2012 Winston & Strawn LLP

Transcription

1 2012 Winston & Strawn LLP

2 Coal Combustion Residuals: Regulatory, Enforcement and Compliance Update Brought to you by Winston & Strawn s Environment and Sustainability practice group 2012 Winston & Strawn LLP

3 Today s elunch Presenters Nash Long Environment And Sustainability Charlotte nlong@winston.com Michael W. McLaughlin, P.E. Senior Vice President SCS Engineers MMcLaughlin@scsengineers.com May Wall Environment And Sustainability Washington mwall@winston.com 2012 Winston & Strawn LLP 3

4 EPA s Proposed CCR Rule Proposed May CCRs include fly ash, bottom ash, boiler slag, and flue gas desulfurization materials destined for disposal. Proposal presents two options for the regulation of CCRs: Option #1: CCRs would be designated a special waste and regulated under Subtitle C of RCRA when destined for disposal in landfills or surface impoundments. Option #2: CCRs would be regulated as non-hazardous solid waste under Subtitle D of RCRA through the issuance of national minimum criteria. Proposing to establish dam safety requirements to address the structural integrity of surface impoundments to prevent catastrophic releases under each option. Main differences involve implementation and enforcement. Each proposal will increase compliance costs and litigation risks Winston & Strawn LLP 4

5 Beneficial Use Exemption EPA proposed to leave unchanged its May 2000 regulatory determination exempting beneficially used CCRs from hazardous waste regulations. EPA proposed to define placement of CCRs in sand and gravel pits and large-scale fill projects as land disposal, not beneficial use. EPA set forth criteria for distinguishing between CCRs destined for beneficial use of CCRs and CCRs destined for disposal. EPA also solicited comment on whether certain uses of CCRs should be considered beneficial uses, and whether a formal listing of all beneficial uses should be required Winston & Strawn LLP 5

6 Subtitle C Proposal CCRs from electric utilities and independent power producers listed as special waste subject to Subtitle C regulations, including storage, manifest, transport, and disposal requirements, and corrective action and financial assurance Allows for direct federal enforcement Existing units not closed in accordance with the outlined criteria would be subject to all of the Subtitle C requirements, including permitting requirements Requirements for dam safety and stability for impoundments that have not been closed Land disposal restrictions and treatment standards 2012 Winston & Strawn LLP 6

7 Subtitle D Proposal CCR classified as a non-hazardous waste EPA would establish minimum nationwide standards for CCR disposal that would be enforced by States; would go into effect sooner than a Subtitle C Rule (six months after promulgation) No permitting requirements; not federally enforceable Would include location standards, composite liner requirements applicable to new and existing facilities, groundwater monitoring and corrective action standards, closure and post-closure care requirements, and requirements to address the stability of surface impoundments Subtitle D prime option no composite liner requirements for existing surface impoundments 2012 Winston & Strawn LLP 7

8 Current status of the proposed rule EPA has not set a date for issuance of the final rule not expected before 3rd quarter 2013, maybe later. In October 2011, EPA published a Notice of Data Availability ( NODA ) on additional information obtained by EPA. The NODA solicited comment on the following additional information: Chemical constituent data from CCRs; facility and waste management unit data; information on additional alleged damage cases; adequacy of State programs; beneficial use 2012 Winston & Strawn LLP 8

9 Current Status of Proposal As of May 2012, eight public hearings held 450,000-plus comments received Delay has spawned litigation against EPA and state agencies and resulted in state regulatory activities 2012 Winston & Strawn LLP 9

10 Litigation Against EPA: Appalachian Voices v. Jackson In April 2012, environmental groups and two CCR recyclers filed suit in the District of Columbia District Court to compel EPA to finalize the rule, claiming EPA has violated section 2002(b) of RCRA, which requires EPA to review and revise every three years, where necessary, regulations promulgated under RCRA. The Environmental Plaintiffs requested that EPA finalize the CCR rule within six months of the court s ruling. The CCR recyclers have requested that EPA determine whether it will regulate CCRs under Subtitle C or Subtitle D within three months of the court s ruling. In an October 11, 2012 brief, EPA argued that it needs considerably greater than six months from the court s ruling to finalize the CCR rule. EPA also argued it is not statutorily required to issue the rule. Reply briefs are due on December Winston & Strawn LLP 10

11 Coordination with Power Plant Effluent Limitation Guidelines ( ELGs ) In a settlement agreement with environmental organizations, EPA agreed to propose the new power plant ELGs by December 14, Industry groups have appealed to intervene in that agreement. Defenders of Wildlife et al. v. EPA New ELGs will revise the wastewater discharge standards for electric generating facilities and will likely include limits for discharges from flue gas desulfurization units. There is a nexus between the power plant ELGs and CCR rules in that both regulate waste from coal plants. An EPA official in the Office of Water ( OW ) recently indicated that the OW and Office of Solid Waste and Emergency Response ( OSWER ) are working to coordinate the rules to avoid duplicative or contrary requirements Winston & Strawn LLP 11

12 Federal Legislative Developments Coal Ash Recycling and Oversight Act of 2012 (S. 3512) Proposed August 2, 2012 Bipartisan group of Senators Strong State oversight of storage/management of CCR State permitting program for coal ash under RCRA Letter to Senate in opposition 300 public interest groups.legislation encourages inadequate state programs that preserve the status quo and extend lives of hundreds of leaking toxic dumps 2012 Winston & Strawn LLP 12

13 Federal Legislative Developments Coal Residuals Reuse and Management Act (H.R. 2273) Passed House October 14, 2011 Authorizes states to regulate coal ash from power plants Shifts power from EPA to states; establishes minimum federal requirements for management and disposal 2012 Winston & Strawn LLP 13

14 CCR Developments in Illinois 24 power plants with a total of 83 impoundments and one coal ash permitted landfill. IEPA Ash Impoundment Strategy Requirements including lining and groundwater monitoring for new ash ponds. Assessment priorities of new and existing ash ponds based on potential for impacting aquifers and presence of potable wells near ash ponds. IEPA s ash pond closure requirements are at least as stringent as USEPA s proposed CCR requirements under either option. On October 3, 2012, the Sierra Club and other environmental groups filed a complaint with the Illinois Pollution Control Board against Midwest Generation, arguing that CCR ponds at four Midwest Generation facilities are contaminating groundwater. The environmental groups are seeking an order requiring Midwest Generation to modify its coal ash disposal practices, remediate groundwater contamination, and pay civil penalties Winston & Strawn LLP 14

15 CCR Developments in Pennsylvania 43 coal-fired power plants generate roughly 20 million tons of coal ash annually Hot Topic in PA: Beneficial Reuse of Coal Ash New regulations released in 2010 encourage reuse of coal ash at mine sites Address acid mine drainage, increase soil fertility, fill mine pits and voids Environmental groups argue that this reuse may threaten groundwater quality In July 2012, PADEP ordered shut down of largest coal ash pond in the country, Little Blue Run, an unlined pond dating back to the 1970s Winston & Strawn LLP 15

16 CCR Developments in North Carolina 14 coal-fired power plants with 34 ash impoundments NC Division of Water Quality Effluent limits Groundwater monitoring Reuse of coal ash NC Division of Land Resources Ash pond integrity monitoring Environmental groups filed a complaint in late 2012 requesting NC Environmental Management Commission to require cleanup of groundwater contamination related to ash ponds at all 14 power plants in the state 2012 Winston & Strawn LLP 16

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18 Coal Ash 2012 Litigation Update TVA Kingston (E.D. Tenn.) PADEP v. FirstEnergy Generation (W.D. Pa.) Sierra Club v. San Juan Coal Company, et al. (D.N.M.) Catawba Riverkeeper Foundation v. South Carolina Elec. & Gas Co. (D.S.C.) Winyah Rivers Foundation v. South Carolina Public Service Authority (D.S.C.) 2012 Winston & Strawn LLP 18

19 Coal Ash 2012 Litigation Update Settlement Analysis Key Terms Little Blue Run San Juan Generating Station SCE&G 2012 Winston & Strawn LLP 19

20 Coal Ash 2012 Litigation Update Threatened Litigation AES WE Energies 2012 Winston & Strawn LLP 20

21 Coal Ash 2012 Litigation Update What do Plaintiffs want? Phase-out of wet coal ash storage facilities Siting restrictions Composite liners Covers Comprehensive monitoring Corrective action Long-term financial assurance 2012 Winston & Strawn LLP 21

22 Compliance Options and Best Practices by Generators of Coal Combustion Residuals Michael W. McLaughlin, P.E. Senior Vice President SCS Engineers 2012 Winston & Strawn LLP

23 Overview With help from EPA, most CCR wet impoundments have been evaluated and are being repaired or upgraded as needed Big and tall impoundments will have to do more under eventual regulations Public stocks approach It is still expensive to convert from wet to dry collection of CCR Uncertain (perhaps unlikely) that EPA will require Hard to do both (during transition period) 2012 Winston & Strawn LLP 23

24 Overview Markets for beneficial uses of CCR in the United States are flat ACAA attributes flatness to uncertainty and stigma associated with EPA s proposal to regulate as Special Waste under Subtitle C Recession also may have affected demand New air pollution controls also have affected CCR properties CCR are still being produced and must be managed despite uncertainties 2012 Winston & Strawn LLP 24

25 Wet Impoundments CERCLA 104(e) information requests to utilities in 2009: 676 impoundments EPA contractors reviewed data, observed facilities, and prepared assessments: 425 impoundments EPA put it all on the internet for the world to see 2012 Winston & Strawn LLP 25

26 For the World to See 2012 Winston & Strawn LLP 26

27 EPA Information Requests Impoundment size (n=676): Average 1,362 acre-ft Median 186 acre-ft Just over 70 percent designed by PE Only 6 percent reported historical releases Two-thirds are big or tall (20 acre-ft capacity and 5-ft height, or 20-ft height) 2012 Winston & Strawn LLP 27

28 Big and Tall Impoundments Required to submit design documentation under either Sub D or Sub C approach Many utilities will have data gaps in design information Folks will only have a year after the effective date to gather the 15 Sub D) or 17 (Sub C) data elements required by proposed rule 2012 Winston & Strawn LLP 28

29 EPA Assessments EPA Contractor Assessment of Impoundments Condition Assessment Hazard Rating Poor Fair Satisfactory Total Less than low Low Significant High Other Total Winston & Strawn LLP 29

30 EPA Assessments Top Ten States by Number of Impoundments State Poor Fair Satisfactory Total IN MO NC OH GA KY SC IA IL Total Winston & Strawn LLP 30

31 EPA Assessments Top Ten States by Number of Impoundments State Less than low Low Significant High Other Total IN MO NC OH GA KY SC IA IL Total Winston & Strawn LLP 31

32 EPA Assessments 2012 Winston & Strawn LLP 32

33 Action Plans Of the 106 impoundments rated poor, 27 were rated poor due to lack of design documentation Many Action Plans include geotechnical investigation and repairs as warranted 2012 Winston & Strawn LLP 33

34 Action Plans Qualitative sense that utilities are taking their action plans seriously and a diligently pursuing the work they said they would do Qualitative sense that EPA is not really monitoring compliance with tasks or schedules proposed Qualitative sense that this approach has been clever and effective 2012 Winston & Strawn LLP 34

35 Changes in Collection and Management 2012 Winston & Strawn LLP 35

36 Change is Hard Modifying and installing equipment for dry collection are expensive Operating and maintaining equipment for dry collection are expensive Building and operating a new lined landfill are expensive Replacing closed wet ash impoundments with stormwater BMPs is expensive Doing these things at a generating station in service is really hard 2012 Winston & Strawn LLP 36

37 Closing Units and Building New 2012 Winston & Strawn LLP 37

38 Beneficial Use of CCRs ACAA notes flat trend, and attributes to uncertainty: 2012 Winston & Strawn LLP 38

39 Beneficial Use of CCRs Regulatory uncertainty might not be the only reason for flat beneficial utilization of CCRs 2012 Winston & Strawn LLP 39

40 Beneficial Use of CCRs Large-scale unencapsulated uses (e.g., for reclamation of surface mines and quarries) may be better than EPA thought Gambrills, MD site being redeveloped for shopping center and more Battlefield Golf Club in Chesapeake, VA was evaluated by EPA and there is no significant threat to public health or the environment from site-related contaminants at this time (April 2010) 2012 Winston & Strawn LLP 40

41 Beneficial Use of CCRs Air pollution control upgrades at many coal-fired electric utilities may affect ability to use CCRs in some cements Addition of carbon or ammonia to gas stream presents challenges for using fly ash in cement Several specialty vendors targeting these challenges (e.g., Headwaters, CeraTech) Markets for beneficial uses may survive challenges 2012 Winston & Strawn LLP 41

42 Pantheon in Rome, Italy Largest non-reinforced concrete dome ever built. Still standing ~2,000 years after construction Construction material: Pozzolanic cement made of volcanic ash 2012 Winston & Strawn LLP 42

43 Conclusion Many coal-fired power plants have addressed or are addressing geotechnical concerns for existing CCR impoundments Some are making significant investments in CCR management upgrades Lined onsite landfills for dewatered CCRs Converting wet collection to dry collection Teaming with technology partner for beneficial use of CCRs Hard to spend $$$ in uncertain environment 2012 Winston & Strawn LLP 43

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45 2012 Winston & Strawn LLP Questions?

46 2012 Winston & Strawn LLP Thank You.