ASSESSMENT OF THE POTENTIAL COSTS, BENEFITS, AND OTHER IMPACTS

of the

WITHDRAWAL OF THE EMISSION -COMPARABLE FUEL EXCLUSION

UNDER RCRA – FINAL RULE

Economics and Risk Analysis Staff Office of Resource Conservation and Recovery U. S. Environmental Protection Agency 1200 Pennsylvania Ave., N. W. Washington, DC 20460

May 11, 20102 BACKGROUND

Regulatory Background

The comparable fuels exclusion (CFE) final rule was promulgated in 1998. This rule excluded from the regulatory definition of hazar dous waste fuel-grade hazardous secondary materials with specifications comparable to fossil fuels. The exclusion could be applied to liquid hazardous secondary materials, but not to solids or used oils. Following promulgation, several members of the regulated commun ity expressed concern about constraints in the rule that prevented beneficial fuel use for much of the pot entially eligible hazardou s secondary materials. The Office of Management and Budget (OMB ), in their 2005 report on regulatory reform 1

, recommended that EPA remove these constraints to achieve the full potential of the exclusion. Following additional data collection, review, and assessment, the Agency promulgated the emission-comparable fuel final rule (ECF final rule) in December 2008. 2 This rule expanded the CFE to include hazardous secondary materials wh ich, when burned in industrial boilers meeting certain conditions, would generate emissions compar able to those from burning fuel oil. The Agency is now finalizing the withdrawal of the ECF final rule.

Analytical Background

The Agency published an economic assessment in support of the ECF final rule. 3 Under the assumption that all 50 states would adopt the rule, this assessment estimated net social benefits (cost savings) of $13.4 million per year , with an estimated 118,500 tons/year of ECF excluded. Our primary data source at the time of this analysis 4 does not identify a management

method code for wastes that are combusted in an incinerator and where that waste may have a heating value that is used benefici ally in lieu of fossil or other fu els. As a result, we assumed that

ECF burned in a hazardous waste incinerator is burned for destruction only (no energy value derived from the material), as reported by these facilities to EPA’s Biennial Reporting System

under H040. 5

Upon further consideration, the Agency has de termined that material qualifying as ECF but reported under hazardous waste management c ode H040 is likely to provide some level of heating value to incinerators. As a result, we developed a revised economic assessment that accounted for H040 heating value to incinerators. This revised assessment estimated benefits (cost savings) of $6.6 million per year with up to 117,100 tons of ECF excluded per year. This

document 6 was developed as a supplementary assessment to the May 14, 2008 Assessment and

should not be considered as the economic assess ment in support of this withdrawal of the ECF

Final Rule.

1 Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), Regulatory Reform of the U.S. Manufacturing Sector – 2005

2 Expansion of RCRA Comparable Fuel Exclusion-Final Ru le, December 19, 2008 (eff ective January 20, 2009).

3 U.S. EPA, Assessment of the Potential Costs, Benefits, and Other Impacts of the Expansion of the RCRA Comparable Fuel Exclusion—Final Rule , May 14, 2008.

4 USEPA, “2005 National Biennial Report”

5 U.S. EPA, 2005 Hazardous Waste Report Instructions and Forms , EPA Form 8700-13 A/B, October 2005.

6 U.S. EPA, Revised Assessment of the Potential Costs, Benefits, and Other Impacts of the Expansion of the RCRA Comparable Fuel Exclusion-Final Rule , July 15, 20093 PURPOSE

The purpose of this document is to present estimated impacts associated with the withdrawal of the December 19, 2008 ECF final rule. Estimated impacts include costs, benefits, small entity, and other impacts. Impacts presented in this paper are based on findings contained in the July 15, 2009 revised assessment document.

BASELINE CHARACTERIZATION

Proper baseline characteriza tion is critical for the accura te assessment of impacts associated with any regulatory action. The proper baseline for this action should reflect the level of ECF final rule implementation from the date of this rule to the date of full and final implementation of the ECF rule. Full implemen tation of the ECF final rule was expected to occur over several months, if not years for those stat es and facilities projected to adopt the rule.

METHODOLOGY AND FINDINGS

This withdrawal of the ECF final rule seeks to reverse the newly promulgated exclusions to selected rules implementing subtitle C of the Resource Conservation and Recovery Act (RCRA). These exclusions are for energy-rich secondary materials which would otherwise be hazardous wastes. However, when burned under specified conditions, these ECF materials can be used for energy recovery in non hazardous boile rs and would have emissions comparable to emissions from industrial boilers burning fuel oi l. This document assesses the estimated impacts

of the withdrawal based on a re versal of the benefits, as re vised, for the ECF final rule.

Based on our revised assessment for the ECF fi nal rule, we find that this withdrawal

could result in annual lost benef its (costs) to society of as mu ch as $6.6 million dollars per year 7

, with up to 117,100 tons/year of ECF moving back under full RCRA Subtitle C jurisdiction. However, due to baseline uncerta inty, the actual impact of this action could range from negligible to $6.6 million, with anywhere from negligible to 117,100 tons/year of material diverted away from ECF. The low end of the range assumes little or no implementation of the ECF rule. Actual impacts of this action are likely to fall very near the low end of the range due to the anticipated slow implementa tion of the ECF final rule.

This withdrawal is expected to result in no discernable impacts to human health and the

environment.

7 The revised assessment also conducted a sensitivity analysis assuming an alternative average Btu level derived from ECF burned in incinerators. This sensitivity analysis indicated total ECF final rule benefits of approximately $10.6 million per year.4 SMALL ENTITY IMPACTS

The May 14, 2008 economic assessment identif ied 34 facilities projected to take advantage of the ECF final rule (see Appendix E). Based on the corporate ownership of these facilities, one is confirmed as a small busines s based on the Small Business Administration size

standards. 8 The size category of one other facility is undetermined. All other facilities are owned by large businesses or the federal government (e.g., DOE). For the one identified small business and the one of undetermined size, im pacts to these companies could be up to a maximum one percent of gross annual revenues. This impact estimate is based on the average annual gross revenues for the NAICS category (2002 Census data) and the average cost savings per generator, as reported in Exhibit 15 of the revised assessmen t. This impact finding assumes both “small businesses” have fully implemented the ECF final rule and would experience cost

increases as a result of this withdrawal. Howeve r, as discussed above, we anticipate that, as of the projected date of this withdrawal, few if a ny facilities are likely to have fully implemented the exclusion. As a result, actual impacts to the identified entities are likely to be negligible.

EQUITY CONSIDERATIONS AND OTHER IMPACTS:

Regulatory Planning and Review: Under Executive Order 12866 [58 FR 51735 (October 4, 1993)], the Agency, in conjunction with the Office of Management and Budget (OMB) Office of Information and Regulatory Affairs (OIRA), must determine whether a regulatory action is “significant” and therefore subj ect to OMB review and the fu ll requirements of the Executive Order. Pursuant to the terms of the Order, this final rule is not a signifi cant action and therefore

has not been submitted to OMB for review.

This final withdrawal of the ECF final rule is expected to have no discernable impacts in regard to the following considerations:

Executive Order 12898, “Federal Actions to Ad dress Environmental Justice in Minority Populations and Low-Income Populations”

Executive Order 13045: “Protection of Childre n from Environmenta l Health Risks and Safety Risks”

Executive Order 13175: “Consultation and Coordination with Indian Tribal

Governments”

Executive Order 13132, “Federalism”

Executive Order 12630, “Government Actions a nd Interference with Constitutionally Protected Property Rights”

8 http://www.sba.gov/idc/groups/public/documen ts/sba_homepage/serv_sstd_tablepdf.pdf5 Executive Order 13211, “Actions Concerning Re gulations that Affect Energy Supply, Distribution, or Use”

Executive Order 12988, “Civil Justice Reform”

Executive Order 13352, “Facilitation of Cooperative Conservation”

The Unfunded Mandates Reform Act (UMRA),