PB 95-flOS 948
OSW 530-R-95-022
Cost and Economic Impact Analysis
of the Proposed CESQG Rule
U.S. EPA, Office of Solid Waste
May 1995
en
CD
EPA Headquarters Library
-------
I. INTRODUCTION
This report presents a cost and economic impact analysis for proposed revisions to the Criteria for Classification
of Solid Waste Disposal Facilities and Practices (40 CFR Part 257) and Identification ,and Listing of Hazardous Waste (40
CFR Part 261). These proposed revisions have been developed by the U.S. Environmental Protection Agency (EPA) in
response to Sections 3001(d)(4) and 4010(c) of the Resource Conservation and Recovery Act (RCRA), and an agreement
reached between EPA and the Sierra Club pursuant to a lawsuit filed by the Sierra Club in October 1993.
The proposed revisions would apply to generators and managers of conditionally exempt small quantity
generator (CESQG) waste. CESQGs generate hazardous waste in quantities of no more than 100 kilograms (kg) per month,
or acutely hazardous waste in quantities of no more than 1 kg per month. CESQGs may accumulate no more than 1,000 kg
of hazardous waste or 1 kg of acutely hazardous waste at one time. Currently, CESQG waste may be managed at a
hazardous waste facility or at a Subtitle D facility that is permitted, licensed, or registered by a State to manage municipal or
industrial waste. - ' . ' .
The proposed revisions to Part 257 would establish facility standards for non-municipal solid waste disposal
facilities that may receive CESQG wastes; they would not affect municipal solid waste landfills (MSWLFs), which are
subject to the criteria found in 40 CFR Part 258. The revised facility standards would include location restrictions,
groundwater monitoring, and corrective action. The proposed revisions to Part 261 would require CESQGs to manage their
wastes at MSWLFs or at non-municipal solid waste facilities subject to the revised Part 257 facility standards.
Executive Order No. 12866 (FR V. 58 No. 170, 51735, October 4, 1993) requires that regulatory agencies
determine whether a new regulation constitutes a significant regulatory action. A significant regulatory action is defined as
an action likely to result in a rule that may:
Have an annual effect on the economy of $100 million or more or adversely affect in a material'way
the economy, a sector of the economy, productivity, competition, jobs,-the environment; public health
or safety, or state, local, or tribal governments or communities;
* . Create a serious inconsistency or otherwise interfere with an action taken or planned by another
agency; , '
Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights
i and obligations of recipients thereof; or
Raise novel legalor policy issues arising out of legal mandates, the President's priorities, or the
principles set forth in Executive Order 12866.
To comply with the requirements of EO 12866, EPA hasi estimated the incremental costs of the proposed rule
and examined its potential effects on small businesses. This report presents the results of this analysis. The remaining
chapters are as follows:
Chapter 2 discusses the parties affected by this proposed rulemaking;
Chapter 3 describes the methodology used for the cost analysis;
* Chapter 4 presents the results of the cost analysis;
Chapter 5 discusses the limitations of the cost analysis; and
' Chapter 6 discusses potential effects on small businesses.
-------
2. IDENTIFICATION AND CHARACTERIZATION OF AFFECTED PARTIES
EPA's proposed revisions to 40 CFR Parts 257 and 261 will have the potential to affect both generators of
CESQG waste, and owners and operators of non-municipal solid waste disposal facilities in which CESQG wastes are
managed. This chapter discusses the parties that may be affected by the rulemaking. Section 2.1 characterizes the number of
CESQGs and the quantities of waste they generate nationwide. Section 2.2 characterizes the number of CESQG waste
managers and the quantities of waste they manage nationwide. In Section 2.3, the number of generators and waste quantities
affected by the mlemaking are estimated by adjusting the national numbers to account for the existence of state requirements
similar to those contained in the rule. .
. 2.1 GENERATORS OF CESQG WASTE
According to the National Small Quantity Hazardous Waste Generator Survey (National SQG Survey), 455,000
establishments nationwide generated 201,600 tons of CESQG'waste in 1982. About 80 percent of CESQGs and 88 percent
of CESQG waste were associated with the non-manufacturing sector, while the remainder was associated with the
manufacturing sector.
*
. - Only a small fraction of the nation's 455,000 CESQGs will be affected by EPA's proposed mlemaking,
however, as many CESQGs currently manage their wastes in ways that are not covered by the rule (e.g., disposal in
municipal solid waste landfills, recycling). As discussed in Chapter 1, this rule would apply only to CESQG wastes disposed
in land-based Subtitle D units other than municipal solid waste landfills (MSWLFs).
Three types of CESQGs are potentially affected by "this mlemaking:
CESQGs who dispose their CESQG wastes along with their non-hazardous industrial wastes in on-
site Subtitle D landfills, surface impoundments, land application units, or waste piles; ,
CESQGs who send their wastes off site to commercial industrial Subtitle D waste management
facilities; and
CESQGs who send their wastes off site to construction and demolition (C&D) waste landfills.
These parties are discussed in more detail below. . /
' 2.1.1 CESQGs with On-site Disposal in Subtitle D Units
c
. Manufacturing Sector
In 1985, EPA conducted the "Screening Survey of Industrial Subtitle D Establishments" (Screening Survey).
While this is an old survey, it is-the most recent source available for this information. The Screening Survey focused on 17
industries in the manufacturing sector believed to be responsible for most of the Subtitle D waste generation in the U.S. It
was designed to develop national and industry-specific estimates of the number of establishments managing industrial non-
hazardous wastes on site, specifically in land-based units (landfills, surface impoundments, land application units, and waste
piles), and the volume of Subtitle D waste managed in these units. The Screening Survey also captured information on'
CESQG waste generation and management.
The Screening Survey estimated that 12,000 establishments managed industrial non-hazardous.waste on site in
land-based units in 1985. An estimated 3,742 of these establishments were also CESQGs, 605 of whom managed their
CESQG wastes on site in Subtitle D 'land-based units. These 605 establishments used surface impoundments (309), waste
piles (135), land application units (91), and landfills (69). The distribution of these 605 establishments among the 17
manufacturing industries surveyed is shown in Exhibit 2-1.
For the purposes of this cost analysis, EPA is assuming that all 605 CESQGs will be affected by the proposed
mlemaking. EPA believes that this figure overestimates the number of CESQGs that co-dispose industrial non-hazardous
process waste and CESQG waste in on-site Subtitle D land-based units. Recent conversations with trade associations
representing the Stone, Clay, Glass, and Concrete Industry and the Food and Kindred Products Industry (which together
-------
EXHIBIT 2-1.
NUMBER OF CESQGs WITH ON-SITE MANAGEMENT
-IN SUBTITLE D LAND-BASED UNITS
INDUSTRY
Stone, Clay, Glass, Concrete
Food and Kindred Products
Textile Manufacturing
Primary Iron and Steel
Pulp and Paper
Rubber and Misc. Products
Petroleum Refining
Selected Chemical and Allied
Products
. Primary Nonferrous Metals
Electric Power Generation
Water Treatment
Transportation Equipment
Fertilizer & Agricult. Chem.
Plastics and Resins Manuf.
Organic Chemicals
Inorganic Chemicals
Leather and Leather Products
TOTAL
NUMBER OF
ESTABLISHMENTS
160
131
50
48
43
30
28
25
24
22
15
15
5
} 4
3
2
0
605
Source:
Screening Survey oflndustrial Subtitle D Establishments (Westat, 1987)
-------
comprise almost half of the 60S CESQGs with on-site management) have indicated that most facilities no longer manage their
CESQG waste in on-site disposal units.
The Screening Survey does not provide information on the volume of CESQG waste generated by these 605
establishments. For the purposes of this analysis, EPA has assumed that each CESQG generates 50 kg/month of hazardous
waste (the midpoint of the range of 0-100 kg per month that defines a CESQG). Thus, the total amount of CESQG waste
disposed in on-site Subtitle D units annually is estimated to be 400 tons.
Non-manufacturing Sector
The National SQG Survey reported that certain CESQGs in the non-manufacturing sector also disposed of their
wastes in on-site landfills in 1982: EPA views this finding with caution, however, since the National SQG Survey did not
define the term "solid waste landfill." Moreover, more recent studies in the State of Washington and Montgomery County,
Maryland, showed that none of the CESQGs in these locations disposed of their hazardous waste in an on-site solid waste
landfill. This finding suggests that CESQGs have changed their management practices with regard to on-site disposal in
landfills since the National SQG Survey was performed. For the purposes of this cost analysis, EPA has assumed that no
CESQGs in the non-manufacturing sector manage their wastes in on-site disposal facilities.
' \ *
2.1.2 CESQGs with Off-site Disposal in C&D Landfills
Debris generated from the construction and demolition of structures such as buildings, roads, and bridges may
contain small quantities of materials that may meet the definition of RCRA hazardous waste. Examples include excess
materials used in construction and their containers (e.g., adhesives, paints, roofing cement), waste oils, and other discrete
items such as batteries and mercury switches. Thus, firms involved in the construction or demolition of structures are
potentially affected by this rulemaking. EPA believes there to be approximately 194,000 construction firms (157,000
building contractors and 37,000 heavy construction contractors) and 1,240 demolition firms in the U.S.1 Only a portion of
these firms will be affected by this rulemaking. Only those generating RCRA hazardous waste below the CESQG threshold .
and currently sending this waste to a C&D landfill will be affected.
There is considerable uncertainty associated with the quantity of waste generated by the construction and
demolition of structures. It is widely accepted that the approximately 30 million tons often cited in the older literature
significantly underestimates the quantity of C&D waste generated annually. Recent literature2 suggests that the quantity is
more in the area of 100 million tons per year.
As will be discussed in Chapter 3, the compliance costs of the proposed rule depend on the proportion of C&D
waste that is generated from construction vs. demolition activities. Again, very little information was found in the literature.
A survey of C&D waste generation in the European Community3 indicates that construction debris comprises 18 percent of
C&D waste, and demolition debris 82 percent. Applying these percentages to the estimated 100 million tons of C&D waste
generated annually provides the following waste generation rates: i
Construction debris: 18 million tons /
Demolition debris: 82 million tons
2.2 CESQG WASTE MANAGERS , .
1 1987 Census of Construction Industries. -
2 According to SWANA's 1993 "Construction Waste & Demolition Debris Recycling...A Primer," Mr. Lee
Adelman of Waste Management Inc., a speaker at the 1992 World Recycling Conference, stated that over 110
million tons of C&D waste are generated annually. Also, the October 1994 issue of "C&D Debris Recycling," a
periodical published by the C&D industry, contains an article ("C&D'Debris Recycling; The Forgotten Goal?")
stating that 80 to 120 million tons of C&D waste are generated each year.
i
3 "Demolition and Construction Debris, Questionnaire About an-EC Priority Waste Stream," European
Demolition Association, the Netherlands (undated).
-------
Many types of Subtitle D solid waste facilities may be used for the disposal of CESQG waste. Manufacturing
facilities that co-dispose industrial non-hazardous and CESQG waste in on-site waste management units are one type of
facility; these were discussed in Section 2.1.1. This section focuses on Subtitle D facilities that may receive CESQG waste
from off site (other than municipal solid waste landfills which are not subject to this rulemaking).
2.2.1 Commercial (Off-site) Subtitle D Industrial Waste Facilities
One type of facility that may receive CESQG waste is a commercial facility that co-disposes industrial non- ,
hazardous wastes and CESQG hazardous wastes received from off site. EPA estimates that there are 10 to 20 such facilities
in the U.S. (excluding commercial facilities that also receive municipal solid wastes). EPA has held meetings with trade
associations representing the commercial solid waste industry and has been told that as a general matter, CESQG disposal is
prohibited at these types of facilities as a result of permitting conditions and' decisions at the corporate level of individual
companies not to accept CESQG waste. EPA also believes, based on conversations with industry representatives, that these
facilities already meet or exceed the requirements outlined in this proposal. For the purposes of this cost analysis, EPA has
assumed that no commercial Subtitle D industrial waste facilities will be affected.
2.2.2
Construction and Demolition Landfills
EPA estimates that 1,889 C&D landfills receive wastes from off site in the U.S, and, for the purposes of this
analysis, EPA assumed that these 1,889 landfills receive all.of the C&D waste generated in the U.S.4'5 Exhibit 2-2 shows
the estimated size distribution and average capacity of these landfills. EPA's approach for deriving the information presented
in Exhibit. 2-2 is explained below.
EXHIBIT 2-2.
ESTIMATED SIZE DISTRIBUTION AND CAPACITIES OF THE NATION'S 1,889 C&D LANDFILLS
SIZE
Large
Medium
Small
TOTAL
WASTE
ACCEPTANCE RATE
(tons per day)
>500 tpd
30 - 500 tpd
<30tpd
-
ASSUMED
ACCEPTANCE RATE
(tons per day)
1,000 tpd
285 tpd
15 tpd
NUMBER OF
LANDFILLS
97
600.
1,192
1,889
4 "List of Industrial Waste Landfills and Commercial and Demolition Waste Landfills," prepared by Eastern
Research Group, Inc., for the Office of Solid Waste, September 1994. In addition, there are an unknown
number of on-site C&D landfills used for the disposal of C&D waste generated at a particular site. These are
typically closed following completion of the activity. Because these sites are on privately-owned land and
receive only waste generated at that site, little information exists on the number of these landfills nationwide.
On-site C&D landfills are not considered in this cost analysis.
5 The -100 million tons of C&D "waste" estimated in the literature is assumed to reflect the quantity
remaining after recycling. According to OSW's MSWLF survey, MSWLFs received 18 million tons of C&D
waste in 1985. The quantity sent to MSWLFs is assumed to be lower today, given the capacity problems faced
by MSWLFs. For this cost analysis, EPA has assumed that MSWLFs today receive an insignificant portion of
discarded C&D waste, and that all 100 million tons are sent to C&D landfills. This is a conservative assumption
whose likely effect is to overestimate compliance costs.
-------
The only information available on the size distribution of C&D landfills is the 1986 "Subtitle D Study Phase 1
Report."* .According to this report, there were 2,586 C&D landfills in existence in 1986, with the following the size
distribution: , '
3.6 percent received >500 tons per day;
21.7 percent received 30 to 500 tpd; '
74.7 percent received <30 tpd.
Multiplying the number of landfills in each size category by the tpd received (assuming that the large size receives 1,000 tpd,
the medium size 265 tpd, and the small size 15 tpd) yields an estimated annual C&D waste quantity that is very close to the
100 million tons estimated Yor today.
/ '
Because the number of C&D landfills has decreased since 1986 (from 2,586 to 1,889) while the estimated
amount of waste disposed has remained essentially the same, EPA has assumed that the size distribution of C&D landfills has
shifted. Specifically, EPA has assumed that the number of mid-sized and large C&D landfills has increased, while the
number of small C&D landfills has decreased to a greater extent, resulting in a net decline in the total number of C&D
landfills. EPA estimates the current size distribution of the nation's 1,889 C&D landfills to be as shown in Exhibit 2-2.
2.3 ACCOUNTING FOR STATE REQUIREMENTS
Many states have location restrictions, groundwater monitoring requirements, and/or corrective action
requirements in place for C&D landfills. This section explains how the existence of these state requirements was accounted
for in the national cost analysis. EPA did not account for state requirements in the estimation of compliance costs for non-
C&D CESQGs because the affected volumes and compliance costs for non-C&D CESQGs are minimal.
\
EPA conducted a study of state regulatory requirements for C&D landfills in 1994 and found that 24 states
prohibit C&D landfills from receiving CESQG wastes. Of the 26 remaining states, eight have mandatory groundwater
monitoring and corrective action requirements at C&D landfills. EPA assumed that C&D landfills and C&D waste .generators
located in these 32 states will be unaffected by the proposed rulemaking.
Of the eight states that require both groundwater monitoring and corrective action at C&D landfills, some states'
groundwater monitoring requirements are iess stringent than specified in the revisions to Part 257. EPA's assumption that
landfills in these states will be unaffected by the rule may lead to an underestimate of compliance costs. On the other hand,
some other states have groundwater monitoring requirements without corrective action requirements; and EPA's analysis
overestimates compliance costs for landfills in these states by. assuming that they will incur the full costs of complying with
the Part 257 requirements. EPA believes that these biases are for the most part offsetting..
As discussed above, EPA assumed that there would be no compliance costs for C&D waste generators or
managers in any of the 32 states. EPA then calculated the number of C&D landfills and quantity of waste in the 18 .
remaining states (referred to in the remainder of this report as the "affected" states). According to a recent study conducted
for the Office of Solid Waste7, there are 718 C&D landfills in the affected states. To estimate the number of C&D waste
generators and the quantity of C&D waste generated in the affected states, EPA apportioned the number of generators and
quantity of waste to each state based on population, Using this approach, EPA estimates that about 28 percent of all C&D . -
waste generators are located in the 18 affected states, and that they generate 28 percent of all C&D wastes, or 28 million
tons. .
The next step was to apportion the 28 million tons of waste in the affected states to the 718 C&D landfills
present in these states. Lacking any other data, EPA began by assuming that in affected states, both the percent distribution
. of landfills across the size categories and the average acceptance rate in each size category are the same as in the nation as a
whole. EPA found, however, that these assumptions do not yield a waste generation rate of 28 million tons per year in the
affected states. Therefore, EPA adjusted the average acceptance rates in each size category downward to reflect the lower
average population per landfill in the affected states (since demolition debris is assumed to be correlated with population).
6 U.S. EPA, Office of Solid Waste, Subtitle D Study Phase I Report, October 1986. . ,
7 "List of Industrial Waste Landfills and Commercial and Demolition Waste Landfills," prepared by Eastern
Research Group, Inc., for the Office of Solid Waste, September 1994.
-------
EPA also divided the "medium" size category in half to allow for more detailed analysis. The results, shown in Exhibit 2-3,
were used as the basis for estimating compliance costs in affected states.
EXHIBIT 2-3.
ESTIMATED SIZE DISTRIBUTION AND CAPACITIES OF THE 718 C&D LANDFILLS IN AFFECTED STATES
SIZE
Large
Medium
Small
TOTAL
WASTE
ACCEPTANCE RATE
(tons per day)
>500tpd
500 -265 tpd
265 - 30 tpd
<30 tpd
ASSUMED
ACCEPTANCE RATE
(tons per day)-
738 tpd
, 282 tpd
109 tpd
1 1 tpd
NUMBER OF
LANDFILLS .
s
37
114
114
453
' 718
-------
3. METHODOLOGY FOR ESTIMATING COSTS
This chapter discusses EPA's methodology for estimating the national compliance costs of the proposed
rulemaking. The chapter begins with an overview of the methodology, and then presents a detailed approach for each type of
affected 'parry.
3.1 OVERVIEW '
EPA estimated the national costs of this proposed rulemaking to waste generators and managers in 18 affected
states. To estimate national costs, EPA first identified the compliance options available to each affected parry. EPA then
selected the compliance practice or practices likely to be selected by each party based on technical feasibility, cost, and other
factors. The next step was to estimate the per-ton unit costs associated with each compliance practice; this was based on
information available in the literature or obtained through selected telephone contacts with representatives of the C&D
industry. National costs were estimated by multiplying the per-ton costs of each compliance practice by the number of tons
of waste affected. ' ;
As will be discussed in more detail later in this chapter, EPA believes that compliance 'behavior under this rule
will favor separation of the small amounts of hazardous waste from the bulk of the affected waste, with disposal of the
hazardous components in a MSWLF or Subtitle C facility. EPA believes that the alternative scenario C&D landfill owners-
upgrade their landfills to accept non-hazardous waste mixed with CESQG waste, and recover the costs by charging higher.
tipping fees to waste generators - would be more expensive to waste generators than separating their wastes. If generators
choose to separate wastes rather than use upgraded landfills, there will be no demand for them, and landfill owners will be
unlikely to recover their upgrading costs through higher tipping fees. Thus, EPA's estimate of national costs is based on the
assumption that no C&D landfills will upgrade in response to this rulemaking. For the reader's information, EPA has also
included at the end of this chapter a "high-end" analysis of national costs if some C&D landfills do, for some reason, opt to
upgrade.
The next three sections discuss EPA's methodology for estimating national compliance costs for- each affected
party. , ' _ '
3.2 CESQGS WITH ON-SITE DISPOSAL IN SUBTITLE D UNITS
3.2.1 Compliance Practices
Manufacturing facilities with on-site land-based management will have three compliance options under the
proposed rulemaking:
1. Upgrade the on-site units to meet the revised Part 257 requirements;
2.. Separate the hazardous portion of the waste from the non-hazardous portion. Send the hazardous
/ portion off site to a Subtitle' C facility or a municipal solid waste landfill (MSWLF), and continue
disposing the non-hazardous portion on site; or
3. Do not separate the hazardous portion of the waste from the non-hazardous portion. Send all of the
waste off site to a Subtitle C facility or a MSWLF.
EPA contacted a small sample of firms in two industry sectors.representing a large proportion of CESQGs with .
'on-site Subtitle D land disposal units: the Stone, Clay, Glass and Concrete industry, and the Food and Kindred Products
Industry.. Representatives of both industries reported that industry practice is to keep hazardous wastes separate from non-
hazardous wastes. If this is true of die other industries as well, the costs of separating hazardous wastes from non-hazardous
wastes are negligible, and option 2 is the least-cost compliance option. The-incremental costs of option 2 are only those
associated with sending the hazardous portion of the waste off site, which is less expensive than sending all of the waste off
site (option 3), or bringing on-site units 'into compliance with the Part 257 revisions (option 1). ' .
For costing purposes, EPA assumed that under option 2, the hazardous portion of the waste would be sent to a ,
Subtitle C facility. According to EPA's Municipal Solid Waste Landfill Survey, in 1985 over 70 percent' of MSWLFs
-------
explicitly reftised to accept CESQG waste. However, under today's proposed rule, sending the CESQG waste to a MSWLF
or'upgraded landfill would be acceptable as well.
3.2.2 Unit Costs
As noted above, the costs of separating out hazardous wastes were assumed to be negligible or zero, as were the
costs associated with continuing to dispose of the non-hazardous portion of the waste on site.
There wiH be incremental costs for sending the CESQG wastes off-site for disposal. While the generators have
the option of sending the CESQG waste to a Subtitle C landfill, MSWLF or upgraded C&D landfill, for the purposes of this
analysis, EPA used the most costly alternative, sending the waste to a Subtitle C landfill. This scenario is not unreasonable
in many cases since many MSWLFs choose not to accept CESQG wastes and there may not be an ungraded C&D landfill
available nearby. The cost of pick-up and disposal of CESQG waste may vary. For.the purposes of this analysis, EPA used
an estimated cost of $430/ton.* However, since there is such a low volume of CESQG waste generated, fluctuations in this
cost will not dramatically affect national cost estimates.
3.2.3 National Costs ,' ,
To estimate national costs incurred by the 605 CESQGs with on-site disposal in Subtitle D units, EPA simply
multiplied the estimated 400 tons of CESQG waste by the estimated pickup and disposal cost of $430 ,per ton. EPA has not
adjusted the costs incurred by these generators to account for state requirements that may be as stringent as those imposed by
this rulemaking.
3.3 CONSTRUCTION AND DEMOLITION WASTE GENERATORS
EPA believes that construction waste generators will be affected by this rulemaking, but that demolition waste
'generators will not. Road and bridge demolition waste will be unaffected because it typically does not contain CESQG
waste. While there may be CESQG types of wastes in buildings, EPA assumed that building demolition waste will not need
to go to an upgraded landfill. EPA assumed that a decision on the nature of building demolition waste would occur once the
building had been demolished. If the waste was determined to be hazardous, the volumes would be far beyond the CESQG
levels. Otherwise, if the waste is determined to be non-hazardous, it would not need to go to an upgraded landfill.
3.3.1 Compliance Practices
Construction waste generators who currently send their waste to a C&D landfill that is not in compliance with
the proposed revisions to Part 257 will have two options: . . ' % .
, 1. Separate the hazardous portion of the waste from the non-hazardous portion and send the hazardous
waste to a MSWLF, a C&D landfill that has been upgraded to be in compliance with^the Part 257
revisions (an "upgraded C&D, landfill"), or a Subtitle C facility; or
2. Do not separate the hazardous portion of the waste from the non-hazardous portion,' and send all of
the waste to a MSWLF, an upgraded C&D landfill, or a Subtitle C facility.
' Because the. volumes involved would be quite small, EPA has kept its analysis of the costs of disposing
these wastes simple. A standard construction cost estimating guide provided a range of $130 to $300 per ton
(with a midpoint of $215 per ton) for pickup and diposal of hazardous waste, Mean's Construction Cost
Estimating Guide, p. 25, 1991. This source did not indicate how the cost per ton might be affected by the
volume of wastes to be picked up. If costs per ton are higher for small quantities due to fixed costs of hiring a
truck and driver, the true costs of disposal would be higher. While EPA assumes that the midpoint of the
reported costs, $215 per ton, is a reasonable assumption, for the purposes of this analysis, a cost twice that
amount, $430 per ton, was used. This cost is significantly higher than the reported range; and will capture some
of the uncertainty about increased costs due to small volumes. However, because the volumes involved are quite
small, even a doubling of the midpoint cost (from $215 to $30 per ton) does not significantly affect national
costs.
-------
The compliance option that construction firms will select will depend.on several factors, such as the feasibility
and cost associated with separating the hazardous from the non-hazardous components of the waste; whether or not the waste '
will be accepted at a MSWLF; the costs to transport the waste from the point of generation to the disposal site; and the
tipping fees charged by the different types of landfills.
EPA assumed that generators of construction waste would choose option 1. According to the National
Association of Demolition Contractors (NADC)', it is relatively easy to keep the hazardous components of construction waste
(e.g., paints and solvents) separate from the non-hazardous components. EPA believes that it will be less expensive for
construction waste generators to separate out the hazardous portion of construction waste and send it off site (option 1) than
to send ajl of the waste off site (option 2). MSWLFs are unlikely to accept all of this waste, given the capacity problems
that many of them face. As will be discussed later in this report, even if some C&D landfills choose to upgrade, the
upgrading costs are likely to be passed along to the waste generators, making disposal in an upgraded C&D landfill expensive
relative to the costs of option 1.'
While generators will have the option of sending CESQG waste to MSWLFs or upgraded facilities, for costing
purposes, under option 1, EPA assumed the CESQG waste separated from construction waste will be sent to a Subtitle C
facility, as was assumed for CESQG separated from industrial non-hazardous waste (see Section 3.2.1).
3.3.2 Unit Costs
As noted above, EPA has assumed that construction waste generators will separate out the hazardous portion of
the waste and send it to a Subtitle C. facility and keep sending the non-hazardous portion to the non-upgraded C&D landfill
they used prior to the rule.
EPA assumed that at most small construction sites, there, would be no incremental costs of separating out the
CESQG wastes. It is assumed that CESQG waste would be separated during routine site clean-up activities and disposed of
in a container near the non-hazardous waste dutnpsters~on site. The cost of this separation is assumed to be negligible. For
heavy construction companies, EPA assumed that an unskilled worker at $13.60 per hour ($8.50 per hour with an overhead
rate of 1.6) would inspect sites and pick-up CESQG wastes periodically. . One hour per week per company was assumed for a
yearly cost of $707 per company. . .
Incremental costs for the pickup and disposal of the CESQG wastes which are separated out was assumed to be
the same as for generators with on-site disposal. As discussed in section 3.2.2., a unit cost of $430 per ton was used.
/
3.3.3 National Costs
The national costs of the proposed rule for generators of construction waste are the sum of the costs for (1)
separating the hazardous and non-hazardous components of construction waste, and (2) sending the hazardous portion off site
to a Subtitle C facility.
To estimate the national cost of separating out CESQG wastes, EPA multiplied the estimated number of heavy
construction facilities by the incremental cost per facility of inspecting sites to ensure CESQG wastes are separated. The 1987
Census of Construction Industries reports there are approximately 37,000 heavy construction companies in the United States.
This would work out to be approximately 10,000 heavy construction companies in the affected states. It was estimated that,
these companies incur an incremental separation cost of $707 per year.
To estimate the national costs of sending the hazardous portion of the waste to a Subtitle C facility, EPA
multiplied the quantity of hazardous waste separated from construction waste by the transportation and disposal cost of $430
per ton. According to the National Small Quantity Hazardous Waste Generator Survey, 2,270 tons of hazardous construction
waste are generated each year nationwide; this translates to 636 tons in affected states.
EPA assumed that there would be no increase in costs for disposing the non-hazardous portion of construction
wastes: these wastes are assumed to go to the same C&D landfill, and to be charged the same tipping fee, as before the rule.
9 Mike Taylor, Executive Director, National Association of Demolition Contractors, telephone
communication, September 19, 1994.
10 .
-------
3.4 C&D WASTE LANDFILL OWNERS
3.4.1 Compliance Practices
Construction and demolition waste landfills that are not currently in compliance with the Part 257 revisions may
respond to the regulation in one of two ways:
1. Choose not to upgrade, and accept only C&D waste that does not contain hazardous waste.
2. Upgrade and accept all C&D waste,
C&D landfill owners that choose not to upgrade may only receive C&D waste that does not contain hazardous
waste. EPA assumes that C&D landfills that choose not to upgrade (option 1) will take steps to ensure that CESQG waste is
not disposed of in their landfills. , '
C&D landfill owners'that choose option 2 will upgrade the landfill to come into compliance with the Part 257
revisions. C&D landfill owners will choose this option if they believe that it will be profitable to do so. In making this
decision, they will consider the costs of upgrading, the additional tipping fees they would have to charge waste generators to
recover these costs, and the extent .to which waste generators would be willing to pay the increased tipping fees. Those waste
generators with less expensive alternatives (e.g., separation and disposal in a Subtitle C facility) would'be likely .to avoid
paying the additional tipping fees, and landfill owners would lose business. If landfill owners believe that most of their
customers will be unwilling to pay tipping fee increases targe enough to cover the costs of upgrading, they will probably
choose not to upgrade. .
Section 3.4.2 presents the units costs of each option, and Section 3.4.3 discusses the number of landfills
nationwide that EPA expects to select each option.
3.4.2 Unit Costs
Spot Checking Costs'
C&D landfills that choose not to upgrade (option 1) will take steps to ensure that CESQG waste is not disposed
of in their landfills. C&D landfill owners are expected to include in .their contracts with haulers a clause specifically
.forbidding CESQG waste, and to perform spot checks of the waste entering the facility. Based on conversations with the
National Association of Demolition Contractors (NADC),10 EPA assumed that an unskilled worker would spend one hour a
day spot checking the waste entering the facility to assure that no CESQG waste is being disposed. At $13.60 per hour
($8.50 per hour with an overhead rate of 1.6) and 260 days per year, the resulting annual cost per facility would be $3,400.
Upgrading Costs
C&D landfills owners that choose to upgrade (option 2) must first meet the location restrictions (to be eligible to
upgrade)'and will then need-to comply with the groundwater monitoring and corrective action requirements.
Location Criteria: ' ,
The location criteria contained in the revisions to Part 257 are more restrictive than those in 'the existing
regulations. Criteria that apply to existing landfills address three locations: airports, floodplains, and unstable areas. The
existing regulations already cover airports and floodplains; the revisions to Part 257 only add demonstration requirements for
facilities located in these areas. 'The lo'cation- restrictions addressing unstable areas are new, and require landfills located in
unstable areas to demonstrate die integrity of the structural components of the landfill or to stop receiving CESQG waste 18
months after the rule is promulgated. -
EPA has not included costs for location-related demonstrations in this cost and economic impact analysis
because these costs are expected to be small relative to the other costs of the rule.
10Mike Taylor, Executive Director, National Association of Demolition Contractors, telephone
communication, February 14, 1995.
11
-------
Groundwater Monitoring:
The groundwater monitoring requirements of the proposed rule are similar to those imposed on MSWLFs under
Part 258. To estimate the costs for C&D landfills to comply with these requirements, EPA used the costs estimated for
existing MSWLFs to comply with the Part 258 groundwater monitoring requirements. The RIA for the MSWLF criteria
revisions" provides per-ton groundwater monitoring costs for each of seven MSWLF sizes (ranging from 10 to 1,500 tons
per day), two post-closure care periods (10 years and 40 years), and two assumptions concerning the duration of the
remaining active life over which monitoring costs can be amortized (10 years and 20 years). EPA used these costs to
calculate per-ton monitoring costs associated with a 30-year post-closure care period (the duration required under the Part 257
revisions) and an assumed 15-year remaining active life for each size class. EPA then fit a smooth curve to these cost
estimates to generate a simple function relating per-ton monitoring costs to landfill size. This function was then used to
estimate per-ton monitoring costs for all but the smallest C&D landfill size category shown in Exhibit 2-3 (EPA assumed that
the smallest C&D landfills would not choose to 'upgrade because the per-ton costs would be prohibitive). Typical
groundwater monitoring costs for landfills in each size category are shown in Exhibit 3-1 (per-ton costs are rounded).
EXHIBIT 3-1.
GROUNDWATER MONITORING COSTS FOR DIFFERENT
C&D LANDFILL SIZE CATEGORIES
SIZE
Large
Medium '
Small
WASTE
ACCEPTANCE RATE
(tons per day)
>500 tpd
500 - 265 tpd
265 - 30 tpd
<30 tpd
ASSUMED
ACCEPTANCE RATE
(tons per year)
269,000 tpy
103,000 tpy
40,000 tpy
' 4,000 tpd
MONITORING
COSTS
' (per ton)
$1.01
$2.08
$3.97
NA
ANNUAL
MONITORING
COSTS
(per landfill)
$271,000
$214,000
$158,000
NA
Note: Numbers are rounded
Corrective Action: . .
EPA used a similar approach to estimate corrective action costs for C&D landfills. The RIA for the MSWLF "
criteria revisions provides information on the proportion of existing MSWLFs that trigger corrective action in each of three
landfill size categories and four environmental settings, and provides per-ton corrective action costs for each landfill size and
environmental setting. These per-ton costs were based on an assumed remaining life of 10 years.
To apply these costs to C&D landfills, EPA adjusted them to reflect a 15-year remaining life. Otherwise, the
clean-up technologies and per-ton clean-up costs for C&D landfills that trigger corrective action are assumed to be the same
as for MSWLFs of similar sizes and in similar environmental settings. Based on the assumption that the distribution of C&D
landfills across the environmental settings is the same as MSWLFs, EPA calculated an average per-ton corrective action cost
for each size category. As with groundwater monitoring costs, EPA fit a smooth curve to these cost estimates to generate a
simple function relating per-ton corrective action costs to landfill size. This function was then used to estimate per-ton
corrective action costs for landfills that trigger corrective action in all but the smallest of the four C&D landfill size
categories shown in Exhibit 2-3. Typical corrective action costs for landfills in each size category are shown in Exhibit 3-2
(per-ton costs are rounded).
3.4.3
National Costs
To calculate the national costs of the rule, EPA first estimated the number of C&D landfills that would upgrade
to come into compliance with the Part 257 revisions. To do this, EPA compared (1) the per-ton costs that waste generators
!l "Regulatory Impact Analysis for the Final Criteria for Municipal Solid Waste Landfills," Prepared for
EPA's Office of Solid Waste, December 1990.
12
-------
would incur in separating out the hazardous portion of their waste and sending it to a Subtitle C facility, to (2) the increased
tipping fees that C&D landfills would charge waste generators to recover the costs of upgrading. Presumably, if. the costs to
the waste generator under (2) exceeds that under (1), the C&D landfill industry would, by and large, choose not to upgrade.
EXHIBIT 3-2.
CORRECTIVE ACTION COSTS FOR LANDFILLS THAT
TRIGGER CORRECTIVE ACTION IN DIFFERENT
C&D LANDFILL SIZE CATEGORIES
SIZE
Large
Medium
Small
WASTE
ACCEPTANCE RATE
(tons per day)
>500tpd
500 - 265 tpd
265 - 30 tpd
<30 tpd
ASSUMED
ACCEPTANCE RATE
(tons per year)
269,000 tpy
103,000 tpy
40,000 tpy
4,000 tpd
CORRECTIVE
ACTION COSTS
(per ton)
$1.04
' . , $1.64
$2.78
NA
CORRECTIVE
ACTION COSTS
(per landfill
that triggers)
$280,000
$168,000
$110,000
NA
Note: numbers may not add due to rounding
As discussed in Section 3.3:3, EPA estimates that it will cost generators of heavy construction waste $707 per
company to see that hazardous waste is separated. Multiplying this per-company cost by 10,000 heavy construction
companies gives a national cost of $7,072,000 for separating hazardous waste. It will cost construction waste generators $430
to dispose of each ton of separated hazardous waste. Multiplying this unit cost by 636 tons of hazardous waste gives a ,
national cost of $273,480. Thus, the total national cost to construction waste generators under this scenario is $7,345,480.
Dividing this national cost by the number of tons of construction waste generated in the affected states (18 percent.of 28
million tons, or 5,040,000 tons) gives an average per-ton separation/disposal cost of $1.45.l: .
Exhibits 3-1 and 3-2 show the per-ton costs for groundwater monitoring and corrective action for landfills that
choose to upgrade. In Exhibit 3-3, these costs are combined to show the per-ton costs of upgrading landfills in different size
categories, both for landfills that trigger corrective action and those that do not. If these costs are passed along equally to all.
users of the upgraded landfill - construction and demolition waste generators alike - then the increase in tipping fees would
be equal to those shown in Exhibit 3-3. However, as noted before, demolition wastes are assumed not to be CESQG wastes.
Thus, demolition waste generators are not affected by this rulemaking and will probably be unwilling to pay these added
tipping fees. If the upgrading costs are passed along only to the construction waste generators, the increased tipping fees'
would be distributed across the 18 percent of C&D waste generated by the construction industry, 1 / 0.18 or 5.6 times higher
than those reflected in Exhibit 3-3.
Based on this analysis, EPA assumed for the purposes of this analysis, that overall, the least cost response to this
rulemaking will be comprised of (1) separation and Subtitle C disposal of hazardous waste on the part of construction waste
generators, and (2) avoiding receipt of CESQG wastes (no upgrading) on the part of C&D landfill owners.
Under this assumption, the only costs to C&D landfill owners will be those associated with spot checking the
waste entering the facility to assure that no CESQG waste is being disposed. To calculate national costs for this activity,
EPA multiplied the per-landfill cost of $3,400 by the total number of landfills in the affected states (718).
: 12The per-ton costs would be higher than this amount for firms that conduct inspections;to assure that
hazardous waste is screened out (in this analysis, firms that conduct heavy construction), and lower than this
amount for construction firms that do not. The $1.45 per-ton cost is a national average.
13
-------
EXHIBIT 3-3.
PER-TON COSTS OF UPGRADING C&D LANDFILLS
(Ground-water Monitoring and Corrective Action)
SIZE
Large -
Medium .
Small
ASSUMED
ACCEPTANCE RATE
(tons per day)
>500tpd
500 - 265 tpd
265 - 30 tpd
<30 tpd
COSTS FOR
LANDFILLS THAT DO
NOT TRIGGER
CORRECTIVE
ACTION (per ton)
Sl.O!
' $2.08
$3.97
NA
COSTS FOR LANDFILLS
THAT TRIGGER
CORRECTIVE ACTION
(per ton)
$2.05
$3.72
$6.75
NA
3.5
"HIGH-END" COST ANALYSIS - IF C&D LANDFILLS UPGRADE
Although in the least cost of compliance scenario, no C&D landfills are expected to upgrade in response to this
rulemaking, EPA conducted an analysis to estimate "high-end" costs if some landfills choose to do so. This scenario changes
the national costs of the proposed rule for construction and waste generators and managers, as described below.
3.5.1
C&D Landfill Owners
The unit costs of upgrading C&D landfills to come into compliance with the Part 257 revisions are presented in
Exhibits 3-1 and 3-2. Calculating the national costs associated with upgrading required an estimate of the number of landfills
that upgrade under the hypothetical "high-end" scenario. ' v
V * .
To estimate the number of upgrading landfills, EPA first considered the effects of the location criteria related to
unstable areas. For this analysis, EPA has defined "unstable areas" to include both karst areas and areas of poor foundation
conditions. As a proxy for the percentage of C&D landfills located in unstable areas, EPA used previous estimates that 3.5 to
7 percent of land-based.Subtitle C treatment, storage and disposal facilities are located in karst or poor foundation areas."
EPA used the midpoint of this range, or 5 percent, as the estimated percentage of existing C&D landfills located in unstable
areas. EPA has assumed that C&D landfills located in unstable areas will be unable to demonstrate their structural integrity
in the event of land subsidence. Under this assumption, 5 percent of C&D landfills will be ineligible to upgrade to receive
CESQG wastes. EPA therefore eliminated 5 percent of existing landfills from the set of landfills that upgrade.
For C&D landfills that are not located in unstable areas, EPA assumed that the larger C&D landfills with greater
remaining capacity would upgrade, and that the smaller C&D landfills with less remaining capacity would not. Therefore,
EPA assumed that 95 percent of the landfills in each of the two largest size categories would upgrade (35 landfills in the
>500 tpd category and 108 landfills in the 285-500 tpd category). EPA also assumed that 19 landfills in the 30-285 tpd
category would upgrade.14 To calculate the national costs of groundwater monitoring for these 162 landfills, EPA simply
multiplied the number of upgrading landfills in each size category by the appropriate per-landfill groundwater monitoring cost
shown in Exhibit 3-1. A similar approach was used to calculate corrective action costs, although here it was also necessary
to estimate the number of upgrading landfills that would trigger corrective action.
The RIA for the MSWLF criteria revisions estimated that about two-thirds of existing MSWLFs would trigger
corrective action under Part 258. Although, the revisions to Part 257 are similar to Part 258 with regard to corrective action,
EPA believes that the characteristics of C&D landfills are such that they are less likely than MSWLFs to trigger corrective
action. To estimate the proportion of C&D landfills that would trigger corrective action, EPA examined C&D landfill
13ICF Incorporated, "Location Standards: Costs and Economic Impact Analysis," March 1992.
'"This assumption was based on an earlier version of the analysis and does not affect the national costs
significantly.
14
-------
leachate data provided by NADC. Specifically, EPA calculated the median concentrations of constituents found in leachate
from 21 landfills, and divided these concentrations by a dilution/attenuation factor of 10 to approximate concentrations at a
monitoring well located at the waste management boundary." These concentrations were then compared to corrective action
trigger levels such as Maximum Contaminant Levels (MCLs) promulgated under the Safe Drinking Water Act or, for
constituents without MCLs, health-based levels in drinking water (reference concentrations for non-carcinogens and 10~5 risk-
specific doses for carcinogens).
Using this approach, 3 of the 21 landfills, or 14.3 percent, trigger corrective action. For this analysis, then, EPA
assumed that 14.3 percent of C&D landfills that upgrade would trigger corrective action.16
For the remaining 556 landfills (those that do not upgrade and stop receiving CESGQ waste), the costs are
simply those associated with spot checking incoming loads, as discussed in Section 3.4.3.
i
3.5.2 Construction and Demolition Waste Generators .
Disposal costs under the high compliance cost scenario will increase for construction and demolition waste
generators if the C&D landfill to which they currently send their waste chooses to upgrade. Under this scenario, the waste
generator would either continue to use the same landfill at a higher cost, or take the waste to a different landfill, presumably
at a greater distance. For this analysis, EPA assumed that waste generators would continue to send their waste to the newly
upgraded landfill and pay the increased tipping fees. To estimate the increase in tipping fees that would be charged by
. landfill owners, EPA simply divided Ihe total upgrading costs for the 162 landfills by the total number of tons received by
those landfills. Implicit in this approach is that the upgrading costs will be passed along to all users of the landfill, including
demolition waste generators, who are not CESQG waste generators and are not required to use upgraded landfills.
The total quantity of waste received annually by the 162 landfills assumed to upgrade is 21.3 million tons,
approximately 76 percent of the total generation of construction and demolition waste in the affected states. The total annual
cost of upgrading these landfills is $39.9 million (see Chapter 4). Therefore, the average per-ton cost of upgrading is
estimated to be $1.87. EPA assumes that this is equal to the incremental tipping fees these landfills will charge for waste
disposal.
To calculate costs associated with increased tipping fees for demolition waste going to C&D landfills that
upgrade, EPA simply multiplied the quantity of demolition waste that will go to upgraded landfills (82 percent of 21.3
million tons, or 17.5 million tons) by the incremental tipping fee of $1.87 per ton.
Similarly, to calculate costs associated with increased tipping fees for construction waste going to C&D landfills
that upgrade, EPA multiplied the quantity of construction'waste that will go to upgraded landfills (18 percent of 21.3 million .
tons, or 3.8 million tons) by the incremental tipping fee of $1.87 per ton. In addition, generators of construction waste who
currently send their wastes to C&D landfills that do not upgrade will incur the costs of separating out the hazardous portion
of the waste and sending it to a Subtitle C facility.
However, not all construction waste will be going to an upgraded landfill. Thus, some construction sites will
still need to separate their wastes. Inspection costs to ensure CESQG wastes are separated for heavy construction companies
were presented in section 3.3. It is uncertain, what portion of the 10,000 companies assumed to "inspect" sites in section 3.3,
would continue to incur this cost under this scenario where the majority of large C&D landfills upgrade. To be conservative,
EPA assumed 70 percent of these companies will continue to "inspect" the sites capture a reasonable upper-bound of facilities
which might continue to inspect and separate. To calculate separation and disposal costs for' these construction waste
generators, then, EPA simply multiplied the costs estimated previously for all construction waste generators by 70 percent.
15 Median leachate concentrations were based on all samples, including those in which the constituent tested
for was not detected. , . .
i '
16 Estimated monitoring well concentrations of iron, manganese, sulfates, and/or total dissolved solids exceed
secondary drinking water standards (SMCLs) at several additional landfills. However, these constituents are not
among those the rule requires owners of C&D landfills to monitor for, and are not of concern for health .reasons
(SMCLs are based on aesthetics). Therefore, EPA has not included these landfills in estimating the proportion of
C&D landfills that will trigger corrective action under the rule.
15
-------
4. RESULTS OF THE COST ANALYSIS
This chapter presents the results of the cost analysis. Sections 4.1 through 4.3 present the costs to each type of
affected party, and Section 4.4 summarizes the costs to the economy. Section 4,5 examines costs under a hypothetical "high-
end" scenario in which the majority of large C&D landfills upgrade in response to the rulemaking; EPA believes this to be an
unlikely scenario. , . >
4.1
CESQGS WITH ON-S1TE DISPOSAL IN SUBTITLE D UNITS
Exhibit 4-1 shows the estimated annual costs of the rule to CESQGs in the manufacturing sector with on-site
disposal. The total cost, estimated to be $172,000, is relatively low because (I) the cost of separating the hazardous waste.
from the rest of the waste is-assumed to be negligible, and (2) the quantities of hazardous waste requiring off-site disposal are
very small.
EXHIBIT 4-1. '
. Estimated Annual Costs
to CESQGs With Oil-Site Disposal
(Cost for Hazardous Waste Pickup and
Disposal (per ton)
$430
Tons of Hazardous Waste Generated
400
Total Annual Cost
$172,000
4.2
CONSTRUCTION WASTE GENERATORS
Exhibit .4-2 shows the estimated annual costs of the rule to construction waste generators in affected
states, first for separating out the hazardous portion of the waste and then for disposing of it. The bulk of the .
total annual costs are associated with the separation process itself rather than from the disposal of the small
quantity of separated hazardous waste.
EXHIBIT 4-2.
Estimated Annual Costs to Construction Waste Generators
(Cost of Separating Hazardous
Waste (per construction company)
$707
Number of Construction
Companies
. 10,000
Total Cost of Separation
$7,070,000
Cost for Hazardous
Waste Pickup and
Disposal (per ton)
- $430
Tons of Hazardous .
Waste Separated
636
Total Cost of Pickup
. and Disposal
$273,000 |
Total Annual Cost
1 .' $7,340,000
Note: numbers ire rounded
16
-------
4.3
CONSTRUCTION AND DEMOLITION LANDFILLS
C&D landfills are assumed not to upgrade in response to the rule, and to incur compliance costs only
from spot checking incoming waste at the landfill. Exhibit 4-3 shows the estimated costs of the rule to C&D
landfills. .
EXHIBIT 4-3.
Estimated Annual Costs to C&D Landfills
Cost of Spot Checking Incoming
Waste (per landfill)
$3,400
Number of C&D Landfills in
Affected States
718
Total Annual Cost
$2,440,000
4.4
TOTAL COSTS TO THE ECONOMY
The total costs to the economy, shown in Exhibit 4-4, are estimated to be $9.96 million. These
consist of (1) costs of hazardous waste disposal for a small quantity of hazardous waste from CESQGs currently
using on-site disposal; (2) costs to construction waste generators to separate out the hazardous portion of their
wastes and send it to Subtitle C facilities; and (3) costs to C&D landfill owners to spot check incoming waste for
CESQG waste. Over 70 percent of the costs of the rule are associated with separating out the hazardous portion
of construction waste.
EXHIBIT 4-4.
Estimated Costs to the Economy
Affected Parties
CESQGs with On-site Disposal
Construction
Generators
Construction
Waste || Hazardous Waste Separation
I Pickup and Disposal
|| Total Costs
and Demolition Waste Landfills
Total
Annual Costs (millions)
. ' $0.17
$7.07
$0.27
. . . $7.34
$2.44
$9.96
4.5
"HIGH-END" COSTS - IF 162 C&D LANDFILLS UPGRADE
Exhibits 4-5a through 4-5c show the estimated costs to construction waste generators, demolition
waste generators, and C&D landfills under the hypothetical scenario that 162 C&D landfills upgrade to come into
compliance with the Part 257 revisions. Costs to CESQGs with on-site disposal are the same under this scenario
as presented above in Section 4.1.
17
-------
EXHIBIT 4-5a.
Estimated. Annual Costs to Construction Waste Generators
Cost of Separating Hazardous '
Waste (per construction company)
$707
Number of Construction
Companies
7,000
Total Cost of Separation
' ' $4,950,000
Cost for Hazardous Waste Pickup
and Disposal (per -ton)
$430
Tons of Hazardous Waste
. Separated
445
Total Cost of Pickup and
Disposal
$191,000
Incremental Tipping Fee to
Upgraded C&D Landfills (per
ton)
. , . $1.87 >
Tons of Waste to Upgraded
C&D Landfills
3,830,000
Total Cost of Disposal in
Upgraded C&D Landfills
$7,180,000
Total Estimated Annual Costs to Construction Waste Generators = $12300,000
Note: numbers may not add due to rounding
The incremental tipping fee of $1.87 per ton is based on the assumption that landfill owners will pass
along upgrading costs to all users of the landfill. If landfill owners do not pass along these costs, this exhibit
overstates the compliance costs of the rule to construction waste generators. If landfill owners pass along these
costs only to construction waste generators (demolition waste generators are not CESQGs and therefore are not
required to use upgraded landfills), the'compliance costs incurred by co'nstructioh waste generators would be
higher than those shown in the exhibit. . ,
EXHIBIT 4-5b.
Estimated Annual Costs to Demolition Waste Generators
Incremental Tipping Fee to
Upgraded C&D Landfills (per
ton)
$1.87
Tons of Waste to Upgraded
C&D Landfills
17,466,250
Total Annual Cost
$32,718,000
As stated above, this analysis assumes that upgrading costs will be passed along to all users of the
upgraded landfill. If upgrading costs are not passed along, or are passed along only to construction waste
generators, the incremental costs of the rule to demolition waste generators would be zero.
18
-------
EXHIBIT 4-5c.
Costs to C&D Landfills
Size Range
(Capacity in
Tons Per Day) -
0-30
30-265
265-500
>500
Total
Number of
Landfills
Assumed to
Spot Check
Only
453
95
6
2
556
Number
of
Landfills
Assumed
to'
Upgrade
0
19
108
35
162
Annual Costs (millions)
Spot
Checking
$1.5
$0.3
<$0.1
<$0.1
$1.9
Monitoring
o
$3.0
$23.1
$9.5
$35.6
Corrective .
Action
0
$0.3
$2.6
$1.4 -
$4.3
Total
$1.5
- $3.6
$25.7
$10.9
$41.8
About 85 percent of the upgrading costs are associated with groundwater monitoring.
Exhibit 4-5d shows the total costs to the economy under the assumption that 162 landfills upgrade.
EPA estimates these costs to be $47.1 million per year. These consist of (1) costs of hazardous waste disposal
for a small quantity of hazardous waste from CESQGs currently using on-site disposal; (2) costs to a subset of
construction waste generators to separate out the hazardous portion of their waste and send it to a Subtitle C
facility; (3). costs to a subset of C&D landfills for spot checking incoming wastes; and (4) costs to a second
subset of C&D landfills for upgrading.
Increases in tipping fees incurred by construction and demolition waste generators who send their
wastes to upgraded C&D landfills under this hypothetical high-end scenario are not included in the costs to the
economy. To estimate costs to the economy, it is necessary to distinguish between opportunity costs and
transfers: the former represent true social costs, while the latter are payments that "net out," since the cost to one
entity is exactly balanced out by the gain to the entity receiving the payment. Changes in tipping fees paid by
generators are exactly balanced out by the increased revenues received by the C&D landfills. Thus, these two
categories are not included in the estimate of total costs to the economy.
As shown iii Exhibit 4-5d, the high costs of the rule in this hypothetical high-end scenario result
mainly from the high costs associated with upgrading existing landfills. -
19
-------
EXHIBIT 4-5d.
Estimated Costs to the Economy Under the Hypothetical "High-End" Scenario
Affected Parties
CESQGs with On-site Disposal
Construction Waste
Generators
Hazardous Waste Separation1
Pickup and Disposal1
Total '
Demolition Waste Generators
C&D Landfill Owners
Spot Checking2
Monitoring3
Corrective Action3
Total Upgrading Costs
Total
Annual Costs (millions)
$0.17
$4.95 -
$0.19
$5.14
SO
$1.9
$35.6
$4.3 .
$39.9
$47.1
Note: numbers may not add due to rounding
1. 70 percent of Construction Waste Generators separate
2. 556 C&D landfills spot check
3. 162 C&D landfills upgrade
20
-------
5. LIMITATIONS OF THE COST ANALYSIS
A number of assumptions and simplified methodologies were used in this analysis. Important caveats
and limitations are discussed in this chapter.
5.1 OVERALL LIMITATIONS IN THE ANALYSIS
One important limitation of the analysis is the considerable uncertainty associated with the quantities,
management practices, and characteristics of construction and demolition wastes. .The analysis assumes that 100
million tons of C&D waste are generated annually, based on two estimates presented in the literature. EPA also
assumes that all of this waste is currently sent to C&D landfills; this is a conservative assumption that likely
overestimates costs somewhat. .
EPA found very little information on how much C&D waste is construction waste versus demolition
waste. There is also uncertainty with respect to the frequency with which construction and demolition waste '
generators are CESQGs. EPA has assumed that all construction waste generators are CESQGs, and that no
demolition .waste generators are CESQGs.
\
Finally, with the exception of the hypothetical "high-end" analysis, EPA has developed only point
estimates of costs, not range estimates. The presentation of point-estimates should not be interpreted to indicate
-precision in the results.
5.2 LIMITATIONS IN THE ANALYSIS OF COSTS TO CESQGS USING ON-SITE
MANAGEMENT
EPA's estimate of the costs to CESQGs using on-site management is very rough. Limitations include
the following: ,
Separation costs are not included.
EPA assumed that all of the CESQG waste sent off site will go to Subtitle C facilities.
Some portion of this waste might be accepted at MSWLFs.
When CESQGs with on-site waste management units begin shipping the hazardous portion
of their wastes off site, they will begin using their on-site capacity at a slightly lower rate.
This analysis does not account for the slight extension of the useful life of on-site units as
a result of the rule.
Because the affected waste quantities are very small, these uncertainties have correspondingly small effects on
the national cost estimate.
5.3 LIMITATIONS IN THE ANALYSIS OF COSTS TO CONSTRUCTION AND DEMOLITION
WASTE GENERATORS
EPA assumed that it would be feasible, in all cases, to separate out the hazardous portion of
construction waste, and that the added costs would be attributable only to inspection of construction sites. There
is considerable uncertainty associated with the activities and associated costs for separating out hazardous waste
at construction sites.
. In the hypothetical "high-end" analysis, EPA assumed that owners of landfills opting to upgrade
would pass along all of the upgrading costs to the users of their landfills, and calculated increased tipping fees
21
-------
based on this assumption. If landfill owners do not pass along the upgrading costs, tipping fees will not increase,
and the analysis overstates compliance costs to both construction waste and demolition waste generators. If
landfill owners pass along the upgrading costs only to construction waste generators, the analysis understates
compliance costs to construction waste generators and overstates compliance costs to demolition waste J
generators. Finally, the analysis does not account for any changes in behavior on the part of construction or
demolition waste generators resulting from higher tipping fees charged by landfill owners that upgrade; it
assumes that aJ] generators will continue to send their waste to the same landfill as before the rule.
5.4 LIMITATIONS IN THE ANALYSIS OF COSTS TO C&D LANDFILLS
f
, . EPA's cost estimate is based on the assumption that no C&D landfills will find it profitable to
upgrade after the rule is in effect. The cost comparison presented in Section 3.4.3 indicates that the (1) per-ton
costs incurred by owners of landfills that upgrade are in some cases lower than (2) the per-ton costs incurred by
construction waste generators who separate their wastes, but only for the largest landfills and only if they do not
trigger corrective action. It is possible that the economics favor upgrading under other circumstances as well.
/
In the hypothetical "high-end" scenario, EPA_has assumed that 162 landfills will upgrade in response
to this rulemaking. This is generally based on the assumption that landfills in the larger size categories will find
it economical to upgrade, while the smaller landfills will not. There is no firm basis for this assumption and it
was made for hypothetical purposes only.
There are several uncertainties associated with the estimate of upgrading costs in the hypothetical
"high-end" scenario:
The per-ton costs for groundwater monitoring and corrective action were assumed to be the
same as for MSWLFs.
EPA assumed that C&D landfills opting to upgrade would upgrade the entire facility.
Some C&D landfill owners might choose instead to stop receiving CESQG waste in the
existing portion of the landfill, and to open a new, separate section which would receive
only CESQG-containing waste. Under mis scenario, only the new section would be
upgraded (assuming that this is allowed),'and the upgrading costs would be lower.
C&D landfills were assumed to have a 15-year remaining life over which to amortize the
upgrading costs. No information was found on the remaining life of C&D landfills.
: i
. The costs of making demonstrations in response to the location restrictions are not included
in the national cost estimates.
The analysis did not consider the possible construction of new C&D landfills, and how
competition from new landfills may affect tipping fees.
The analysis did not consider .the effects of the rule on the generators of C&D waste that
currently use on-site C&D landfills.
22
-------
6. POTENTIAL IMPACTS ON SMALL ENTITIES
The Regulatory Flexibility Act of 1980 requires federal agencies to assess the effects of proposed
regulations on small entities and to examine alternatives to the proposed regulations that may reduce adverse
economic effects on significantly impacted entities (5 U.S. Code 601 et. seq.). The Act requires agencies to
prepare a preliminary analysis for all proposed rulemakings to determine if a Regulatory Flexibility Analysis
(RFA) is necessary.
This chapter examines the potential impacts of the proposed rulemaking on small entities. Section
6.1 provides a description of the requirements of the Regulatory Flexibility Act and the EPA guidelines for
determining significant impacts on small businesses. The general methodology used to determine whether the
proposed'action may have significant impacts on small entities is described in Section 6.2. Section 6.3 presents
the results of the analysis for each type of entity affected by the proposed rulemaking.
This analysis is based on EPA's assessment of the most likely compliance behavior on the part of
affected entities. The hypothetical "high-end" scenario described in Chapters 3 and 4 is considered to be an
unlikely outcome of the rulemaking and is not addressed in this chapter.
6.1 REGULATORY FLEXIBILITY ACT AND EPA GUIDELINES
, t
The Regulatory Flexibility Act requires federal agencies to determine whether their actions will have
a significant impact on a substantial number of small entities, including businesses, nonprofit agencies, and
governmental jurisdictions. The Act does not define the key terms "small entity," "significant impact," or
"substantial number." However, EPA's guidance states that "For the purposes of EPA's implementation of the
Act, any economic impact is a significant impact, and any number of small entities is a substantial number."17
, In cases where the approximate severity of the impacts of a proposed rule on small entities is
unknown, the EPA guidelines recommend undertaking an initial screening analysis.18 As one possible method,
the EPA guidelines suggest comparing the annual compliance costs under the proposed rulemaking to operating
characteristics of the affected firms, such as annual sales, operating expenditures, net profits, or cash flow. The
results of the screening analysis are then used to ascertain the potential economic impacts of the proposed
rulemaking and to determine the level of additional analysis needed.
6.2 GENERAL APPROACH
To obtain a preliminary indication of the potential impacts of the proposed rule on small entities, this
analysis compares annual compliance costs to average annual sales revenue (or average annual dollars of business
done) for each type of affected facility. When available, the analysis, also examines annual compliance costs as a
percentage of annual net income. For the purposes of a screening analysis, comparing compliance costs to
revenues provides a reasonable indication of the magnitude of the potential regulatory burden relative to a
commonly available measure of a company's business volume. If the compliance costs represent a very small
fraction of a typical firm's revenues (e.g., less than one percent), the financial impacts are likely to be minimal.
When the ratio of compliance costs to annual revenue or net income is very high, additional analysis may be
17 EPA Guidelines for Implementing the Regulatory Flexibility Act. U.S. EPA, Office of Regulatory
Management and Evaluation, Office of Policy, Planning and Evaluation. Revised April 1992.
18 "Appendix E: Screening Analysis to Determine Severity of a Rule's Impacts on Small Entities," from
EPA Guidelines for Implementing the Regulatory Flexibility Act. U.S. EPA, Office of Regulatory Management
and Evaluation, Office of Policy, Planning and Evaluation. Revised April 1992.
23
-------
necessary, to determine whether or not affected entities can "pass on" these additional costs to their consumers or
absorb the additional costs themselves.
As discussed in previous chapters, three types of entities may be affected by this rule:
CESQGs with on-site disposal in Subtitle D units (primarily manufacturing facilities from
various industries);
* CESQGs with off-site disposal in C&D landfills (primarily construction and
wrecking/demolition companies); and
C&D waste landfills.
Each type of entity is examined separately because they face different compliance costs and represent wholly
different industries. The specifics of the analysis of each group are described below in Section 6.3.
Data on the average annual "dollar value of business done," or revenues, for the construction
industries and the wrecking and demolition industry were obtained from the 7957 Census of Construction
Industries. Data on the average annual sales revenues for the waste disposal industry and for selected .
manufacturing industries with on-site disposal were obtained from Robert Morris Associates, Annual Statement ,
Studies for 1993 (RMA). Annual compliance costs per facility were estimated based on the results of the
national cost analysis. Since the compliance cost estimates are in .1993 dollars, the revenue data from the Census
were inflated to 1993 dollars based on the average gross domestic product (GDP) for 1987 and the estimated
GDP for the final quarter of 1993."
While compliance costs are estimated on a per-facility basis, the financial data used for this analysis
is at the firm level (i.e., for an average parent company). The financial data for a firm and an affected facility
could differ if the firm operates more than one facility. This analysis assumes that a firm operates only one
facility, and could therefore underestimate the potential impacts to firms with more than one affected facility.
Three possible criteria are provided in the EPA guidelines for defining "small entity." First, "the
cutoff can be the point at which the adverse economic impact appears to rise or fall substantially, for example, in
the form of higher costs or closures." Second, "EPA can use the point in the range of size segments that most
closely approximates the Small Business Administration's definitions." Third, "EPA can use the point at which
the regulation effectively includes a large number of regulated entities without covering a large portion of the
pollution problem (e.g., 50 percent of regulated entities, but only 10 percent of the discharge of pollutant)."
For this analysis, the definition of a small entity varies by type of facility and by industry. For most
industries examined, the analysis uses average annual sales data for the smallest size range of companies (in
terms of annual sales revenues or number of employees) for which data are provided by RMA and Census. The
specific definitions and data used for each type of affected party are discussed below.
6.3 RESULTS
6.3.1 CESQGs with On-Site Disposal in Subtitle D Units
CESQGs in the manufacturing sector are not expected to be significantly impacted by the proposed
rulemaking because (1) few facilities still manage their CESQG waste in on-site disposal units; (2) industry
19 Implicit price deflators for the gross domestic product are produced by the Bureau of Economic Analysis
in the Department of Commerce. An annual average was not available for 1993 so revenues were inflated using
the final quarter GDP estimate. The resulting GDP inflator for converting the 1987 Census data to 1994 dollars
is 1.2263.
24
-------
practice is to keep hazardous wastes separate from non-hazardous wastes, so separation costs are insignificant;
and (3) the quantities of CESQG waste generated are small, and the cost of disposing these wastes off site is
correspondingly small.
Facilities that still handle their CESQG waste on site are expected to send their CESQG waste to
Subtitle C facilities. The costs for pickup and disposal of the CESQG waste are estimated to be approximately
$430 per ton.
Given that a CESQG, by definition, produces less than 100 kg of hazardous waste per month, or 1.32
tons per year, the cost of disposing this waste off site is estimated to be less than or equal to $568 per year per
facility. Exhibit 6-1 presents the potential impact of $568 in additional waste disposal costs to small companies,
or those with annual sales of $1 million or less, in various segments of the Stone, Clay, Glass, and Concrete
industry and Food and Kindred products industry.20 Impacts are measured by examining compliance costs as a
percentage of annual sales and as a percentage of net income. As Exhibit 6-1 shows, the highest possible annual
compliance costs represent only a small impact on the smallest companies in these industries. The impacts on
larger firms, with higher annual revenues, are expected to be even lower.
6.3.2 Construction Industry " ,
There are approximately 194,000 construction contractors in the U.S., of which approximately
157,000 are building contractors (residential, operative, and nonresidential) and approximately 37,000 are heavy
construction contractors (roads, bridges, etc.).21 Based on the distribution of the national population,
approximately 44,000 building contractors and 10,000 heavy construction contractors could be affected by the
proposed rulemaking.22 In the cost analysis, EPA assumed that building contractors will separate the hazardous
and non-hazardous portions of their waste and continue to dispose of the non-hazardous portion as. in the
baseline. The hazardous portion is assumed to be disposed in a Subtitle C facility.
EPA has estimated that it will cost each of the 10,000 heavy construction contractors $707 per year
to separate out the hazardous portion of construction waste. It will also cost $430 per ton, on average, to dispose
of the hazardous portion of construction waste in a Subtitle C facility. Multiplying $430 per ton by a maximum
of 1.32 tons of CESQG waste per year, each heavy construction company faces a maximum disposal cost of
$568 per year under the proposed rulemaking. The total maximum increase in costs to construction companies is
therefore $1,275. ,
Exhibit 6-2 shows the cost impacts as a percentage of annual revenues for four segments of the
construction industry: single family house construction, residential construction other than single family,
highway and street construction, and heavy construction not elsewhere classified. .To be conservative, all
segments were assumed to incur a maximum cost of $1,275, even though the cost analysis is based on the
assumption that only companies involved in heavy construction would incur inspection costs. As shown in the
exhibit, the increase in costs represents a small impact, less than one percent of annual revenues, for all sizes and
20 The potential impact to facilities in these industries is examined to demonstrate that the potential
compliance costs represent a very small percentage of revenues and net income for this category of facilities.
Specific industries were chosen from the Stone, Clay, Glass, and Concrete, and Food and Kindred products
industries because facilities from these industries represent almost 50 percent of the CESQGs that with on-site
management, based on the Screening Survey of Industrial Subtitle D Establishments (Westat, 1987). The impact
of the additional costs to facilities in other industries is expected to be similar.
21 Based on data from the 1987 Census of Construction Industries.
22 The states affected by the proposed rulemaking represent approximately 28 percent of the U.S. population.
The number of construction contractors to be affected is estimated by multiplying the total number of contractors
in the U.S. by 28 percent. .
. ' 25 .
-------
EXHIBIT 6-1
Estimated Impacts on CESQGs with On-Site Management,'
with Annual Revenues of $1 Million or Less
(1993 Dollars)
Industry
Cut Stone and Stone
Products'
(SIC Code 3281)
Glass Products'1
(SIC Code 3231)
Concrete Brick, Block
and Other Products0
(SIC Code 3271 and
3272)
Dairy Products4
(SIC Codes 2021, 2022,
2024, and 2026)
Canned and Dried Fruits
and Vegetables'
(SIC Codes 2033 and .
2034)
Maximum Estimated
Compliance Costs
$568
$568
r*
$568
$568
$568
Annual Costs as
Percentage of Annual
Revenues
0.10%
0.09%
0.09%
0.10%
0.06%
Annual Costs as
Percentage of Annual
Net Income
2.1%
NA
7.2%
NA
NA
Impact percentages are calculated using an average annual revenue of $563,700 and an average
profit before taxes of $27,058. These average numbers are calculated from data in RMA, 1993.
Impact percentages are calculated using an average annual revenue of $652,000, calculated from
data in RMA, 1993. Average profit before taxes was not available for this size category.
Impact percentages are calculated using an average annual revenue of $607,400 and an average
profit before taxes of-$7,900. These average numbers are calculated from data in RMA, 1993.
Although these smaller firms have negative profits before taxes, on average, the loses are small, on
the order of 1 percent. The annual costs to these companies under the proposed rulemaking
represent a small percentage of these losses.
Impact percentages are calculated using an average annual revenue of $584,500, calculated from
data in RMA, 1993. Average profit before taxes was not available for this size category.
Impact percentages are calculated using an average annual revenue of $877,000, calculated from
of-$7,900. These average numbers are calculated from data in RMA, 1993. Although these
smaller firms have negative profits before taxes, on average, the loses are small, on the order of 1
percent. The annual costs to these companies under the proposed rulemaking represent a small
percentage of these losses. ' .
26
-------
types of construction companies. The cost impacts as a percentage of annual revenues are similar or lower for
the other segments of the construction industry; such as non-residential and elevated highway and bridge
construction. .
6.3.3 C&D Waste Landfills
This section addresses the potential impacts to C&D waste landfills under the assumption that none
will upgrade. The only costs that will be incurred by C&D landfills will be those associated with spot checking
incoming loads to make sure that they do not contain CESQG wastes. EPA estimates that this screening process
will cost each landfill, on average, $3,400 per year. It is assumed that landfills will be able to pass this
relatively small cost to users of their facilities.
. 6.3.4 Conclusions
It is unlikely, given the assumptions applied in the analysis and the results of the screening analysis,
that any of the affected parties will be impacted significantly by this rulemaking. If there are changes in any of
EPA's expectations regarding the behavior of firms within the industries affected, it may be necessary to
reexamine the potential impacts.
27
-------
I
y
53,
t
^^
in
a
o
I
H i =3
5' o Q
C U n
S 82
41
E
t>
o
U
o
U
1
ta
e
&
t
4
Cfl
$
e
1
Z
u
ħ g.
o "5,
l|
11
II
it
31
£ £
st
V
Ğl
P O
r
.
2 *>
8 6
it
tn
s s
o o
-------
£§
S°
* u
a|
n
e "S
' te
B
O
a -^ 1
Us
e U, O
£ğ
I
S
"!§;
td
y S
o .S
U 2
o
&
08
nts with an
.B
Z
- -s
bd
il
e o.
S
n
£8
SI
o CL
m v
'$(
e*
n
S8
sl1
M
1
> |
I
;l
0 °"
-1
£
*" 1
S
0 0*
V
f\
rs
§
B
VI
r-
_-
g.
1 Maximum Annual
Compliance Costs
Company '
Z.
z
r*
n
10
p
oT
(S
M
op
Ov
1
g .
' OO
g
S
| ' f
1 Average Annual R
per Company*
-(Thousands of Doll
Z
<
o
o
V
o
0
V
o
o
V
0^
s
o
o
o
i
o
s ;
o
s
o
1 Average Annual C
Percentage of Avei
Annual Revenues
o
o
I
§
s
a
u
Ğ
S
o
29
-------
i
a
ON
Os
VS
^N
4>
U
S
£
to
S
O
B
ğ*
C
o
Ğ
|
o
U
u
^
I
H E
s *^
X'
as
o
BJ
ts
s
a
I
'a.
I
faJ
o
So
w
a
as
1
S
g
E
£
1
if
o a.
V
^
§s **
e e
Ğ"*
S E
V) W
II
r* **
£ 2
S 3
0 §"
e S1
2 S
S! J,
I
Ğ8
si
_ a
° i
2 t
fil
2 1
en
_ S
st
" I1
V
' £
II
-. &
V
§
^
M
"
M.
ri
^
".
^
r-.
§
^
"
Maximum Annual
Compliance Costs per
Company
*
P
T.
00
1
3
l
S
*T
S
Average Annual Reven
per Company*
(Thousands of Dollars)
\
S
o
o
V
g
S
o
S
V
SS
0
o
1
I
0
g
o
o
r-
VI
O
S
Average Annual Costs
Percentage of Average
Annual Revenues
I 4
30
-------
Os
4>
a
u
£
I
5
** .
3-
B
O
'
ul
2
e s a
S x£
x Ğo
td
I
-B
u
u
a.
J
1
Ğ
E
1
I
0
&
S
u
lisbments with a>
2
Iu
g
g G
o *cL
"" 6
i:t
o S*
** "5,
§g
V
Ji
r*
. t
ğ s.
§
tf^
r*
*
§
(N
2Ğ ""-
!l .
I
1 Maximum Annual
Compliance Costs
Company
"0
r-T
------- |