By Rob Arner
Part 1 of this two-part article addressed the likelihood of failure of landfill engineering systems and management practices. Part 2 looks at the inadequacies of financial assurance, funding, and risk assessment mechanisms, and sets out some regulatory changes that should be addressed urgently.
As world leaders in resource management, we must work toward sustainable solutions in our handling of solid waste rather than simply burying it. We need to ask ourselves: Are the current requirements governing landfills adequate?
Lack of financial guarantees is troubling
Another black box of grave concern is landfill financial assurance requirements. EPA presently allows captive insurance that does not provide any guarantee that landfill liabilities will be covered or that closure, post-closure care, and corrective action costs will be available. The use of captive insurance is alarming since Subtitle C or Hazardous Waste facilities are also allowed to use this financial assurance mechanism.
Previous EPA studies have documented that at least one of the nine EPA region's hazardous waste sites fell far short in having adequate financial reserves for clean-up1.
Captive insurers covering financial assurance related obligations may have limited capitalization and obligations for reserves. Simply put, this is not insurance, but retention. A captive insurance company is a wholly owned subsidiary formed exclusively to ensure coverage of worker and/or environmental exposures of the parent organization2.
Some states, including Massachusetts, Minnesota, Pennsylvania, Texas, Virginia and Wisconsin, no longer allow the use of captive insurance.
The final rule of 40 CFR 258, Appendix H, Subpart G, "Financial Assurance Criteria", Section 258.70(b) states that:
…the Agency is considering revising the criteria of the corporate financial test currently available to subtitle C hazardous waste facilities…thus allowing financially strong firms to demonstrate that setting aside funds in a trust fund or obtaining third-party assurance of their closure, post-closure care and corrective action costs is unnecessary.
The Subtitle D Rule provides a number of mechanisms to demonstrate financial assurance. The original 1991 Subtitle D Rule listed trust funds, surety bond guarantees, letters of credit, and insurance. However, due to strong political pressure by local governments and corporate waste firms, U.S.EPA amended this rule to include corporate and local government tests, and corporate and local government guarantees. Without extensive accounting, engineering analysis data, and review of these insurance mechanisms, it's anyone's guess whether these reserves will be adequate, or even available, some thirty years down the road.
Demonstrating availability of funds
Another area that needs greater scrutiny is how owners or landfill operators demonstrate that funds are available to meet the costs of closure, post-closure, and corrective action. Most landfills use self-assurance financial mechanisms, which do not guarantee that funds will be available after the operating life of the landfill.
In addition, the proposed rule deferred the possibility of financial responsibility requirements for third-party liability claims because there was insufficient data available to set appropriate levels of coverage for MSWLFs. It was assumed that MSWLFs would have difficulty obtaining financial assurance mechanisms to fulfill this requirement. New information is becoming available for EPA concerning different types of financial third-party mechanisms. EPA may also wish to explore liability-pooling arrangements similar to those being developed in brownfields cleanup.
The final rule of 40 CFR 258, Appendix H, Subpart G, "Financial Assurance Criteria", Section 258.70(b), also states that:
…the Agency recognizes that today's requirements may pose a significant burden on small landfills located in small and remote communities…. Therefore, while owners or operators of these landfills are subject to financial responsibility requirements for closure and post-closure care, they are eligible for exemption from the corrective action financial responsibility requirements…. By not requiring a ground-water monitoring system to be monitored and maintained for 30 years, the burden on small and remote communities will be minimized.
Lack of funding
What is also troubling is that the EPA has no resources to look at the risks of the landfills in the ground today, nor to evaluate greenhouse gas threats or threats to our groundwater.
How can we not afford to explore the potential corrective action costs to clean-up Solid Waste Management Units (SWMUs)?
With such great uncertainty about both the number and specific sites to be remediated and the likely per-site cost, it is obvious that any estimate of overall corrective action costs must be view cautiously. Nevertheless, on the assumption that 3,000 facilities will require significant corrective actions at these SWMUs, and on the equally heroic assumption that cleanups at these facilities will cost $30 million each, the RCA corrective action program may result in cumulative costs on the order of $90 billion3.
Risk assessment must be honed
We must make responsible inquiry into the ramifications of landfill cleanup.
EPA Regulatory Impact Analysis for the Final Rulemaking on Corrective Action for Solid Waste Management Units: Propose Methodology for Analysis, Office of Solid Waste, March 1993, cites:
- Landfills Total Present Value Cost of Corrective Action - $5.2 billion (1992 dollars, Exhibit 5-12)
- EPA estimates that 5,800 facilities and 100,000 SWMUs are potentially subjected to corrective action (ES.4.1 pg. ES-10)
- EPA projects releases to the environment (i.e., ground water, surface water, and air would occur at approximately 2,600 (44%) of these facilities. (ES.4.1 pg. ES-10)
- Roughly half of the total costs of corrective action are likely to be incurred by slightly more than ten percent of the facilities. …Of the approximately 3,000 SWMUs expected to be remediated at the upper 10% of facilities, 50% are landfills and surface impoundments. (5.2.2 Distribution of Facility Costs 5-16)
- Landfill are projected to have the highest remediation cost ($2.6 million per SWMUs) (5.2.3 Distribution of SWMU-level Costs pg. 5-21)
EPA's risk assessment of landfills needs to evolve from simply its "fault tree" approach to address a greater probability of what the possible discharges are and revise its algorithms of what the potential environmental impact of landfills are likely to cost. Advancing risk analysis for landfills is certainly in the public interest since our present day assumptions of what may happen in the future must be challenged.
Exemptions should be reassessed
Another troubling exemption in the hazardous waste regulations allows certain small quantity generator (SQGs) to landfill their toxins. No one really knows how much hazardous waste generated by SQGs goes into landfills today. The cumulative total of toxins generated by these SQGs is an unknown quantity.
NRC urges complete restructure of regulations
The National Recycling Coalition (NRC) has taken a leading position in addressing problems with hazardous waste regulations. After evaluating the Subtitle D regulations, the NRC has suggested that EPA completely restructure the regulatory mechanisms for solid waste management in five areas:
- ENTOMBMENT. EPA should consider changing the overall regulatory approach from one of entombment to one that requires pre-treating the municipal discard stream so that the resulting waste load is harmless to human health and the environment and no longer needs to be isolated or monitored.
- FINANCIAL ASSURANCE. In order to strengthen existing financial assurance regulations, EPA should eliminate various forms of self insurance, extend the liability period from 30 years through perpetuity or until the waste load is determined to be benign, and require third party insurance for worst-case corrective action. A law extending the liability through perpetuity is already in force in California and would more accurately reflect the potential long-term risk these facilities pose.
- SMALL GENERATOR EXEMPTION. EPA should consider eliminating the hazardous waste exemption for small quantity generators. This exemption is one of the reasons NRC believes pre-treatment of municipal solid waste should be required.
- MEGA-FILLS. EPA should consider placing a moratorium on accepting new landfills with elevations greater than 300 feet until engineering studies have validated the long-term side slope stability and functioning of the leachate collection systems in mega-size landfills.
- RECYCLING CONDITIIONS FOR LANDFIIL PERMITS. EPA should review key landfill permit conditions adopted around the country to foster waste prevention, source separation, and recycling as conditions of landfill permits. EPA should consider requiring minimum standards of recycling to be included in future landfill permits to integrate and achieve EPA's 35% national recycling goal. EPA should recommend additional recycling and source reduction requirements to be considered and implemented by state and local enforcement agencies in reviewing environmental documents and adoption of mitigation conditions on state and local solid waste permits and local land use permits for all landfills.
A question of time
It is merely a question of time. EPA has posited for decades that landfills will ultimately fail. Significant amounts of evidence show that the hazardous constituents in land disposal facilities eventually migrate into the broader environment. How can wastes be contained for periods long enough to allow for adequate degradation?
The EPA is currently re-evaluating the so-called 30-year rule. In its regard, their work plan states:
Current regulations specify termination of the post-closure monitoring period 30 years after closure. While emissions are likely to continue well beyond 30 years, the EPA lacks the scientific basis to define an appropriate endpoint for post-closure monitoring.
At this time, EPA's §610 review of its Subtitle D landfill regulations (40 CFR Part 258) is constrained by limited time, staff, and money. The Office of Solid Waste, Municipal and Industrial Solid Waste Division is currently reviewing all of the comments and plans to announce the results of the review by publishing a notice in the "Completed Actions" section of the Regulatory Agenda in December 2000.
EPA received over 180 comments from 43 respondents to the Regulatory Flexibility Act" 610 Review" announced in a Federal Register Notice published on Nov. 22, 1999, with the comment period ending Feb. 29, 2000. The results of this review will address comments on the impact of the regulations on small entities, and at that time, will either rescind, amend, or leave the rule unchanged.
Let's not deny what all the evidence points to. Landfill regulations, operation, and closure must be assertively addressed or we will continue to pass this burden on to our children, and on to our children's children. These landfills are like the graves of the undead, and they will come back to haunt us at some time in the future.
It's time we realized that the emperor, indeed, has no clothes.
- Finney et. al, Evaluating the Use of Captive Insurance as a Financial Mechanism Under RCRA, USPEA Region 4, Atlanta, GA
- Goff, Kate, When a Guarantee is No Guarantee, MSW Management, Santa Barbara, CA, May/June 1999, Vol. 9, No. 3.
- Portney, Paul, "the Economics of Hazardous Waste Regulations," in US Waste Management Policies: Impact on Economic Growth and Investment Strategies, Washington, D.C., American Capital Formation, 1992
About the author: Rob Arner has worked in the field of solid waste and environmental issues both inside and outside of Washington, D.C. for the past 20 years.
Edited by Kate Goff
Editor, Solid Waste Online