The peace dividend is becoming a green dividend as America's largest corporations discover enormous profits to be made cleaning up the environmental mess that their own technologies spawned.
Companies that once fought environmental regulation now battle pollution for profit. The fast-growing industry generated revenue of $132 billion last year--nearly the cost of the nation's savings and loan bailout if the entire bill were paid today.
Defense contractors are especially avid converts, as the post-Cold War military begins spending less on building weapons and more on environmental cleanup.
The Energy and Defense departments will spend $7.1 billion in fiscal 1992 alone to begin cleaning up lethal radiation, toxic waste and a plethora of other pollutants at nuclear weapons plants and military bases.
The staggering decontamination project spans more than 11,000 sites from Cape Cod to Guam, is expected to take 30 years and could cost $100 billion to $150 billion, according to Energy Department projections. Other estimates place the cost as high as $400 billion.
"It probably ranks up there with SDI," the Strategic Defense Initiative or "Star Wars" program, DOE spokesman Fred Lash said.
Eager to cash in, engineering and construction firms including Fluor Corp. in Irvine, Parsons Corp. in Pasadena and Bechtel Group Inc. in San Francisco, as well as defense contractors including Hughes Aircraft Corp., Martin Marietta Corp., Lockheed Corp. and Westinghouse Electric Corp., have formed divisions to apply industrial and military technology to environmental problems. All are angling for the lucrative government contracts.
"With the easing of tensions between East and West, we have begun to beat our swords into environmental plowshares," said Richard Golob, publisher of the Hazardous Waste Intelligence Report.
The military contracts have created something of a green fever. This month, the Energy Department announced that it was looking for its first "environmental restoration management contractor" to supervise cleanup of a closed uranium fuel plant in Fernald, Ohio. Inquiries came from 200 firms--20 times the usual number, Lash said.
Still, the federal government last year accounted for only a fraction of the national outlay for environmental products and services. Two other trends are driving the environment business into fast forward.
The first is the ongoing cleanup of Superfund sites. Most of the money spent to date has paid for engineering and feasibility studies, and work has been completed at only 64 of the 1,211 "priority sites" deemed dangerous enough to qualify for federal funds, according to the Environmental Protection Agency.
After up to a decade of work, many Superfund sites are finally ready for the real cleanup work to begin. Up to 30,000 more industrial areas are believed to be contaminated. The true cost of the industrial cleanups are unknown, but estimates range up to $100 billion.
The second factor is the need for industry to retool to comply with tougher environmental regulations, especially the Clean Air Act of 1990 and California's strict emissions controls. Oil refineries are under particular pressure to reduce their own emissions and to produce cleaner-burning gasolines.
Consumer products companies may buff their images by introducing biodegradable diapers, non-polluting barbecue lighter fluid and other "green" products.
But the industrial market is vastly bigger, spanning everything from air pollution scrubbers to landfill liners, waste water treatment plants to analytical laboratories, robots to handle nuclear waste and bacteria to digest solvents.
Despite the recession, the industry grew 11% last year to $132 billion, according to Grant Ferrier, publisher of the Environmental Business Journal in San Diego.
Though thousands of new environmental services companies sprang up and flourished in the 1980s, it is the Fortune 500 corporations that are best positioned to profit from the environmental business boom of the 1990s, industry analysts say.
That is because they have longtime relationships with the military and with industries that need environmental help and experience in managing multimillion-dollar engineering projects that Pentagon and Superfund cleanups will require. Perhaps most important, these companies are rich enough to assume the legal risks associated with hazardous waste cleanups.
"DOE and DOD and many of the large industrial companies want a contractor that can help them with the full range of environmental problems, so they have one-stop shopping," Golob said.
Some companies are making money cleaning up toxic substances they themselves once manufactured. Others are disposing of nuclear waste for weapons systems they engineered. Still others are retrofitting factories--designed when environmental standards were more lax--to cut down on pollutants.
"It's ironic, because they caused the problem and now they're cleaning it up," Ferrier said. "But that's really how it should be."