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Environmental Groups Target Coal Ash Disposal

May 2, 2012

Environmental groups have asked a federal court to compel EPA to finalize rules regulating the disposal of coal combustion residuals (CCR) under the Resource Conservation and Recovery Act (RCRA).[1] They are joined by a manufacturer and marketer of products made with recycled coal ash who alleges, in a companion suit, that the agency is harming its business by not acting to finalize rules proposed nearly two years ago.[2] Coal ash is beneficially used in a variety of products, including construction materials like concrete, cement, and roofing materials, and the beneficial use industry is concerned about the potential economic impacts that would result if coal ash is designated as a RCRA hazardous substance.

At the same time, the new rules would have a substantial financial impact on firms that generate, transport, and dispose of coal combustion residuals. Indeed, EPA estimates that its proposed rules would have annualized regulatory compliance costs between $587 million to $1.4 billion, while industry trade groups estimate that the rule’s potential costs could be three to four times higher.

Given the controversy surrounding the regulation of coal combustion residuals under RCRA, members of Congress have sought to block EPA from doing so. In October 2011, the House of Representatives passed H.R. 2273, which would prohibit EPA from regulating coal combustion residuals as a RCRA Subtitle C hazardous waste, but would amend RCRA Subtitle D to address the disposal of coal combustion residuals as a solid waste. A similar measure (S. 1751) is under consideration in the Senate.

I. Background

EPA estimates that over 70 million tons of coal ash is disposed of annually in landfills or surface impoundments, and that there are nearly 800 active coal ash impoundments in the United States, many of which have operated for decades. These wastes have typically been managed in relatively unsophisticated and lightly regulated landfills, reflecting the lack of volatility and mobility of the waste and the fact that most are in remote or industrial locations. Hazardous substances originating in coal, such as mercury and heavy organic molecules, can be concentrated in combustion residuals. Rainwater infiltration, wind, and other factors can lead to releases of coal ash and its hazardous constituents.

In 2008, the regulatory landscape began to change as a result of the failure of an impoundment in Kingston, Tennessee, owned and operated by the Tennessee Valley Authority (TVA). The impoundment released over 5.4 million cubic yards of ash slurry, which covered several hundred acres. That incident led EPA to conduct two years of investigations into coal ash impoundments. In 2010, EPA proposed regulations that would impose additional regulatory requirements on coal combustion residuals (including fly ash, bottom ash and other debris, such as “clinkers” – the cinder-like residuals at the bottom of combustion chambers) under RCRA. EPA’s delay in finalizing its rules spurred the filling of the two lawsuits.

II. Current Regulation of Coal Ash

Under RCRA, all solid wastes are subject to regulation, with one set of regulations (Subtitle C) directed to “hazardous” wastes and the other set of regulations aimed at ordinary solid wastes (Subtitle D).

Regulation of hazardous and solid wastes is vastly different. Subtitle C imposes a comprehensive regulatory scheme, under which materials designated as hazardous are managed from “cradle to grave.” Often, these wastes must be treated, and are subject to restrictions on land disposal. In contrast, Subtitle D regulates solid waste by controlling the construction and operation of landfills to prevent releases of chemicals into the environment. Some wastes are afforded “special waste” treatment, which is a hybrid of the two approaches.

The disposal of coal ash waste has been controversial since RCRA’s inception. While coal ash contains hazardous elements that could result in its classification as a hazardous waste, it is also relatively immobile and inert if held in landfills, and cannot be economically treated to eliminate the potential for release. Congress recognized that EPA’s Subtitle C regulations for hazardous waste could apply to coal ash, and enacted legislation amending RCRA (known as the Bevill Amendment) that exempted coal ash and related combustion residuals from immediate regulation as hazardous waste. Instead, Congress directed EPA to study and decide whether to regulate “solid waste from the extraction, beneficiation, and processing of ores and minerals.” The Bevill exclusion applies to, among other materials, “fly ash waste, bottom ash waste, slag waste, and flue gas emission control waste generated primarily from the combustion of coal or other fossil fuels.”[3]

In making a determination whether or not to regulate coal combustion residuals, RCRA required EPA to take the following factors into consideration: (1) the source and volumes of such materials generated per year; (2) the present disposal and utilization practices; (3) the potential danger, if any, to human health and the environment from the disposal and reuse of such materials; (4) documented cases in which danger to human health or the environment from surface runoff or leachate has been proved; (5) alternatives to current disposal methods; (6) the costs of such alternatives; (7) the impact of those alternatives on the use of coal and other natural resources; and (8) the current and potential utilization of such materials.[4]

In 1988, EPA filled a report with Congress recommending that coal ash and other residuals generated from the combustion of coal remain exempt from RCRA Subtitle C regulation.[5] EPA filed a second report with Congress in 1999 that again recommended excluding coal ash from RCRA Subtitle C regulation.[6] In May 2000, EPA published its final regulatory determination concluding that waste from the combustion of fossil fuel should not be regulated as a Subtitle C hazardous waste.[7]

EPA’s decisions regarding coal combustion wastes were based, in large part, upon improved management practices. EPA noted that the industry had made significant improvements in its waste management practices for new landfills and surface impoundments since EPA issued its 1999 Report to Congress. EPA also concluded that most state regulatory programs had similarly improved. EPA accordingly decided to retain the Bevill exemption and stated that it would establish national standards for the management of coal ash and other residuals generated from fossil fuel combustion under RCRA Subtitle D, the non-hazardous solid waste regulations.

III. EPA’s Proposed CCR Rules

Public criticism following the TVA’s Kingston surface impoundment release caused the agency to take another look at coal ash regulation. EPA proposed new regulations in June 2010 covering the management of coal combustion residuals. The proposed rule, however, did not come to a conclusion as to how coal ash residuals should be regulated. Instead, the proposed rule laid out two very different regulatory approaches, whereby coal combustion residuals would either be regulated: (1) as hazardous waste under RCRA Subtitle C, or (2) as solid waste under RCRA Subtitle D.[8] These approaches involve significantly different waste management requirements and costs.

A. Subtitle C Alternative

Under the first option, EPA would list coal combustion residuals as special wastes subject to nearly full regulation as hazardous wastes under RCRA Subtitle C. Coal combustion residuals would be regulated from the point of generation to the point of final disposal. The regulations would include standards for generators and transporters of coal combustion residuals, as well as standards for new facilities managing coal combustion residuals (e.g., sitting, liners, run-on and run-off controls, groundwater monitoring, fugitive dust controls, financial assurance, corrective action, and post-closure care). Facilities that treat, store, or dispose of coal combustion residuals would also be required to obtain RCRA Subtitle C permits.

Significantly, under the Subtitle C proposal, existing surface impoundments without liners would have to be excavated and retrofitted with liners within five years or cease receiving CCRs and close. Existing landfills (in which the CCR waste is not mixed with water) would not be subject to liner requirements, but would require groundwater monitoring to detect releases to groundwater.

EPA’s Subtitle C proposal also implicates CERCLA and a number of other environmental laws. All RCRA hazardous wastes are considered “hazardous substances” for purposes of CERCLA. If a CERCLA hazardous substance is released in amount that equals or exceeds its reportable quantity (RQ) (generally one pound), the release must be reported pursuant to CERCLA section 103. Since the key constituents of concern in coal combustion residue (i.e., arsenic, cadmium, mercury, and selenium) are already listed as CERCLA hazardous substances, persons who spill or release such substances already have reporting requirements. Acknowledging the massive volume of coal combustion residuals, EPA has proposed upwardly adjusting the statutory one-pound RQ that would apply, and has sought public comment on the methodology for making such adjustments.

B. Subtitle D Alternative

Alternatively, EPA proposed to regulate coal combustion residuals under Subtitle D. EPA’s proposal would establish national standards for surface impoundments and landfills. New surface impoundments would require liners, while existing surface impoundments would have to be retrofitted with liners within five years. The Subtitle D regulations would not address the handling of coal combustion residuals prior to disposal. Furthermore, given EPA’s limited authority under Subtitle D, the agency would generally not be able to enforce the requirements; instead, states would adopt regulations and enforce permit programs. Citizens could also seek to enforce the requirements via RCRA’s citizen suit provisions.

EPA has solicited public comment on the two proposals, but has made no final decision.[9] EPA has held eight public hearings and received more than 450,000 comments on its proposals.

IV. The Lawsuits

Frustrated with EPA’s inaction, eleven environmental groups filed a federal lawsuit on April 5, 2012, seeking to compel the agency to take action on the disposal of coal combustion residuals. The gravamen of the plaintiffs’ complaint is that EPA has violated provisions of RCRA that require the agency to review its regulations exempting coal ash every three years and revise them if necessary.[10]

The plaintiffs also allege that EPA has failed to revisit its Toxicity Characteristic Leaching Procedure (TCLP), which is used to determine if a solid waste exhibits the characteristic of toxicity and is therefore deemed “hazardous” as a characteristic waste. The TCLP determines the extent to which toxic metals and other contaminants may leach from solid waste, and EPA’s prior decision to maintain the Bevill exemption for coal combustion residuals is based, in part, on the TCLP.

The complaint alleges a number of shortcomings in the current TCLP with respect to coal combustion residuals. For example, the TCLP is designed to simulate conditions in a municipal solid waste landfill, but the plaintiffs note that many industrial wastes, including coal combustion residuals, are rarely disposed of in municipal landfills. The plaintiffs also note that courts have found that EPA could not demonstrate a “rational relationship” of the TCLP to particular wastes. For example, in Association of Battery Recyclers, Inc. v. EPA, 208 F.3d 1047 (D.C. Cir. 2000), the court held that EPA failed to justify its application of the TCLP to waste generated at manufactured gas plants. EPA revised its regulations in light of that decision, clarifying that the TCLP cannot be used to determine whether waste from manufactured gas plants is toxic.

The plaintiffs also note that revisions to the TCLP are warranted because the procedure relies on maximum contaminant levels (MCLs) that defined drinking water quality standards when the TCLP was adopted, but that have subsequently been lowered in some cases. For those reasons, the plaintiffs allege that EPA has failed to comply with its mandatory duty to review and revise its regulations.

A second lawsuit was also filed by Headwaters Resources, Inc., the largest manufacturer and marketer of coal combustion residuals. Headwaters alleges that EPA’s delay in finalizing its coal combustion residual rule has created uncertainty in the beneficial use marketplace. Headwaters seeks a court order compelling EPA to finalize its proposal.

V. Conclusion

The ultimate question is whether EPA will impose significant new regulations on existing coal ash impoundments, and whether EPA will choose the more expensive solution (Subtitle C) or the more pragmatic solution (Subtitle D regulation). Either way, the adoption of final regulations concerning coal ash is likely not to please both sidesf, and there is likely to be additional litigation to address whether the new regulation of coal combustion residuals is too much, too little, or just about right.

Please direct questions on the CCR rules and related lawsuits to any member of Marten Law’s Waste Management Practice Group.

[1] Appalachian Voices v. EPA, 1:12-cv-00523 (D.D.C. filed Apr. 5, 2012).

[2] Headwaters Resources, Inc. v. EPA., 12-cv-00523 (D.D.C. filed Apr. 5, 2012).

[3] 42 U.S.C. § 6921(b)(3)(A)(i).

[4] 42 U.S.C. § 6982(n).

[5] Report to Congress on Wastes from the Combustion of Coal by Electric Utility Power Plants (EPA, 1988).

[6] Report to Congress: Wastes from the Combustion of Coal by Electric Utility Power Plants (EPA, 1999).

[7] Notice of Regulatory Determination on Wastes from the Combustion of Fossil Fuels, 65 Fed. Reg. 32,214 (May 22, 2000).

[8] Hazardous and Solid Waste Management System; Identification and listing of Special Wastes; Disposal of Coal Combustion Residuals from Electric Utilities, 75 Fed. Reg. 35,128 (June 21, 2010).

[9] Notice of Data Availability and Request for Comment - Hazardous and Solid Waste Management System: Identification and Listing of Special Wastes; Disposal of Coal Combustion Residuals From Electric Utilities, 76 Fed. Reg. 63252 (Oct. 12, 2011).

[10] 42 U.S.C. § 6912(b).

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