, energyconservation, environmental quality, employ-ment, and other important impact areas.

A more detailed discussion of the implementa-tion options can be found in Working Paper Six,(vol. II-F). The implementation options listedbelow are illustrative of the range of options thatcould be considered.

Establish a Governmental ContingencyPlanning Function

Periodic shortages and oversupply along withprice variation have been a part of the materialssupply system since the beginning of the industrialage. Industry and consumers have learned to livewith this condition and in some situations to takeadvantage of it. In most of these shortage situa-tions, warning has been adequate. In the materialsfield, suppliers and users maintain a close workingrelationship and the suppliers are usually aware ofdeveloping threats. [n addition, the Bureau ofMines, the State Department, the Defense Depart-ment, and the Central Intelligence Agency monitormaterials supply and in most cases provide an ade-quate alert. Materials users whose business de-pends on a given material initiate their own in-formation network independent of the suppliers


and are often the first to anticipate a problem.Through trade publications and the technical liter-ature, this information is available to those whochoose to avail themselves of it.

The primary difficulty comes in responding tothe threat. Each organization moves independent-ly to cover their own position and often overreacts,which tends to make the situation worse. Whenthe supply does become limited, the suppliers in-voke an allocation system that provides for anorderly distribution to current customers. But thissystem locks out other customers and provides lit-tle incentive to increase capacity. In addition, cer-tain industries are more dependent on criticalmaterials than others and will suffer more duringtimes of shortage, with a greater negative impacton the economy and total employment. The ques-tion is: What could the Government do now, ifanything, to be ready for such a situation?

One option available to Congress is to assign amaterials contingency planning function to oneGovernment organization. This organizationwould be responsible for evaluating the severity ofperceived threats in materials supply and todevelop contingency plans to cope with theseproblems should they arise. Such a function couldbean extension of the scope of work now providedby various existing offices and bureaus. The mainadvantage of this option is that it would provide, ata small additional cost, a continuous appraisal ofthe seriousness of the threats to be faced and theability of current mechanisms to counter thosethreats.

Establish a Public Data System

Decisionmaking with regard to materials man-agement in both the private and public sectors ap-pears to suffer from a lack of comprehensive in-formation and integrated analysis, insufficientR&D on generic problems, and lack of a long-rangeholistic view of materials problems.

The Federal Government is the only participantin the process with the scope of concern and theauthority to collect, integrate, and disseminate in-formation necessary to compensate for imperfec-tions in market mechanisms and inequalities inresources of the various actors. It may also be the

only participant with the resources, capabilities,facilities, and long-range interest to fund theresearch necessary to solve the technical problemsinherent in the transition to an economy of finiteresources.

A public data base would help to improve thequality and quantity of information available toGovernment and to industry for better analysis andforecasting of materials supply and demand prob-lems. It would also help identify R&D needs forsolving or alleviating technical problems in thematerials cycle (e.g., substitutions for temporarilyor chronically scarce materials, techniques forseparating and reclaiming scrap materials). SomeR&D support needs were discussed in an earliersection.

New Government sponsored and operated infor-mation systems are favored by nearly all academicobservers and professional societies, by labor, byGovernment experts (with a few exceptions, notedbelow), and by some industry representatives.Such actions have been opposed by the Depart-ments of the Interior and Commerce. They main-tain that existing systems, such as that of theBureau of Mines, are adequate. Some industriesoppose such systems on the grounds that theywould be a step toward a “nationally plannedeconomy” and an infringement on proprietary in-formation rights.

A public data base would be the foundationstone for many forms of private planning, publicpolicy review, and contingency planning. All thebasic public implementation options would requirespecific evaluative information in the formulation,operation, and modification of standards andguidelines. The greatest need is for additional in-formation on the end uses of materials and thetotal quantities of a given material used in anygiven product. Supplier inventories would also bevaluable information to assist in assessing theneed for implementing contingency plans and toassist industry in locating scarce materials.

These two implementation options, contingencyplanning and public data base, have been studiedin detail in an earlier OTA report Assessment of In-formation Systems Capabilities Required to SupportU.S. Materials Policy Decisions (December 1976).Option 3 in that study, known as the Bureau of Ma-

Ch. VII— Preliminary Policy Considerations ● 91

terials Statistics and Forecasting, encompassesthese two options. Chapters VII and VIII of the In-formation Systems report provide a detailed discus-sion of the impacts and issues associated with im-plementation of such a Bureau with contingencyplanning and public data base capabilities.

Establish a Market for ContingencyShares Certificates

In this implementation option, a private sectormarket for contingency shares certificates wouldbe established between materials suppliers and in-dustrial customers of basic materials. This optionwould be a private allocation system. The Govern-ment would not be involved in-these private sectortransactions. This market would be an extension ofthe emergency allocation scheme that the metalssuppliers use now during shortages in whichshares are based on the previous year’s proportionof total orders. In the contingency shares market,customers would have to pay in advance for theprivilege of obtaining a share of limited supplycapacity during periods of shortage.

The contingency shares certificates sold in aprivate marketplace between suppliers and userswould designate the fraction of available produc-tion capacity allocated to the certificate holder (andguaranteed by the supplier) under the contingencycondition that all orders could not be met onschedule.

Furthermore, the certificates would designate apriority for the filling of the order. Those with thehighest priority would have their orders filled first.But , unlike the successful wartime priorityscheme, lower priority orders would automaticallyreceive a higher priority following a specifiedperiod of delay (possibly 1 month). In this way, allorders are eventually filled because even thoseorders with the lowest initial priority will eventual-ly arrive at the highest level and receive attention.

The period of incremental increasing of prior-ities would be calculated according to the numberand size of the contingency shares sold. In thisway, the fact that a fraction of capacity is allocatedto each certificate holder and that those holdinglower priorities eventually receive attention pre-vents the highest priority certificates holders from

usurping the total supply by placing a largenumber of orders.

The major effect of using these certificates toallocate available capacity during periods of short-age would be to allow materials buyers to realisti-cally assess their needs for an assured supply inanticipation of possible shortages. The assessmentis based on a price mechanism, that is, the recogni-tion that they will have to pay more for large ca-pacity share and high priority.

The contingency shares arrangements allow’market participants to anticipate the relative com-petitive pressure for materials under shortage con-ditions in order to make intelligent decisions aboutsubstitutions while there is time to implement asubstitute, or to reconsider whether the material isso important that their needs could not be deferredin time of shortage. Revenues from the contingen-cy shares would enable suppliers to attract invest-ment capital for expansion if demand were run-ning high. Movement in the contingency sharesmarket could give suppliers warning of shifts in de-mand enabling them to stockpile in advance or sellpotential surplus. Also, speculators would receivemuch better price signals from the technicallyastute stakeholders and would thereby be muchmore likely to act to stabilize the market.

During periods of plenty, all orders would befilled as they come in with no change from busi-ness as usual. Only during shortages would theprovisions and privileges of the certificates be im-portant. The competition among various buyerswould determine the specific selling price of thecertificates, as in any securities or futures markets.Speculators could buy certificates and gamble on ashortage occurring to produce high profits in resell-ing these privileges and offering latecomers entryinto the market even though it may be tight.Brokers would hold certificates and resell theirprivileges in smaller blocks to make it easier forsmall, intermittent, or new buyers to gain marketentry.

Additional provisions may be necessary for verysmall customers so that they are not locked out ofthe market as happens today during shortages.The normal fraction of the market going to themany small users (probably 10 percent of the totalmarket) could be set aside for bids during the


shortage—with only the small or intermittent useror new entrants being qualified to place orders onthis fraction. This provision would require over-sight inspection to prevent resale and speculation.It remains to be seen whether brokers and specula-tors could provide this function better than the for-mal provision of set-aside capacity and the costlyoversight to go with it.

The prices for contingency shares certificateswould be a valuable indicator of “criticality” formetals under abnormal market conditions; itwould also indicate beforehand which sectorswould be most hard hit (those bidding highest forshares). Both public and private organizationscould benefit from these price signals to improvetheir planning and coping strategies.

The contingency shares certificates marketwould virtually eliminate the cause of materialsmarkets’ imperfections during periods of shortage.Double ordering would be impossible without hav-ing paid for the privilege through the purchase ofcertificates; this would reestablish the rates ofordering as a useful indicator of real demand to thematerials suppliers.

Increasing private stockpiles leading into andduring periods of shortage would be impossibleunless the purchaser had also bought sufficientcertificates to gain the capacity to be able tostockpile. In either case, the certificates would be auseful indicator of real demand. The decision tobuy enough shares to stockpile would help to payfor a needed expansion of productive capacity bybidding up certificate values.

Price signals for shortage conditions would oper-ate in advance of shortages or true contingencyevents. They would thereby reduce the advantageof “quick response” by major corporations. Therewould be real penalties (one cost of the certificates)for using materials for less essential applicationsduring shortage periods. By reducing hoarding anddouble ordering, the glut following past shortageswould be moderated. In addition, increases in thecertificate prices would induce compensatory ac-tions to cope with anticipated shortages ratherthan increase materials prices per se.

Research and Development onMetal Substitution

Substitution promises substantial savings forspecific metals. Approximately one-third of thepossible substitutions would use other metals; one-third, coatings (metallic and nonmetallic); and theremaining third, nonmetals. Substitution can pro-vide flexibility in the face of specific materialsshortages. In the long run, substitution is a prin-cipal means of coping with shortages.

The Paley Commission in 1952, the NationalMaterials Board in 1972, and others have recom-mended greater design efficiency and substitutabil-ity. However, Government implementation pol-icies have been proposed only in general termssuch as “tax policy” and international standards.The options available for harnessing materials sub-stitutions as an instrument of national policy war-rant further investigation.

Substitutions are a strategy selected by manage-ment to fit conditions of technical desirability,especially in product performance; efficiency ofoperations; and price or availability. Evidence sug-gests that price is usually not the most critical fac-tor. One industry representative has noted thatmaterial costs represent only 5 percent or less ofthe final product cost of an aircraft, although it maybe responsible for 75 percent of Iifecycle costs.Thus, Government taxing or price control can onlybe effective in major applications for mature in-dustries in which small cost differences exert con-siderable materials selection leverage.

Some have suggested designers and manufactur-ers make materials choices on the basis of “truerelative value” rather than cost. This “true relativevalue” could include disposal costs and long-termmarginal costs of replacement. These policieswould not lead to greater materials substitutionflexibility because the true relative value is anaverage market price, not a reflection of the uncer-tainty of supply and limitations of capacity duringperiods of high demand.

Discovering the available substitution options isin part a product of Government-sponsored R&D.This should be done within the industries wheresubstitutions would be desired based on high-vol-ume usage. Congress could establish a research


program to develop practical substitutes for criticalmaterials, with particular emphasis on productswith high metal use, nonmetallic coatings for cor-rosion and wear resistance, and dissipative uses.This would encourage additional private sectorR&D.

Improve Product Aftermarket

Product remanufacturing, reuse, and repair (col-lectively known as product recycling) offer thegreatest leverage for saving materials and energy.Improved aftermarket (the market for recycledproducts) would prevent the mixing of scarce ma-terials with the landfill waste stream as well as im-prove the recovery of the major metals—iron,steel, aluminum, and copper. The aftermarketchanges that could improve efficiency resemblevertical integration in their managerial and techno-logical efficiency but do not necessarily lead to cen-tralized control. For example, the following trendsare toward vertical integration in the aftermarketbut not by new product manufacturers: the growthof automotive jobbers and mass merchandisers inrepair markets, greater leasing of products (new orused) by retail outlets, more efficient diagnosticand rework procedures in support of these inte-grated service groups, and greater willingness tooffer guarantees on reworked products.

Improved product recycling to capture the resid-ual value in products through a strengthened after-market would eventually have implications for theentire materials cycle. Table 40 systematicallyenumerates the functional requirements that applyto each step of the materials cycle, if recycling is toincrease. The table also lists the benefits to the Na-tion and stakeholder groups, the correspondingdisbenefits, possible Government options, andlikely impacts of implementing the options.

in all, there are 20 possible Government optionslisted. Fifteen of these would dovetail with im-proved efficiency; eight directly support improve-ments in the aftermarket.

The results of this preliminary study of the prod-uct aftermarket indicate that four of these optionsshould receive primary consideration.

●

●

●

●

Anewpactjobs

Encourage product leasing through taxdeductions. —Tax deductions could be usedto provide an incentive for leasing of majorproducts, such as automobiles, appliances,and machinery. At the end of the lease peri-od, the products would be returned to thesupplier who would have product recyclingcapability, rather than being discarded intothe waste stream.Provide loans to establish aftermarketbusiness.—Low-cost loans could be pro-vided to assist product recycling firms in at-tracting the necessary investment capital. Atpresent, most major products are discardedrather than recycled, in large part becausevery few firms are in the business of productrecycling.Provide funding to establish a scrap in-ventory.-Another likely prerequisite to ef-fective product recycling is improved infor-mation about the amount, form, and locationof residual scrap and its flow in the aftermar-ket. Funding could be allocated to establish ascrap inventory for this purpose. See thefollowing section for further discussion of ascrap inventory.Increase public confidence in recycledproducts.—Another major barrier to prod-uct recycling is lack of consumer acceptanceof used or remanufactured products. Govern-ment regulations (e. g., with regard to producttesting, labeling, specifications, and procure-ment) could be modified so as to increaseconsumer confidence in the quality of recy-cled products.

direct substitution of recycled products forones would probably have a short-term im-of reducing net jobs and replacing unskilledwith those requiring somewhat greater skill.

However, the long-term impact would be to in-crease consumer buying power and generate evengreater product flows and even more jobs in othernonmanufacturing sectors. Engineering skills andtalent would have to shift toward the aftermarket.Following this shift, unskilled employment oppor-tunities would likely improve.

Product recycling would also save energy. Asshown earlier in figure 30, metal refining and fabri-cating are several times above the national average


Table 40.—lmplications and Impacts of Recycling on the Materials Cycle

Functional requirementsif recycling is to

be increased

Constant and rapid feed-back of information be-tween extraction of pri-mary materials and re-cycling to assess scarci-ty and value of materialsI n order to adjust andbalance rate of depletionand rigor of recycling.

Toxicity or other dangersfrom primary materials,which wiII eventuallyenter recycling process,must be understood andtracked to avoid hazardsduring reprocessing,reuse, or disposal.

Application to nationalgoals; benefits to

stakeholder groups

Future needs and usesprotected, balancedagainst today’s needsand Iikelihood of futuretechnological develop-ment, substitutions, orchanges in usage/de-mand,

Occupational safety ofrecycling, reprocessinglabor force and consum-ers; reduced IandfilI re-quirements, reduced en-vironmental degradation.

Avoidance of irreversiblelosses of materialsvaluable i n the future

Disbenefits to. stakeholders and

Nation

1. EXTRACTIONErrors in forecastingsupplies and shortageshave economic and se-curity risks

Extraction industrybears costs.

Government options,role, and imple-

mental ion strategies

Establish commission tocontinually assess scar-city, provide feedbackbetween recycling andextraction.

Rare materials which arebyproducts from extrac-tion of other materialsmust be preserved forfuture use regardless ofcurrent value (e. g.,helium).

Il. PROCESSING, FABRICATION

EPA research and

Assure energy conserva-tion benefits from usingrecycled metal insteadof primary raw materials,

Trace element contam-ination of recycled ma-terials may require mod-ification of processingequipment, new equip-ment, and/or highercosts in processing.Some modification infabrication.

Reduced energy costs inproduction, reducedenergy sensitivity.

Better understanding oftrue costs of small alloycontamination in re-cycled materials,

Greater flexibility inmeeting materialsdemands, reduced fluc-tuation in supply cycle

Coupling of materials in-dustry energy needs toavailability of recyclablematerials.

Either reduced certaintyabout materials qualityor Increased materialstesting.

Could lead to lowerquality primary materialsand higher production/manufacturing costsbecause some forming/bonding applicationsnow require higherquality.

Impacts ofimplementing Govern-

ment options

Compet i t ion between re-cycled and raw materialsmay destabilize either or

both: who absorbs costsof market variability?

Basic materials marketsstandards develop- become more sensitivement for problem to Government policymaterials, tracking decisions regardingthrough cycle. safety, forecasting

needs. and recycling.

Tax credit or other Increased capital re-subsidy of differential quirement by industry.costs of processingequipment for handling Standards may restraincontaminated/mixed re- materials developmentcycled materials (invest- and innovation.ment tax incentive?),

Joint sponsorship ofR&D for processes tohandle mixed/contam-inated materials or to ex-tract valuable traceelements,

Procurement Incentivesfor use of scrap,

Establish standard ofmetal quality for recycle.

= Indirectly Improved efficiency of reworking, repair, and resale of products in the aftermarket● = Directly supports improvements in the aftermarket activities

SOURCE Working Paper SIX.

Ch. VII—Preliminary Policy Considerations ● 9 5

Table 40.implications and Impacts of Recycling on the Materials Cycle—continued.

‘Government options,role, and imple-

men tat ion strategies—

Impacts ofimplementing Govern-

ment options

Functional requirementsif recycling is to

be Increased

Application to nationalgoals; benefits to

stakeholder groups-.

Disbenefits tostakeholders and

Nat ion— —Ill. MANUFACTURING

I Government procure-ment standards favor-ing reuse/rehabilita-tion of products, com-ponents.

Repair industry is largelycaptive of manufac-turers; creation of newconflicts of interest.

Modularize designs sothat components can bereplaced, refurbished, orInterchanged.

Reduced costs for prod-uct/component repair orreplacement (consumersatisfaction).

Without vertically inte-grated companies (or so-phisticated purchasers),additional design costsare borne by manufac-turers for good of therepair industry.

Constraints on productdesign may compromiseoptimality of design interms of energy efficien-cy, substitution of mate-rials, rates of innovation.

Design for ease of repair,diagnostic evaluation,and recycling.

Easier/less expensivediagnostics, facilitatedo-it-yourself repair

● Establishment of stand-ards for design andrepairability through of-ficially designatedevaluation laboratories.

Higher priced new prod-ucts due to higher resalevalue compensates man-ufacturer but new andused products competeand tend to destabilizethe market for both.

Easier to meet specificconsumer/user needsthrough modularization.

Build in diagnosticchecks and/or electronicmonitoring.

Economies of scale inreliabiIity studies.

Develop production-linecompatibility with usedcomponents.

Greater volatility in de-mand for new products ifbuyer choice betweennew/used products isdependent on fluctua-tions in disposable in-come.

Market research onreasons for discard/replacement of nonob-solescent products.

Some additional con-straints on design/marketing decisions;some reduction in con-sumer choice and con-venience.

IV. DISTRIBUTIONConsumer’s control, in-dependence, autonomyreduced by leasing.

Share new product distri-bution system and out-lets with recycled prod-ucts, or devise new dis-tribution systems/outlets.

Create new smallbusiness opportunities.

Distributor may becaught in conflict ofinterest: higher profitson new goods than onrehabilitated goods.

[ Review/revise ICC reg-ulations on trans-portation rates; enddiscrimination orsubsidize recycling.

Reduce costs of collec-tion, transportation—principal barriers torecycling.

Prolonged product lifethrough better mainte-nance from leasing, orreduced user care ofleased devices/vehicles.

● Encourage leasingrather than sale ofproducts a throughtax advantages andinsurance protect ion

Better informed buyersmay gain advantagesover poorly educatedor poorly informed.

Use distribution systemfor consumer in forma-tion/education and forcollecting data on prod-uct failure/obsolescenceetc.

Improved relationshipsbetween manufacturer,selIer, buyer, repair in-dustry.

Government leasing.Buyers may be victim-ized by misrepresen-tat ion of recycledproducts, components.

Issues of financial/legal liability re-sulting from leasing.

● Government procure-ment through leasingrather than purchase.

New customers forrailroads, truckers.Equitable transportation

costs for recycled trade-In products from dealers. F1 Assistance to small

business to build dis-tribution system andoutlets: guaranteedloans, training, etc.

aLeasing of vehicles large appliances, and equipment usually provides more systematic maintenance, greater intensity of utlization aggregated collection for eventual recycling, andgreater motlvation for recycling

—— Indirectly Improved efficiency of reworking, repair, and resale of products in the aftermarket● = Directly supports Improvements in the aftermarket activities

SOURCE Working Paper SIX

51-680 0 - 79 - 8


Table 40.—lmplications and Impacts of Recycling on the Materials Cycle—continued.

Functional requirementsif recycling is tobe increased—

-.Application to national

goals; benefits tostakeholder groups

Disbenefits tostakeholders and

Nation

V. USE AND REUSE

Government options,role, and imple-

mental ion strategies

Impacts ofImplementing Govern-

ment options

Better information aboutpatterns of obsoles-cence, discard, etc.

Extended use, avoidanceof premature obsoles-cence.

More labor require-ments, lower profitsfor retailers.

I R&Don durabil-ity, safety.

Resistance from manu-facturers/distributors,wholesalers/retailersbecause of competition[ Public education

and persuasion.Better knowledge ofdurability, safety ofrehabilitated, resolditems.

Improved customer con-fidence in buying de-cisions.

Possibly lower GNP dueto reduced markup be-tween purchase of usedproduct and sale of re-worked product; i.e., lessvalue added which most-ly goes to wages.

New product manufac-turers may move intothe aftermarket in com-petition with existingrepair/rework companiesor new part manufac-turers; conversely af-termarket firms coulddevelop more sophisti-cated units and en-croach on new productmanufacturing.

● Manpower trainingfor rebuild ing/re-habilitation.Improved discretionary

income.Building of consumerconfidence throughstandards, warranties,labeling, etc.

● Development of diag-nostic/repair tech-niques.

Less pressure on in-dividuals and house-holds for excess con-sumption.

Possibly reduced cus-tomer choice and satis-faction. ● Development of insur-

ance warranty systems.

VI. DISPOSAL

Collection systems formaterials, products,components.

Reduced municipal solidwaste disposal problem:land and environmentaldegradation, costs.

Esthetic/environmentalinsults from collection,sorting, transportation,stockpiling (local).

Encouragement ofMSWb resource recoverycenters (technical aid).

(MSW centers) requireschanges in State laws/constitutions; may un-dercut present second-ary suppliers and de-stabilize prices; re-quires heavy State/local investment inrapidly evolving hightechnology; requiressteady flow of waste,may undercut longerrange conservation in ini-tiatives; centers alsoproduce energy.

Sorting/evaluating sys-tems for products andcomponents.

Disposal deposits basedon testing, lab evalua-tion of recyclability.

Preservation of itemsof value

Inhibit substitution ofcomposite material,special alloys, and com-plex designs because itmakes recycle more dif-ficult.

Residual disposalsystem.

Enhanced internationalimage.

Q Inventory of obsolete,abandoned, discardedmaterials (in large orconcentrated deposits)available for recovery.

Product design foreasier recycle.

General encouragementof prudence, conservingsociety.

Knowledge of availabilityand locational access toobsolete discardedmaterial items.

● Requirement for manu -facturers/distributorsto buy back.

Establish learning curvefor recovery of addi-tional material underincreased scarcity.

Disposal charges pro-mote roadside dumping

Disposal charges.Deposits add to con-sumer prices, reducesales volume, highadministrative costs.

Reduced costs of re-trieval through bet-ter information.

Inventory may undercutscrap dealers basisfor business (knowl-edge of location andaccessibility y of mate-rial for recycle).

bMunicipal solid waste= Indirectly improved efficiency of reworking, repair, and resale of products in the aftermarket

. = Directly supports improvements in the af termarket act ivi t ies.

SOURCE: Working Paper SIX.


in energy intensity. Therefore, recycling of metalproducts and components—which involves themaintenance and manufacturing stages of thematerials cycle—is more energy-efficient thanbuilding products from scratch with newly mined,refined, and fabricated metal parts.

In sum, improvement of the product aftermarketwould provide the institutional mechanism toachieve many other important objectives such asenergy conservation and environmental protec-tion, as well as contribute to materials conserva-tion.

Establish Scrap Inventory

A complementary approach to recycling wouldbe to inventory the unused products or abandonedmaterials available for recycling when needed.Discarded products form a large reservoir of mate-rials that has never been accounted for in detail.Estimates of the magnitude of this resource havebeen made, but to support recycling, the types ofmetal and their location, physical accessibility, andunit sites would be needed. A periodically updatedinventory might provide an ongoing assessment ofavailable resources sufficient to reduce the needfor direct Government action. The inventorywould also provide accurate estimates of true prod-uct life and reuse patterns. Many “obsolete” prod-ucts are in fact acting as backup units or serving assecond systems (refrigerators and machine shoplathes are clear examples of this).

The most valuable metals (other than commonsteels) are found in specialized applications andmay or may not be accessible. By balancing thebooks on obsolete products, one could: 1) deter-mine the amount of accessible scrap (scrap that isnot corroded and within a reasonable distance of arecycling center), 2) the flows of material productsin the aftermarket, 3) the reserves the Nation hasto fall back on in case of shortage, and 4) productsperforming nonessential functions or materialsthat could be removed from working products andreplaced with substitutes in the event of an emer-gency.

One objection to such an inventory of unusedproducts would be the high administrative cost ofthe inventory, especially for materials not owned

by organizations with readily available inventoryrecords. Some form of sampling procedure wouldbe needed to obtain estimates and focus furtherstudy to keep administrative cost down. Existingscrap dealers might object to losing the proprietaryinformation needed to match sellers and their cus-tomers. New metal industries may feel their mar-ket would be undercut in the short-term, reducingtheir capacity, but when the scrap ran out therewould not be enough capacity. Such instabilities oroverreaction would have to be eliminated.

Owners of the scrap might fear that proprietaryinformation would be released to competitors byrevealing the amount of material or equipment incurrent inventory. The data base would need somesecurity protection; this would raise costs. Ifowners of products lost some control over theseproducts—as in a recall during a materialsshortage—this would complicate the present own-ers’ planning for future needs.

Summary

The illustrative implementation options pre-sented were selected so as to avoid Governmentintervention in private decision processes to thegreatest extent possible. Instead, they enable theprivate sector to more efficiently deal with theirown needs while reducing the uncertainties andvulnerabilities for all parties. These means of im-plementation are to a great extent self-correcting.They do not require constant Government adjust-ment of standards or regulations in order toachieve a balance of interests.

These options were also selected so as to max-imize the potential for reducing materials losses,and to increase the adaptability, stability, and effi-ciency of the materials cycle.

The set of illustrative options discussed aremutually reinforcing. The public data base sup-ports all the other options. Contingency planningprimarily strengthens adaptability and stability.The contingency shares certificate market wouldmoderate the extremes of tight materials marketsand diminish the frequently self-defeating re-sponses of stakeholders during short-term crises.Substitution is very much the result of a privatedecision process, but it also can be an important


instrument of national materials and energy pol-icy. Improvements in the aftermarket will contrib-ute to greater efficiency but will also provide theinstitutional mechanism to achieve many othergoals such as energy conservation and environ-mental protection.

These options if implemented would depend oncooperative action by the private and public sec-tors. By initiating a private/public sector partner-

ship now, when crisis conditions do not yet exist,all parties could fully assess these and other op-tions without the overriding pressure of emergen-cy situations obscuring their underlying and long-term needs. Through such a partnership, optionslike those illustrated in this section could strength-en the ability of the United States to avoid crisisconditions in materials such as now exist withregard to energy resources.

Appendixes

/ ’

Appendix A. —Proceedings of a Workshop onWear Control to Achieve Product Durability*

BACKGROUND

The Office of Technology Assessment, U.S. Wear control was chosen as an example of aCongress, is analyzing the potential for materials technology which can increase product durability.conservation in the manufacturing and use of Experts from the field of wear along with represen-products. This assessment will determine at which tatives from industry discussed the status of wearstages in the materials cycle materials can be con- control technology and its application in the designserved and the potential economic and other im- and maintenance of a range of products (railroadpacts of such conservation. equipment, automobiles, aircraft, propulsion,

One possible strategy for conservation wouldbe to increase product life through improved corro-sion, wear, and fracture control. To explore theconservation potential of increased product life, aworkshop was held in Washington, D. C., on the23rd, 24th, and 25th of February 1976. This docu-ment presents the proceedings of that workshop.(See table A-1 for Agenda.)

naval aircraft structures, metal-cutting machineryand tools, and heavy construction equipment).

*Excerpted from Martin J. Devine, Editor, Proceedings of aWorkshop on Wear Control to Achieve Product Durability,1977, Analytical Rework/Service Life Project Office, Naval AirDevelopment Center, Warminister, Pa. 18974. The workshopwas sponsored by the Office of Technology Assessment, U.S.Congress.

Table A-1 .—Agenda for the Workshop on Wear Reduction(Sponsored by the Office of Technology Assessment, U.S. Congress, February 23-25, 1976)

Theme: “Materials Conservation—improved Product Durability by the-Application of Wear-Control Technology”——-—

Morning Session, Monday, Feb. 23, 1976Chairman— Dr. Elio Passaglia

Opening Remarks— PurposeM.J. DevineOffice of Technology Assessment

WelcomeEmilio Q. Daddario, DirectorOffice of Technology Assessment

Materials Program OverviewA. E. PaladinoOffice of Technology Assessment

Workshop BackgroundE. PassagliaNational Bureau of Standards

Session A.1

Session Chairman:Dr. J. B. Wachtman, Jr.National Bureau of Standards

Wear TechnologyM. PetersonWear Sciences

Incentives for Longer Product LifeW. FlanaganCenter for Policy AIternativesMassachusetts Institute of

TechnologyManufacturing Technology for Materials

ConservationR. MattAerojet General

Economic Factors in Product DurabilityC. H. Madden/R. S. LandryChamber of Commerce of the United

States —. —SOURCE: OTA.

Technology for Estimating Product Advanced-Research Projects AgencyDurability Wear ProgramJ. John E. Van RuethlR. MillerIRT Corporation Advanced Research Projects Office

Financial and Taxation lmplication of Office of Naval ResearchEquipment Replacement

P. LermanFairleigh-Dickinson

Safety Aspects of Improved ProductDurabi l i ty

H. AzzamInterrad Corporation

Automobile DurabilityD. BarrettFord Motor Company

Economic impact of Tribology (U.K.Experience)

D. ScottNational Engineering Laboratory/Wear Publications

Improved Product Durability NavyProgram

A. KouryNaval Air Systems Command

Bell Systems Wear Control ProgramG. KitchenBell Laboratories

Life-Cycle CostingT. BrennanNaval Air Development Center

National Science FoundationTribology Program

M. GausNational Science Foundation

— ————

Maintenance Improvements Within theAirlines

T. MattesonUnited Airlines

Session A-2 (Evening)

ASME Wear Control HandbookW. WirierGeorgia Institute of Technology

ASLE Replacement Costs SurveyR.L. JohnstonRensselaer Polytechnic Institute

ASTM Wear ProgramK.C. LudemaUniversity of Michigan

MFPG— Wear Control

1.2.

3.4.5.6.

E. KlausPennsylvania State University

Session B—Seminars

Automobiles/automobiIe spare partsNaval aircraft structures/materials/componentsAircraft/aircraft propulsion systemsMetal cutting machinery and toolsRailroad rolling stockConstruction equipmenta. Track-laying tractorsb. Rubber-tired earth-moving equip-

ment —

101


The workshop explored whether product life and 4) the methodology and information available.could be extended by improved wear control and

The fact that only a few products were studiedwhat would be the cost and other consequences oflimits the conclusions. However, these productssuch extension. These questions were explored

from various viewpoints: 1) the status of technol- are sufficiently representative of a cross section of

ogy to support increases in durability, 2) economic industry so that the question of product durabilitycould, indeed, be qualitatively explored.considerations, 3) current policies and programs,

FINDINGSMethodology of Economic Appraisal

A large amount of economic data was presentedat the workshop establishing that the real cost ofwear can be evaluated for a range of productsand/or industries. Such information is essential tojudge the need for and the significance of newtechnology.

No standard techniques for acquiring the realcosts of wear are available. It is not apparent that astandard technique would suffice; each productmight require its own separate analysis.

Standard methodologies are available for eco-nomic appraisals, and these could be applied towear, corrosion, or any other degradation process.Some illustrative procedures are: 1) NationalAssociation of Corrosion Engineers (NACE) stand-ards for corrosion economies, and 2) lifecyclecosting.

Wear Costs and Consequences

It is clear from information provided during thepresentations and seminars of the workshop that:1) data on the cost of wear in several differentproduct areas are available, and 2) that cost ap-praisal standards or techniques have been devel-oped for this purpose. As expected, the greater partof this information is available from Governmentsources. However, further contacts with represent-atives from other product sectors are expected toyield additional cost data.

At the workshop, examples of specific cost datawere presented. These data, if shown to be gen-erally applicable, would in themselves providestrong economic incentives for improved productdurability and therefore, for increased materialsconservation. It is recommended that such data becollected. A major data source would be the mil-

itary, which retains computerized malfunctionmaintenance records. Some examples of specificcost

●

●

●

It

data discussed at the workshop include:

Data on Wear Costs in Naval Aircraft.Data provided on the wear costs in naval air-craft show that the scheduled maintenancefor wear for one aircraft amounted to $67 perflight hour, unscheduled maintenance $140per flight hour, and overhaul $36.87 per flighthour. Thus, the total cost of wear is $243.87per flight hour. This can be compared withthe cost of fuel of $376 per flight hour. Datawas also provided on the lifecycle costing ofnaval aircraft tires. The Navy uses 20,500tires per year at a cost of $3.48 per landing fora total yearly cost of $1,853,200.

Data on Wear Cost of Diesel Engines.Data provided on the diesel engine main-tenance and repair for 20 ships (120 engines)indicated that wear costs were $38.92 pership per hour. Fuel costs were $75.00 per shiphour.

Data on Wear Costs of Tools. The pur-chased cost of high-speed steel tools (U. S. A.)was $470 million per year; carbide tools $435million per year, It was also learned at theworkshop that the best estimates of the cost ofwear came from users rather than manufac-turers of products. The relationship of thesecosts to manufacturing design decisions wasnot defined. However, where responsibility isdivided between the user and the manufac-turers the chief concern of the latter is mar-ketability with durability being an indirectconsideration.

is clear from the data presented that ignoranceas to the wear control costs a significant amountnot only from the resultant necessity to overdesign

Appendix A—Proceedings of a Workshop on Wear Control to Achieve Product Durability ● 103

but also from the discard of components. Anotherimportant factor regarding wear costs was that fewproduct areas use lifecycle costing. And thoseareas that do use lifecycle costing employ it only atcertain stages of decisionmaking. Also, there is lit-tle agreement as to how the appropriate interestrate should be calculated in order to compare dif-ferent development and procurement plans fromthe present-worth point of view. Present high ratesof interest tilt decisions to labor-intensive ratherthan capital-intensive projects, with a resulting lossin concern for product durability and hence wearcontrol. The possibilities of technological obso-lescence further aggravate the problem. Those re-sponsible for development and procurement arefrequently career people who will move on andwhose current responsibility is to keep downcapital cost, not to assure succeeding low-costmaintenance programs.

Thus, the above findings, which are but repre-sentative of the material that was covered duringthe workshop, all point to the fact that wear con-siderations cannot be isolated from the other con-siderations that go into the design of consumerproducts. Wear control simply does not appear tobe a primary goal anywhere. Since responsibilityfor wear control changes hands as the productchanges hands during its lifecycle, lifecycle costingwill not be used. The heart of the analysis of wearand wear programs, or the lack of them, lies in theunderstanding of the objective functions of the pro-ducers and the consumers as well as the con-straints under which they operate.

State of the Technology

It was pointed out at the workshop that tri-bology, the branch of science concerned chieflywith improvements in wear control for greaterproduct durability, has not received sufficient at-tention in U.S. academic, industrial, and Govern-ment institutions. The benefits of increased em-phasis have not been defined sufficiently by thescientists involved. Further research in the field ofwear could result in improved techniques to con-trol damage resulting from sources such as con-tamination, vibration, misalignment, etc. Thus, themost pressing need is for a centralized source of in-formation on wear control technology which canbe effectively used in product design.

At the same time, technology does not limitproduct durability, since many newly developedtechniques are now currently used by industry. im-plementation of this technology in design andmaintenance varies from one product to anotherand one industry to another and is generallylimited by many other factors such as cost-effec-tiveness.

At present, several professional and technicalsocieties sponsor activities which contribute to andfacilitate efforts to control wear. Some examples ofthese societies are as follows:

●

●

●

●

American Society of Lubrication Engineers(ASLE) documentation of wear and failurecosts;

American Society for Testing and Materials(ASTM) Committee G-2 on erosion and wear;

Mechanical Failure Prevention Group (MFPG)sponsored by the National Bureau of Stand-ards; and

American Society of Mechanical Engineers(ASME) Lubrication Division and ResearchCommittee on Lubrication.

Existing technology is shared by variousmanufacturers or industries by communicationwith each other through these societies.

It was also noted that support programs orientedtoward tribology and wear control are sponsoredby the National Science Foundation, the AdvancedResearch Projects Agency of the Department ofDefense, the Office of Naval Research, the NationalBureau of Standards, and the National Aeronauticsand Space Administration.

Product Durability

Concise definitions of product durability are notavailable; however, it relates both to the maximumlife achieved and the ability of the product to sur-vive both normal and abnormal usage. High prod-uct durability appears desirable from the point ofview of reliability and materials conservation. Inpractice this is usually achieved at a higher pur-chase price. Secondly, longer life products mayhave a tendency to reduce the application of tech-nical innovations.


The conclusions of this workshop indicate thatconsiderable improvement in the durability ofsome products can be achieved if desired. Thequestion which ultimately must be answered iswhether increased durability is worth the addedcosts to the consumer and whether it can be effec-tively achieved. Product durability is the pre-rogative of the consumer. It is available if he wantsand demands it.

During the workshop several different actionswere discussed which could lead to improved dur-ability.

Industries with close working relationshipsbetween manufacturer and user, e.g., the BellSystem and the heavy construction equip-ment industry, could provide an active feed-back system yielding improved durability ofproducts.

Inspection requirements and inspection fre-quency may be utilized to achieve increaseduseful life of products, e.g., based on datafrom Sweden, and comparison of States in theUnited States, with and without periodicmotor vehicle inspection (PMVI), median carlife was shown to be extended as a result ofPMVI programs.

At the workshop, active product-durabilityprograms were reported by the Navy Depart-ment. These programs, which have been des-ignated the analytical-rework and service-lifeprograms (ARP), are concerned with: 1) re-ducing the cost of aircraft maintenance; 2) ap-plying new technology to aircraft repair-rework aimed at increasing service life andimproving performance/safety /quality; 3)conducting the optimum strategy for a moreefficient application of materials and proc-esses generated under ARP; and 4) increasingcomponent and product durability throughthe application of the rapid and precise non-destructive inspection techniques (with theminimum disassembly of components) cur-rently available.

However, product life is often not limited byproduct durability. For example, many productsare removed from service which still have some re-maining useful life, Among the reasons for early

product retirement are: 1) cost of operation orrepair, 2) productivity or functionality, 3) esthetics,4) accidents, 5) physical loss, and 6) style prefer-ences. Nevertheless, the extent to which usefulproduct life can be extended without decreasedproduct durability is not known. The primary fac-tors that can affect useful product life are: 1) use, 2)environment, 3) maintenance, 4) procedures, 5)personnel qualifications, 6) inherent durability, 7)design, 8) manufacturing process, and 9) materialcharacteristics.

In addition, product durability is only one ap-proach to materials conservation. Due considera-tion should be given to other approaches. At thisworkshop, reducing materials wastage in manufac-turing was frequently cited as one means of achiev-ing materials conservation and should be inves-tigated.

Capital and Labor

From the manufacturer’s point of view there aremany factors in the development of a product: per-formance, safety, development cost, schedule,energy consumption, maintenance costs, firstcosts, appearance, styling, and durability. Thesefactors must be balanced in such a way as to findwidespread consumer acceptance. Where durabil-ity has a high value to the consumer, that attributewill be accentuated in the product. Even withoutthis demand, the manufacturer has compellingreasons for maintaining high durability standards.First and foremost, a good service record for dura-bility helps to ensure that the customer will return.This is particularly true for industrial consumerswho maintain detailed maintenance records andperform component evaluations.

The manufacturers in general cannot design fora given product life. However, they do know andkeep records of service problems (warranty orotherwise) and strive to eliminate these. Wherethere is a close working relationship between themanufacturer and the user, more success andgreater durability result. However, the manufac-turer is limited in this regard since he seldom hasinformation on the life of a product or a compo-nent based upon the service condition in which itoperates. Thus, it can be concluded that the acqui-sition and distribution of such data would provide

Appendix A—Proceedings of a Workshop on Wear Control to Achieve Product Durability ● 105

a necessary base to initiate the engineering devel-opment actions for achieving increased productdurability.

The results of this workshop suggest that it isprimarily the consumer who determines productdurability. First of all, in a free-market system,products reflect consumer demands. Secondly, evi-dence presented at the workshop suggests thatmany failures are service-related and that productdurability is often a function of the kind of usageand maintenance it receives rather than its design-related deficiencies. Market surveys have shownthat product durability is very high on the list ofcustomer wants. However, consumers are general-ly not willing to pay more for increased durabilityand often when given the choice, they select thelower cost, less durable items (e.g., power tools areoften made in different quality lines; even profes-sionals often select lower cost quality). It was fur-ther pointed out at the workshop that even sophis-ticated corporate “buy” decisions of capital equip-ment are based on maximizing the immediate cashflow (net present value computation) to the com-pany. Thus, longer life at increased cost achievedby greater durability will not be sufficient justifica-tion for purchase. The incentive to buy must belower operating or maintenance costs since thesedirectly influence cash flow.

Thus it seems clear, based on the conclusions ofthis workshop, that one point of action for in-creased durability is the consumer, and two areasof appropriate investigation concern maintenancecost reductions and improved durability at equalcost. Programs which identify and correct servicerelated malfunctions, for example, Navy’s ARP,should be encouraged since they achieve theabove mentioned goals as well as provide recip-rocal information to the manufacturer.

Another incentive for the consumer would bethe further acquisition of cost data. At thisworkshop, wear costs were shown to be surprising-ly high in a variety of product areas. The same canundoubtedly be said for corrosion, fatigue, andother durability factors. If consumers realizedthese costs, they might be prompted to take remed-ial action. It was also pointed out at the workshopthat there are acceptable techniques (e.g., cost

modeling, economic system analysis) for bothassessing durability (wear) costs and in determin-ing how changes in durability would result insystem cost savings for a number of products.

The Lifecycle

Product life is not a clear concept. As an indi-vidual product reaches the end of its useful life (asdetermined by its owner), it is not necessarilyscrapped. A product may be reconditioned or re-built. Or, when a product is finally considered un-usable, it may be used as a spare part for a similarmodel. Thus, it is possible to recycle parts as wellas materials. It was also learned at the workshopthat scrapped products and components could notbe considered waste. For example, the majority ofworkshop participants felt that for those productsconsidered, the recycling of materials reached 80to 90 percent. Thus, while recycling can some-times result in a combination of materials havingdifferent properties, it cannot be considered waste.Furthermore, scrapped products often find valueas completely different products.

It should also be noted that the workshop par-ticipants expressed one area of concern regardingproduct life. It was reported that inventories forspare parts often reach a high of 20 to 1. Such anexcess in inventory could cause severe economicloss. It was decided that this subject should receivecareful consideration in the final assessment onmaterials conservation.

Materials Wastage

It was also found at the workshop that except forspare parts, wastage due to poor product durabilityseemed small for those products considered. Thoseproducts that do not enter the spare parts inven-tory are often recycled. And, as the supply of ma-terial decreases, one would expect more use ofspares and more recycling. It was felt by the work-shop participants that specific areas of possiblewastage should be identified and correctionsshould be made when possible.


Significance for Research

Although this workshop was called to explorethe questions of wear, product durability, andmaterials conservation, certain implications forresearch become obvious when that work is takenin its broadest context. A great proportion of theresearch undertaken in this country has been re-lated to innovation, that is, finding new ways to ac-complish a stated objective. Composite materialsare a good example of this type of research. Muchless attention has been devoted to disciplines suchas wear, mechanical failures, corrosion, fatigue,etc., which affect our knowledge of such factors.

It is clear from the results of this workshop thatthe wearing of materials produces significant costsin the overall materials cycle. And even more par-ticularly, wear degrades performance so that muchof the original value of the product is lost. An em-phasis on wear research, particularly those studieswhich emphasize predicitve capability, would bedesirable. This emphasis need not be limited onlyto wear but to all life-limiting technologies. Productdurability and life prediction are basically the sameconcept and increased durability will not be attain-able without better concepts of component life.

Improved knowledge of component life and thefactors which affect it would not only lead to im-proved durability but allow tradeoff decisions to bemade relative to such factors as materials conser-

vation, lifecycle costs, reimbursement for defectiveproducts, maintenance costs, net value, and depre-ciation. At the present time, these are largelyguesses.

Life prediction need not be a priori. Diagnostictechniques such as those being used on naval air-craft should be further developed. Estimates ofproduct life remaining allow “use” decisions to bemade which result in longer life and improvedutilization. Research emphasis on this subjectcould lead to considerable improvements in mater-ials utilization.

A greater priority could be given to research thatextends product life. That is,

1.

2.

3.

4

Improved research and knowledge on whatmalfunctions actually limit product servicelife.

Increased research on those technologiesresponsible for life determination such aswear, fatigue, etc.

Increased support of research that allowsestimates or predictions to be made of productand component life.

Expanded research on the subject ofdiagnostic instrumentation that will allowresidual life estimates to be made.

Appendix B.— Conservation in World War II: 1933-45

INTRODUCTION

Over 35 years ago, the United States had tomobilize for a global war. The demand for warmaterial such as aircraft, ammunition, ships, andtanks, plus the loss of foreign sources of supply,created threats of shortages for materials such as:aluminum, chromium, copper, iron and steel,manganese, nickel, tungsten, and others. Strongproduction and conservation measures had to beestablished to meet the threats of shortage. Thisappendix examines the production and conserva-

tion strategies and their implementation, and thetechnical and institutional impediments and asso-ciated impacts. This appendix is developed in ascenario format to allow for easy comparisons withfuture scenarios of materials shortages, and isbased primarily on information from the historicalpublication Industrial Mobilization for War, Vol. I,Program and Administration, Bureau of Demobil-ization, U.S. Civilian Production Administration(1947).

ELEMENTS OF THE WORLD WAR II SCENARIO

Table B-1 provides basic information describingthe World War 11 period. War production rose from2 percent of total output in 1939 to 40 percent oftotal output in 1943 and 1944, as shown in figureB-1. Expansion of total output was so great thatconsumer purchases of goods increased by 12 per-cent. The impact of the war on civilians, in spite ofthe human misery, was an economic improvementover the great depression.

Strategic and Critical Materials

Table B-2 lists the materials “strategic” to theNation’s military needs in World War 11. Listed as“critical” are other materials that were less difficultto procure than the strategic materials. Table B-3shows the materials stockpiled just before the warerupted.

Military Requirements forSelected Materials

Table B-4 list the maximum percentages ofselected materials allocated to military and foreignrequirements. Although 90 percent of the alumi-num was used to meet military and foreign de-

mands, sufficient capacity was reached in 1943 tomake aluminum more generally available than itwas before the war. The high use of copper for themilitary did not seriously harm the civilian sector,although supply fluctuations were a source of ir-ritation. Originally, drastic cuts for iron and steelwere proposed in the civilian sector, but the actualmaximum amount used by the military never ex-ceeded 57 percent.

National Objectives and Policies

The general war objective was to supply theUnited States and its allies with war materials as afirst priority. Second priority went to basic civilianneeds for public services, food, clothing, andhealth care. The remainder went to other civilianconsumer needs. Table B-5 lists major national ob-jectives based on the January 1942 Address of thePresident. For comparison purposes, the actualproduction of munitions in 1945 dollars for the warperiod is shown in table B-6. Table B-7 describesthe production of selected materials prior to 1942.At the beginning of the war in 1942, expansion ofproduction capacity was of greater importancethan conservation.

107


Table B-1 .—Elements of the World War II Scenario

Elements Remarks

Overall economicconditions. . . . . . . . . .

Availability of materials,Energy . . . . . . . . . . . . . . .

Weather/climate. . . . . . .

Labor . . . . . . . . . . . . . . . .Patterns of social values

GNP . . . . . . . . . . . . . . . . .Inflation. . . . . . . . . . . . . .

Interest rates. . . . . . . . . .

Population. . . . . . . . . . . .Population distribution

Concentration ofbusinesses . . . . . . . . .

Leisure and recreation. .

Recent turnaround from the GreatDepression.

Critical (see table B-2).Generally abundant except for

100-octane gasoline.Favorable (some droughts af-fected hydroelectric power sup-ply).

Full employment, labor scarce.Strong group achievement effortsto meet war needs.

(See figure B-1.)Inflationary pressures held downby price controls with some two-tier pricing.

Low-rate Government financing(60-percent private financing).

137,000,000.Northeastern States concentra-tion.

Northeastern States with emerg-ing aircraft industry on the WestCoast.

Limited by long work weeks andmilitary service.

Crime. . . . . . . . . . . . . . . . Limited by high employment andmilitary service.

Elements Remarks

Domestic policies. . . . . . Recently established social secu-rity and labor laws. Isolationistpressures before the war werefollowed by strong war emphasiswith attempts to maintain civiIiandemocratic relationships in warproduction efforts.

Environment concern. . . Little concern, smoke, etc., meantproduct ion.

Education trends . . . . . . Crash training programs in war-related areas. Education for vet-erans followed the War.

Technology trends . . . . . Steel industry was healthy beforethe War. Synthetic rubber was inpilot plant status. War needsspurred innovation. Atomicenergy unleashed. Radar in-troduced and expanded. Basicmaterials industries general-ly expanded with known tech-nology.

Foreign relationships. . . Strong ties with England to supplywar goods. Conquest of friendlycountries changed supply rela-tionships. Russia became an ally.

SOURCE: OTA, based on data supplied from Civilian Product Ion Administration

Figure B-1.— Gross National Product, World War II

[Total output of goods and services]

Annual Rate - Adjusted for seasonal variation and forchanges in the price level.

Non war Gov’t. War outlaysexpenditures

4

I I I Consumer expenditures

1939 1940 1941 1942 1943 1944 1945

SOURCE: Civilian Production Administration.

Appendix B—Conservation in World War II: 1933-45 ● 109

Table B-2.—Strategic and Critical Materials(World War II)

Strategic (essential to defense)Aluminum for aircraftCopper for ammunitionCarbon steel for weaponsAlloys steel for weapons

Also: Antimony, chromium, manganese, coconut shell char,manila fiber, mercury, mica, nickel, quartz crystal,quinine, silk, tin, tungsten

Critical” (less difficult to procure but essentialto the Nation)

Steel in the form of shapes, plate, tubing rail, shell, tin plateZincAluminum (other than aircraft purposes)MagnesiumCopper (other than for ammunition purposes)BrassBronzeTinNickelRubberAlso: asbestos, cork, graphite, hides, iodine, kapok, opium,

optical glass, phenol platinum, tanning materials,tolunol, vanadium, wool

“ -Conservation controls were Imposed on all materials critical enough to war.rant stockpil ing

SOURCE: OTA, based on data suppl ied from Civi l ian Product Ion Administrat ion

Table B-3.—Status of Government Stockpiles(12/27/41)

Percent ofobjective on

Commodity Objective hand 12/27/41

Metals and mineralsAntimony . ..............27,000 short tonsBeryllium ore . ...........3,000 metric tonsCadmium. . ..............6,000 short tonsChrome ore. . ............1,950,000 long tonsCobalt . .................2,500 short tonsIridium. . . . . . . . . . . . . . . . . . 7,750 troy ouncesLead. . ..................200,000 short tonsManganese ore. . .........3,300,000 long tonsMercury. . . . . . . . . . . . . . . . .25,500 f lasksTin . . . . . . . . . . . . . . . . . . . . . 207,434 long tonsTungsten ore . ...........27,209 short tonsZinc concentrates . .......150,000 short tonsAsbestos. . . . . . . . . . . . . . . .30,700 short tonsCorundum ore . . . . . . . . . . . 3,000 long tonsDiamonds, industrial . .....6,410,000 caratsGraphite . ...............34,000 short tonsKyanite . ....... . . . . . . . . .3,000 short tonsMica. . ..................13,850 short tonsNitrate of soda . ..........300,000 short tonsQuartz crystals. . .........702,000 poundsMiscellaneousRubber. . . . . . . . . . . . . . . . . . 1,200,000 long tons

aStored in Chile

2901

16009

1625242859

20

1310

2067a

?b

30

bConsiderable quantity delivered, but not yet tested against Government spec-ifications.

SOURCE: WPB Dec. 30, Feb 24, 1942, file 025

Table B-4.—Supply to the Military and Relevant Materials Policies

Maximum percent toMaterial

Aluminum . . . . . . . . . . . . . . .

military and export

90

Copper . . . . . . . . . . . . . . . . .

Iron and steel . . . . . . . . . . . .

Alloy materials:Chromium. . . . . . . . . . . . .

Manganese. . . . . . . . .

Nickel . . . . . . . . . . . . . .

Tungsten, . . . . . . . . . . . . .

90

57

60

Same as steel

Approximately all tomilitary

Same as steel

Relevant materials policies

Policy of production expansion solved basic supply problemby 1943 with some remaining shortages in shapes andforms.

Policy of heavy foreign purchases from South America. LittleU.S. expansion made until a premium price system estab-lished. Erratic supply problems.

Policy of expansion relieved shortages later in the war with a30-percent increase in capacity.

Policy to buy as much ore as possible from all sources.Domestic low-grade production established as an insurancepolicy, but less than 2 percent of that produced was used.

Policy of stockpiling worked well with l-year supply availablethroughout the war. Manganese was used as a substitute formore critical materials. Conservation attention only to high-grade ores.

Policy of strict conservation controls on use and distribu-tion. Overconfidence in Canadian supply resulted in earlyshortages. Substitutions, leaner alloys, and recycling im-proved materials flow.

Policy of expansion in domestic mining plus price supportsand assistance to foreign producers. Miscalculations re-sulted in excess of supply and inventory surpluses at theend of the war.

Policy of expansion of synthetic rubber production as 90percent of natural rubber was unavailable.

60Rubber. . . . . . . . . . . . . . . .

Other important metals not included in the chart: magnesium, cobalt, molybdenum, vanadium; an important fuel was 100-octane gasoline.

SOURCE: OTA, based on data supplied from Civilian Production Administration


Table B-5.—National Objectives (1942), Presidential Goals

1. To increase our production rate of airplanes so rapidly 3. To increase our production rate of antiaircraft guns sothat in this year, 1942, we shall produce 60,000 planes, rapidly that in this year, 1942, we shall produce 20,000 of10,000 more than the goal set a year and a half ago. This them; and to continue that increase so that next year,includes 45,000 combat planes—bombers, dive bombers, 1943, we shall produce 35,000 antiaircraft guns.pursuit planes. The rate of increase will be continued so 4. To increase our production rate of merchant ships so rap-that next year, 1943, we shall produce 125,000 airplanes, idly that in this year, 1942, we shall build 8 million dead-including 100,000 combat planes. weight tons as compared with a 1941 production of 1.1

2. To increase our production rate of tanks so rapidly that in mill ion. We shall continue that increase so that next year,this year, 1942, we shall produce 45,000 tanks; and to con- 1943, we shall build 10 million tons.tinue that increase so that next year, 1943, we shall pro-duce 75,000 tanks.

SOURCE: 77th Cong., 2d sess , Address of the President of the United States, H. Doc. 501, pp. 3-4, Jan, 6, 1942

Table B-6.–Munitions Production by Type (July 1940 to August 1945)(in millions of standard 1945 munitions dollars)

1940 1945(July- (January- Percent

Item December) 1941 1942 1943 1944 August) Total of total

Munitions totala. . . . . . . . . . . . . . . . . 2,047 8,442 30,168 51,745 57.594 33,153 183.149 100.0

Aircraft . . . . . . . . . . . . . . . . . . . . . . . . 370 1,804 5,817 12,514 16,047 8,279 44,831 24.5Ships. . . . . . . . . . . . . . . . . . . . . . . . . . 391 1,852 6,957 12,498 13,429 6,011 41,138 22.5Guns and fire control . . . . . . . . . . . . 78 355 1,794 3,180 2,926 1,471 9,804 5.3Ammunition . . . . . . . . . . . . . . . . . . . . 87 427 2,743 4,908 5,768 4,173 18,106 9.9Combat and motor vehicles . . . . . . . 238 1,285 4,778 5,926 4,951 3,138 20,316 11.1Communicant ion and electronic

equipment . . . . . . . . . . . . . . . . . . . 27 226 1,512 3,043 3,739 2,212 10,759 5.9Other equipment and supplies. . . . . 856 2,493 6,567 9,676 10,734 7,869 38,195 20.8

aExcludes net increases in naval stock fund value of goods in store and stock in transit between supply offices, as follows: July-December 1940 (28); 1941 (194); 1942(320); 1943 (613); 1944 (148); 1945(68); cumulative, July 1940-August 1945 (1,326)SOURCE: War Production Board, Program and Statistics Bureau,

Table B-7.–Production of Selected Metals (July 1940 to December 1941)

Third Fourth First Second Third Fourthquarter quarter quarter quarter quarter

Metal Total 1940quarter

1940 1941 1941 1941 1941

Aluminum (thousand pounds) . 848,254 108,390a 121 ,553a 127,085 b 147,888 b 164,939 b 178,399 b

Copper (tons). . . . . . . . . . . . . . . 1,596,750 254,089 276,394 282,816 267,637 253,858 261,356Lead (tons) . . . . . . . . . . . . . . . . . 954,971 143,651 176,432 177,782 164,819 145,049 147,238Steel (tons). . . . . . . . . . . . . . . . . 120,416,094 17,967,529 19,609,306 20,277,275 20,592,070 20,622,050 21,347,864Zinc (tons) . . . . . . . . . . . . . . . . . 1,120,050 178,620 190,154 186,604 188,277 188,198 188,197

aLetter J. L._ Honey to G. C Bateman, Apr. 29, 1941, file 523.4.bReport "The Aluminum situation, ” table Vll, files 523.01 and 523.4.SOURCE. Metal Statistics, 1945, New York: American Metal Market, 1946, except where otherwise noted.

Appendix B—Conservation in World Warn: 1933-45 . 111

CONSERVATION APPROACHES

Figure B-2 presents a schematic flow of conser-vation policy in World War II. Although the pol-icies varied as the war emerged, peaked, and sub-sided, the general conservation policy was central-ized Government control of materials supply andproduction in the basic framework of a private en-terprise system. Conservation was just one toolamong several for meeting the objectives of sup-plying the United States and its allies with neededgoods for war as well as providing basic needs for

the civilian sector. The prominent conservationoptions implemented were substitution, simplifica-tion and standardization, curtailment, and salvage.

Conservation options such as design efficiency,life extension of products, reducing exports, andreducing dissipative uses were not given much at-tention because of the crisis conditions and lack ofleadtime and advance planning.

Figure B-2.—Conservation Policies During World War II

*Policies

Centralized control of materials supply& production in a private enterprise system

I Conditions{

ThreatsI

r strategies 3World Expand

sourcing production

[ Stockpile 1I I t1 I

I Salvage 1War Resources Board (1939)Advisory Commission to the Council of

National Defense (1940)

[Implementation Office of Production Management (1941)

War Production Board (1941-45)(6,000 to 18,000 employed)

Civilian Production Administration (1945-47)SOURCE OTA, based on data supplted from Cwlllan Production Admmtstrat(on

51-680 0 - 79 - 9

772 . #eta/ Losses and Conservation Options

Substitution

The largest substitution project in World War 11was the substitution of synthetic rubber for naturalrubber. Ninety percent of the supplies of naturalrubber were cut off. Just before Pearl Harbor, thesynthetic rubber process was in a semiexperimen-tal state. Six companies hoped to produce 10,000tons by 1941. For war expansion, businessmenestimated that each 100,000-ton requirementwould involve a 12- to 18-month leadtime and $50million in costs. In 1942, a rubber “Czar” wasgiven production and conservation powers to in-crease production and meet supply requirements.By early 1943, 241,000 long tons were produced.By late 1943,850,000 long tons were produced. ByMarch 1944, 50 plants had been either built or con-verted to rubber production. Table B-8 shows theestimated economics of the substitution of syn-thetic for natural rubber.

Conservation was emphasized in greater de-grees as the war progressed and resources becametaxed to the utmost, In the early stages of the con-

servation program, substitution was the methodmost commonly used. Excessively heavy demandson certain materials, for which there was insuffi-cient supply, frequently made substitution thequickest and easiest way to relieve the problem.Many of the substitutes used in these crisis timesproved unsatisfactory.

Three substitution methods were prominent: (a)complete materials change, for example, steel car-tridge cases substituted for brass cartridge cases,(b) changes to reduce the use of the critical materi-al, for example, substituting a different productionprocess, and (c) downgrading the same material forthe same product, for example, downgrading theuse of compositions in production of tube bush-ings.

Simplification and Standardization

Simplification was the elimination of items,types, sizes, and colors of products that might hin-der the flow of essential products in periods of

Table B-8.—Estimated Economics of Substitution

Material or product. . . . . . . . .Make v. buy . . . . . . . . . . . . . . .

Required capitalinvestment. . . . . . . . . . . . . . .

Operating andmaintenance costs. . . . . . . .

Cost increase/decreasedue to the substitution. . . . .

Synthetic rubber for natural rubber World War II period.The choice to buy was not possible because of the loss of Asian sources duringthe war. Only 10 percent of the natural rubber supply was available.

Before the war, in 1940, the synthetic rubber process was in a semiexperimentalstate requiring new process development including learning curve experienceswith input materials and operating characteristics. Existing capacity was 5,000tons/yr. Six companies expected to have a combined capacity of 10,000 tons/yr by1941.

Financial estimates were $50 million for providing each 100,000 ton/yr ofcapacity with 12- to 18-month Ieadtimes.

Ultimate production desired was 877,000 long tons/yr including:40,000 tons neoprene rubber (raised later to 60,000)

132,000 tons butyl-rubber705,000 tons buna-S-rubber (raised later to 877,000)

In early 1943, there were 241,000 tons/yr. produced. In later 1943, there were850,000 tons/yr. produced. By early 1944, the program was complete with 50plants in operation.

Assuming $50 million/100,000 tons time approximately 1 million tons gives anestimate of total expansion cost of one-half billion dollars (1945 dollars).

Assuming 50 plants were in operation with approximately 1,000 employeesestimated per plant making $3,000 per year, then the annual operating costs wereprobably around $150 million per year.

Standard tire cost—Approximately the same to the buyer but he couldn’t get anatural rubber tire.

Total cost of the synthetic rubber—The Defense Plant Corporation provided thefinancing and the costs were subsidized making comparisons difficult.

Total cost to the customer—The cost is mixed because of the amount directlypaid does not include general taxes to the war effort.


Appendix B— Conservation in World War II: 1933-45 ● 113

short supply. It was a means to break the wastefuluse of critical materials and facilities. It was also ameans to protect the buying public against exces-sively low quality. Standardization included build-ing in the feature of interchangeability. As an ex-ample, through standardization, electrical indi-cating instruments could be transferred from onecombat vehicle to another with substantial in-creases in production and elimination of waste.

Simplification and standardization were not ef-fective early in the war because of the hurriedstartup production efforts. Around 1943, the pro-duction efforts smoothed sufficiently to allow therefinements necessary to simplify and standardize.The driving force for simplification and standard-ization was the taxing of nearly every type ofresource to the utmost, in order to meet the enor-mous war production goals and maximize facil-ities, manpower, and materials usage.

The Office of Civilian Requirements took theleadership in establishing minimum standards ofessential consumer goods and limiting productionof higher priced luxury goods or unnecessarymodels and sizes that were wasteful of scarce re-sources. Attention was given to: (a) the quantitiesand types of goods and services needed by civil-ians; (b) the materials required to produce them;and (c) the broad price ranges in which the bulk ofproduction would be sold.

Curtailment

In a war time mood, it was possible to have aprogram of direct orders from Washington for con-servation by curtailment. Curtailment involvedpreference rating orders, allocation orders, conser-vation orders, limitation orders, and inventorycontrol.

a. Preference Rating Orders. The preferencerating order was a priority rating given to manufac-turers whose products were vital to the defenseprogram, but entered only indirectly into militaryitems. Some examples of industries receivingblanket preference ratings were building materials,mining machinery, farm machinery, chemicals,and health and medical supplies. Military produc-tion had an A-1 rating. The preference rating sys-tem was difficult to administer for two basic rea-

sons: 1) quantities were not included in the ratingsand hence only A-1 really meant anything; and 2)the paper work was excessive. Over 7,000 piecesof mail came in each day, and applications arrivedat about twice the rate at which they could be proc-essed.

b. Allocations. Allocations were a mandatoryform of distribution. Manufacturers were directedto fill all defense orders in preference to non-defense uses. Rating provisions were included, butwent further toward actual allocation by requiringthat complete booking of orders be submitted oncea month from manufacturers. Nondefense useswere divided into categories, and each was alloweda quantity of metal equal to a percentage of anamount used for the same purpose before the war.Deliveries were contingent upon receipt of a swornstatement of inventory and a sworn statement thatno other order had been placed with another sup-plier for metal for the same purpose. The systemdid not work well because of the extensive paper-work involved.

The system later evolved into primarily focusingon three key materials: 1) carbon and alloy steel, 2)copper, and 3) aluminum.

Seven claimant agencies dealt directly with theWar Production Board: the War Department, theNavy Department, the Maritime Commission, theAircraft Scheduling Unit, the Office of Lend Lease,the Board of Economic Welfare, and the Office ofCivilian Supply. The claimants broke down theirrequirements by major programs and related themto monthly production schedules. Requirementsincluded not just raw materials, but also specificforms and shapes. The requirements were ear-marked as to programs for: production, construc-tion, and maintenance. The sum of the materialsrequirements of all the agencies were to make upthe total demand. On receiving their allotment,each claimant agency had to bring its programsand schedules into line with its allotment. Allot-ment numbers were then given to contractors andwere in effect a “certified check” to obtain materi-als needed.

c. Limitation Orders. These orders were cur-tailment directions to the civilian manufacturers tolimit the production or use of consumer goods and


services. There were two reasons for the curtail-ment: 1) to add pressure on industry to convert towar production, and 2) to conserve scarce materi-als. For example, a truck manufacturer would begiven assistance by the Government in gettingscarce material if the manufacturer would agree tocut back on the amount of civilian vehicles pro-ducd. A percent of the average annual output of aselected prewar period might be the quota set inthe limitation order. These limitation orders ap-plied not only to manufactured goods like vehiclesand refrigerators, but also applied to energy con-servation. Drought conditions, for example, re-duced the amount of hydroelectric power for alu-minum production. Limitation orders had to be is-sued to restrict electrical consumption.

d. Conservation Orders. These were ordersto eliminate scarce materials in products or toreduce the amount of such natural use in products.As an example, in order to conserve copper, theuse of copper in building construction was pro-hibited and specific articles containing copperwere given quotas based on 60 percent of previoususage before the war. In the case of tool steels,

substitution compelled the use of molybdenumalloying element in place of scarce tungsten alloy-ing element.

e. Inventory Control Orders. Inventory con-trol orders attempted to curb overbuying of materi-als and hoarding in anticipation of future scar-cities. Under the orders, suppliers were forbiddenknowingly to deliver any of the named metals con-sidered critical in amounts that would increase thecustomer’s inventory for any calendar month be-yond the quantity necessary. The basis for deter-mining quantities was the customer’s usual meth-od and rate of operation, and his required deliv-eries for products produced.

Salvage

The War Production Board had a Salvage Groupin its Conservation Division. The group conductedcampaigns for the salvage of cutting tools, cordage,twine, fuel, and paper. Salvage was encouraged forall critical materials. As the war began to winddown, the Salvage Division watched only tin andpaper, which were still in short supply.

IMPLEMENTATION OF PRODUCTIONAND CONSERVATION POLICIES

The implementation of war production and con-servation policies started slowly with limited con-tingency planning by advisers just before the war,building into a super operating agency during thewar, and finally, shrinking to a demobilizationagency for peacetime preparations. At its peak,6,000 to 18,000 people were directly engaged incarrying out the national materials policies for thewar effort. In 1939, a War Resources Board consist-ing of Government, industry, and labor advisers at-tempted to determine possible wartime needs.Through its efforts, a limited stockpile of materialwas accumulated to meet contingencies. In 1940,an attempt was made to create a stronger organiza-tion. Civilian isolationist pressures allowed only amodest change with the establishment of an Advi-sory Commission to the Council of National De-fense. This council had no single leader. Effortswere geared at converting segments of industry to

producing war goods. Resistance was met from in-dustry, labor, and local government, for example,when curtailment of civilian automobile produc-tion hurt brisk sales.

In 1941, a stronger organization was formedwith two leaders, one from industry and one fromlabor. The organization was called the Office ofProduction Management (OPM). Large orders fromEngland were coming into the United States forwar goods when the lend-lease program was initi-ated. The OPM had to balance production for thesewar goods against civilian requirements. Effortswere aimed at increasing productive capacities andbuilding the stockpile. This organization had theauthority to apply priorities for needed materialsand goods.

After the war broke out in late-1941, the Nationwas in total war effort mood, and a centralized

. .

Appendix B—Conservation in World War II: 1933-45 ● 115

superagency was established, called the War Pro- changed from a two front to a single front, pres-duction Board (WPB). By 1943, the superagency sures formed to eliminate WPB and reduce Gov-was in firm control, and production and conserva- ernment controls. The Civilian Production Admin-tion procedures were fairly well established except istration replaced WPB and carried out the transi-for conflicts concerning military estimates of tion task. The Civilian Production Administrationneeds. Most of the discussions in this paper cover was finally phased out in 1947.the activities and policies of WPB. After the war

IMPACTED STAKEHOLDERS AND THEIR RESPONSES

Table B-9 shows a selected listing of stakehold-ers and their problems in the World War II period.The conflict between the military and the civilianneeds was the most prominent of stakeholderproblems. The civilian sector lost out to the mili-tary as the war approached. When the war wasending, the civilian influence grew as evidencedby the isolationist pressures on Congress and thePresident to slow the shift to war production. Anexample of military influence was the strength ofthe Army-Navy Munitions Board in demandingthat its needs be given priorities during the heat ofthe war. An example of reemerging civilian influ-ence, as the war ended, was the pressures to letprice do the allocation rather than formal Govern-ment controls.

The second prominent stakeholder problem in-volved industry, which had to look to the super-agency for its needed materials and productquotas. Industry representatives were very vocalabout the delays, confusions, and contradictions ofthe new Government bureaucracy. Special interestgroups in the industrial sector would also push forgains that would put them in a favorable futurecompetitive position.

The third prominent stakeholder problem in-volved management and labor. Before the war,labor had just accomplished a great deal of gainsthrough labor legislation and confrontations withmanagement. Labor was afraid that gains would belost under wartime emergency actions. The Presi-

dent and Congress were pressured to include bothlabor and management people on the wartimeboards involved with materials policies.

The fourth prominent stakeholder problem in-volved the established executive agencies and thewartime superagency. Overlapping of functionsand power caused confusions and strained rela-tionships. As an example, both the Department ofthe Interior and the Federal Power Commissionwanted more say in the development of hydroelec-tric sources.

England and the allies were also importantstakeholders that placed demands on the waragency. Supplies had to be portioned out. Eng-land’s huge demands had to be reduced to a bal-ance with U.S. needs. Russia’s needs had to be por-tioned in the light of possible collapse of that na-tion. South America had to have sufficient goods toremain good neighbors. The War Production peo-ple in the United States did not always see theglobal picture of resources and alternatives andrisks. As an example, British Empire resourcesaround the world were still available in manycases and the English had to point this out to WPB.

Internal stakeholders emerged within WPB. Thefield organizations differed with the central organi-zation on how to work with industry. Often thefield groups were left confused without informa-tion or authority while having to meet the indus-trial user face to face.


Table B-9.–Examples of Impacted Stakeholders and Their Responses (World War 11)—.. — — ——

1942 . . . . . . . . .

1943, . . . . . . . .

1944 -45. . . . . . .

Stakeholders Nature or the problem Stakeholder responses Results. — —Time period-. . . . . . . . . -. . . . . - . .

1939 . . . . . . . . .

1940 . . . . . . . . .

1941, . . . . . .

Military v. civilians

Industry v. antitrust units


Industry v. Govt.production agency

U.S. v. foreign


Civilian v. ProductionAgency

Interest groups v.interest groups

Joint Chiefs of Staffv. WPB

Free enterprise v.Govt. controlinterests

Amount of military influencein production plans

Isolationist pressures

Firms reluctant to acceptdefense contracts involvingnegotiated

Consumers worried aboutnew priorities extended byCongress

Overlapping functions bynew agency

Aid to England, Russia,South America

Overlapping authorities

Appeals by civilians formaterials

Oil groups wanted rubberfrom oil, Agriculture wantedthe synthetic rubberfrom alcohol

Lack of production control

Pressures for allocationby price v. Governmentdetermination of need

industry delays

Consumer complaints

Pressures by industry forless confusion

U.S. concern over loss ofvital goods

Production Agency dis-turbed over free hand ofthe military

Civilian demand for demo-cratic treatment

Interest groups pressureon Congress

Inability of War ProductionBoard to validate militaryclaims for materials

Interagency arguments overconsumer quality and priceproblems

Hesitancy of President toestablish War ResourcesAdmin.

Attorney General promisesfreedom from prosecution

Vice President had to interveneto resolve conflicts

Delays, contradictions

Lend-lease program and closerforeign cooperation

Production agency reorgani-zation but problem persists

Appeals Board established

Synthetic rubber made fromalcohol

Paper committee set up butresolved. Dislocation inmaterials flow.

Trends to decontrol as warwound down. Reorganizationfavored less Governmentinvolvement


SUMMARY 1939945

In the World War II period, there were four basicconservation options: 1) substitution, 2) simplifica-tion and standardization, 3) curtailment, and 4) sal-vage. The major strategy for materials supply wasnot conservation, but increased production. Othermaterials supply strategies included stockpilingand world sourcing.

Strategic materials were those essential to de-fense, including aluminum for aircraft, copper forammunition, and carbon and alloy steel for weapens. Critical materials were those less difficult toprocure but essential to the Nation.

Substitution was the conservation option usedfirst and most frequently. Many of the substitutesused under crisis conditions were unsatisfactory.Users were eager to return to the original material

or product. Three prominent substitution methodswere: 1) complete materials change,reduce use of critical materials, anding the material for a given product.

Simplification and standardization

2) changes to3) downgrad-

was a conser-vation-option that came later in the war as produc-tion began to smooth out and consumer demandsfor better quality increased.

Curtailment was a conservation option involvingdirect orders. The orders included: 1) preferencerating orders, 2) allocation orders, 3) conservationorders, 4) limitation orders, and 5) inventory con-trol.

Salvage was the recycling conservation option.Recycling of steels became an important part of re-

Appendix B—Conservation in World War/l: 1933-45 117

ducing alloy element requirements later in thewar.

Implementation of production and conservationpolicies was accomplished during World War 11 bya new superagency called WPB. At its peak, 6,000to 18,000 people were directly engaged in the ac-tivity.

In addition to the production and conservationstrategies, two additional strategies were applied:1) stockpiling; and 2) world sourcing. Manganesewas stockpiled successfully with a l-year supplyavailable throughout the war. World sourcing ofminerals like chromium and tungsten ores pro-vided sufficient needed material to make subeco-

nomic mining in the United States questionable inspite of foreign military occupations and hazardoustransportation problems.

Two general observations can be made concern-ing materials conservation. First, availability ofmaterials shifted in a short period of time, for ex-ample, steel was scarce and lumber abundant andthen the reverse occurred within a couple of yearsas the war progressed. Policies had to be shiftedwith the mood of the people, for example, the peo-ple would accept controls of a “Rubber Czar” dur-ing the heat of the war, yet they objected to Gov-ernment intervention and leaned to private sectorallocation as the war was ending.

Appendix C.-- Conservation and Shortages: 1946-77

INTRODUCTION

In analyzing whether the occurrence of materialsshortages should affect the conservation of mate-rials, one needs to look at all types of materialsshortages, both general and specific. As most mate-rials experts will agree, there have only been twomajor materials shortages of any duration from theend of World War 11 through 1977: the Korean Warand the materials shortages occurring during1973-74 (see figure C-l). However, at the sametime, experts in both the public and private sectorsnote that interruptions in supply are constantly oc-curring on a short-term basis. As a result, indus-

tries are constantly having to adjust their supplydecisions regarding production needs, etc., due tosuch factors as cartels, environmental regulations,fiscal and monetary policies, capacity limitations,and domestic and international demand pressures.

As illustrative of the types of materials shortagesthat have occurred in the United States, the follow-ing discussion] examines the supply of sevenmetals from 1946 to 1977. The metals that are ex-amined include: aluminum, chromium, copper,nickel, scrap, steel, and tungsten.

SHORTAGES IN ALUMINUM SUPPLY

1. Aluminum Supply in 1950-53. Aluminumwas in tight supply during this period as a result ofthe Department of Defense (DOD) requirementsfor the Korean War. Restrictions were placed oncivilian use of aluminum until 1953, and the per-centage of aluminum use by the military increasedfrom 5 percent in 1950 to 28 percent in 1952.

During this period, the Government offered thealuminum industry financial incentives to increaseproduction capacity. Under this program, 613,000tons of new capacity were added between 1951and 1954.

2. Aluminum Supply in 1966. During late1965 and early 1966, aluminum supply was againin tight supply due to an increase in military ac-tivities as a result of the Vietnam War. The DODrequirements for aluminum increased from 2 per-cent in the second quarter of 1965 to 11 percent

IThe data for this appendix is based on the followingsources: (1) literature survey in the New York Times, WallStreet Journal, and American Metal Market newspapers; (2)working paper prepared by the Department of Commerce forthe National Commission on Supplies and Shortages on“Shortages and Surpluses in Selected Commodities–1976;”(3) report prepared by A. D. Little for the Department of Com-merce entitled, Material Shortage Study; and (4) hearings heldby the Senate Government Operations Committee, August1974, on Materials Shortages, The Industry Perception.

118

during the third period of 1966. A shortage situa-tion was avoided by the release of aluminum fromthe Government stockpile.

3. Aluminum Supply in 1972-74. During theperiod 1972-74, aluminum was reported as beingone of the major metal shortages. In the surveyundertaken by the Senate Government OperationsCommittee regarding the industry perceptions ofthe materials shortages, 74 companies indicatedthat they had experienced aluminum supply prob-lems. The survey indicated that aluminum millproducts, for example, sheet, plate, rod, bar, tube,extrusions, casting, foil, forgings, etc., were all inshort supply. The major problem the industrieswere facing was an increase in demand and a staticsupply of aluminum. An additional factor that af-fected production capacity was an electric powershortage which occurred in the Pacific Northwestin 1973. This shortage was responsible for reduc-ing aluminum production capacity by 9.5 percent.

Other factors that aggravated aluminum produc-tion were: (a) the difficulties encountered in obtain-ing aluminum scrap and alumina catalysts fromforeign markets (due to very high prices); (b) theunavailability of adequate metal and rolling capac-ity to produce aluminum foil; (c) the costs of com-pliance with environmental protection regulations;and (d) price controls.

Appendix C—Conservation and Shortages 1946-77 ● 119

Figure C-1.— Metal Shortages 1939-77

1 [ r

1955195619571958195919601961196219631964

1

- - l

196819691970 I I

7 ——————————— -19711972 -––--–––––––_–_–-- — ——— ——

- - - - ~:–~-~_:_:_:_ ——-— ——————————-———_—— — — —

1975

1976 --:-:-:–––––––––--1977

= Shortages, specific~ General shortage periods

SOURCE: OTA based on data from references cited in footnote 1 p 118

It was found that independent fabricators andsmaller customers were hit the hardest by the in-crease in prices, the shortages of selected types ofaluminum products, and the allocations institutedby some producers and suppliers.

4. Aluminum Supply in 1975-77. At thebeginning of 1975, the demand for aluminumdropped off due to the reduction of constructionjobs. In response to this reduction in demand,aluminum producers began to curb their output. Inaddition, the General Services Administration fur-ther aggravated the situation by releasing 15million lbs of aluminum from the Governmentstockpile. Thus, both the United States and Canadafurther limited their production of aluminum.

In late 1975 and early 1976, demand for alumi-

num was on the rise. The construction industrybegan to pick up, and the Ford Motor Companydecided to expand its output of cars. As a result ofthese two factors, demand and increased suppliesbegan to tighten (a result of reduced capacity dur-ing 1975). The tight aluminum supply situationwas eased to a certain degree by the recycling ofaluminum cans during 1976.

Articles indicate that while some spot shortagesof aluminum occurred on the east coast due to un-usually severe winter weather conditions, theoverall outlook for aluminum supplies remainedpositive. However, it is possible that due to capaci-ty limitations the production of aluminum mighthave been bottlenecked as economic recovery con-tinued.


SHORTAGES IN CHROMIUM SUPPLY

The United States is dependent on foreignsources for its chromium requirements, either aschromite or as ferrochromium. Up until 1968, theUnited States imported a large amount of chromite.However, in 1968, the United States shifted its im-portation of chromite to the importation of ferro-chrome. One reason for this shift was the UnitedNations sanction against Southern Rhodesia,which was the U.S. principal supplier of chromite.As a result, the United States shifted its depend-ence to the Soviet Union. While many companiesexpressed the fear that raw materials might be cutoff from either Rhodesia or Russia—thus limitingproduction—such a shortage did not materialize.

1. Copper Supplylustrates the periods of

SHORTAGES IN COPPER

in 1946-71. Table C-1 il-surplus and tight supply in

regard to copper and the major factors influencingthe supply from 1946-71.

Table C-1 .—Copper Supply

Period Incident—

1946-49 . .

1949 . . . . .1950-53 . .

1954-56 . .

1957-58 .

1959 . . . . .

1960-64 . .

1965-68 . .

1969-71 . .

Tight supply

Excess supplyRelative balance

Tight supply

Excess supply

Tight supply

Relative balance

Tight supply

Relative balance

At the same time, however, another type ofshortage did occur during 1972-74. This shortagerelated to the ability of the United States to produceferrochromium alloys at peak steel demand. Peakdemand was reached in 1973-74 and could bereached again in any type of national emergency.Thus, the shortage in regard to chromium resultsnot from the unavailability of the raw materials,but rather from the inability to convert the ore toferrochromium alloys.2

2The conversion problem stems from the availability ofelectric furnaces. Apparently, industry switched its electricfurnaces from the production of ferrochromium alloys tosilicon ferroalloys, which are more profitable.

Influencing Factors

Strong post-World War IIdemand and Governmentaction.

Weak demand.Strong demand and

production. Governmentprice controls.

Strong demand and copperstrike.

Weak demand due torecession.

Strike reduces availablesupply.

Demand and supplyincrease.

Strong demand. Govern-ment actions includingVietnam War and 8-monthcopper strike.

Supply able to keep pacewith demand.

2. Copperconsidered to

SUPPLY

Supply in 1972-74. Copper wasbe in short supply during 1972-74.

Sixty-two companies, as reported by the surveyundertaken by the Senate Government OperationsCommittee on industry perceptions, indicated sup-ply shortages. The reason most cited for the ap-parent shortage was an increase in world demandcombined with limited production capacity.

Other factors that were mentioned as producinga tight supply situation included: (a) the exporta-tion of domestic copper to foreign countries due tohigher prices overseas, (b) price controls, and (c)the possibility of formation of a copper cartel thatwould restrict the sale of copper to the UnitedStates.

3. Copper Supply in 1975-77. Demand forcopper began to fall during the first quarter of 1974and plunged in 1975 due to a worldwide recession.As a result, copper production was cut back andprices fell. However, by early 1977 an oversupplyof copper existed due to the very low level of de-mand.

SOURCE: Department of Commerce

Appendix C—Conservation and Shortages 1946-77 ● 121

SHORTAGES IN NICKEL SUPPLY

1. Nickel Supply in 1946-71. A primarynickel shortage was experienced in the UnitedStates from 1950 to 1957. This shortage was theresult of rationing by Canadian producers, fromwhich the United States imports about two-thirdsof its nickel. This rationing caused U.S. steel pro-ducers (nickel is used in the production of stainlesssteel) to revert to the production of low-nickelsteels. The Government continued to buy metal fordefense stockpiles and placed nickel under alloca-tion from August 15, 1951, to November 1953. Thenickel shortage was less severe in 1955 due to thediversion of nickel, scheduled to be stockpiled, tothe consumer sector.

In 1958, supply .exceeded demand and nickelproducers reduced operating capacity. As a result,the Government terminated all contracts for nickeldelivery, and DOD lifted all restrictions on the useof nickel.

During 1964, a nickel shortage wouldcurred, due to an increase in demand for

have oc-stainless

steel, except for the fact that the Governmentreleased nickel from the strategic stockpile.

2. Nickel Supply in 1972-74. Nickel opera-tions were fairly normal from 1972 through 1973.However, in early 1974, the nickel supply began totighten due to a record consumption. In responseto the tight market, many companies began to im-port additional nickel from the U.S.S.R. Additionalresponses to the demand/supply situation werethe allocation of metal by nickel producers and theresistance by nickel producers to accept defense-related orders from new customers. The major in-dustry that was adversely affected by the tightenedsupply of nickel during 1974 was the steel indus-try, that is, in the production of stainless steel.

3. Nickel Supply in 1975-77. Nickel was inexcess during this period due to weakened de-mand.

SHORTAGES IN SCRAP SUPPLY

Ferrous Scrap Supply From1946 to 1971

1. Ferrous Scrap Supply From 1946 to1949. Steel production steadily increased from1946 through 1948, thus increasing the demandfor ferrous scrap. By 1948, ferrous scrap was inshort supply. Also, price controls were lifted onNovember 10, 1946, thus allowing prices to rise.

A drive was begun by the Secretary of Com-merce in November 1948 to assist in increasingthe flow of scrap. The program was terminated inMay 1949 as a result of an improved scrap situa-tion. Also, imports of scrap during this periodhelped to ease overall scrap supply.

(b) Ferrous Scrap Supply During 1950-53.The demand for scrap increased during the KoreanWar due to increased steel production. Purchased

scrap receipts increased between 1949 and 1950by about 35 percent. Some spot shortages of scrapcaused the closing of some open-hearth furnaces inearly 1952. However, widespread closings of fur-naces were averted due to the National ProductionAuthority allocation program and by the mainte-nance of adequate flow of scrap from processors.

(c) Ferrous Scrap Supply During 1955-57.Ferrous scrap was in tight supply due to a recordincrease in the production of steel during thisperiod. Also, scrap demand was especially highdue to large export volumes.

(d) Ferrous Scrap Supply During 1969-70.Ferrous scrap again moved into a tight supplysituation due to an increase in steel production.While steel production started to ease in 1970, ex-ports increased the total scrap demand.


Scrap Supply From 1972 to 1974

(a) Ferrous Scrap. Tight supply of ferrousscrap is usually associated with a rising demand forsteel. When steel demand increases, so does theprice of scrap. Scrap prices are constantly chang-ing, up and down, in response to changes in de-mand. A second factor that affects the supply andprice of ferrous scrap is export demand. And in1973-74, a rapid increase in scrap exports tookplace.

During 1972 and early 1973, the steel industrybegan to recover from the severe recession of1971. The demand for domestic steel increaseddue to: (1) a lesser availability of foreign steel as aresult of the devaluation of the dollar,3 and (2) theoverall increase in worldwide demand. Thus, thedemand for U.S. domestic-steel and scrap sharplyincreased both domestically and internationallyduring this period.

Scrap prices began to increase and ranged from$48 per ton in January 1973 to $55 at the end ofJune, to a high of $81 per ton in November 1973.Also, scrap prices were not only high, but in some

cases the supply of scrap was limited due to the ex-portation of scrap to foreign markets. Some smallscrap companies were able to export their scrap forhigher profits due to the fact that they were not af-fected by the wage/price control constraints. A fur-ther factor that aggravated the supply of scrap wasthe shortage of gondola cars that are used to shipthe scrap to markets.

The situation was most serious in regard to theavailability of scrap on the west coast. This wasdue to the large amounts of scrap being exportedin proportion to the supply of scrap available forproduction.

(b) Aluminum Scrap. Aluminum scrap is theprime raw material used in the production of sec-ondary aluminum ingot.4 During this period, alu-minum scrap was in short supply due to a numberof factors: (1) as the demand for primary aluminumincreased, so did the demand for aluminum scrap;(2) more scrap was exported due to increasedworldwide demand and higher prices received forscrap on the foreign market; and (3) scrap that wasnormally available from fabricating plants of in-tegrated producers was no longer offered for sale.

3Due to the devaluation of the dollar, domestic steel was

priced about 25 to 35 percent lower than foreign steel.

4secondary ingot accounts for approximately 20 percent ofthe total U.S. aluminum supplied.

SHORTAGES IN STEEL SUPPLY

1. Steel Supply in 1946-71. The periodfollowing the end of World War 11 included periodsof peak steel demand with tight supply or short-ages of steel and periods of weak demand at thelow point of the business cycle, as well as the morenormal demand periods. Steel was in tight or shortsupply three times during 1946-71: (a) 1947-57when the European and Japanese steel industrieswere rebuilding, (b) 1959-60 caused by the 116-daysteel strike in the United States, and (c) 1969-70due to a worldwide increase in steel demand.

2. Steel Supply in 1972-74. During the period1972-74, one of the major shortages of materialsexperienced by industry was steel. Approximately106 companies indicated to the Senate Govern-ment Operations Committee in their survey on“Industry Perceptions of Materials Shortages” that

they were having difficulty obtaining steel, that is,stainless, castings, forgings, plate, sheet, and steelproducts.

Major factors to the tight demand/supply situa-tion included: (a) a lack of adequate steel produc-tion capacity to meet demand, (b) wage and pricecontrols, (c) a shortage of iron, and (d) an overallincrease in worldwide demand for steel.

3. Steel Supply in 1975-77. During the firstquarter of 1975, the demand for steel reached anall-time low. As a result, the production of steelwas cut back drastically, However, by the end of1975, the demand for steel began to improve, caus-ing spot shortages to occur in various steel prod-ucts. By the end of 1976, the demand/supply situa-tion began to balance out.

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Spot shortages also occurred in the availability quate fuel to operate the steel mills. However, asof steel products during the first quarter of 1977 weather conditions began to ease, so did the tight-due to severe weather conditions and a lack of ade- ened steel supply.

SHORTAGES IN TUNGSTEN SUPPLY

During the materialscompanies indicated toGovernment Operations

shortages of 1972-74, two the lack of capacity. Factors influencing capacity,the Senate Committee on as with other metals, were wage and price con-that tungsten was in short trols, environmental protection regulations, and

supply. The reason given for such a shortage was foreign competition.

SUMMARY 1946-77

From 1946 to 1977, interruptions in supply wereconstantly occurring in regard to the seven metalsanalyzed in this study. Factors affecting the supplyof such metals include: governmental regulations,capacity limitation, direct raw materials shortages,strikes, transportation disruptions, import limita-tions, unusual demand surges, and acts of nature,for example, severe weather conditions. While atight supply situation can result solely from thegeneral fluctuations of the business cycle, the oc-currence of supply disruptions adversely affectingindustry usually involves the combination of sev-eral factors, for example, unusual demand surgescombined with capacity limitations, and/or de-mand surges combined with direct raw materialsshortages.

Tight supply situations or actual disruptions insupply occurred as follows: 1) aluminum was intight/short supply in 1950-53, 1966, 1972-74, and

early 1976; 2) ferrochromium alloys were insuffi-cient to meet peak steel demand in 1973-74; 3)copper was in tight/short supply in 1946-48,1954-56, 1959, 1965-68, and 1972-74; 4) nickelwas in short supply during 1950-57, 1966, and1974; 5) supply shortages were apparent in thesupply of scrap in 1948, 1952, 1955-57, 1969, and1973-74; 6) steel was in short supply in 1947-57,1959-60, 1969-70, 1972-74, and the first quarter of1977; and 7) the supply of tungsten was inter-rupted during 1972-74.

The above facts indicate that tight/shortagesituations with regard to the seven metals con-stantly occurred over the past 38 years. Since thefactors that have combined to cause such supplydisruptions can reoccur, the probability of specificshortage conditions in the future is quite high.There is less certainty about the reoccurrence ofgeneral non-war-related shortages.

Appendix D.— Glossary of Terms

Corrosion and Wear Losses-Metal that is lostin the actual process of corrosion and wear(e.g., the gradual wearing down of saw bladesor drills due to cutting friction) in the utilizationof products; does not include metal lostbecause of a shortened product life due to cor-rosion and wear.

Dissipative Losses-Metal that is lost or con-sumed in use (e.g., used as catalysts and inpaints and fertilizers) or dispersed beyond prac-tical recovery (paper clips, nails, etc.).

Excess Metal in the Material Cycle—Materialin use at each step in the material cycle thatcould be eliminated through applications ofone or more conservation options.

Materials Cycle—The total flow of a materialfrom mining to its ultimate return to the Earth(e.g., in landfills). Includes several steps orstages: mining, ore processing, metal produc-tion, transportation and handling, productmanufacturing, distribution, use, storage, anddisposal.

Metal Conservation Options–A technique bywhich metals can be conserved (their usagereduced). Example include: substitution of onematerial for another, prevention of losses inmanufacture, making products smaller or withless metal, and recycling.

Metal Losses From the Materials Cycle—Re-sidual metal from each step in the material cy-cle; examples include: the metal remaining inthe ore that is not recovered, the slags ofbyproducts of metal processing, industrialscrap from product manufacture, materialdispersed in use (e.g., pencil lead), and post-consumer waste.

Metal Processing Losses—Metal that is lost inthe conversion of ore to metal, usually in theform of slags and dresses.

Metal Recycling-Recovering of metal from allsources including used products.

Milling and Concentrating Losses-Metal thatis not recovered from the mined ore and re-mains in the mine “tailings.”

Nonmetallic Losses-Metal that is lost when theore is not actually converted to metal but isused in nonmetallic applications, such asabrasives, refractories, insulation, andceramics.

Product Manufacturing Losses-Metal that islost in the form of industrial scrap remainingfrom the manufacture of products: examplesare chips, grinding dusts, unused metal, andproduct rejects.

Postconsumer Waste-Metal that is lost inhousehold wastes discarded into the municipalsolid waste stream.

Product After Market-The business of productrecycling, resale, and reuse.

Product Recycling-All forms of recycling in-cluding metal recycling, product or componentrework or remanufacture, or product or compo-nent reuse.

Product Rework or Remanufacture-Theprocess by which an old product is restored toa condition approaching or equaling its originalcondition by replacing worn parts, cleaning,and refinishing.

Substitution-The use of one material or metalin place of another in a product or application.

Transportation and Handling Losses—Orethat is lost in transit between the mine and themill.

Unrecovered (and Unknown) Material-Metalthat is lost due to lack of recycling; calculatedby subtracting the amount of scrap availablefrom obsolete products in a given year from theamount actually recycled. The amount of scrapavailable is based on the products manufac-tured in previous years and estimates of theirlifetimes.

Wastes-Metal losses or excess usage.

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Appendix E.— List of Working Papers

Working Papers contain the complete texts ofsix working papers prepared by contractors insupport of this assessment. The papers will beavailable in the near future from the NationalTechnical Information Service (NTIS), Departmentof Commerce, Springfield, Va. 22161. Please callOTA’s Public Affairs Office on (202) 224-8996 forNTIS availability and ordering information.

OTA staff have drawn heavily on these workingpapers for data and analyses. Their public releaseby OTA does not imply that OTA endorses the as-sumptions, data, findings, or conclusions of any ofthe papers or their authors. Neither OTA nor itscontractors endorse specific named products, proc-esses, or firms.

OTA wishes to acknowledge the considerable ef-forts of the staffs of Battelle Columbus Labora-tories, The George Washington University, Rens-selaer Polytechnic Institute, and Pugh RobertsAssociates, Inc., who cooperated in providing thevaluable data and analysis contained in the work-ing papers.

Working Paper OneA Preliminary Assessment of Options for

Reducing Wastage of Materials, Volume II-Aby Battelle Columbus Laboratories

o

Working Paper TwoFlows of Selected Materials, 1974, Volume II-Bby Battelle Columbus Laboratories

Working Paper ThreeIdentification and Evaluation of Metal

Conservation Approaches for Products,Volume II-C

by Rensselaer Polytechnic Institute

Working Paper FourAlternative Methods for Implementing a

Recycling Policy, Volume II-Dby Battelle Columbus Laboratories

Working Paper FiveAnalysis of the Impacts of Changing Product

Service Life and Material Content, VolumeII-E

by Pugh Roberts Associates, Inc.

Working Paper SixPreliminary Technology Assessment of

Materials Conservation Strategies, VolumeII-F

by The George Washington University Programof Policy Studies in Science and Technology

125