Analysis - The Institute for Southern Studies

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. redistribute resources to select groups c. prohibit discrimination d. protect privacy e. permit more personal freedom f. promote other democratic aspirations As explained below, EPA’s proposed RCRA 7 regulation of coal combustion residual (CCR) disposal at coal-fired electricity plants is both required by law and will correct market failure. 1B. EPA’s Proposed Regulation of CCR Disposal Is Required by Law In 1976, Congress amended the 1965 Solid Waste Disposal Act (the first federal statute that specifically focused on improving solid waste disposal methods) by adding industrial hazardous waste management requirements as Subtitle C, among other new requirements. This amendment is the 1976 Resource Conservation & Recovery Act (RCRA). The EPA’s regulatory evaluation of coal combustion residues (CCR) dates back to 1978, two years after enactment of RCRA. In December 1978, the EPA proposed the first industrial hazardous waste regulations to implement Subtitle C (i.e., Sections 3001 to 3020 of RCRA). At that time, the EPA recognized that certain large-volume industrial wastes, including wastes from the combustion of fossil fuels (aka “CCR” as named in this RIA), might warrant special treatment under RCRA regulation. On 18 December 1978, EPA proposed but deferred and never finalized a relatively limited set of ten RCRA Subtitle C industrial hazardous waste regulations for the management of CCR. 8 Included in this deferral of hazardous waste requirements were six categories of industrial wastes --- which EPA termed “special wastes” 9 --- until further study and assessment could be completed by EPA to determine their risk to human health and the environment. The six categories of special wastes included: 1. Cement kiln dust 2. Mining waste 3. Oil and gas drilling muds and oil production brines 4. Phosphate rock mining, beneficiation, and processing waste 5. Uranium waste 6. Utility waste (i.e., fossil fuel combustion waste by electric utility plants) These wastes typically are generated in large volumes and, at the time, were believed to possess less risk to human health and the environment than the wastes being identified for regulation as RCRA hazardous waste. On 12 October 1980, Congress enacted the Solid Waste Disposal Act Amendments of 1980 (Public Law 96-482) which amended RCRA in several ways. Pertinent to “special wastes” were the Bentsen and 7 RCRA = Resource Conservation & Recovery Act of 1976: http://www.epa.gov/waste/laws-regs/rcrahistory.htm 8 Federal Register, Vol. 43, No. 243, 18 December 1978, page 59015, section 250.46-2 “Utility Waste” of “Hazardous Waste Guidelines and Regulations.” This action proposed the following ten regulatory conditions: (a) waste analysis standards, (b) waste site selection standards, (c) waste site security, (d) waste shipment manifesting, (e) recordkeeping, (f) reporting, (g) waste site visual inspections, (h) waste site closure, (i) waste site post-closure care, and (j) groundwater monitoring. 9 To learn more about these six “special wastes” see EPA’s special waste website at http://www.epa.gov/osw/nonhaz/industrial/special/index.htm 14
Bevill Amendments 10 which exempted “special wastes” from regulation under Subtitle C of RCRA until further study and assessment of risk could be performed: 1980 Bentsen Amendment (RCRA 3001(b)(2)(A)): Exempted drilling fluids, produced waters, and other wastes associated with the exploration, development, and production of crude oil or natural gas or geothermal energy. 1980 Bevill Amendment (RCRA 3001(b)(3)(A)(i-iii)): Exempted fossil fuel combustion waste; waste from the extraction, beneficiation, and processing of ores and minerals (including phosphate rock and overburden from uranium ore mining); and cement kiln dust. The Bevill and Bentsen Amendments required EPA to complete full assessments of each exempted waste and submit a formal report to Congress on its findings. As itemized in Appendix A to this RIA, since 1978, EPA continued to evaluate CCR (as well as the other five waste categories) for different possible RCRA hazardous and non-hazardous waste regulatory approaches. The proposed RCRA regulation this RIA supports is a continuation of those prior evaluations. 1C. EPA’s Proposed Regulation of CCR Disposal Will Correct Market Failure OMB’s 2003 Circular A-4 “Regulatory Analysis” guidance (pages 4 to 5) to Federal agencies for implementation of Executive Order 12866 identifies three major types of market failure: 1. Externality, common property resource, and public good 2. Market power (i.e., lack of market competition from monopolies) 3. Inadequate or asymmetric information The CCR proposed rule which this RIA supports may be characterized as addressing the “negative externality” of environmental pollution and damages from CCR disposal landfills and impoundments. As summarized in the “Benefits” Chapter 5 of this RIA, there are a number of historical and recent environmental damage cases which represent externalities, in that some or all of the (a) human health damages (i.e., human cancer cases from contaminated groundwater near CCR disposal sites) and (b) environmental damages (i.e., ecological damages, natural resource damages, and socio-economic damages from CCR spills/releases from structural failures in CCR disposal impoundments) may be external to the capital and operating costs of the electric utility plants. If implemented, the CCR proposed rule may be expected to reduce this market failure externality, by internalizing into the capital and operating costs of the electric utility plants, the added costs of installing engineering controls and oversight of the physical integrity of CCR disposal units. Firms are sometimes held accountable for some of the external costs through lawsuits brought by affected citizens. However, the system of accountability can be imperfect. The primary human bearers of the external costs from CCR disposal are households residing disposal units. When an unorganized group of households suffer external costs, they face a host of obstacles to having their costs recuperated. They must 10 These 1980 RCRA “special waste” amendments are named after US Senator Lloyd Bentsen (D-TX; Senate service years 1971-1993) and US House Congressman Tom Bevill (D-AL; House service years 1967-1997). Source: Biographical Directory of the US Congress at http://bioguide.congress.gov/biosearch/biosearch.asp 15
Page 1 and 2: Regulatory Impact Analysis For EPA
Page 3 and 4: Table of Contents Executive Summary
Page 5 and 6: Executive Summary This RIA evaluate
Page 7 and 8: impoundments, the relative number t
Page 9 and 10: Summary Exhibit 3 Induced Effect of
Page 11 and 12: Summary Exhibit 6 Comparison of Reg
Page 13: Chapter 1 Problem Statement: The Ne
Page 17 and 18: Just three weeks after the TVA’s
Page 19 and 20: 2. Waste & Environmental Management
Page 21 and 22: This RIA did not discover similar d
Page 23 and 24: Exhibit 2A Identity of Other Indust
Page 25 and 26: Require review of surface impoundme
Page 27 and 28: Chapter 3 Baseline CCR Management i
Page 29 and 30: Exhibit 3C below, these 495 coal-fi
Page 31 and 32: Exhibit 3C State-by-State Electric
Page 33 and 34: 3B. Types of CCR Disposal Units Es
Page 35 and 36: 92 plants Offsite landfill fly ash
Page 37 and 38: electric utility plants in the data
Page 39 and 40: Exhibit 3E Annual CCR Disposition f
Page 41 and 42: 3D. Size of CCR Disposal Units The
Page 43 and 44: costs for each type of disposal (no
Page 45 and 46: annual sampling for surface impound
Page 47 and 48: o Of the 25 state regulations revie
Page 49 and 50: Exhibit 3I Baseline Compliance with
Page 51 and 52: Baseline CCR Disposal Cost Estimati
Page 53 and 54: Before-tax costs: 50-year period:
Page 55 and 56: Baseline “Engineering Control”
Page 57 and 58: assume that the same water trucks w
Page 59 and 60: memorandum to George Garland, EPA,
Page 61 and 62: Exhibit 3K Summary of Industry & St
Page 63 and 64: ($80,000 per year average Subtitle
Page 65 and 66:
Validity Check of Baseline Cost Est
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Chapter 4 Estimated Cost for RCRA R
Page 69 and 70:
B. Ancillary costs for CCR disposal
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location restriction mitigation inv
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o Impoundment berms: The average su
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State government average cost per w
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corrective action remedies usually
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Exhibit 4A Two Case Studies: Possib
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Biennial Report”). According to E
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4B.3 Land Disposal Restriction Cost
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The TVA cost study did not estimate
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Using the EPA ORCR 2009$ updated un
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Exhibit 4D Comparison of Annual O&M
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Exhibit 4E Summary of Wet Conversio
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o Recent Trend in CCR Impoundment P
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from coal to other fuels such as na
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o Result of Dry Conversion Cost Upd
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As summarized below in comparison t
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17% phase-out trend suggest the fut
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RIA 50- ye ar period Actual company
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4C. State-by-State Distribution of
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4D. Cost Estimation Uncertainty Thi
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Exhibit 4N Cost Estimation Uncertai
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In contrast to the Exhibit 5A list
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Step 2. Determine Potentially Affec
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Step 3. Apply EPA-ORCR 2009 Arsenic
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RISKn WELLREACH iRISK EDn N Where
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The constant slope allowed estimati
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Step 6. Monetize Future Avoided Can
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controls like surface-impoundment p
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Finally, for Subtitle C, there woul
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Exhibit 5A-12 Percentile of Cleanup
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Exhibit 5A-16 Per-Site Groundwater
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Multiple CCR disposal units at a si
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5B. Benefit of Preventing Future CC
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As displayed below in Exhibit 5B-2,
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Where: = Observed arrival rate (0.
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Step 3. Calculate Future Impoundmen
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some surface impoundment regulation
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Exhibit 5B-8 Poisson Distribution (
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With these new distributions, EPA p
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Exhibit 5B-12 Scenario #2: Cleanup
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5C. Induced Effect of RCRA Regulati
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Exhibit 5C-1 Estimate of Annual Mat
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Exhibit 5C-3 below presents a 2004
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To avoid double-counting of economi
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5C2. Potential Effect of RCRA Regul
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Others take a different view on how
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Exhibit 5C-7 EPA Extrapolation of E
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Based on the most recent CCR benefi
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Beneficial uses of CCR have been co
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Exhibit 5C-12 Beneficial Use Trend
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Increases due to increased disposal
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“Using [coal] fly ash in building
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Exhibit 5C-14 Historical Annual Per
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Hypothetical expansion of CCR custo
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Step 6: Apply Estimated Induced Eff
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Exhibit 5C-16 Scenario #1: Increase
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Exhibit 5C-17 Scenario #2: Decrease
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Exhibit 5C-18 Beneficial Use Trends
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Exhibit 5C-19 Scenario #1: Benefit
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Exhibit 5C-21 Scenario #2: Cost of
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Step 10: Quantify Potential Capacit
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Chapter 6 Comparison of Regulatory
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Exhibit 6B Comparison of Regulatory
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Exhibit 6D Comparison of Regulatory
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Exhibit 6F Comparison of Regulatory
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Exhibit 6F Scaling Factors (Extrapo
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Exhibit 6G Estimate of Subtitle D (
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detect contamination early and thus
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Step 1: Downloaded the annual milli
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Exhibit 7A State by State Breakout
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Small government: Based on the RFA/
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Step 3 & Step 4: Determine and docu
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Factor #2 of 2: The small business
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how much they use or indeed how muc
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Collection of Minority & Low-Income
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Comparison of Minority & Low-Income
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Exhibit 7G Minority and Low-Income
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Exhibit 7H Comparison of Minority a
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o The state-by-state range of minor
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CCR fraction #3: CCR fraction #4:
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7D. Child Population Statistics (Ex
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Comparison of Child Populations Liv
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Count of plant unique ZCTAds Exhibi
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Exhibit 7K Comparison of Child Popu
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7E. Unfunded Mandates (UMRA) & Fede
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Findings for UMRA Impact and Federa
Page 241 and 242:
Exhibit 7M List of 74 Coal-Fired El
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Analysis - The Institute for Southern Studies

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