On behalf of the Grassroots Recycling Network (GRRN), this letter
is to OPPOSE the inclusion of two provisions in H.R. 2511,
both relating to expanding SECTION 45 tax credits for municipal
solid waste, specifically for:
gas energy recovery and,
GAS ENERGY RECOVERY
It is true that energy recovery from landfill gas is a desirable
objective. But, it does not follow that tax subsidies should be
used to encourage the practice instead of simply mandating recovery,
just as we mandate liners, leachate collection systems and monitoring
wells in landfills.
The source of the methane from landfills used for energy production
is the decomposable organic fraction, and the growing weight of
scientific and technical evidence demonstrates conclusively that
it is impossible to safely manage rotting garbage in the ground.
This is illustrated by the fact that the European Commission has
already acted to phase out land disposal of organic matter.
For these reasons, subsidizing landfilling, instead of mandating
energy recovery and permitting the price for disposal to rise to
approach its true costs, would discourage the only sensible solution.
That is to source separate our organic material for composting,
just as we already do our recyclables, which is the simple and practical
addition, even if for the sake of argument subsidization were considered
desirable, credits for this application are an extremely ineffective
tax mechanism. For municipally owned landfills, one of the more
common applicants for the earlier SECTION 29 LFG credits, do not
pay taxes. Thus, they must contract with third party shell entities,
which divert a substantial part of the credits, in order to claim
privately owned landfills, a significant fraction of those using
those credits under SECTION 29 were facilities in states with sufficiently
high electricity rates to not require subsidies to economically
justify the energy recovery projects. Those earlier SECTION 29 credits
for landfill gas had little to no impact on encouraging energy recovery
in states with the lower electricity tariffs where the ostensible
need was greatest. 
Recent breakthrough developments with micro-turbines to recover
energy from landfill gas are also bringing down costs and self-justifying
more projects at the same time as electricity rates are rising to
make landfill gas recovery competitive. Yet, the tax credit is set
at a fixed level unrelated to any economic rationale for a particular
add further tax inefficiencies to the provision, the language would
qualify projects previously installed, albeit at a lower credit.
This constitutes a pure transfer from taxpayers to a few selected
parties without even any putative public benefits.
The disposal of organic matter in the ground - the source of the
methane used for energy - is a demonstrably obsolete and hazardous
practice. Where it continues as a relic of a bygone era of discredited
solid waste management practices, energy recovery should be mandated,
not subsidized to the detriment of the true solution. Tax subsidies
make even less sense where most of the revenues are lost to projects
that would be undertaken without subsidization.
The preliminary draft appears to proscribe SECTION 45 tax credits
for incineration. However, the actual language used to do so can
almost certainly be distorted from original legislative intent to
permit WTE to be subsidized too.
In the draft bill, the WTE exclusion seems to be specified by excluding
"unsegregated municipal solid waste" in the definition
of qualified projects for SECTION 45 credits. However, there is
a cottage industry of tax lawyers poised to exploit such vague language,
which can be by evaded by advising clients to install an inexpensive
magnet for steel can removal and low cost sortation screens at the
head of the incoming stream .
The incineration exclusion should and must be expressly stated to
insure that legislative intent is followed.
Bill Sheehan, PhD
In terms of groundwater pollution, EPA itself has repeatedly acknowledged
that the elaborate system of barriers required by current landfill
rules "will ultimately fail" in decades while the toxicity
of the waste load remains hazardous for centuries. For decomposing
organic matter keeps the facility active for an indefinite period.
53 FED. REG. 168, at pp. 33344-33345 (August 30, 1988). Limited-life
barriers may have been the very worst approach because it has
only shifted in time the occurrence of environmental damage to
such a distant future world that it will be a certainty the responsible
entities will have departed the scene and remediation systems
will have decayed. In terms of air pollution, gas collection systems
suffer from myriad operational limitations and, although hard
data does not exist, it is doubtful that more than 25% of the
total emissions are captured. This means that most of the greenhouse
gases and also the non-methanic carcinogens such as benzene and
toluene are released to the atmosphere. Most recent data is now
being published showing the previously unrecognized ways uncontrolled
decomposition of organics when permitted to be mixed with toxics,
threatens the environment. According to Oak Ridge National Laboratory,
the dangerous dimethylated form of mercury, which is a deadly
nerve poison that causes developmental impairment in 60,000 babies
each year, comes not only from power plants, but also from bacterial
digestion in landfills. S.E. Lindberg, Methylated Mercury Species
in Municipal Waste Landfill Gas Samples in Florida USA,"
Atmospheric Environment 35 (20001), at p. 4011.
European Community, Council Directive 1993/31EC (April 26, 1999),
at Art. 5, pars. 1 and 2:
The states three with the most intensive development of landfill
energy recovery projects under SECTION 29 on a weight adjusted
basis, Rhode Island, New Hampshire and Illinois, had industrial
electric rates 51%, 162% and 3%, respectively, higher than the
national average. Compiled from data base requested of the EPA
Methane Outreach Project.
See, e.g. John McKinnon, "Lobbying Helps Companies Turn Coal
Into Tax Credits," Wall Street Journal (July 12, 2001)