APRIL 2010

How the EPA “Tailoring Rule” may affect landfills nationwideClick to Enlarge - A waste industry source believes the new EPA rule will affect twice as many landfills as those projected by EPA.
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The Environmental Protection Agency’s (EPA) proposed Tailoring Rule, developed to minimize the impact of greenhouse gases (GHG) from small sources, is leaving public and private landfill operators in a state of confusion and uncertainty over what it may mean to the already challenging task of operating a landfill under increasingly burdensome regulations in a weak economy.

On February 22, EPA administrator Lisa Jackson retreated from the original Tailoring Rule implementation date and announced that she expects to weaken its proposed standards from stationary sources and delay implementation until 2011. It was originally scheduled to go into effect this March and would have triggered both New Source Review, under EPA’s Prevention of Significant Deterioration (PSD) and Non-attainment New Source Review programs, and operating permit requirements mandated under Title V of the Clean Air Act (CAA) for stationary sources emitting greenhouse gases (GHG) including landfills. Her action was largely in response to a letter from eight Democratic senators with strong ties to coal, oil, and industrial polluters, obviously reflecting their constituent opposition.

Many in the waste disposal industry are breathing a sigh of relief at the delay and weakened provisions, among them Ed Repa, director of environmental programs for the Environmental Industry Association (EIA). EIA represents over 2,500 private company members in the waste management industry. “Generally our membership has not been very happy about this and I think a lot of them are hoping that somebody preempts it all. There may be some preemption in Congress that takes care of it. We questioned EPA’s authority to divide the world into two pieces, the big guys versus the little guys. According to the Clean Air Act everybody’s in. I’m sure there are going to be legal challenges.”

A little background on how the Tailoring Rule came to be: Three years ago the U.S. Supreme Court held that greenhouse gases are air pollutants subject to regulation under the CAA. The ruling gave the EPA three options: find endangerment, don’t find endangerment or review the science.

Last September, EPA announced its solution, which immediately became highly controversial – the proposed Tailoring Rule that was to regulate GHG from light-duty vehicles. This action would then trigger the requirement for control of GHG from all emitting sources and focused on large facilities emitting over 25,000 tons of GHG per year. EPA estimated that approximately 14,000 large sources would need to obtain operating permits that demonstrate they are using the best practices and technologies to minimize GHG emissions. Most are large stationary sources such as power plants, refineries and cement production facilities. About 3,000 of these sources would be newly subject to CAA operating permit requirements, the majority being solid waste landfills emitting methane gas.

Many disagree as to how many landfills would actually be affected. Mike Niemann, landfill gas program technical director for Environmental Information Logistics, a consultant on EPA regulations to Waste Management, Republic Services, Veolia and several municipal clients, sees the numbers much differently than the EPA. “I estimate that upwards of 5,000 landfills will be affected. EPA estimates that only about 2,700 will be impacted. But from everything I’ve looked at and all the sites I am aware of I don’t see that as realistic.”

Lisa Jackson’s delay in implementing the proposed rule came with other concessions. She expects to take action to ensure that no stationary source will be required to get a CAA permit to cover GHG during 2010. EPA plans on phasing-in permit requirements for GHG for large stationary sources beginning in 2011. In the first half of 2011, only those facilities that already must apply for CAA permits for non-GHG emissions will need to address GHG emissions in permit applications. Jackson expects that GHG emissions from other large sources will phase in the latter half of 2011. Until 2013, the threshold for permitting will be substantially higher than the 25,000 ton limit that EPA originally proposed. The EPA will not subject the smallest sources to CAA permitting any sooner than 2016.

In response to Jackson’s February announcement, Senator Lisa Murkowski (R-AK) raised the economy-vs-environment paradox related to complying with potentially budget-busting GHG permitting and remediation costs. “While the delay in implementation is a small step in the right direction, the Clean Air Act continues to be the wrong tool for the job, and EPA’s timeline continues to create significant and ongoing uncertainty for a business community. Congress is the appropriate body to address climate policy. Until the specter of command-and-control regulations goes away, it will remain a counterproductive threat hanging over the work that must be done to find common ground. The EPA has restated its commitment to regulating greenhouse gases, down to the smallest emitters, regardless of the economic consequences.”

If the Tailoring Rule eventually reaches down to small landfills, the consequences could be dramatic and costly. Larger private waste management companies and large municipalities have dedicated staff that can cope with EPA permitting requirements, although it will take more time and increase cost. “The underlying impact is going to be more onerous permitting requirements on existing and new facilities,” said Mike Niemann. “The greatest impact is going to be for facilities not subject to the major operating permit program, a lot of small, closed landfills that under the current permitting framework are minor sources would become major sources requiring Title V permits. That in itself is going to trigger more reporting, paperwork and monitoring.”

The permitting requirements imposed by the Tailoring Rule would not only affect landfill operators, but also increase the workload of state regulators. Many state regulators are concerned that they don’t have enough staff address potential impacts. That may lead to either higher tax to hire more staff or longer delays to get projects permitted. Further permitting clogs would make a slow system even slower. While some states are diligent in issuing permits, some states are woefully backlogged already and some states have taken as much as five years to actually issue permits.

“Certainly it’s going to cost more money to do business. The amount of that increase ultimately depends on how large a facility is and whether we are looking at an operating permit, or obtaining an expansion permit. Expansion permits under the PSD program could be upwards of fifty to one hundred thousand dollars depending on the size of the landfill for just the permit. For a closed facility the impact could be on the order of twenty to forty thousand dollars for an operating permit, plus the annualized increases in monitoring obligations.” No doubt additional costs caused by the Tailoring Rule would be passed onto consumers in the form of higher disposal costs or taxes. Ultimately, if the EPA mandates that landfills install the best available control technology (BACT) the cost ramifications for many municipalities could be dire. A landfill gas collection system can cost from $500,000 to over a $1,000,000. Then there would either be the cost of a flaring system to burn off the volatile organics, or the cost of installing an energy recovery system. Coming up with that kind of capital would be hard for many municipalities without considerable improvements in the economy.

Is there a better way to handle greenhouse gas emissions from landfills? Should landfills be lumped in with industrial emitters under the Tailoring Rule? Perhaps Lisa Jackson could find more sensible solutions through her own Landfill Methane Outreach Program (LMOP), a voluntary assistance program that is already significantly reducing methane emissions from landfills by encouraging the recovery and use of landfill gas (LFG) as an energy resource. Rather than punishing landfills with more regulations, recover valuable energy and create new revenue streams for cash-strapped municipalities and private landfills.

As of December 2009 the EPA claims there are approximately 509 operational LFG energy projects in the United States and 530 landfills that are good candidates for projects. But there are likely many more good candidates. Mike Niemann estimates that methane gas recovery systems have only penetrated between 8 to 12 percent of United States landfills. “I think a lot of facilities that may become subject under Tailoring Rule requirements, especially closed landfills, will be looking for ways to generate additional revenue to help support the costs they will have to bear.”

Annika Colston, vice president of emissions reductions projects for Blue Source, a company that invests in municipal gas recovery systems to earn carbon credits believes there are better market-driven solutions to handle landfill emissions. “If EPA regulates municipal landfills then these projects will no longer be eligible to receive carbon credits, because it is no longer voluntary. We think it’s an unfunded mandate that really does not consider the current market. It is quite reasonable to say that the vast majority of these municipal landfills that are not currently regulated would install gas collection systems purely based on the carbon market.”

The Solid Waste Association of North America (SWANA), the association of over 8,000 members from both the public and private sectors of waste management weighed in on the proposed Tailoring Rule. Shannon Crawford, SWANA manager of legislative and regulatory programs said, “EPA made it clear that it believed that the best way to address this problem posed by GHG emissions would be through legislation directly addressing GHG emissions rather than through the use of tools in the Clean Air Act and we agree with them.”

Everyone wants cleaner air, including the waste management industry. Landfills are unique emitters of GHG in the form of methane gas and should be eliminated from the Tailoring Rule. Landfill emissions hold market-driven mechanisms, beneficial energy solutions far superior to cumbersome and costly regulations. It’s time for Congress to act and prevent another regulatory morass.