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> Government Affairs 601 Pennsylvania Avenue, NW

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> June 22, 2005

# Electronic submission to <1605bGuidelines.Comments@hq.doe.gov>

Hard copy submission to:

Mr. Mark Friedrichs, PI-40

Office of Policy and International Affairs

U.S. Department of Energy

1000 Independence Ave., S.W.

Washington, D.C. 20585

#### RE: RIN 1901-AB11

Dear Mr. Freidrichs:

Waste Management, Inc. (WM) is pleased to submit comments to the DOE's
Interim Final Rule for revised guidelines, Voluntary Greenhouse Gas
Reporting, pursuant to Section 1605(b) of the Energy Policy Act of 1992,
as published at 70 FR 15169, dated March 24, 2005. Our comments will
also cover issues raised by the associated Technical Guidelines that
were made available to the public simultaneous with the Interim Final
Rule.

WM is the nation's largest provider of solid waste services. Our
operations include almost 300 land disposal facilities for municipal,
industrial, and hazardous waste; 17 waste-to-energy plants that produce
electricity from the combustion of municipal and other wastes; over
30,000 refuse collection vehicles; over 150 recycling facilities; and
over 1200 administrative and maintenance facilities throughout the
country. The waste industry is largely a decentralized service industry,
which makes aspects of the industry's emissions generation, reductions,
monitoring, data gathering and data collation far more complex than
"smoke stack" industries, such as large fossil fuel power plants, whose
emissions generation may be largely confined to a small set of plants
with easily monitored point sources. In addition, many of the waste
industry's facilities are, in fact, pollution control facilities,
designed to treat and/or manage wastes so that the public is not exposed
to potential threats of its wastes. Any GHG emissions from these
activities are by-products of the larger purpose of removing pollution
threats to public health and the environment.

WM has been an active supporter of the development of reasonable public
policy and reporting regimens regarding climate change. Over the past
four years, WM has submitted information on voluntary GHG reductions to
DOE dating back to 1995, pursuant to the existing 1605(b) guidelines. We
currently report on over 200 individual projects. From 1995 through
2003, those reductions totaled over 172.5 million tons of carbon dioxide
equivalent, largely through the recovery or destruction of landfill gas.
In addition, WM is a founding member of the Chicago Climate Exchange
(CCX), and has agreed to reduce its GHG emissions by 4% through 2007 and
to participate in the nation's only active exchange trading program for
climate change gases. WM has voluntarily contributed GHG reductions to
events such as the Salt Lake City Olympics and the 2004 Super Bowl to
help make these events climate-neutral. We have also engaged in some
private greenhouse gas transactions, including a sale of options to
purchase future GHG reductions, as well as straightforward sales of
direct GHG reductions.

WM is thus deeply interested in the further development of the Voluntary
Guidelines and its impact on our ability to continue to report on our
reduction efforts as well as to assist in the development of public
policy on greenhouse gas emissions over the long term. Our comments
below reflect our profound concern that the Voluntary Guidelines are
deeply flawed and require considerable amending if the waste industry as
a whole and WM in particular are to continue their participation in and
support for the 1605(b) program.

> 1\. DOE's approach for accounting of greenhouse gas emissions from
> waste management activity is arbitrary and inherently biased against
> the waste industry. The model that DOE employs to account for carbon
> emissions carries forward any carbon in products until an emission
> occurs at a specific facility, thereby continually and universally
> transferring the carbon emission during the product's life cycle until
> the inevitable transfer of the used product to a waste management
> entity of some kind. In short, in DOE's scheme, the waste management
> entity is almost *always* accountable for carbon emissions during
> product life cycle. DOE arrived at this position by determining that
> (1) landfill methane is not biogenic, but anthropogenic, (2) the
> landfill operator is "accountable" for that methane emission when
> reporting emission inventories, (3) the landfill operator, while
> accountable for methane emissions from his facility, may not claim
> credit for carbon storage at the landfill, and (4) product
> manufacturers may claim credit for the carbon storage that occurs in
> their products that may be placed in a landfill after use, but bear no
> responsibility for the carbon emissions that may occur from the
> management of its products after their useful life. In applying this
> flawed and inequitable policy, DOE has not considered important
> aspects of the waste industry and its role in managing carbon-based
> materials that are used in our industrial society, particularly in
> managing the products that will eventually wind up in the waste
> stream.
>
> [Landfill Methane Emissions are Biogenic.]{.underline} DOE has
> determined that CO2 emissions that may occur during the life cycle of
> a carbon-based product are biogenic (with some exception for
> combustion of fossil-fuel based products such as plastic). However,
> DOE has inexplicably and illogically determined that methane, the
> product of the natural biodegradation of organic matter in the absence
> of oxygen, is anthropogenic if that biogenic process occurs at a
> municipal waste landfill. Inconsistently, DOE considers the CO2 that
> is produced simultaneously with the methane during biodegradation as
> biogenic, which indicates that DOE's decision point on biogenesis vs.
> anthropogenesis is based on Global Warming Potential (the GWP of
> methane being approximately 21-23 times greater than CO2). However,
> GWP is only a relationship factor among climate change gases, and not
> relevant to determining the origin of the emission. WM would concede
> that the landfill *facility* is anthropogenic, and the governmental
> rules and management practices that govern the management of material
> are anthropogenic, but the process that produces methane in a landfill
> is biogenic.
>
> [Landfill Operators Are Not Accountable for Methane
> Emissions.]{.underline} DOE's mistaken definition of landfill methane
> as anthropogenic is compounded by its proposal that the landfill
> operator is directly accountable for the landfill's methane emissions
> for purposes of entity reporting. However,, DOE fails to acknowledge
> that the landfill operator has no direct control over the content of
> the waste that is generated by his customers, or over the natural
> biochemical processes in the landfill that generate the landfill
> emissions. The design and operations for a modern municipal waste
> landfill are prescribed by EPA's Solid Waste Disposal Facility
> Criteria, 40 CFR Part 258. These rules, which all new landfills and
> expansions at existing landfills began following in 1993, contemplate
> and promote the anaerobic biodegradation of organic matter in the
> landfill, which is the biogenic source of landfill methane. The
> landfill operator, in short, does not produce methane by choice.
> (Operators of municipal solid waste landfills may control or recover
> that methane, either through voluntary action or as a by-product of
> Clean Air Act regulation of emissions of non-methane organic
> constituents at larger landfills). In addition, unlike producers of
> electric energy that may choose their fuel, the landfill operator
> cannot "choose" the materials that go into the landfill. The waste
> manager must accept the wastes generated by his customers. The fact
> that our modern society generates large amounts of carbon-based wastes
> (paper and other forest products, plastics, food, etc.) is beyond the
> control of the landfill operator. Although carbon-based wastes may
> also be recycled, composted, or combusted, those management choices
> may be limited by other external factors such as commodities markets,
> facility availability, cost constraints imposed by markets and
> customers, and other factors that, again, may be beyond the waste
> manager's control. The landfill operator's accountability is
> appropriately limited to operating the facility in compliance with
> established environmental, health, and safety regulations and using
> best management practices. It is inequitable for landfill operator
> participants in the 1605(b) Program to be held accountable, as entity
> reporters, for methane emissions from landfill operations.
>
> MSW Landfills Store Carbon. DOE's proposed approach for methane
> emissions from landfills is made more confusing by its accounting for
> the carbon storage that occurs in products that wind up in landfills.
> EPA and others have long understood the phenomenon of carbon storage
> in landfills. Indeed, in its publication *Greenhouse Gas Emissions
> from Selected Materials in Municipal Solid Waste*[^1]*,* EPA
> established carbon storage profiles for the major components of
> municipal solid waste. An interesting outcome of this accounting is
> that a landfill may be a *net storer* of carbon because, for many
> materials, the majority of carbon is not released in a gaseous state
> such as methane or CO2 but is sequestered in the compost matrix in the
> landfill. However, DOE's Technical Guidelines and proposed accounting
> for wood products imply that the landfill operator may not take credit
> for carbon storage that occurs at landfills but *wood products
> manufacturers may take credit.* WM does not follow DOE's logic that a
> product manufacturer is entitled to credit for carbon storage as a
> result of its voluntary choice of product materials, but is not
> accountable for the carbon emissions that may result from the product
> once disposed. Those carbon emissions are accountable to the waste
> manager. In short, the waste manager, under DOE's model and as noted
> above, is *always* left holding the carbon bag, so to speak.
>
> The DOE guidelines provide no rationale for its approach to landfill
> methane. The apparent rationale seems to be an attempt to allocate all
> carbon emissions to point sources, and to make those point sources
> accountable for those emissions in the 1605 (b) reporting program .
> However, once DOE embarks on that path, it may not arbitrarily choose
> "winners" and "losers" in carbon accounting without considerable
> deliberation and consideration of equity and responsibility for the
> carbon emissions.[^2] This does not seem to be the case in DOE's
> approach to methane emissions from landfills and for assigning
> "ownership" of carbon storage. [^3]
>
> WM does not believe that the 1605(b) program requires, as a matter of
> law or good policy, that all emissions identified in GHG inventories
> must be assigned to individual facilities. DOE already makes that
> concession in its consideration of CO2 emissions from the use and
> disposal of carbon-based products. Such emissions are considered part
> of the natural carbon cycle. A similar consideration may be made for
> methane from the land disposal of carbon-based products.
>
> The temporal emissions profile of a modern municipal waste landfill
> demonstrates another inequity of DOE's proposed approach for methane
> and carbon storage. Under all other climate change control schemes
> today (see Recommendation below), methane destruction and recovery
> from municipal waste landfills is considered an offset to carbon
> emissions from sources external to the landfill.[^4] Other
> governments, states, and trading institutions consider this reasonable
> policy given the internal offset of carbon storage at the landfill and
> the biogenic nature of the methane. In addition, the biodegradation
> process that occurs at a landfill from year to year is a function of
> many factors, which make relatively detailed emissions profiles
> problematic, with one exception -- the measured collection of landfill
> gas that occurs for purposes of flaring or energy recovery. Estimating
> the total generation of landfill gas annually is another matter,
> dependent on the total volume and carbon content of the waste, the
> fraction of waste that is biodegradable, the moisture content of the
> waste, annual rainfall, methane oxidation through daily, intermediate,
> and final landfill cover, the methane storage capacity of the waste
> mass, and the age of the waste. Generation rates from year to year
> will always vary, and sometimes change significantly. When a landfill
> first starts up, methanogenesis is slow to initiate, and when a
> landfill ceases taking waste, generation rates may drop rapidly.
> Indeed, with current technology, it is not possible to directly
> measure total landfill gas emissions. Currently, regulators and
> landfill operators use a relatively simplistic mathematical model that
> does not take into account all the important factors identified above.
> Yet, DOE proposes that a landfill operator choosing to participate in
> the Program must account and take ownership for such methane
> generation, include these methane emissions in its inventory, and, by
> implication, only be able to offset internal methane generation by the
> amount collected and destroyed in flares or recovery units. Since
> methane generation will always be greater than methane destruction,
> even though collection efficiency rates may reach 95% or greater, the
> landfill will always be a net generator of GHG, thus setting in place
> an accounting policy that undermines all other national and global
> protocols for addressing landfill emissions.
>
> Recommendation: DOE should follow the course of the Kyoto Protocol,
> the Kyoto Clean Development Mechanism, the Chicago Climate Exchange,
> the Government of Canada, the Massachusetts program for CO2
> reductions, the Regional Greenhouse Gas Initiative and the California
> Climate Action Registry by defining municipal solid waste landfills as
> carbon neutral, based on the biogenic nature of landfill methane, the
> offsetting carbon storage associated with the landfilling of
> carbon-based materials[^5], and as a matter of equity to landfill
> operators. All *voluntary reductions* of methane from landfills should
> be considered net reductions in methane and its associated global
> warming potential. The only other equitable alternatives for DOE to
> consider, *which WM does not endorse*, are to either require product
> manufacturers \-- to include makers of forest products, food, and
> other biodegradable items that may become waste \-- to be accountable
> for both downstream carbon storage and carbon emissions, or, in other
> words, establish a complete climate change stewardship accounting for
> all products containing carbon that find their way into the waste
> stream. Alternatively, DOE could establish an intensity factor for
> waste management based on a ratio of total waste managed to the total
> carbon emission over time. However, the intensity value will always
> trend toward zero as carbon stores in the landfill increase while the
> methane generation potential of the waste mass decreases over time. As
> a result, such an indicator provides no indication of active efforts
> to reduce the carbon footprint of the entity and is only a function of
> business-as-usual for landfill operators.

It is important to note that landfill operators gain no "free pass"
under a carbon neutral approach. Reportable methane reductions would
still require capital investment, installation, and operation of methane
collection and control equipment in order to generate reductions. Other
policy criteria can be applied to address issues of additionality, such
as regulatory requirements, in any future mandatory program and/or
trading program for carbon reductions.

> 2\. Entity wide reporting requirements for national companies,
> especially decentralized service companies such as WM, are a
> considerable disincentive to Program participation.
>
> WM, like many other national service companies, consists of hundreds
> of facilities that serve local markets. Although financial accounting
> systems are centralized, many of the quantities and calculations that
> go into an inventory for GHG emissions are not, and data gathering and
> collation may be time-consuming and expensive. These costs must be
> weighed against any benefit gained by reporting inventory and
> reductions.[^6] WM is particularly concerned with the distinction
> between registered and reported reductions, with the former carrying a
> requirement for an entity wide inventory as a prerequisite for
> registered reductions. This, again, seems biased against service
> industries whose emissions are widely disbursed.
>
> As we noted above, WM's emissions emanate from hundreds of facilities
> and tens of thousand of
>
> service vehicles. These assets are employed in the service of local
> markets. In each market or
>
> facility service area, projects may be undertaken which would reduce
> greenhouse gas emissions,
>
> such as vehicle routing improvement or voluntary methane recovery
> programs. The 1605(b)
>
> program provides no incentive for "production"[^7] to be transferred
> to another service area to
>
> hide greenhouse gas emissions because facility shutdown or lowering
> business volumes are not
>
> creditable actions. Thus, any local action to lower greenhouse gases
> is a unique, real, and
>
> absolute reduction that may stand on its own in any registration
> system.
>
> Recommendation: DOE should allow project reductions to be
> "registered", even in the absence of entity-wide reporting, if the
> entity responsible for the reduction can certify that the reduction
> did not occur as a consequence of transferring carbon emissions from
> one facility to another.
>
> 3\. DOE must revisit the concept of "one General Guideline fits all."
> Despite the customization afforded by the sector-specific Technical
> Guidelines, a number of the general guidelines appear to be
> constructed for "smokestack" industries with easily monitored emission
> points. As only one example, because of the ordinal rating system for
> estimation methods for registering reductions, service entities such
> as transportation-based services would have to spend considerably more
> per unit of carbon inventoried than would a power plant or
> manufacturing operation with far fewer locations where carbon can be
> monitored, controlled, or emitted. This is because fuel use at a power
> plant is more easily monitored than in a fleet of several thousand
> trucks, and estimation methods have different values in DOE's rating
> system. The choice for the trucking entity is to choose readily
> available estimation methods, such as fuel costs from general ledgers,
> or to incur considerable costs to identify actual fuel usage among a
> wide variety of vehicles and translate that into an estimated GHG
> emission.
>
> A second example is the guideline dealing with establishing reductions
> against a set baseline of production. As indicted above, the concept
> of baseline production is not relevant to emissions from municipal
> solid waste landfills compared to, say, a power plant or automobile
> manufacturing plant. Methane emissions and methane reductions may go
> up or down regardless of changes in volume of waste managed on an
> annual basis, and emissions/ unit of waste managed is not a reasonably
> obtained value that will make sense to regulators or the public.
>
> Recommendation: DOE should work with industry representatives to
> develop sector specific general guidelines for reporting that take
> into account the unique elements of that industry's carbon footprint
> and the industry's ability to collect and collate information that is
> useful to developing public policy on controlling climate change
> gases. The value of "verifiable" reductions[^8] should be secondary to
> the value of information on opportunities for reduction through
> application of technology or management practices.

Again, thank you for the opportunity to comment on this important
program. Please contact me at the above address or email me at
<eskernolis@wm.com> if you have any questions regarding these comments.

Sincerely yours,

Edmund J. Skernolis

Director of Government Affairs

[^1]: EPA Office of Solid Waste, 530-R-98-013, September 1998, Revised
    2002.

[^2]: Even then, WM does not believe that the mandate under 1605 (b) in
    any way authorizes DOE to establish ownership over carbon storage or
    reductions that may clearly be in dispute.

[^3]: 1605(b) statutory language directs DOE to address carbon storage
    "regardless" of method, but DOE appears to have chosen to narrow its
    definition of sequestration and storage to preclude landfills from
    accounting for landfill storage of carbon.

[^4]: WM does not dispute the value of *national* inventories of
    landfill methane, estimates for which are included in both DOE and
    EPA annual reports on climate change gas generation.

[^5]: WM does not believe that simply allowing landfills to quantify
    carbon storage as an offset to total methane generation is a
    feasible alternative. Despite the fact that at landfills with gas
    collection systems it is likely that storage will more than offset
    methane emissions, measurement of the total carbon content of the
    waste mass, and the temporal disconnect between the initial disposal
    of carbon-based wastes and any eventual fraction that biodegrades
    into methane (and the fraction eventually collected) would make
    accounting so daunting and expensive that it would likely eliminate
    the participation in the program by landfill operators.

[^6]: The issue is one of the costs of reporting to the 1605(b) Program
    and not one of undertaking a reduction project, which will be
    determined on its own merits and would occur regardless of any
    federal reporting program.

[^7]: The term "production" is used liberally here in the context of a
    service such as waste collection or disposal.

[^8]: DOE acknowledges that the reductions reported under 1605(b) cannot
    be ascribed value nor can DOE commit future Congresses or
    Administrations to any particular use of the reported reduction, to
    include value in a trading program.