Capital structure and asset utilization: the case of resource intensive industries

This research studies the relationship between the capital structure of a firm and its asset utilization rate in resource intensive industries. We study this issue from both private and public policy perspectives. From a private perspective, it's conceivable that a positive relationship may exist because a company is trying to increase its use of debt to effect a more efficient utilization of its assets. However, from a public policy perspective, finding a positive relationship between asset utilization and debt levels in natural resource sensitive industries may signal a sub-optimal exploitation of natural resources when debt levels rise. This research examines measures of leverage and asset utilization in firms from the mining, oil, and timber industries to determine whether the behavior alleged in the PALCO/MAXXAM case (an increased cutting rate to pay off junk bond financing) has been observed more systematically. We observe a positive relationship between leverage and asset utilization in all three industries when leverage is calculated using book value measures. When market value measures are used, this positive relationship no longer holds in the mining industry. Possible explanations for these results are offered.     

Linkages to manufacturing in the resource sector: The case of the Angolan oil and gas industry

This paper discusses the current state and future prospects of backward production linkages to the manufacturing sector in the Angolan oil and gas industry. The paper finds that local value-added links are currently limited to labour and to a lesser degree in basic services. However, there is a realistic and strategic potential for local manufacturing linkages to expand in the oilfield services sector of the industry, which in turn can stimulate industrial development. For this to be achieved, the factors that are currently constraining the expansion and deepening of linkages have to be addressed, namely, a weak local content strategy, a weak local skills and industrial base and the integration of industrial and oil sector policies.     

Regional resource management techniques: The case of Colorado oil shale development

Regions under stress from rapid development require comprehensive planning and management tools, capable of identifying the pace, location and magnitude of growth and assessing social, economic and environmental impacts. Northwest Colorado, endowed with massive rich deposits of oil shale, went through a boom-bust cycle of growth during the early 1980s as US interest in synthetic fuels peaked and then rapidly declined. An innovative resource information system has been developed which has assisted the region in anticipating growth and modifying its consequences. This article reviews the organization and development of the Colorado Resource Information System (CRIS) and evaluates its role and impact in the decisionmaking process. Experience shows that regions which develop and maintain planning and information tools can have significant influence on economic development.     

State interventions and natural resource management: A study on social interfaces in a riverine fisheries setting in Kerala, India

This article attempts to analyse the social interface between formal institutions and local fishing communities along the Pamba‐Achankovil River Basin in Kerala, India. It examines primarily the nature of the relationship between state agencies and traditional fishing communities in the context of (i) enforcing certain formal regulations of resource use and (ii) implementing resource enhancement programmes. The article also analyses the nature of social interfaces that emerge when local level formal organizations, such as cooperatives and gram panchayats, take up resource management or community welfare schemes on behalf of the traditional fisherfolk in the study region. Social interfaces can be understood in terms of social processes, such as cooperation, accommodation and conflicts between various actors involved in fisheries management. The article is based on ethnographic fieldwork. Interview guides and focus group discussions were the primary tools of data collection. The findings show that the relationships between formal institutions and traditional riverine fishing communities lack mutual trust. Conflicts between fishing communities and state agencies emerge when the formal institutions threaten or contradict those elements of local culture that sustain livelihood needs. Conflicts and discontent with a particular formal institution can also lead to the modification or violation of coexisting institutional arrangements.     

An approach to integrated ecological assessment of resource condition: the Mid-Atlantic estuaries as a case study

The complex and interconnected nature of ecological systems often makes it difficult to understand and prevent multiresource, multistressor problems. This article describes a process to assess ecological condition at regional scales. The article also describes how the approach was applied to the Mid-Atlantic estuaries, where it focused on characterizing the current state of the environment rather than on predicting future effects from humans. The necessity for iteration during the exercise showed how important it was to identify the purpose of the assessment and its users, that appropriate, consistent data are lacking for large-scale assessments, and that it remains a challenge to communicate succinctly the results of such an assessment.     

Defining an ecological baseline for restoration and natural resource damage assessment of contaminated sites: The case of the Department of Energy

Retrospective ecological risk assessment, restoration, natural resource damage assessment (NRDA) and managing ecosystems all require having a baseline. This policy and practice paper explores the factors that influence baseline selection, and it is suggested that ecological resources would best be served by: (1) integrating NRDA considerations into both future land-use planning and remediation/restoration; (2) selecting a baseline for NRDA that approximates the land-use conditions at the time of occupation (or a preferred ecosystem); and (3) integrating both the positive and negative aspects of industrial occupation into restoration decisions, baseline selection and NRDA. Under the Comprehensive Environmental Response and Compensation and Liability Act (CERCLA), natural resource damages are assessed for injuries incurred since 1980 due to releases, but the release itself may have occurred before 1980. The paper uses the Department of Energy as a case study to examine NRDA and the management of ecosystems. Releases occurred at many DOE sites from the 1950s to the 1980s during nuclear bomb production. It is suggested that the DOE has been responsible not only for injuries to natural resources that occurred as a result of releases, but for significant ecosystem recovery since DOE occupation, because some lands were previously farmed or industrialized. Natural resource injuries due to releases occurred simultaneously with ecosystem recovery that resulted from DOE occupation. While the 1980 date is codified in CERCLA law as the time after which damages can be assessed, baseline can be defined as the conditions the natural resources would have been in today, but for the release of the hazardous substance. It is also suggested that NRDA considerations should be incorporated into the remediation and restoration process at DOE sites, thereby negating the need for formal NRDA following restoration, and reducing the final NRDA costs.     

Socioeconomic evaluation of the impact of natural resource stressors on human-use services in the Great Lakes environment: A Lake Michigan case study

The Great Lakes watershed is home to over 40 million people (Canadian and U.S.) who depend on a healthy Great Lakes ecosystem for economic, societal, and personal vitality. The challenge to policymakers and the public is to balance economic benefits with the need to conserve and replenish regional natural resources in a manner that ensures long term prosperity. Nine critical broad-spectrum stressors of ecological services are identified, which include pollution and contamination, agricultural erosion, non-native species, degraded recreational resources, loss of wetlands habitat, climate change, risk of clean water shortage, vanishing sand dunes, and population overcrowding. Many of these stressors overlap. For example, mining activities alone can create stress in at least five of these categories. The focus groups were conducted to examine the public’s awareness of, concern with, and willingness to expend resources on these stressors. This helped generate a grouping of stressors that the public is especially concerned about, those they care little about, and everything else in between. Stressors that the respondents have direct contact with tend to be the most important to them. This approach of using focus groups is a critical first step in helping natural resource managers such as Trustees and NGOs understand what subsequent steps to take and develop policy measures that are of most interest and value to the public. Skipping or glossing over this key first task could lead to difficulties with respect to survey design and model development in a non-market valuation study. The focus group results show that concern related to pollution and contamination is much higher than for any of the others. It is thus clear that outreach programs may be necessary to educate the public about the severity of some low-ranked stressors including climate change.     

Bioethanol from waste: Life cycle estimation of the greenhouse gas saving potential

This paper considers two alternative feedstocks for bioethanol production, both derived from household waste—Refuse Derived Fuel (RDF) and Biodegradable Municipal Waste (BMW). Life Cycle Assessment (LCA) has been carried out to estimate the GHG emissions from bioethanol using these two feedstocks. An integrated waste management system has been considered, taking into account recycling of materials and production of bioethanol in a combined gasification/bio-catalytic process. For the functional unit defined as the ‘total amount of waste treated in the integrated waste management system’, the best option is to produce bioethanol from RDF—this saves up to 196 kg CO₂ equiv. per tonne of MSW, compared to the current waste management practice in the UK.However, if the functional unit is defined as ‘MJ of fuel equiv.’ and bioethanol is compared with petrol on an equivalent energy basis, the results show that bioethanol from RDF offers no saving of GHG emissions compared to petrol. For example, for a typical biogenic carbon content in RDF of around 60%, the life cycle GHG emissions from bioethanol are 87 g CO₂ equiv./MJ while for petrol they are 85 g CO₂ equiv./MJ. On the other hand, bioethanol from BMW offers a significant GHG saving potential over petrol. For a biogenic carbon content of 95%, the life cycle GHG emissions from bioethanol are 6.1 g CO₂ equiv./MJ which represents a saving of 92.5% compared to petrol. In comparison, bioethanol from UK wheat saves 28% of GHG while that from Brazilian sugar cane – the best performing bioethanol with respect to GHG emissions – saves 70%. If the biogenic carbon of the BMW feedstock exceeds 97%, the bioethanol system becomes a carbon sequester. For instance, if waste paper with the biogenic carbon content of almost 100% and a calorific value of 18 MJ/kg is converted into bioethanol, a saving of 107% compared to petrol could be achieved. Compared to paper recycling, converting waste paper into bioethanol saves 460 kg CO₂ equiv./t waste paper or eight times more than recycling.     

Uncertainty in optimal pollution levels: modelling and evaluating the benefit area

This paper identifies the optimal pollution level under the assumptions of linear, quadratic and exponential damage and abatement cost functions and investigates analytically the certain restrictions that the existence of this optimal level requires. The evaluation of the benefit area is discussed and the mathematical formulation provides the appropriate methods for that to be calculated. The positive, at least from a theoretical point of view, is that both the quadratic and the exponential case obey the same form for evaluating the benefit area. These benefit area estimations can be used as indexes between different rival policies, and depending on the environmental problem, the policy that produces the maximum area will be the beneficial policy.     

Co-digestion of pig manure and glycerine: experimental and modelling study

It is a fact that the rapid increase of biodiesel production over the last years has resulted in the generation of large and constant amounts of glycerine, which is causing an oversupply problem. Since glycerine is a biodegradable organic compound exempt of nitrogen, it can be applied as a co-substrate in the anaerobic digestion process of pig manure (PM). In order to analyze the feasibility of a mixture of pig manure and glycerine in anaerobic processes and to define the effect originated by the nitrogen limitation when large amounts of glycerine are added, several biodegradability batch tests were performed with different mixtures. These were named as: 100% PM, 80% PM, 60% PM, 40% PM and 20% PM, in pig manure wet weight-basis. Furthermore, a modified model based on anaerobic digestion model no.1 (ADM1) was used to simulate the methane production profiles for the mixtures tested. Specifically, both experimental and model results show the power of the co-digestion technology. In particular, the mixture of 80% PM produced the highest methane production with 215 mL CH(4) g(-1) COD, almost 125% more methane than when pig manure was mono-digested. In contrast, the one with 20% PM was clearly inhibited by the volatile fatty acid due to the low nitrogen concentration of the mixture. In addition, the specific methane production predicted by the model was in good agreement with the experimental results, although in some samples the shape of the profiles did not match perfectly. Moreover, the modified ADM1 appears to be a useful tool to predict the methane production and the limitations related to the lack/excess of nitrogen during the co-digestion process of pig manure and glycerine.     

Influence of farm resource endowment on possibilities for sustainable development: a case study for vegetable farms in South Uruguay

In different parts of the world, there is an urgent need for redesigning and innovating farming systems. Such a process may be supported by model-based explorations that enable ex-ante evaluation of a broad range of alternatives. Since a variety of viable patterns of farm development exists related to farm resource endowment and farmer's strategy, model-based explorations should be able to capture the existing variation in resource endowment and strategies in order to have impact on strategic farm management. In this paper, we present an overview of the model-based explorative method based on the MILP model Farm Images, applied to explore options for sustainable development of vegetable farms in Canelón Grande, Uruguay. The method is used to gain insight into the impact of current farm resource endowment on the possibilities for sustainable development and on the resource use efficiency at farm scale. We maximized farm income for 128 different farm types in an environment-oriented scenario and in an income-oriented scenario. Farm types were defined by combining 4 farm sizes, 2 labor endowments, 4 irrigation endowments, 2 soil quality combinations and 2 mechanization levels. The results demonstrate a strong impact of farm resource endowment on possibilities for sustainable development, as well as synergy between labor, land and irrigated area on resource-use efficiency at farm scale. Farms with 10ha of land or less, representing 47% of the farms in the Canelón Grande region, could only achieve a family income higher than the average income of Uruguayan families when the irrigated area was ca. 40% of the farm area. The achievement of environmental targets was less costly in terms of income on farms with a low rather than high labor availability per unit area and on farms with irrigation facilities.     

Taxing mineral resource projects : Papua New Guinea, Indonesia and the Philippines

Within the context of a case study of three Asia/Pacific countries' mineral taxation regimes, this article examines the impact of individual fiscal instrucments, and the total fiscal package, on investor risk perceptions, investor returns and government receipts. It shows that under conditions of uncertainty and risk aversion on the part of investors, significant gains in expected government revenues can be achieved without seriously affecting the investors' ex-ante assessments of projects by a judicious selection and mix of fiscal instruments.     

Assessing the impact of fisheries co-management interventions in developing countries: a meta-analysis

Co-management is now established as a mainstream approach to small-scale fisheries management across the developing world. A comprehensive review of 204 potential cases reveals a lack of impact assessments of fisheries co-management. This study reports on a meta-analysis of the impact of fisheries co-management in developing countries in 90 sites across 29 case-studies. The top five most frequently measured process indicators are participation, influence, rule compliance, control over resources, and conflict. The top five most frequently measured outcome indicators are access to resources, resource well-being, fishery yield, household well-being, and household income. To deal with the diversity of the 52 indicators measured and the different ways these data are collected and analysed, we apply a coding system to capture change over time. The results of the meta-analysis suggest that, overall fisheries co-management delivers benefits to end-users through improvements in key process and outcome indicators. However, the dataset as a whole is constituted primarily of data from the Philippines. When we exclude this body of work, few generalisations can be made about the impact of fisheries co-management. The lack of comparative data suitable for impact assessment and the difficulties in comparing data and generalising across countries and regions reiterates calls in other fields for more systematic approaches to understanding and evaluating governance frameworks.     

The NICE-Whyco technologies partnership: saving energy, dollars, and the environment in the metal plating industry

In partnership with the US Department of Energy’s Office of Industrial Technology, Whyco Technologies, Inc., has developed an innovative perforated plating barrel used in the plating of metal parts. This new technology employs a thin-walled construction, differing from the traditional thick-wall design required to provide adequate structural integrity. The thicker walls lowered the efficiency of transferring plating solution into and out of the barrel and diminished the electrical current pushed through the holes and onto the parts being plated. By machining pockets out of the traditional thick-walled perforated structure, Whyco produced a ‘honeycomb’ of staggered cells, allowing for the greatest number of holes per open area while maintaining structural integrity. Hydrodynamic pumping occurs during barrel rotation to create greater solution transfer than in traditional barrels. The Whyco barrel has higher current density plating, which leads to faster plating cycles, reduced bath concentration, and better plating of difficult chemistries such as in alloys. This new technology has helped the company reduce energy use by 16%, eliminate more than 480 tons/year of solid waste, and reduce wastewater by more than 17 000 gallons/day. The resulting cost savings total more than $500 000 annually. The company has manufactured and sold more than 275 of these barrels to other electroplating companies that are reporting up to a 40% increase in plating productivity and similar energy and environmental impacts.     

Reverse logistics in Malaysia: Investigating the effect of green product design and resource commitment

Reverse logistics and green product design are green supply chain management practices that are being implemented to demonstrate firm's commitment to environmental sustainability. The generation of waste from electrical and electronic equipments prompts the viability of product recovery to salvage invested material and energy. Selection of various reverse logistics product disposition options relies on products’ residual value and the accessibility of reusable content for re-entry in forward supply chain. This study explores the effect of green product design and resource commitment on reverse logistics product disposition by employing empirical analysis on 89 returned mail survey received from ISO14001 certified electrical and electronic manufacturing firms in Malaysia. The results indicated that design for disassembly is necessary to harvest valuable inventories from every product disposition options except of disposal whereas design for environment and commitment of resources have slight influence on repair and disposal activities. As the evidences show that green product design and reverse logistics product disposition are interrelated, firms ought to undertake environmentally proactive approaches to generate benefits from resources that are undeservingly discarded as landfill waste.     

Integrating long-term stewardship goals into the remediation process: natural resource damages and the Department of Energy

The United States and other developed countries are faced with restoring and managing degraded ecosystems. Evaluations of the degradation of ecological resources can be used for determining ecological risk, making remediation or restoration decisions, aiding stakeholders with future land use decisions, and assessing natural resource damages. Department of Energy (DOE) lands provide a useful case study for examining degradation of ecological resources in light of past or present land uses and natural resource damage assessment (NRDA). We suggest that past site history should be incorporated into the cleanup and restoration phase to reduce the ultimate NRDA costs, and hasten resource recovery. The lands that DOE purchased over 50 years ago ranged from relatively undisturbed to heavily impacted farmland, and the impact that occurred from DOE occupation varies from regeneration of natural ecosystems (benefits) to increased exposure to several stressors (negative effects). During the time of the DOE releases, other changes occurred on the lands, including recovery from the disturbance effects of farming, grazing, and residential occupation, and the cessation of human disturbance. Thus, the injury to natural resources that occurred as a result of chemical and radiological releases occurred on top of recovery of already degraded systems. Both spatial (size and dispersion of patch types) and temporal (past/present/future land use and ecological condition) components are critical aspects of resource evaluation, restoration, and NRDA. For many DOE sites, integrating natural resource restoration with remediation to reduce or eliminate the need for NRDA could be a win-win situation for both responsible parties and natural resource trustees by eliminating costly NRDAs by both sides, and by restoring natural resources to a level that satisfies the trustees, while being cost-effective for the responsible parties. It requires integration of remediation, restoration, and end-state planning to a greater degree than is currently done at most DOE sites.     

Adsorption of nutrients and cadmium by different minerals: experimental studies and modelling

This work analyses cadmium sorption by natural vermiculite, zeolite, and pumice, which have been recently considered for their potential use in remediation of contaminated soils. Batch experiments were performed to investigate the interactions between the mineral surfaces and the main nutritive cations of Hoagland solution. In addition to their ameliorative effect of reducing metal mobility, these minerals are able to interact to different extents with various components of the nutrient solution and can change the availability of essential nutrients in solution. Therefore, the minerals were also exposed to a range of cadmium doses to compare their different affinities for this element and to analyse the cadmium–nutrient interactions. The results showed that the nutrient solution composition was significantly modified by contact with zeolite and vermiculite, and to a minor extent with pumice. The ionic equilibrium between the solid and aqueous phases was attained at several time points depending on the cation. Ammonium and potassium ions were almost entirely absorbed by zeolite, while in vermiculite endogenous magnesium ions were exchanged with the liquid phase calcium ions. The amount of cadmium adsorbed on mineral surfaces equilibrated with the nutrient solution showed the following sequence zeolite>vermiculite>pumice, and the cation concentrations of the fluid phase were sensitive to cadmium addition.     

Uranium resource appraisal: Past trends and outlook for adequacy of supply

As uranium has practically no other industrial uses besides electricity generation, demand is determined by the requirements and stockpiling policies of electric utilities. The uranium market has experienced strong fluctuations and is currently affected by the reductions in nuclear forecasts resulting from the slowdown in electricity demand. Analysing supply/demand indicators proves, however, that in retrospect the development has been relatively smooth and it appears that oversupply is more a consequence of overly optimistic short-term expectations. In the future, especially in the long term, nuclear power policies continue to be concerned with striking a proper balance between increasing production capability and development of new reactor technologies which would be less dependent on the availability of uranium. A bounding scenario approach is applied in this article to the assessment of adequacy of supply under varying assumptions on the total installed nuclear capacity, available resource base and attainable production capability.     

Environmental resource footprinting of drug manufacturing: Effects of scale-up and tablet dosage

The formulation and scale-up of batch processes is one of the major challenges in the development of pharmaceutical dosage forms and at the same time a significant resource demanding process which is generally overlooked in environmental sustainability assessments. First, this paper proposes general trends in the experience curve of cumulative resource consumption of pharmaceutical tablet manufacturing of PREZISTA^® 800 mg through wet granulation (WG) at four consecutive scales in both R&D and manufacturing environments (resp. WG1 = 1 kg/h, WG5 = 5 kg/h, WG30 = 30 kg/h and WG240 = 240 kg/h). Second, the authors aim at evaluating the environmental impact from a life cycle perspective of a daily consumption of PREZISTA^® 2× 400 mg tablets versus the bioequivalent PREZISTA^® 800 mg tablet which was launched to enhance patient compliance. Environmental sustainability assessment was conducted at three different system boundaries, which enables identification, localization and eventually reduction of burdens, in this case natural resource extraction. Exergy Analysis (EA) was used at process level (α) and plant level (β) while a cradle-to-gate Exergetic Life Cycle Assessment (ELCA) was conducted at the overall industrial level (γ) by means of the CEENE method (Cumulative Exergy Extraction from the Natural Environment). Life cycle stages taken into account are Active Pharmaceutical Ingredient (API) production, Drug Product (DP) production and Packaging. At process level (α), the total resource extraction for the manufacturing of one daily dose of PREZISTA^® (800 mg tablet) amounted up to 0.44 MJ_ex at the smallest scale (WG1) while this amount proved to be reduced by 58%, 79% and 83% at WG5, WG30 and WG240 respectively. Expanding the boundaries to the overall industrial level (γ) reveals that the main resource demand is at the production of the Active Pharmaceutical Ingredient (API), excipients, packaging materials and cleaning media used in DP production. At the largest scale (WG240) the use of cleaning media during DP production contributes considerably less to the total resource extraction. Overall, the effect of scale-up and learning on resource consumption during DP production showed to possess a power-law experience curve y = 2.40 * x^−0.57 when shifting from WG1 (smallest lab scale) to WG240 (industrial manufacturing). Tablet dosage (2× 400 mg versus 1× 800 mg) did not significantly affect the absolute environmental burden. However, the relative contribution of resource categories did change due to the different production technology. It could be concluded that in meeting social and economic demands by launching the PREZISTA^® 800 mg tablet, no trade-off in environmental burden occurred. On the long term, future research should strive to take into account R&D processes and all services related to pipeline activities taking place prior to market launch and eventually to allocate impacts to the final product.