How aggressive will U.S. EPA be in its final rule for coal ash regulations? During today's OnPoint, Kirk Benson, CEO of Headwaters, the country's largest manager of coal ash, discusses his expectations for the final rule and talks about the impact Duke Energy Corp.'s Dan River incident had on the dynamic of the coal ash debate.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Kirk Benson, CEO of Headwaters, the country's largest manager of coal ash. Kirk, thank you for joining me again.
Kirk Benson: Thank you very much.
Monica Trauzzi: Kirk, last month, 85 Democrats sent a letter to EPA calling on the agency to issue final coal ash regulations soon. The environmental impact of coal ash has become a contentious issue, not only in Washington, but around the country. How far do you anticipate the agency will go in their final rule?
Kirk Benson: Well, the EPA has clearly given guidance that they intend to regulate fly ash under Subtitle D of [the Resource Conservation and Recovery Act], so they've stated that on three separate occasions. Most recently, they made that statement in the proposed rules surrounding CO2. So it's very clear, the direction that the EPA is moving. We believe that we'll have regulations under Subtitle D, and the commitment that came out of the court proceedings is that the EPA will issue those regulations by December of this year.
Monica Trauzzi: Earlier this year, the agency released its risk-benefit assessment of use in coal ash. How did that move by EPA impact the discussion?
Kirk Benson: Well, there's two things that need to take place for us to improve the use of fly ash from a beneficial perspective. One thing is that we need to have regulatory certainty, and the second thing that's important is that people understand that fly ash isn't really a waste material; it's a very valuable product. So when the EPA issued their risk analysis, the conclusion was that the use of fly ash as a replacement in concrete, a replacement for portland cement in concrete, was very positive. So the EPA issued a statement that was very supportive of beneficial use. So we're moving in the direction of having regulatory certainty and we're moving in the direction of people understanding that there's no incremental environmental exposure when fly ash is used in concrete. So that action by the EPA is very supportive and very positive.
Monica Trauzzi: There's pushback, though, from the environmental community, some aggressive pushback. How do you respond to that and how do you deal with that pushback?
Kirk Benson: Well, we've been working with the EPA for five years in trying to get to a point where we have regulatory certainty, and the environmental organizations have started to make comments because of the Dan River spill in North Carolina, but that has nothing to do with the characteristics of fly ash. That has to do with the engineering of a disposal pond that was done over 50 years ago, and it doesn't change the fundamental nature and the fundamental qualities of fly ash. In the EPA's risk assessment, the risk evaluation they did using their methodology, their conclusion was that there's no incremental environmental exposure when fly ash is used as a replacement for portland cement. So there's no reason for a Subtitle C rule. The EPA should move ahead as it is towards a Subtitle D rule.
Monica Trauzzi: OK, and that's the major point of contention, of whether it's a hazardous material or not. Let's talk about North Carolina. You brought it up on the state level. North Carolina legislators are moving forward with cleanup mandates for Duke Energy in response to the Dan River incident. What's your take on what the North Carolina Senate has moved forward with, and does that serve as a model for the rest of the country?
Kirk Benson: I think that what has happened in North Carolina is very politically charged. There's clearly going to be action taken in North Carolina. The important thing for the legislators and for regulators to understand is the wide variety of beneficial uses that fly ash can add value to, both economically as well as the positive environmental impact from using fly ash. So that's the message that we need to carry to North Carolina to ensure that people understand and consider both the environmental impact and the economic impact. So we're hopeful that out of North Carolina, people will continue to understand that the best thing that we could do is increase beneficial use so material doesn't have to be disposed of at all.
Monica Trauzzi: And again, here, the environmental community has identified other facilities that they believe are at risk for a similar type of incident as we saw in North Carolina.
Kirk Benson: Yes, and it's important to understand that the engineering standards under a Subtitle C approach or Subtitle D approach are virtually identical. There is no incremental safety afforded the environment through Subtitle C. They're virtually identical rules. The difference is on enforcement of those rules, and so we're very hopeful we'll move ahead with the Subtitle D, and there is legislation that could address the enforcement issue, and we, of course, will be supportive of enforcement under Subtitle D with citizen enforcement or the legislation, which would grant the EPA more authority.
Monica Trauzzi: Federal backstop.
Kirk Benson: Yes, a federal backstop would be -- that's an excellent approach. There is already a federal backstop in municipal solid waste disposal, and the legislation is basically crafted using that model. So the model's already there, so whether it's a Subtitle D or whether it's a legislative approach, either one would be acceptable to us.
Monica Trauzzi: How did the Duke Energy incident change the dynamic of the discussion over coal ash?
Kirk Benson: Well, the unfortunate thing was it gave the environmental organizations an opportunity to raise the issue of how disposal of fly ash should be handled.
Monica Trauzzi: And it wasn't just the opportunity; this was a serious incident for the community.
Kirk Benson: It was a serious incident, clearly, for the community, and we're very supportive of increasing engineering standards around disposal of fly ash. We're absolutely -- believe that that is the right thing to do, but again, it didn't change the fundamental characteristics of fly ash because there was the incident at Dan River. Fly ash continues to be a material that does not create incremental environmental exposure when it's properly used. There is not that much difference between fly ash and materials that it substitutes for, and so Dan River doesn't change that fundamental fact.
Monica Trauzzi: All right. We'll end it right there. Thank you for coming on the show.
Kirk Benson: You're welcome.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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