### 1 MEMORANDUM

TO: Hillary Ward, U.S. Environmental Prot ection Agency, OAQPS/Sector Policies and Programs Division, Fuel and Incineration Group

FROM: Eastern Research Group, Inc. (ERG)

DATE: April 2014

SUBJECT: Cost and Emissions Impacts Resulting from the Landfills NSPS Review

Introduction

The purpose of this memorandum is to present the results of the analysis to estimate costs and emission reductions for the 2014 review of the ne w source performance standards (NSPS) for municipal solid waste (MSW) landfills. These impacts were calc ulated for new landfills that are projected to commence construction, reconstruction, or modification in the first 5 years after proposal (between 2014 and 2018). The equations and data i nputs used to estimate the impacts are discussed in other memoranda in the docket. 1,2,3

Results are presented in 2012 dollars ($2012) and are based on the annualized costs in 2023 using an interest rate of 7 percent. By 2023, the new m odel landfills have reached a point in their lifecycle at which at least half of the models trigger the NMOC emission threshold, install controls, and therefore incur costs and emission reductions for most of th e options under consideration in this review.

The results of the impacts analysis are presen ted for the proposed changes to the NSPS (the proposal) as well as several options. The results are pr esented as incremental impacts relative to impacts associated with the current design capacity and NMOC emission thresholds currently in 40 CFR part 60, subpart WWW. Landfill-specific details of each optio n under consideration are documented in the modeling database. 4 This memorandum is organized as follows:

1.0 Overview of Regulatory Options 2.0 Estimating Cost Impacts 3.0 Estimating Emission Reductions Impacts 4.0 Estimating Impacts for Enhanced Surface Emission Monitoring 5.0 References Appendix A: Index of Regulatory Options Appendix B: Charts Tracking Impact of NMOC Emission Thresholds and Lag Times Over Time Appendix C: Detailed Cost a nd Emission Reduction Impacts

1. Overview of Regulatory Options



### D escriptions of the current regulatory baseline, th e proposed revision, and alternative options are included in this section.

### 2 1.1 Baseline

 Currently, 40 CFR part 60, subpart WWW requi res all landfills with a design capacity of 2.5 million megagrams (Mg) and 2.5 million cubi c meters or greater to report their NMOC emission rate. When the NMOC emission rate excee ds 50 Mg/yr, a landfill is required to control its emissions within 30 months of submitting a report in which the NMOC emissions exceeded the threshold. Based on the characteristics of th e 21 modeled new landfills expected to commence construction, reconstruction, or modification in the first 5 years after proposal, 17 landfills are expected to meet the design capacity threshold. Of these 17 landfills, eight are expected to exceed the NMOC emission threshold and install a gas collection and control system (GCCS) by 2023.

1.2 Proposal

 The proposal reduces the NMOC emission threshold from 50 Mg/yr to 40 Mg/yr. The number of landfills subject to the rule remains the same as the baseline because the design capacity threshold remains the same. However, 11 landfills are e xpected to exceed the NMOC emission threshold and install a GCCS by 2023. The installation of the GCCS is accelerated under this option, because landfills will exceed the emission threshold earlier, as shown in Table 1.

 Consistent with the current baseline, the propo sal employs a modeled initial GCCS installation lag time of 3 years after exceeding the NMOC th reshold, and an average GCCS expansion lag time of 4 years as discussed in another memorandum. 2 As a result, 2020 is the earliest year any cost and emission reduction impacts would be r ealized from the projected new landfills as shown in Table 1.

Table 1. Total Number of New Landfills Project ed to Control Landfill Gas Emissions over the Initial 10-year Period

Control Parameters Number of Landfills with Control Systems Installed By Year 2014- 2019 2020 2021 2022 2023 Baseline (2.5/50) 0 0 6 7 8
Proposal (2.5/40) 0 3 6 7 11

1.3 Alternative Regulatory Options

The impacts of several regulatory options other than proposed option 2.5/40 were also considered. The options varied one or more of the control parameters and/or lag times to install and expand on the GCCS. These options are summarized in this memorandum for reference and include the following adjustments to the control requirements. A complete index of the characteristics of each option considered is shown in Appendix A.

 Some options incorporated a further reduction in the NMOC threshold, to 34 Mg/yr. These options also made a corresponding reduction in th e design capacity threshold, from 2.5 million Mg to 2.0 million Mg in order to include any smaller landfills that might exceed this lower NMOC emission threshold. While these landfills would be exp ected to achieve additional reductions over the lifetime of the landfill when compared to the baseline emission threshold of 50 Mg/yr, there can be some variation of how much additional emission reductions, if any, would be achieved in any particular year. A lower NMOC emission threshold would result in earlier

### 3 installation of controls, and these initial systems would be designed smaller than a system that was installed at a later point in the landfill lifecycle. As a result, the amount of reductions achieved in any particular year may fluctuate a bove or below the baseline as shown in Chart B-1 of Appendix B.

 Other options considered increasing the desi gn capacity threshold to 3.0 million Mg from 2.5 million Mg along with a reduced NMOC em ission threshold of 40 Mg/yr. This option evaluated any potential reduction in the reporting bur den from landfills that are subject to the rule but have not yet exceeded the emission threshold.

 Some options shortened the initial lag times for in stalling the GCCS. For example, shortening the initial lag time from 3 years to 2 years would requir e some landfills to install the controls earlier and would also trigger an earlier installation sch edule for each subsequent expansion. However, because the same subset of landfills would require controls to be installed under the current 3- year lag times, the overall additional emission reduc tions are not as significant over time. Further, when installing controls a year earlier as a result of a shortened lag time, the initial system will be designed slightly smaller than a system designe d to capture gas in a subsequent year.

 Some options shortened the expansion lag times. Reducing the expansion lag time achieves a larger net emission reduction over time because each s ubsequent expansion is on a shorter 2-year cycle. However, the same subset of landfills w ould still require controls to be installed under either lag time.

 Other options shortened both the initial and expansion lag times. Th is combination of initial and expansion lag time reductions achieved the larg est amount of reductions over time because they achieved an earlier installation start date, pair ed with a tighter frequency of subsequent expansions.

 Finally, some options combined reduced desi gn capacity or NMOC emission threshold with a shortened initial and/or expansion lag time.

Charts displaying the patterns of emission reductio ns as a function of various lag times are shown in Appendix B. The patterns of emission re ductions follow a step-wise pattern over time.

2. Estimating Cost Impacts

For each option, the cost impacts analysis compar es net annualized costs of the baseline option in 2023 to the net annualized costs of each regulatory option in 2023. The costs incorporate annualized capital costs to install the GCCS, operating and mainte nance (O&M) costs for the GCCS, and if relevant, any annualized capital and O&M costs for energy recove ry equipment. If energy recovery was expected to occur at a landfill, the annual revenue from the ener gy recovery project was subtracted from the total annualized costs in order to compute the net annuali zed cost to each landfill. The detailed control cost equations are shown in another memorandum. 2

In addition to the control costs to comply with the regulation, the costs also include testing and monitoring costs to demonstrate compliance. The testing and monitoring costs include the labor, equipment rental, and any capital expenses involved w ith preparation of NMOC emission rate reports, conducting initial performance tests, monthly wellhead monitoring, continuous combustor monitoring, and quarterly surface emission monitoring. The detaile d testing and monitoring equations are shown in another memorandum. 3

The costs and revenues associated with the base line and proposal are shown in Table 2.

### 4 Table 2. Summary of Cost Impacts for Proposal in 2023

Option Annualized Control Cost Average Annualized Revenue Average Annualized Testing and Monitoring Cost Average Net Total Annualized Cost Total Costs of Baseline ($2012) Baseline 2.5/50 23,956,900 21,315,300 66,400 2,708,000
Incremental Costs above Baseline ($2012) Proposal 2.5/40 3,178,800 2,713,700 5,900 471,000

The incremental costs associated with the othe r regulatory alternatives as well as a summary of each individual cost component are shown in Appendix C.

3. Estimating Emission Reduction Impacts

The emission reductions of each regulatory option are presented in terms of NMOC (Mg/yr), methane (Mg/yr), and carbon dioxide equivalents (Mg CO 2 e/yr) based on a global warming potential of 25 for methane. The detailed emission reductions equations are shown in another memorandum. 2 The reductions associated with the baseline and the proposal are shown in Table 3.

Table 3. Summary of Emission Reductions for Proposal in 2023

Option NMOC Reductions (Mg/yr) Methane Reductions (Mg/yr) Methane Reductions (Mg CO 2 e/yr) Incremental Annual NMOC Reductions (Mg/yr) Incremental Annual Methane Reductions (Mg/yr) Incremental Methane Reductions (Mg CO 2 e/yr) Baseline 610 94,800 2,371,000 N/A N/A N/A Proposal 2.5/40 689 107,100 2,678,300 79 12,300 307,600

Detailed annual emission reductions for other options for each affected landfill are shown in the landfill modeling database outputs. 4

Table 4 summarizes the overall and incremental cost effectiveness of the proposal.

Table 4. Summary of Overall Cost-Effectiveness Option $/Mg NMOC $/Mg Methane $/CO 2 e Baseline 2.5/50 4,400 29 1.1
Proposal 2.5/40 6,000 38 1.5

The overall cost effectiveness of the baseline is provided for reference and it was calculated by dividing the total emission reductions achieved under the baseline by the total costs associated with the baseline. The incremental cost effectiveness of the proposal was calculated by dividing the incremental

### 5 costs of the proposal by the incremental reductions of the proposal.

Additional details about the emission impacts a nd cost effectiveness of other regulatory alternatives can be found in Appendix C.

4. Estimating Impacts for Enhan ced Surface Emission Monitoring

In the notice to propose amendments to th e landfills NSPS, the EPA is requesting public comment on adopting an enhanced surface emissions monitoring (SEM) program. Using the methodology outlined in another memorandum 3 , SEM costs were estimated for both the proposed SEM program and the enhanced SEM program. 3 The costs for the proposed SEM prog ram are included as one element of the estimated testing and monitoring costs shown in Table 2 of this memo.

This section compares the costs of the proposed SEM program to the costs of the enhanced SEM program as they would apply to the baseline and pr oposal. The significant driv er associated with the increased costs of an enhanced SEM program is the tim e it takes to walk a tighter traverse path. Under the proposed SEM program, the traverse path is every 30 meters (~100 feet), but under an enhanced approach, this traverse is every 25 feet, or approximate ly four times the distance of the current approach. There are also additional costs associated with an in creased frequency of cover de ficiencies identified and repaired as a result of walking a tighter path.

Table 5. Summary of Costs for Proposed Versus Enhanced Surface Emission Monitoring Program

Control Option Surface Monitoring Option No. of Landfills Conducting Surface Monitoring Average Annual Cost Incremental Cost Average Annual Cost Per Controlled Landfill Incremental Annual Cost per Controlled Landfill

Baseline (2.5/50) No change (30- meter traverse) 8 42,300 N/A 5,300 N/A
Enhanced (25- foot traverse, integrated sample) 8 312,800 270,500 39,100 33,800

Proposed (2.5/40) No change (30- meter traverse) 11 50,000 7,700 4,500 700
Enhanced (25- foot traverse, integrated sample) 11 362,900 320,600 33,000 29,100

5. References

1. ERG. 2014. Summary of Landfill Dataset Used in the Cost and Emission Reduction Analysis of Landfill Regulations.

2. ERG. 2014. Methodology for Estimating Cost and Emission Impacts of Proposed MSW Landfill Regulations.

3. ERG. 2014. Methodology for Estimating Testing and Monitoring Costs for MSW Landfill Regulations.

4. ERG. 2014. Modeling Database Containing Inputs and Results of Proposed Revisions to MSW Landfill NSPS.

### A-1 Appendix A: Index of Regulatory Options for Landfill NSPS Review

Database

Model Option # Option Name Description 1 Baseline (2.5/50)  Design capacity cutoff = 2.5 million Mg

 NMOC cutoff = 50 Mg/yr

 Initial lag time = 3 years (30 months in rule, modeled as 3 years to account for

time between when emission threshold was first exceeded and the time the report was submitted)

 Expansion lag time = 4 years (some will do 2, more will do 5, so use 4 as

typical) 2 2.5/50, IL Same as current rule, except  Initial lag time = 2 years
3 Proposed (2.5/40) Same as current rule, except:  NMOC cutoff = 40 Mg/yr

4 2.5/40, IL, EL Same as current rule, except:  NMOC cutoff = 40 Mg/yr

 Expansion lag time = 2 years

 Initial lag time = 2 years
5 2.0/40 Same as current rule, except:  Design capacity cutoff = 2.0 million Mg

 NMOC cutoff = 40 Mg/yr
6 2.0/40, IL Same as current rule, except:  Design capacity cutoff = 2.0 million Mg

 NMOC cutoff = 40 Mg/yr

 Initial lag time = 2 years
7 2.0/34 Same as current rule, except:  Design capacity cutoff = 2.0 million Mg

 NMOC cutoff = 34 Mg/yr
8 2.0/34, IL, EL Same as current rule, except:  Design capacity cutoff = 2.0 million Mg

 NMOC cutoff = 34 Mg/yr

 Expansion lag time = 2 years

 Initial lag time = 2 years
9 3.0/40 Same as current rule, except:  Design capacity cutoff = 3.0 million Mg

 NMOC cutoff = 40 Mg/yr
10 3.0/40, EL Same as current rule, except:  Design capacity cutoff = 3.0 million Mg

 NMOC cutoff = 40 Mg/yr

 Expansion lag time = 2 years
11 2.0/50 Same as current rule, except  Design capacity cutoff = 2.0 million Mg
12 2.5/50, EL Same as current rule, except  Expansion lag time = 2 years

### B-1 Appendix B. Charts Displaying the Impact of Variations in NMOC Emission Thresholds and Lag Times

Figure B-1. Impact of Reduced NMOC Emission Threshold

Figure B-2. Impact of Shortened Initial Lag Time 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030MethaneEmissionReductions(MgCO2e/yr)

NMOC = 50 Mg/yr NMOC = 40 Mg/yr NMOC=34 Mg/yr Threshold : Design Capacity : 2.0 million Mg NMOC: various

‐ 1,000,000 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030MethaneEmissionReductions(MgCO2e/yr)

Net Impact of Reduced Initial Lagtime Initial Lag = 3 years Initial Lag = 2 years Thresholds : Design Capacity : 2.5 million Mg NMOC : 50 Mg/yr

### B-2 Figure B-3. Impact of Shortened Expansion Lag Time

Figure B-4. Impact of Shortened Initial and Expansion Lag Times 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030MethaneEmissionReductions(MgCO2e/yr)

Net Impact of Reduced Expansion Lagtime Expansion Lag = 4 years Expansion Lag = 2 years Thresholds : Design Capacity : 2.5 million Mg NMOC : 50 Mg/yr

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030MethaneEmissionReductions(MgCO2e/yr)

Net Impact of Reduced Initial and Expansion Lagtimes Initial Lag = 3 yrs; Expansion Lag = 4 yrs Initial and Expansion Lags = 2 years Thresholds : Design Capacity : 2.5 million Mg NMOC : 40 Mg/yr