Thank you, Councillor Hayne.
Thank you, Mr. Chair and committee members. I'm Rob Costanzo. I'm the deputy manager of operations for the City of Surrey.
You have in front of you a PowerPoint presentation. I'm going to reference each slide as I go through it.
Slide 4 illustrates the high-level four-phase approach the city engaged to implement its system. I'm going to speak to each of those phases in turn.
Slide 5 shows how one of the initial studies we engaged in was to determine whether the city had enough feedstock within its own curbside material to justify the implementation of a biogas facility.
To that end we looked very closely at the garbage collected from residential waste, and we conducted a series of seasonal composition studies to determine how much of that garbage comprised organic material such as food waste and kitchen scraps. We found on a consistent basis that approximately 65% of that material comprised organic waste. So on that basis, we determined that would be enough to move forward into a further study to determine the size of facility we would need to develop and what additional materials would need to be brought into that facility to increase the capacity. In our case, we were looking at a facility that would process both residential waste from the Surrey residential curbside program and also waste from the institutional, commercial, and industrial sectors.
If you turn to slide 6, you'll see that one of the challenges we had back in 2010 when we initiated our study was that there were very few municipalities in Canada that had initiated or engaged in waste collection using compressed natural gas garbage trucks. The industry traditionally has used diesel vehicles, and there seemed to be a movement in the United States, particularly within the waste management industry, to leverage the CNG vehicles, particularly now when compressed natural gas costs are very low relative to diesel costs.
We found that globally the uptake is significant in countries outside of North America. The United States, for example, as you see in slide six, has possibly 110,000 CNG vehicles, which represents only 1% of all CNG vehicles. Canada is much lower at 12,000 vehicles. But if you look at slide 7, we have found that the uptake in the last six to seven years has been quite significant. So we know that the uptake is growing substantially. Waste collection transfer vehicles account for about 12% of total vehicular natural gas use at present, and they represent a fast-growing segment in the natural gas vehicle industry.
The International Association for Natural Gas Vehicles estimates that there will be more than 50 million natural gas vehicles worldwide, or about 9% of the world transportation fleets, within the next 10 years.
On that basis we felt our risk was relatively low and through additional market sounding we found that the industry was ready to move in that direction but they were really waiting for a municipality to move forward with this kind of requirement. The City of Surrey mandated natural gas vehicles. Otherwise there are very few government incentives to move in that direction for a private entity.
Slide 8 simply reflects one of the environmental benefits of the CNG vehicle, which is that it produces 23% less in carbon emissions and 90% less in particulate emissions than does a vehicle powered by diesel.
Slide 9 describes the approach we took to maximize output from organic waste. We implemented a system two years ago, which we piloted over the course of a year and a half, to determine how we could leverage and maximize that organic waste output. We engaged a three-cart system. Residents are required to place organic waste in one cart, and this waste is collected every week. Their garbage and recycling carts are emptied on a bi-weekly basis. It's forcing residents to remove the odorous waste on a weekly basis.
Through that process, we found that after a year, that waste, the garbage tonnage, dropped by approximately 50%. Conversely we saw a significant increase on the organic waste side. There was almost an equal increase on the organic waste side.
More important is customer satisfaction. The customer's acceptance of this sort of program is very high at 90%. On this basis, we initiated a request for proposal in 2011 and awarded that request for proposal in late 2011 to BFI Canada, or Progressive Waste Solutions, and initiated our program on October 1, 2012. It was four months ago that we initiated the program city-wide to 100,000 households across the city.
Slide 10 talks at a very high level about some of the benefits we found through our process.
The process we engaged not only has economic benefits, on which I'll get into more detail further on in the presentation, but it also has significant financial benefits. Moving toward the CNG system and the type of system that the city engaged resulted in a $3 million a year savings for the city. Those savings were based on the change in waste collection frequency, having a fully automated collection system, fuel savings with natural gas approximately 50% lower than diesel costs, and lower disposal costs associated with organic waste.
Currently in this region, the cost of garbage disposal is very high. It's at $107 a tonne and the region will increase that rate to $180 a tonne by 2015. Organic waste disposal is at less than $50 a tonne.
Slide 11 shows that already in the first three months of the program, from October 1 to December 31, we realized a waste diversion increase from approximately 15% to almost 70%. We've almost met our goal. We anticipated that it was going to take at least two years to reach that 70% diversion, but we're already there.
As far as public consent goes, there's a very high desire to move toward greater waste diversion, and we were able to gauge that through significant public consultation. We're seeing that success now at curbside. This means the facility we're now proposing to develop will already have a significant amount of material ready to be delivered once it's developed.