Coal Ash Rules Carry Costs

(Charlotte Business Journal 9-3-2010) Jimmy Knowles spends his days devising different uses for coal ash. As the head of market research and development for The SEFA Group — formerly known the Southeastern Fly Ash Co. — Knowles envisions a new future for a substance many experts consider a dangerous waste product.
 
His company already sells about 1 million tons of ash a year, typically to concrete companies as a substitute for cement. But Knowles says innovations in coal ash processing can make the material useful in paints, plastics, fertilizers and rubbers and in new kinds of compounds or composite metals and ceramics. “Honestly, I feel like George Washington Carver with the peanut,” Knowles says.
 
The results of Knowles’ work have been proposed as components for two SEFA-operated plants planned for the Charlotte region. The company contracts with utilities across the Southeast and already has workers at four facilities. The multimillion-dollar plants have already been designed, but the projects have been shelved, pending the outcome of a series of Environmental Protection Agency hearings, Knowles says. That’s because regulations proposed by the EPA on how electric utilities can dispose of coal waste may spell the end of Knowles’ entire industry. Hearings have begun across the nation. One is set for Charlotte on Sept. 14.
 
The EPA is proposing two ways of setting restrictions on coal ash waste. One method, which regulators refer to as Subtitle C, would have the EPA craft a comprehensive program of federally enforceable requirements over managing and disposing of the ash.
The other method, referred to as Subtitle D, would have the EPA set performance standards for waste-management facilities, but wouldn’t give the agency the authority to make sure the standards are met. Instead, enforcement would come by way of civil lawsuits. States would be able to sue as citizens.
 
Knowles and others, including Duke Energy Corp., oppose Subtitle C. They say that set of regulations would classify coal as hazardous waste. “I never see the words ‘coal ash’ in news stories without ‘toxic’ as a modifier,” Knowles says. “But the stigma of hazardous waste is a very different thing.” It’s an official designation that would intrinsically alter the handling of coal ash. Knowles fears his company may not survive it.
 
“The only way we make a living is by selling ash,” he says. Knowles says customers are already telling him they won’t buy his ash if the EPA rules it hazardous. That group includes Roger Kerr, co-owner and vice president of Kerr’s Concrete, which has operations in Hickory, Maiden, Lenoir and Morganton. “We have enough things that are looked at by the EPA,” Kerr says. “Using a hazardous material is something we would not want to try to explain to our community and our customers.” Kerr says 99% of his products use coal ash. Switching to cement will raise his company’s costs by up to 5%, he says.
 
A different byproduct
Companies in the coal ash and concrete industries aren’t the only ones at risk. National Gypsum Co. spokeswoman Nancy Spurlock says there’s no question the drywall maker will be directly affected if the stricter EPA regulations are adopted.
 
There’s no coal ash in wallboard. But the product does contain synthetic gypsum, which is made using a different waste material from coal combustion: sulfur oxides or SOx. Those emissions are “scrubbed” from coal-plant smokestacks in a process called flue gas desulfurization. The captured gas is then pumped into a limestone slurry. That creates a chemical creation that produces calcium sulfate, the mineral better known as gypsum. National Gypsum then uses the cleaned byproduct and sandwiches it between recycled paper to make wallboard.
 
The company’s Mount Holly plant makes this “green” drywall from the byproduct gypsum from four Duke Energy coal plants — Marshall Steam Station in Catawba County, Allen Steam Station in Gaston County, Cliffside Steam Station on the border of Cleveland and Rutherford counties and Belews Creek Steam Station in Stokes County. When operating at full capacity, the Mount Holly factory can produce 1 billion square feet of drywall in a year, enough for 100,000 average-sized homes. The plant can load five tractor trailers an hour.

 
. If the EPA declares coal ash waste a hazardous material, Spurlock says the company would likely end the use of the synthetic mineral. And that’s even if environmental regulators make an exception for products with a beneficial use, such as National Gypsum’s drywall. Spurlock says the company fears many customers will reject the wallboard because of the hazardous designation. And then there’s a matter of placing the company at risk of lawsuits. “We may not want to buy it because of the liability,” Spurlock says of the synthetic gypsum. “And they (Duke Energy) may not want to sell it because of the liability.” That means the company would need to get the mineral from somewhere else. The most likely candidate is National Gypsum’s quarry in Nova Scotia, the largest of its kind in the world. “When the plant is running at capacity, we would need the equivalent of considerably more than 500,000 tons of gypsum rock annually,” Spurlock says. That rock would have to be shipped by boat to Wilmington, then hauled by train to the local factory, which would need to be retrofitted to handle rail cars and other equipment.

 
Would National Gypsum opt to close the Mount Holly plant? Or any of its other four plants that exclusively use synthetic gypsum? Spurlock says that hasn’t been decided, but she adds: “At some point, the economics just don’t work.” Other wallboard makers also get the synthetic mineral from power plants. “This will affect the entire industry,” Spurlock says.
 
Heated hearings
 
But Catawba Riverkeeper David Merryman says he doesn’t believe a stigma will be attached to materials made from coal-combustion byproducts. “I don’t buy into that argument,” he says. “Those products should be excluded from the hazardous waste regulations if they are not hazardous waste.” Merryman has already signed up to speak at the EPA hearing. “The most important piece of what needs to be said and heard is that coal ash is a toxic hazardous waste and must be regulated as such.”
 
His group contends power plants’ coal ash ponds leech dangerous amounts of heavy metals into the Catawba River. The organization says the riskiest offender is the Riverbend Steam Station, built more than 80 years ago. Its coal ash pond is adjacent to the plant, upstream from Mountain Island Lake, the source of most of Charlotte’s drinking water. Riverbend is one of Duke’s oldest coal plants and may be retired as soon as 2015.
 
Duke spokeswoman Erin Culbert says the company recognizes the rationale of those who want stiffer coal ash regulations and the concerns over possible risks to Charlotte’s water supply. “On a surface level, it’s a very emotionally charged issue,” she says.But designating coal ash as a hazardous material will increase the volume of waste disposed into landfills to more than 100 million tons per year from 2 million tons, she says. “This creates an immediate and critical shortfall in hazardous-waste capacity, which will slow the cleanup of real hazardous waste sites.” And it will be expensive. Duke estimates the cleanup will cost in the hundreds of millions of dollars.
 
The Charlotte-based energy giant will send four speakers to the local EPA hearing. Both National Gypsum’s Spurlock and SEFA Group’s Knowles also have signed up. Concrete maker Kerr says he’s trying to rework his schedule so he can make it. “This is a livelihood to us,” Knowles says. “Many environmentalists think we are the bad guys because we are doing the bidding of an evil corporate giant. But I feel like we’re going into a heavyweight bout, and we don’t even know how to box.”

 
Want to Go?
 
The Environmental Protection Agency chose Charlotte as the site of one of seven national public hearings on proposed rules for coal ash from power plants. The local EPA hearing will be held Sept. 14 at the Holiday Inn Charlotte on 2707 Little Rock Road, near Charlotte/Douglas International Airport. The hearing starts at 10 a.m. and is scheduled to run until at least 9 p.m.
 
The new regulations will affect electric utilities, including Charlotte-based Duke Energy Corp., as well as companies that make products from the waste material left over from coal combustion.
 
The EPA is proposing two methods of regulation. Both focus on coal ash ponds. Duke and other power companies use water to sluice the ash — which is very fine, like talcum powder — from inside the plant to a pond or basin. Local environmental groups such as the Sierra Club and the Catawba Riverkeeper Foundation have raised an alarm over unlined coal ponds. They share the EPA’s concerns that contaminants in the ash, including mercury, cadmium and arsenic may be leaching into groundwater and drinking-water sources. Duke has 13 coal-ash retention ponds in the Carolinas. Ten are on the EPA’s list of 44 potentially high-hazard sites across the country because of their proximity to people and drinking-water sources.
 
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