Hazardous Choice: EPA Proposes Competing Coal Ash Rules

June 14, 2010

On May 13, the Environmental Protection Agency (EPA) issued its long-awaited coal combustion residue (CCR) proposal, which presents a stark choice between handling CCR under a draconian hazardous waste regime and following past EPA determinations to handle the material as a low-risk solid waste. While EPA reportedly favored the hazardous waste approach, strong pressure from industry and state regulators and from within the Obama administration encouraged the dual draft. The resulting proposal vividly documents the extraordinary costs of listing and handling CCR as a hazardous waste and the less costly, but still difficult, problems of handling CCR as a solid waste. Under both scenarios, generators of CCR face additional burdens and those burdens will extend to historic sites where CCR has been disposed previously.

CCR has been a skirmish point in the environmental community’s challenge to coal combustion power plants for some time. CCR includes many different components of the coal combustion process, including fly ash, bottom ash and boiler slag, all of which are produced in great abundance at large generating facilities. CCR contains numerous metals and other materials, which can be individually hazardous but are released from the CCR matrix only under limited conditions. At the same time, CCR has numerous beneficial uses, including road construction, cement manufacturing, the manufacture of concrete products and soil amendment. These uses are not always available, however, and many power plants end up disposing the material in on-site landfills or storing it in ash ponds. The issue of on-site lagoon storage was brought into greater relief in 2009 with the catastrophic release of 5.4 million cubic yards of ash from a TVA facility in Kingston, Tenn. In proposing these rules, EPA sought to balance its concern for potential physical impacts from impoundment releases and groundwater impacts from long term storage with the administrative burden of regulating such a vast waste stream while not discouraging its continued use as a raw material.

As a result, EPA is at great pains to discuss its support for continued beneficial use of CCR. EPA ostensibly reaffirmed its determinations from 1993 and 2000 that beneficially-used CCR would be excluded from the definition of solid waste and thus could not be regulated as a hazardous waste. Yet despite referencing its prior determinations, EPA significantly changed its position. First, it limited the types of beneficial uses to certain approved activities where CCR would substitute for a raw material, be bound in the resulting product and not be used in a manner similar to disposal. As a result, only activities such as road construction and cement manufacturing would still qualify as beneficial uses. EPA specifically stated that the use of CCR in large scale, unencapsulated fill operations where CCR has been used to modify landscape for commercial or recreational development or for filling quarries would no longer be considered a beneficial use.

Second, EPA made a clear risk assessment in its 2000 determination that CCR should not be listed as a hazardous waste but should be regulated as a solid waste under Subtitle D of the Resource Conservation and Recovery Act (RCRA). EPA stated that a key component of this decision was the fact that the industry was beginning to manage CCR more comprehensively and that a key factor in any reversal would be whether this trend failed to continue. In this recent proposal EPA noted additional examples of situations where damage had occurred, most prominently the 2009 TVA release in Kingston, but it never found that the trend toward self-regulation had halted. Despite the fact that its damage examples represented but a small percentage of sites where CCR is stored, EPA performed a risk assessment which it claimed now documented that it could choose to regulate CCR as a listed hazardous waste.

EPA’s first proposal (and first choice apparently) is to regulate CCR as a hazardous waste under RCRA’s Subtitle C. Acknowledging the concern that listing CCR as a hazardous waste would stigmatize and diminish its beneficial use, EPA creates a new category of “Special Wastes” in which it lists CCR as S001. EPA also recognizes the extraordinary burden on industry and state governments of regulating CCR as a hazardous waste and provides an extended seven-year time period to come into compliance. At the end of this time, current CCR landfills would be required to have groundwater monitoring systems; new landfills would require liners, leachate collection and groundwater monitoring . EPA proposes onerous requirements for surface impoundments , including solids removal and liner retrofit, as well as periodic assessments of structural integrity. EPA frankly states these requirements will probably result in the closure of all impoundments. EPA limits the requirements for CCR landfills compared to hazardous waste landfills but still applies the whole panoply of Subtitle C regulations, including initial registration, operating under interim status rule until a permit is issued, obtaining a RCRA permit, submitting groundwater monitoring, closure and post-closure plans and financial assurance. The draft rule also allows EPA to require corrective action for all releases of solid and hazardous waste at a facility where CCR was disposed and to reach back to require remediation of past CCR disposal sites.

While all of these present difficult and expensive complications, these issues almost pale beside another dangerous consequence. EPA’s listing of CCR under Subtitle C automatically makes it a “hazardous substance” under CERCLA, requiring both release reporting, and potentially subjecting owners and operators of CCR sites to joint and several liability for any response costs incurred by the government or private citizens for site remediation. Every site where CCR has been used as fill – and there are many – would potentially become a Superfund site with all of the attendant risks, liability and transaction costs. This may actually become the most expensive consequence and least manageable risk of EPA’s Subtitle C proposal.

EPA’s second choice is to regulate CCR as a solid waste under Subtitle D. While EPA has much greater flexibility in setting technical standards for Subtitle D waste, it has far less authority and cannot require that Subtitle D sites obtain permits or bring actions to enforce its standards. As a result, the second option sets design standards for CCR landfills which are not dissimilar from the Subtitle C requirements and which include criteria for establishing run-on and run-off controls, demonstration of impoundment integrity, liners and leachate collection, groundwater monitoring and corrective action responses to leaks, as well as closure and post-closure plans. EPA also proposes similar standards for surface impoundments with similar expectations. EPA cannot require site-wide corrective action under Subtitle D, but EPA does not limit the proposal’s requirements to operations that are active as of the effective date of the rules, as it does for other Subtitle D facilities. As a result, the rules could be used to require action at past CCR disposal sites, although it would not have the CERCLA consequences of the Subtitle C listing.

EPA’s inability to require permits or enforce its criteria does force it to propose two innovative approaches. First, EPA suggests establishing a class of technical professionals who would be required to certify that the CCR facilities meet the design and other technical criteria on an ongoing basis. EPA allows states to define standards for “Independent Registered Professional Engineers or Hydrologists” who meet certain specified thresholds of training and experience. Secondly, as an aid to enforcing its standards, EPA requires CCR site operators to establish public websites on which they must post all data regarding the operation of their site. EPA states its belief that this information will allow states and interested parties to bring citizens suits under RCRA for any and all identified violations.

EPA’s innovations with third party certifications and private enforcement are welcome to a certain extent because EPA has resisted prior efforts to privatize its regulatory functions. Yet the real-time posting of all site data may prove debilitating in its own way. Segments of the environmental community will use any excuse to attack coal fired power plants and it is not hard to imagine the same person getting site data and drafting an immediate notice of suit at the same time, no matter how insignificant the exceedence might be.

EPA’s 1993 and 2000 determinations that CCR was not hazardous and should be handled as a solid waste reflected the reality that CCR is extremely high in volume, relatively low hazard in most circumstances and frequently beneficially used. None of that reality has changed, but the issue now arises in a much changed political climate. The environmental community push for regulation under Subtitle C is relatively recent: In 2007, several organizations petitioned EPA to adopt Subtitle D CCR rules. While the environmental community based its demand for a higher level of regulation on the Kingston incident, the real impetus is the general attack on coal fired power plants.

Yet Subtitle C regulation is notoriously cumbersome and expensive for regulator and regulated alike. State regulators strongly protested against the Subtitle C approach since it would multiply by many factors the waste stream for which they are responsible and for which they already lack resources to regulate. Including potential Superfund liability for past CCR fill sites exponentially expands the potential risks and costs and imposes them on numerous businesses outside the energy industry. While the Subtitle D approach has far less downside, it is not without issues. It would impose similar technical requirements but under a generally less demanding regulatory environment. At the same time, it would allow, if not encourage, states to develop their own approaches, which have the potential to be more onerous.

EPA has not yet published its proposal in the Federal Register, which starts the clock on the 90 day comment period. EPA identified numerous issues on which it sought comments, including the central issue of whether it should regulate CCR under Subtitle C or Subtitle D. EPA also has not announced whether it will hold any public hearings on the proposal.