EIP: Coal Ash Recycling Cost-Benefit Analysis Flawed

The Environmental Integrity Project says EPA overstated the value of coal ash recycling by more than 20 times.

Two years after the Kingston, Tenn., coal ash spill, federal action to regulate coal ash dumps is being held up by concerns that stricter standards would depress markets for coal-ash recycling.

“Cost-benefit” analysis estimates prepared by the U.S. Environmental Protection Agency claim that coal ash recycling is worth more than $23 billion a year, based on the annual life-cycle benefits of avoiding pollution and reducing energy costs. That estimate is more than 20 times higher than the $1.15 billion that the U.S. government’s own data shows is the correct bottom-line number, according to a review conducted by the independent and nonprofit Environmental Integrity Project (EIP), Earthjustice, and the Stockholm Environment Institute’s U.S. Center (based at Tufts University).

This flaw in the analysis appears to have escaped scrutiny at the White House Office of Management and Budget (OMB), which required EPA to include a weaker coal-ash proposal favored by utilities and some coal ash recyclers, the EIP press release stated. Common sense and past experience indicate that stricter standards for disposal will work to increase, rather than decrease, recycling, but either way, EPA ought not to be intimidated into adopting weak rules based on grossly inflated values for coal ash recycling, the three groups said.

The new EIP analysis (pdf) shows that the discrepancy is due to several factors, including double counting of pollution reductions that EPA already claimed would occur separately under Clean Air Act rules adopted in August 2010, overstated emission levels from cement kilns, and unrealistic assumptions about potential energy savings from reducing energy consumption at cement kilns and gypsum plants. For example:

  • About half of the coal-ash recycling benefits are based on assumptions that substituting fly ash for 15 percent of U.S. cement production would cut fine particle emissions by more than 26,000 metric tons per year. EPA’s Office of Air and Radiation has estimated that the entire cement kiln industry releases just over 15,000 metric tons per year, and projected emissions already would decline to about 3,500 metric tons by 2013 when separate Clean Air Act standards for that industry take effect.

  • EPA estimated that recycling fly ash in cement kilns saves $4.9 billion in energy costs in the analysis prepared for the coal ash rule, but the agency’s Office of Radiation, in analysis developed to support the separate and more far-reaching Clean Air Act standards, estimated total energy costs for the entire industry at no more than $1.7 billion.

EPA’s cost-benefit analysis also neglects to account for many of the quantifiable benefits that would result from stricter standards and puts an enormous dollar value on the “stigma” that would attach to coal ash recycling by virtue of regulating disposal sites, the press release noted, adding that "these economic assumptions are haphazard, unsupported by the record, and designed to slant the playing field against regulations that are based on protecting the public’s health."

Frank Ackerman, senior economist, Stockholm Environment Institute, said: “We found numerous errors, large and small, in EPA’s cost-benefit analysis of the proposed rules. Once we corrected those errors, the strict regulatory option is the clear winner. The only argument for the weaker option is industry’s unsubstantiated claim that strict regulation of ash disposal would cause immense, long-lasting harm to the market for ash recycling. In reality, strict regulation of disposal would make recycling more attractive, not less.

Abigail Dillen, staff attorney, Earthjustice, said: “It should come as no surprise that requiring safe landfills for coal ash is less costly than allowing ash dumps to contaminate water in hundreds of communities around the country. What is surprising, in the face of this major public health threat, is that the books are being cooked to accommodate the coal industry.”

Why is strong federal action needed? The groups emphasized the following:

  • About $400 million has been spent to clean up the TVA Kingston spill with more than three million tons of spilled ash removed from the site. However, the cleanup is not over. Meanwhile, at least 50 similar, unregulated high-hazard dams around the country continue to pose a similar risk of catastrophic failure, and many more ash dumps are currently contaminating groundwater. EPA, EIP, and Earthjustice have documented more than 100 dump sites where coal ash has poisoned water supplies.

  • EPA’s own risk assessments reveal that arsenic levels in drinking water around unlined ash ponds can be high enough to cause cancer in one of 50 people – which is 2,000 times EPA’s acceptable risk level. Yet there is evidence that this high cancer risk is substantially underestimated. The leading arsenic experts in the country observe that this risk is actually 17.5 times greater.

  • A review of state regulations shows that the majority of states fail to require essential safeguards for coal ash landfills and ponds, including liners, groundwater monitoring, leachate collection, dust controls and financial assurance. In the two years since the disaster in Kingston, little has been done to improve state controls. Only four states in the nation require all landfills to be monitored and only six states require all ponds to be monitored for leaks.

Comments

Tue, May 31, 2011

The best group of people that I have ever seen at cooking the books is the so called environmentalists (lawyers). These rich groups always runs around the country telling people how you should live then get into their fancy cars and planes and head off to their next moneymaker campaign and leave the rest of us to pay the bills. All we need is a few more environmentalist and we can cook our next meal with the sun and a magnifying glass that is if the bugs and the plants don’t object.

Thu, May 26, 2011

Why did you choose not to use citations when referencing sources. I cannot find the EPA study you are referring to anywhere. When you do that you undermine a lot of people's credibility...people who have a stake in the environment!

Tue, Jan 4, 2011 Richard W. Goodwin, PE West Palm Beach, FL

Coal-fired power plants generate three major waste streams: Bottom Ash [inert *** formed during combustion], Fly Ash [fine particulate matter – removed from gas stream prior to venting] and Scrubber or Flue Gas Desulfurization [FGD] Sludge [precipitate formed during chemical removal of Sulfur Dioxide prior to venting]. The USA EPA has proposed two classifications for these materials - hazardous or non-hazardous. Beneficial use of ash and FGD sludge [i.e. FGD by-product gypsum] is exempted; the former used as additive to construction materials and the latter used in Wall Board and Cement production [e.g. Tampa and Seminole Electrics]. Since approximately 40% of these wastes are used, if USEPA opts for hazardous waste classification – beneficial use exemption notwithstanding – the threat of potential litigation would defer end-users [e.g. LaFarge Cement, US Gypsum] from its reuse.Using asbestos lawsuits as a proxy, if 50,000 people were "exposed" to coal ash and at some time during their life found reason to file similar suits, then the potential liability to the industry is $25 billion. If the byproduct would be regulated as a hazardous material, that would cost industry $1.5 billion a year whereas if it is viewed as a nonhazardous material, it would run $600 million a year. This would result in higher construction material prices and increase electric utilities disposal costs and electricity generation rates.

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