With U.S. EPA scheduled to finalize its rule for regulating coal ash by the end of the year, how can utilities prepare to address coal ash in their daily operations? During today's OnPoint, Harry Lamberton, vice president of energy and environmental services at Waste Management, discusses his expectations for the final rule and talks about the subsequent business opportunities that exist for the waste management sector.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Harry Lamberton, vice president of energy and environmental services at Waste Management. Harry, it's nice to have you here.
Harry Lamberton: Great to be here.
Monica Trauzzi: Harry, EPA will be finalizing its rule for coal ash by the end of December. The White House OMB has been holding meetings on the rule already this month. How far do you anticipate the agency will go with the final regulation?
Harry Lamberton: So it's going to be interesting. So there are really two parts of the regulations that they have been looking at, and fundamentally I think the big decision has been around do we manage this material as a hazardous waste under Subtitle C, or is it nonhazardous under Subtitle D? And I think with all the conversation input that's taken place over the last four years that we're most likely going to see a Subtitle D. We really think it's heading in that direction. EPA's done some initial signaling to indicate that it's going that way, and so we think it's going to be nonhazardous as the classification, that that rule's going to attach to the coal combustion residuals.
Monica Trauzzi: Right. And so there's this huge argument over whether coal ash can be successfully reused without environmental impact. Should it be considered a waste material or as something of value?
Harry Lamberton: Well, it's clearly a material of value. I mean, the industry generates upwards of 120 million tons a year, and for years and years -- decades -- they've been beneficially reusing up to 40 to 50 percent of what's generated in applications like a cement material or into wallboard, the synthetic gypsum that they generate, and there's a real value add that those components bring to those products. And I think it's another reason why it's so important that we see a Subtitle D nonhazardous designation, is that these have been long proven very safe practices. EPA just released a study back in late April, early May showing how safe coal ash is as a cement material and as an additive in making cement. And so that's where we think that will continue to go, particularly where encapsulation is involved.
Monica Trauzzi: But there are reports of groundwater contamination in Wisconsin tied to ash being used as fill material there.
Harry Lamberton: As fill material ...
Monica Trauzzi: How concerned are you about that?
Harry Lamberton: Well, so that's an un-encapsulated approach, and so that's a situation where the material is not encapsulated, it's being used as a fill material, and I think that's one of the things we're waiting to see where EPA's going to come down. But from our perspective we're much more used to working with materials. Our beneficial use program is around encapsulation processes or we're managing it in lined landfills, and that's the other approach that we take.
Monica Trauzzi: So what options do utilities have then in terms of how they manage coal ash no matter how the agency comes down?
Harry Lamberton: Right. So, well, I think it will somewhat depend on how the agency comes down, 'cause you do have the beneficial use aspect, and that really is, if there's an industry that's been very progressive around sustainability and finding a solution for their materials other than disposal, it's been this industry. The utility industry has been for decades beneficially reusing material, and so I think that will continue. And I think clearly encapsulation is going to be an approach. And then you're going to see, if we're not beneficially reusing material, and oftentimes the governor behind beneficial reuse is the market. How much cement needs to be produced? 'Cause if they don't need more cement, there's only so much material that can enter the market. But when you get past that there will be on-site disposal, that's something we do with a lot of customers, is we'll design, build, and operate on-site landfills at the power plant, which avoids transportation costs to an off-site facility. And then additionally we've got over 200 landfills around the country that we move material in that are all lined and constructed to federal regulations.
Monica Trauzzi: So really either way it's a win for you guys and your business.
Harry Lamberton: Yeah, from a business perspective we've got solutions, and really the programs that we have today, which do focus around the beneficial use, the on-site or the off-site, have been designed in anticipation of what we think those regulations will be. So from a business perspective it's not really a driver for us in influencing the regulations. It's been much more, a lot of what we do with our customers is work through the stakeholders that they have to work with, the communities, the regulators, in developing solutions that the science is strong around and making the right kinds of protections. We manage both hazardous and nonhazardous waste. It's pretty clear in this situation that that non-hazardous designation is the right one.
Monica Trauzzi: But once you have the regulatory certainty it'll help drive the discussion, yeah.
Harry Lamberton: It will clearly help. I mean, since, it's been four or five years now that there have been impending regulations, and that creates uncertainty for the utility industry. It creates uncertainty for us. It creates uncertainty for the beneficial use industry as to what to do. And so a lot of projects are on hold waiting for those regulations to come out.
Monica Trauzzi: Let's talk about North Carolina and Duke Energy specifically. They arguably have more to be watchful of because of the coal ash spill that occurred there earlier this year. How should Duke navigate this field moving forward?
Harry Lamberton: So I think what you see Duke doing right now is exactly what they should be doing. North Carolina's been very prescriptive in the standards that they've put in place, and so there's very specific regulations that Duke is now following and that they're doing as far as managing the materials that they have on-site, the corrective actions if they need to be taken, how they need to be taken, the process that they're going through as far as working with the regulators around their remedial plans. And so I think they're doing exactly what you should be doing, which is following the regulations that are in place and working with the key stakeholders, particularly in the state of North Carolina where that's been such a big issue.
Monica Trauzzi: All right, we'll end it there. This will be very interesting to watch. Thank you for coming on the show.
Harry Lamberton: Hey, thanks very much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
[End of Audio]