This chapter discusses the development of the landfill gas industry and assesses its prospects for expansion. It describes the regulations that affect the landfill gas industry; provides information on U.S. Environmental Protection Agency (EPA) efforts to encourage the conversion of landfill gas (LFG) emissions into energy; provides information on the economics of LFG conversion into energy; and provides information on the impact of new environmental regulations.
Each person in the United States generates about 4.5 pounds of waste per day, or almost 1 ton per year, most of which is deposited in municipal solid waste (MSW) landfills . As MSW decomposes, it produces a blend of several gases, including methane (about 50 percent). Table 28 shows the main constituents of LFG and their proportions. Methane (CH4) is a greenhouse gas and also poses explosion hazards if uncontrolled. On the other hand, it is the main component of natural gas and can be a valuable source of energy. Other LFG constituents, such as nonmethane organic compounds (NMOCs), can contribute to the formation of smog. Others pose health hazards due to their toxicity.
|Table 28. Landfill Gas (LFG) Constituent Gases|
|Constituent Gas||Concentration in LFG|
|Methane (CH4)||35 to 60 percent||50 percent|
|Carbon Dioxide (CO2)||35 to 55 percent||45 percent|
|Nitrogen (N2)||0 to 20 percent||5 percent|
|Oxygen (O2)||0 to 2.5 percent||<1 percent|
|Hydrogen Sulfide (H2S)||1 to 1,700 ppmv||21 ppmv|
|Water Vapor (H2O)||1 to 10 percent||NA|
|Nonmethane Organic Compounds (NMOCs)||237 to 14,294 ppmv||2,700 ppmv|
|NA = not available. ppmv = parts per million
Note: Highest values occur in perimeter wells.
Sources: G.J. Sandelli, Demonstration of Fuel Cells To Recover Energy from Landfill Gas. Phase I Final Report: Conceptual Study, EPA-600-R-92-007, prepared for the U.S. Environmental Protection Agency by International Fuel Cells Corporation (Washington, DC, January 1992); M. Doorn, J. Pacey, and D. Augenstein, Landfill Gas Energy Utilization Experience: Discussion of Technical and Non-Technical Issues, Solutions, and Trends, EPA-600/R-95-035, prepared for the Air and Energy Engineering Research Laboratory, U.S. Environmental Protection Agency by E.H. Pechan and Associates, Inc. (Washington, DC, March 1995).
Gas collection systems operate continuously. They usually consist of vertical wells and sometimes horizontal trenches or other zones filled with permeable material within the waste, from which LFG is extracted by application of a vacuum. Once the gas is withdrawn, it can be flared  or processed.
The first commercial gas energy recovery project was at the Palos Verdes Landfill, in Rolling Hills, California, in 1975 . The project converted LFG to pipeline-quality gas that was sold to the Southern California Gas Company. Several other projects to convert LFG to pipeline-quality gas were started in the late 1970s in California, including Mountain View in 1978 and Monterey Park in 1979. The first direct heating boiler projects were brought on line in the late 1970s and early 1980s. The first electricity generation projects took place at Brattleboro, Vermont, in 1982. Most projects are located in California and the Northeast.
There are five main ways to recover energy from LFG: direct heating, electricity generation, chemical feedstock, purification to pipeline-quality gas, and heat recovery. Each of these methods has a variety of LFG applications. A complete list of applications and technologies is provided below.
This section reviews the most recent regulations that affect the LFG industry. Table 29 summarizes the regulations discussed in this section.
|Table 29. Regulatory Milestones Affecting the Landfill Gas Industry, 1976-1996|
|EPA, 1976||Original regulations under Subtitle
D, Resource Conservation and
Recovery Act (RCRA)
|Restrict the migration and require collection of
explosive mixtures. The
measure increased the safety of landfills (danger of explosion, health
|FERC, 1978||Public Utility Regulatory Policies
Act of 1978 (PURPA)
|Requires utilities to interconnect with small power
including LFG energy recovery projects, and purchase the energy at
the utilities' avoided costs.
|EPA, 1988||Proposed new landfill regulations
under Subtitle D, RCRA
|EPA, 1991||Promulgation of new landfill
regulations under Subtitle D,
RCRA, setting standards in six
categories: location restrictions,
operating requirements, design
standards, groundwater monitoring
and corrective action, closure and
postclosure care, and financial
|Depending on timing of implementation (see below).
implemented: strengthen existing regulations; increase safety and
reduce environmental impact; and, indirectly, increase costs of
compliance for landfill operators.
|EPA, 1991||Proposed New Source
Performance Standards (NSPS)
under Section 111(b) and
Emissions Guidelines under
Section 111(d) of the Clean Air Act
|The NSPS for MSW landfills designate LFG emissions
as a pollutant.
The proposed emissions guidelines call for control of LFG emissions
through installation and maintenance of LFG control systems at MSW
landfills with capacity in excess of 167,000 tons. The EPA estimated
in 1992 that 621 landfills would be required to install collection/control
systems when the regulations were implemented.
|EPA, 1993||One- and two-year extensions of
some effective dates in Federal
landfill regulations under Subtitle
|Implementation schedule delay; allowed more time
for small and other
special case landfills to either comply with regulations for operating
landfills or shut down.
|EPA, 1994-1995||Effective dates for most regulations
under Subtitle D, RCRA
|The operations and closure/postclosure criteria require
control measures to prevent soil concentrations of methane higher
than 5 percent at the site boundary, monitoring of hazardous waste,
and monitoring of LFG levels for 30 years after closure. Encourages
use of LFG collection systems as a form of control. As part of
hazardous waste monitoring, requires disposal of LFG condensate
accumulated during control and energy recovery processes following
either RCRA regulations (safe disposal at a Subtitle C facility) or the
Clean Water Act (treatment and sewage disposal). Depending on
choice, costs range from $0.70 to $1.50 per gallon. Because less
condensate is created if LFG is flared, disposal costs are about five
times higher in energy recovery projects, thereby discouraging
utilization of LFG in favor of flaring.
|EPA, 1994-1995||Effective dates for compliance with
applicable CAA and Clean Water
Act regulations under RCRA
|RCRA requires compliance with applicable CAA and
Clean Water Act
regulations, such as restrictions on primary and byproduct emissions
(i.e., NOX and CO) in ozone nonattainment regions. Encourages the
use of LFG control systems, but sometimes discourages the use of
energy recovery systems.
|EPA, 1994||Proposed revisions to some CAA
regulations that apply to new and
existing landfills, including
renewable energy reserve credits
(Title IV of CAA Acid Rain
Program) (see below)
|Strict LFG toxic and greenhouse constituent gas control
collection systems. Renewable energy reserve credits encourage LFG
energy recovery once LFG is collected (see below).
|FERC, 1995||Federal Energy Regulatory
Commission (FERC) rejection of
the component of California's
Biennial Resource Plan Update
that restricted bidding for
wholesale power to qualifying
|States may not assign a preference to bidding for
under PURPA. States may not assign externality benefits to particular
|EPA, 1996||Final regulation under the CAA
establishing standards for new and
guidelines for existing large MSW
|Requires landfills that emit LFG in excess of 50
megagrams (Mg) per
year to control emissions. New and existing landfills designed to hold
at least 2.5 million Mg of MSW are also required to install gas
collection systems, unless nonmethane organic compounds (NMOCs)
emissions are less than 50 Mg per year. About 280 landfills are
affected. Surface methane must be monitored on a quarterly basis.
Waste disposal cost increases are estimated by EPA at 20 to 40
cents per household. By requiring more extensive (and expensive)
LFG control, the rule may encourage some landfills to explore LFG
energy recovery options. However, because the rule increases the
costs of both flaring and energy recovery options, most
owners/operators will likely continue to choose flaring.
|Notes: EPA = U.S. Environmental Protection Agency.
FERC = Federal Energy Regulatory Commission.
Source: Science Applications International Corporation, Renewable Industry and Project Descriptions, prepared for the Office of Coal, Nuclear, Electric and Alternate Fuels under contract DE-AC01-92EI21944 (McLean, VA, August 1996).
The original regulations under Subtitle D of the Resource Conservation and Recovery Act of 1976 (RCRA), issued by EPA’s Office of Solid Waste, covered the migration (via underground routes) and collection of explosive mixtures in buildings. A more stringent set of Subtitle D regulations was promulgated in the Federal Register on October 9, 1991 . On that date, new standards were issued for all new MSW landfills that were receiving waste 2 years after the rule’s publication in the Federal Register [171, 172]. Although the rule establishes minimum health and environmental protection standards, implementation of the regulations is left largely to the State governments . The regulations are intended as minimal national criteria to guide States in establishing and enforcing their own regulations, which must be reviewed and approved by the EPA .
Specific applicability criteria are as follows:
The regulations established comprehensive protective standards in six categories of MSW landfill management:
Because of the expenses related to these regulations, operators were required to show that they had financial mechanisms to cover the costs of closure, postclosure care, and any needed cleanups from releases. Some exemptions were granted to certain small landfills serving communities that dispose of less than 20 tons of MSW per day.
Both the operating requirements and the closure and postclosure care requirements included provisions for controlling and monitoring LFG . The box on page 103 shows the regulatory criteria that affect LFG specifically. LFG control and conversion involves the compression of the gas. This compression creates LFG condensate, which is a hazardous waste under RCRA because of its NMOC content. This classification requires disposal either under RCRA or Clean Water Act (CWA) rules. Under RCRA, condensate is treated and safely disposed of at a Subtitle C facility. Under the CWA, it is treated and eliminated through the sewer .
In July 1993, the EPA proposed the following modifications to the relevant compliance dates of certain provisions of the October 1991 rule:
MSW Landfill Criteria Provisions Under Subtitle D of RCRA That Affect LFG and Methane Specifically
Two of the six MSW landfill gas criteria under the 1991 Subtitle D of RCRA affect LFG and methane specifically. The two criteria, an abbreviated version of the relevant provisions, and the effect on LFG are as follows:
Source: U.S. Environmental Protection Agency, Criteria for Solid Waste Disposal Facilities: A Guide for Owners/Operators, EPA/530-SW-91-089 (Washington, DC, March 1993).
In 1991, the EPA’s Office of Air Quality Planning Standards designated “municipal solid waste landfill emissions” as a pollutant to be regulated under the Clean Air Act (CAA), Section 111(b) (New Source Performance Standards (NSPS) for new landfills) and Section 111(d) (Emissions Guidelines for existing landfills) . The standards limit NMOCs in LFG emissions. NMOCs are of concern because of their interaction with nitrous oxides (NOx) to form ozone, a primary cause of smog. Although the guidelines did not directly regulate methane (CH4), they did so indirectly by requiring the installation and maintenance of LFG collection and control systems.
Renewable Energy Reserve credits are available under Title IV of the CAA Acid Rain Program for LFG-to-energy projects. The Renewable Energy Reserve is a special bonus pool of sulfur dioxide (SO2) allowances set aside to reward new initiatives in renewable technologies. For every 500 megawatthours of electricity generated through landfill energy recovery, a public utility earns one allowance. The current market value for a sulfur dioxide allowance is approximately $100.
In 1994, the EPA’s Office of Air Quality Planing Standards proposed new CAA regulations for new and existing MSW landfills. The final regulation was issued on March 1, 1996. It sets revised performance standards for new landfills and emission guidelines for existing ones . The regulations require large landfills that emit LFG in excess of 50 megagrams per year to install and maintain technology to control LFG emissions. New and existing landfills designed to hold at least 2.5 million megagrams of MSW are also required to install gas collection systems, unless NMOC emissions are lower than 50 megagrams per year. NMOCs include toxics such as benzene, carbon tetrachloride, and chloroform .
The rule provides owners/operators with a tier system for determining whether controls will be required. If initial calculations determine emissions to be above the limit of 50 megagrams per year, the tier system provides the opportunity to conduct sampling and obtain site-specific values to prove that emissions are below the limit and that controls are not required. The rule also contains an operational standard that requires the monitoring of a landfill’s surface methane concentration on a quarterly basis. If the concentration is greater than 500 parts-per-million (ppm) after three consecutive measurements, control system expansion is required.
The reach of Federal, State, and local environmental regulations is expanding at an increasing rate. Prospective landfill developers must consult different local and State government agencies to obtain the latest version of their solid waste, air quality, and health regulations. A single project or even a project phase may require obtaining multiple permits from different agencies. For instance, 48 pieces of State legislation affecting solid waste were enacted in California in 1991 alone . As stated earlier, Subtitle D of RCRA sets minimum criteria used by States to establish and enforce their own EPA-approved regulations, which can be more, but not less, strict. A complete list of State regulations affecting landfills would stretch hundreds of pages and is beyond the scope of this report .
A provision under the Public Utility Regulatory Policies Act of 1978 (PURPA) requires utilities to interconnect with small power producers, including LFG energy recovery projects, and purchase the energy at the utilities’ avoided cost. In 1995, the Federal Energy Regulatory Commission (FERC) rejected the component of California’s Biennial Resource Plan Update that restricted bidding for wholesale power to qualifying facilities (QFs), such as renewable energy resources, compared to other small power producers, such as nonrenewable resources. As a result, States may not assign a preference to bidding for LFG-generated energy under PURPA. FERC also rejected preferential treatment via externality adders that would have the effect of setting rates for QFs above avoided cost.
The advantages of energy recovery include decreased emissions of methane, NMOCs, and toxics (e.g., benzene, carbon tetrachloride, and chloroform). Although carbon dioxide (CO2) emissions increase with the energy recovery option, the net atmospheric balance is a positive one because CO2 emissions are significantly less radiative (i.e., the alleged “greenhouse effect” is less) than methane emissions.
The average size of an LFG energy recovery project is about 3 megawatts, with typically over 95 percent availability. The number of commercial LFG energy recovery projects has grown from 4 in 1981 to about 130 in 1996 . Appendix H shows selected case studies of LFG commercial energy recovery projects. Even though there has been a large increase in projects, EPA estimates that over 700 landfills across the United States could install economically viable landfill gas energy recovery systems, but have not. In addition, about 30 of the original conversion and direct use projects initiated in the 1970s and 1980s have had to shut down due to more competitive market conditions of the 1990s [184, 185, 186]. Therefore, although the advantages of LFG energy recovery are many, there are few successful commercial projects relative to the number of MSW landfills due to prevailing market conditions and the array of other formidable barriers that confront project developers (see box below).
Barriers to Recovery and Conversion
Source: M. Doorn, J. Pacey, and D. Augenstein, Landfill Gas Energy Utilization Experience: Discussion of Technical and Non-Technical Issues, Solutions, and Trends, EPA-600/R-95-035, prepared by E.H. Pechan and Associates, Inc., for the Air and Energy Engineering Research Laboratory, U.S. Environmental Protection Agency (Washington, DC, March 1995).
The most significant barrier is low oil and natural gas prices, which make recovery and conversion, with its high initial capital costs, lack of economies of scale, and high transportation costs, uncompetitive in most cases. Table 30 shows a comparison of current costs for the most popular LFG energy recovery technologies. Table 31 shows a comparison of the conditions deemed necessary by industry to achieve cost-competitive LFG control (i.e., flaring) and utilization projects.
|Table 30. Comparison of Costs for
Typical LFG Energy Recovery Technologies
(1992 Dollars, Unless Otherwise Noted)
(Dollars per Kilowatt)
|Operating and Maintenance Costs
(Dollars per Kilowatthour)
|Internal Combustion Engine/Electricity Generation||900 to 1,200||0.013 to 0.020|
|Gas Turbine/Electricity Generation||1,000 to 1,500||0.01 to 0.015|
|Steam Turbine/Electricity Generation||a900||a0.001|
|Boiler/Direct Heat||1,000 to 1,500||0.005 to 0.018|
|Organic Rankine/Heat Recovery||1,000 to 1,500||0.005|
|Fuel Cell/Electricity Generation||b3,000+||NA|
b1995 dollars, using 1995 technology.
NA = not available.
Sources: T.D. Williams, “Making Landfill Gas an Asset,” Solid Waste and Power (July/August 1992), p. 22; and C.E. Anderson, “Selecting Electrical Generating Equipment for Use with Landfill Gas,” Proceedings of the SWANA 16th Annual Landfill Gas Symposium (Louisville, KY, March 1993).
|Table 31. Conditions Necessary for Cost-Competitiveness in LFG Utilization Projects|
|Minimum Necessary Conditions|
Paid for Project
|Gas turbine||Can vary greatly,
from $30,000 to
$1 million per kW
for a 1-MWe
|>1 MWe||At least $0.06 to
$0.07 per kWh
|Less than 2 miles||Tax credits
|Fuel cell: mature
|$1,500 per kW
and assuming 50
recovery sold at
$2.92 per million
|4 x 200 kW||$0.04 per kWh||Emission
ton of NOX
|Fuel cell: today's
no economies of
|$3,000 per kW
and assuming 50
recovery sold at
$2.92 per million
|4 x 200 kW||$0.072 per kWh||Emission
ton of NOX
|NAb,c||Flare system||About $375 per
cubic feet of LFG
|NA||$0.07 per kWh||None||NA||No|
|aG.R. Jansen, “The Economics of LFG
Projects in the United States,” presented at the Symposium on LFG/Applications
and Opportunities (Melbourne, Australia, February 27, 1992).
bG.J. Sandelli, Demonstration of Fuel Cells To Recover Energy from Landfill Gas. Phase I Final Report: Conceptual Study, EPA-600-R-92-007, prepared by International Fuel Cells Corporation for the U.S. Environmental Protection Agency (Washington, DC, January 1992).
cG.J. Sandelli (1992) and Science Applications International Corporation, Renewable Energy Annual 1996. Subtask II: Issues, prepared for the Energy Information Administration under Contract No. DE-AC01-92-EI21944 (McLean, VA, September 11, 1996).
Btu = British thermal units. kWh = kilowatthours. MWe = megawatt-electric. NA = not applicable.
The most economical options for LFG utilization are direct uses such as process heat and boiler fuel, where the end users are in close proximity (no more than 1 or 2 miles) to the landfill, and whose gas supply needs closely match production at the landfill . In practice, end users are infrequently located near landfills and rarely require continuous fuel in the amounts produced. As of 1992, there were 21 landfills (or less than 20 percent of total energy recovery projects) with direct use of LFG as heating fuel .
Boiler fuel is the most typical direct use and a particularly attractive option since conventional equipment can be used with minimal modifications. Boilers are generally less sensitive to LFG trace constituents and therefore require less cleanup than other alternatives. End-use options include industrial applications such as kilns, lumber drying, oil refining, hotel heating, and cement manufacturing. These tend to be economical applications because of the continuous need and availability of the fuel.
Generally, there are three applications for LFG electricity generation: internal combustion engines, gas turbines, and fuel cells. As of 1992, there were about 61 projects that generated electricity using internal combustion (IC) engines and 24 using turbines, accounting for a total output of 344 megawatthours . Today, most of the operating landfill energy recovery projects sell electricity under contract to a utility. IC engines are most economical where the supply of LFG is enough to produce 1 to 3 megawatthours. Turbines are most economical at sites with output of over 3 megawatthours. Advantages of IC engines include comparatively low capital costs (between $950 and $1,250 per kilowatt), efficiency, a high degree of standardization, and ease of transportation from one landfill site to another . One of the disadvantages with IC engines is emissions. There are two types of IC engines, each having distinct emissions characteristics. Stoichiometric combustion engines generate high nitrous oxides (NOx) emissions. Lean-burn engines generate lower NOx and CO emissions, so they are better suited for applications where these emissions are a concern.
There are several economic disadvantages in using gas-fed turbines. According to Waste Management of North America, gas fed turbines typically have parasitic energy losses of 17 percent of gross output . This compares to 7 percent for IC engines. Turndown  performance is poor compared with IC engines, and difficulties may occur when they are operated at less than a full load. Other problems can be combustion chamber melting, corrosion, and accumulation of deposits on turbine blades. Thus, IC engines are currently the most favorable option for LFG energy conversion projects and have been applied in greater numbers than any other option.
In the future, fuel cells may become attractive because of their higher energy efficiency, negligible emissions impact, and suitability for all landfill sizes, although some studies suggest that fuel cells would be more competitive in small (less than 1 megawatt) to medium (less than 3 megawatts) projects . In addition, fuel cells have low labor and maintenance costs. At present, however, economic and technical disadvantages make fuel cells clearly uncompetitive with more conventional applications. These include the high capital cost of designing an LFG cleanup process that can remove the trace constituents from the LFG (fuel cells need a higher grade of LFG purification than other options), and the high cost of the fuel cell itself (about $3,000 per kilowatt using state-of-the-art technology). Because of continued advances in fuel cell technology and the possibility of more stringent future emissions requirements that may make other technologies more costly, some studies estimate that fuel cells will become competitive around the turn of this century. (A manufacturer estimates capital costs as low as $1,500 per kilowatt by 1998) . According to a study by the Electric Power Research Institute (EPRI), if individual fuel cell power plants were used at landfills, 6,000 megawatthours of electricity could be generated from LFG . Another study prepared for the EPA suggests that the approximate total power output that could be generated from about 7,500 landfills using fuel cell energy recovery could be 4,370 megawatthours .
This option involves the use of expensive cleanup, purification, and processing equipment to bring the LFG to the quality standards of alternative feedstocks, such as natural gas. Using LFG as a chemical manufacturing feedstock remains largely uneconomical as long as the price of conventional feedstocks (e.g., natural gas) remains low. Other disadvantages are high transportation costs and a need for proximity to the end user. Landfill sites have found that gas pipelines cannot exceed 1 or 2 miles to be cost-effective . Potential uses for the feedstock include production of methanol and diesel fuels.
This option involves the conversion of LFG, a medium heating value gas, into high heating value gas for local gas distribution networks or, in compressed form, for vehicular fuel. In 1992, there were seven sites that upgraded LFG to pipeline-quality gas . This option also remains uneconomical as long as the prices of natural gas and oil remain relatively low. Disadvantages include the need for a more thorough and expensive purification process than in some other options (but the same as in feedstock for chemical manufacturing processes and fuel cell applications), high transportation costs, and need for proximity to the end-user.
The U.S. Government has an impact on the LFG industry and on the development of energy recovery projects through promotional programs and incentives. The aim of these incentives and programs is to encourage LFG utilization projects, particularly when the projects are not cost-effective due to market conditions or the use of new technology. The EPA has the most important programs regarding MSW landfills. This section provides a brief discussion of EPA’s promotional programs and of other U.S. Government incentives and programs.
The Landfill Methane Outreach Program, part of the Climate Change Action Plan, is an important Government program dealing with LFG and energy recovery. Through this program, EPA is working with MSW landfill owners/operators, States, Tribes, utilities, and other Federal agencies to promote the use of LFG as an energy resource . The program has two main tasks: (1) identifying landfills with the potential to produce energy cost-effectively; and (2) overcoming the barriers to LFG energy recovery at the Federal, State, and local levels. A summary of the outreach services offered by the program appears in the box opposite. The critical barriers identified by the program are shown in Table 32.
|Table 32. Critical Barriers Identified by the Landfill Methane Outreach Program and Their Solutions|
|Critical Barriers||Program Solutions|
|Lack of information and perception of high risk||Provide information to increase awareness of project
enhance understanding of environmental, energy, and economic
|Costly and difficult permitting and other regulatory
|Work with Federal and state regulators to increase
streamline the regulations affecting development of projects
|Poor market conditions: rate of return not high
|Work with utilities and other energy purchasers to
of the environmental value of energy recovery and its energy resource
|Misperception of profitability based on avoided cost
rates that are no longer available
|Raise awareness of the benefits of energy recovery
as a cost-effective
approach to achieving a range of environmental and safety goals
|Source: U.S. Environmental Protection Agency,
Landfill Methane Outreach Program, EPA-430-F-95-068A (Washington,
DC, April 1995).
Some of the program’s outreach objectives are met through EPA’s Landfill Methane Outreach “Ally” voluntary programs with State governments, utilities, and owner/operators. EPA launched these programs in five States during fall 1994; the nationwide launch took place in 1996 .
In the State Allies program, the EPA and a State government office sign a voluntary memorandum of understanding which sets forth the responsibilities and agreements between the parties to make the State government party a Landfill Methane Outreach State Ally.
In the Utility Allies program, utilities are encouraged to purchase electricity generated from LFG. To become a Utility Ally, a utility agrees to take advantage of the best opportunities in its service territory (or beyond) for obtaining power from LFG. In turn, EPA recognizes and publicizes the utility’s efforts. EPA can also assist during evaluation and development of projects and in removing or alleviating the regulatory, information, and other barriers currently limiting development (Table 32). As in the State Ally program, utilities become allies by signing a memorandum of understanding with EPA. The National Association of Regulatory Utility Commissioners (NARUC) recognized the importance of the Utility Allies program by adopting a resolution in March 1994 “encourag[ing] and support[ing] its member commissions’ and utilities’ active participation in the Outreach program .”
Outreach Services of EPA’s Landfill Methane Outreach Program
Sources: National Renewable Energy Laboratory, Using Landfill Gas for Energy: Projects that Pay (Golden, CO, May 1994); and U.S. Environmental Protection Agency, Landfill Methane Outreach Program, EPA-430-F-95-068A (Washington, DC, April 1995).
The Industry Allies program encourages use of the most appropriate energy recovery technology on a site-by-site basis. Industry Allies include several types of organizations: LFG-to-energy developers, engineering consulting firms, equipment suppliers, project facilitators, project financiers, and LFG end users. Industry Ally project developers currently account for over 60 of about 100 U.S. LFG-to-energy projects.
In addition to the outreach program, EPA offers technical assistance through its Control Technology Center. Other EPA activities include research by the Air and Energy Engineering Research Laboratory (AEERL), which provides information on energy conversion options for LFG utilization, specifically to owners/ operators affected by CAA regulations .
The most important tax credits are the Federal Production Tax Credits (PTCs), established in 1979 under Section 29 of the Tax Code. Credits are a direct offset to taxes and can only be used to offset a profit. The tax credits will apply until 2008 and are allowable for LFG extraction systems installed prior to the end of 1992. The credit was $0.94 per million Btu in 1992.
On July 9, 1996, the Senate approved a package that includes an extension for the Section 29 tax credits . If signed into law, the package will extend the Section 29 deadline for a written binding contract to 6 months after the provision’s enactment and extend the “placed in service” date to January 1, 1999. No extension was granted for the duration of the availability of the tax credit. There are also State tax exemptions, such as those on LFG extraction (i.e., collection) and energy conversion facilities. Some State governments, such as California, tax these same systems.
The most important State incentives are favorable utility contracts for electricity projects, created to counter poor market conditions. A good example is California’s Standard Offer No. 4, a price-favored contract that utilities were required to offer in the 1980s. Beginning in 1984, this incentive encouraged several LFG-to-energy projects, the last of which started in 1990; however, FERC rulings on above-avoided cost purchases have eliminated this and similar programs . Other States that adopted incentives programs are New Jersey, New York, and Pennsylvania (now canceled), as well as Illinois, Michigan, and Wisconsin (still in place).
There are three U.S. Department of Energy (DOE) programs with the objective of encouraging the development of LFG energy recovery projects:
Because of the self-implementing nature of the regulations under Subtitle D of RCRA, the stringency of State regulations affecting MSW landfills varies widely. In some cases, State regulations are much more demanding than Federal regulations (e.g., New York, New Jersey), while in other cases, States simply enforce the Federal regulations. Overall, however, increased compliance costs have forced many landfills to shut down.
The United States had 7,683 landfills in 1986 but just 5,345 in 1992. Before the 1992 list was updated, the final rule for solid waste disposal facility criteria (40 CFR Parts 257 and 258, October 9, 1991) was published. The rule allowed a facility to comply only with final cover requirements if it stopped receiving waste within 24 months. The effect of this rule was a further decline in active landfills to 3,581 in 1995.
Table 33 shows typical landfill costs, and LFG control costs in particular, before and after the 1991 version of Subtitle D of RCRA. As shown in Table 33, there was a considerable increase in landfill management costs between 1975 and 1988, followed by a smaller increase from 1988 to 1990. These increases are mostly due to the higher costs of compliance with successive versions of Subtitle D of RCRA. The weight of each item has also changed over time, as provisions have required increasingly expensive construction and postclosure care. The table also shows that the RCRA provisions that address LFG operations have contributed to increased costs in real terms, but not as a percentage share of the total cost of the project. On the other hand, the RCRA provisions that address LFG under the closure and postclosure care criteria may have contributed to increased costs both in real terms and as a percentage share of the total cost of the project.
|Table 33. Comparison of MSW Landfill Costs Before and After the 1991 RCRA Regulations|
|Cost Item||Typical Costs per Ton
and Percentage Share of Total,
by Year and RCRA Compliance Status
|1975 Landfill Not in
Compliance with 1976 RCRA
|1988 Landfill in Compliance
with 1976 RCRA
|1990 Landfill in Compliance
with 1991 RCRA
|Source: R.T. Glebs, “Subtitle D: How Will it Affect Landfills?” Waste Alternatives (Summer 1988).|
In terms of RCRA’s impact on the economics of LFG energy recovery projects, there are two main issues. First, hazardous waste disposal regulations impose a cost for disposal of LFG condensate of between $0.70 and $1.50 per gallon (compared with less than $0.01 per gallon for sewering, in the absence of regulation). In contrast, condensate disposal costs are about 80 percent lower when the LFG is flared (i.e., 1,000 gallons per day for energy recovery vs. 200 for flaring). Thus, while these regulations reduce emissions  (particularly for methane) they discourage the utilization of LFG and encourage flaring. Second, RCRA’s requirement for CAA compliance raised costs by requiring expensive emission prevention systems or applying penalties.
The cost impact of the 1996 New Source Performance Standards and Emissions Guidelines under the CAA will be minimal. Only about 280 landfills are affected by the regulations. Of the 900 new landfills projected to open during the next 5 years, approximately 45 will be subject to the regulation. By requiring more extensive (and expensive) LFG control, the rule may encourage some landfills to explore LFG energy recovery options. However, because the rule increases the costs of both flaring and energy recovery options, most owners/ operators will likely continue to choose flaring.
The reach of State and local environmental regulations is expanding at an increasing rate. According to industry sources, the costs for LFG energy recovery projects of complying with all pertinent regulations are escalating faster than the inflation rate and original financial assumptions . An example is a penalty for the CO2 content in emissions from engines in California, which applies specially to LFG energy conversion projects that use IC engines. The penalty can add as much as 1.5 cents per kilowatthour to operating expenses.
The FERC’s rejection of the component of California’s Biennial Resource Plan Update that restricted bidding for wholesale power to QFs means that States may not assign a preference to bidding for LFG-generated energy under PURPA. States also may not assign externality benefits to particular technologies.
Although the EPA’s Landfill Methane Outreach Program has identified the most important barriers to energy recovery projects, its solutions so far have been mostly cosmetic. While its role of providing reliable information to the marketplace is necessary, the solution to the main identified barrier is well beyond its capabilities; no amount of recognition of the environmental value of energy recovery is likely to have a significant impact on LFG energy recovery project development until rates of return are comparable to those of fossil fuel alternatives.
DOE and EPA research programs have not, so far, resulted in significant commercial project developments. Critics of technology demonstration programs argue that they amount to ineffectual government industrial policy that misallocates public resources. To others, however, these projects are essential to maintain private sector interest in emerging technologies, which may result in commercially viable projects by the turn of the century.
For the purpose of LFG energy recovery project development, the most significant positive impact is that of the Federal production tax credits for LFG extraction systems of $0.94 per million Btu in 1992.
State incentives in the form of favorable utility contracts for electricity projects have contributed to the development of LFG energy recovery projects more than any other government incentive or program. The historical record indicates that these incentives are essential for some projects, which would otherwise be forced to shut down if the pricing structure reverts to the avoided-cost basis. It is no coincidence that the seven States that have offered or are currently offering incentives are also the top seven in terms of number of projects and account for about three-quarters of all projects in the United States .
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|1. Renewable Data Overview|
|2. Biomass Profile: Wood and Ethanol|
|3. Municipal Solid Waste Profile|
|4. Geothermal Energy Profile|
|5. Wind Energy Profile|
|6. Solar Industry Profile|
|7. The Role of Electric Utilities in the Photovoltaics Industry|
|8. Public Policy Affecting the Waste-to-Energy Industry|
|9. Flow Control and the Interstate Movement of Waste: Post-Carbone|
|10. Growth of the Landfill Gas Industry|
|11. Management of Known Geothermal Resource Areas|
|12. International Renewable Energy|
|Appendix A. EIA Renewable Energy Data Sources|
|Appendix B. Renewable Data Limitations|
|Appendix C. Geothermal Energy and Geysers|
|Appendix D. Environmental Impacts of Geothermal Energy|
|Appendix E. Examples of Contract Arrangements at The Geysers|
|Appendix F. Additional Solar and Photovoltaic Tables|
|Appendix G. Moody’s Bond Ratings|
|Appendix H. LFG: Commercial Energy Recovery Case Studies|
|Appendix I. List of Internet Addresses: Renewable Energy Information by Resource|
|Appendix J. State Agencies That Provide Energy Information|