5.2 Landfill Operation
The design of the modern landfill dates back to the late 1930s, when the first engineered landfill began operation in Fresno, California. Modern landfilling includes the intentional excavation or “berming up” of an area with the intention of containing the waste. Waste is placed, compacted, and covered on a daily basis, and landfill construction includes the use of materials, both natural and man-made, employed to reduce environmental impact.
Beginning in 1976 with the passage of the Resource Conservation and Recovery Act (RCRA), the EPA was tasked with developing and implementing solid waste management standards for landfills with respect to both hazardous and nonhazardous waste streams. Much of RCRA’s subsequent amendments and additional regulations focused on the initial siting, design, and operation of solid waste facilities. RCRA also introduced requirements for closure, postclosure monitoring, and corrective action related to environmental contamination resulting from the landfills. A landfill ARO is based in part on these RCRA closure, postclosure, and corrective action regulations, as discussed previously in Chapter 2.
5.2.1 Landfill Construction
Landfill permits commonly limit the final dimensions of landfills, and landfills typically are constructed in sections called cells. The cells themselves can vary from entire, nearly independent waste areas to overlapping continuations of the cell before (like slices of bread in a loaf). The construction of a landfill using these smaller substructures allows the landfill to be constructed on an as-needed basis, with cells being constructed and finished just before they are needed. In addition to the capital benefit of the staggered construction of demand cells, there are also operational and closure benefits.
Landfill cells are constructed typically through the excavation of an area, the placement of lower liners consisting of compacted soils and engineered liner materials, and the installation of a leachate collection system. Many industry participants believe that before the placement of waste in a landfill cell, an ARO may exist but only for the cost of removing the installed materials from the cell. These companies believe that the obligating event for the recognition of AROs related to a particular landfill cell at an operating landfill is the placement of waste in that landfill cell, which occurs in relatively small increments over time. As landfill cells are added to the footprint of the landfill and additional waste is placed in
these cells, ARO layers may be added to account for the new obligations. The timing and cost associated
with the closure or retirement of each new cell may require consideration of variables that are both
dependent on and independent of the larger landfill closure schedule.
Once a landfill cell is constructed with its regulation-compliant lower liner, the cell will collect water that
must then be managed. If this water has come in contact with waste, it is considered to be leachate,
and some level of treatment may be required before a company can dispose of it. An overly large cell
may increase the volume of water to be managed. During operation of the landfill, the water or leachate
management costs are generally considered to be ongoing maintenance costs in accordance with ASC
410-20-15-3(h) and are not part of an ARO.
5.2.2 Landfill Closure
Closure at a landfill is a complex and multifaceted process since closure obligations can be applied at
both the cell and total landfill level. Further complicating matters, some portions of cell closure can begin
before other portions of the cell have received waste.
Closure consists of four main activities or
design considerations: slope stabilization,
covering (or capping) a landfill, drainage
control, and landfill gas management. Closure
normally begins when a total airspace capacity of
a cell has been consumed and no further waste is
to be placed in the cell. When closure of a cell
or an entire landfill begins, the following
actions take place:
Complicating the closure process, slope stabilization and the first layers of the landfill cover can begin
when any portion of the landfill cell is filled to final grades. The grading of compacted waste to final slope
topography and the placement of an intermediate cover could be regarded as part of the final closure
obligation. These early and incremental closure activities complicate the estimation of the retirement
obligation for each cell and for the landfill in total. The placement of waste and the daily cover of that
waste represent ongoing operational costs, whereas the larger-scale grading and placement of buffer
or intermediate cover materials as a part of closure (grading) or to delay the immediate need for closure
(intermediate cover) may not be regarded as operational costs. Costs of grading and intermediate cover
that are not operational costs should be included in the measurement of the liability for the ARO even
though the tasks themselves may occur well in advance of the normal closure activities.
Final closure, which includes the placement of the cap materials, can occur in multiple stages during the
life of a landfill and well before the entire landfill or even an entire cell is ready for final closure. Accordingly,
the activities and costs underlying the ARO may occur in phases over time and not as a single event
at a single point in time. While the total area to be closed and the associated cost may be known and
estimable, the staging of the landfill closure affects closure timing, which a company should consider in the
expected cash flow scenarios and, therefore, when measuring the fair value of the liability for an ARO.
5.2.3 Postclosure Care
At the completion of closure activities, landfill operators are required to conduct postclosure care
(PCC). PCC is necessary because landfills are quite literally living things, or at least made up of a diverse
ecosystem of organisms that slowly break down the waste. In addition to normal settlement resulting
from gravity and the compaction of waste, the biological processes occurring within the landfill can
reduce the volume of waste, resulting in settlement and subsidence.
RCRA Subtitle D requires PCC to be conducted for 30 years, although 40 CFR
Section 258.61(b) stipulates that the length of PCC can be adjusted on the basis
of site conditions, reduced, or increased on the basis of the demonstration of
protectiveness. When measuring an ARO for landfill closure, a company should
include PCC as part of the expected cash flows and generally consider a period
of 30 years for PCC unless the site-specific permit stipulates otherwise.
Under 40 CFR Section 258.61(a), PCC requires the following:
- “Maintaining the integrity and effectiveness of any final cover, including making repairs to the cover as necessary to correct the effects of settlement, subsidence, erosion, or other events, and preventing run-on and run-off from eroding or otherwise damaging the final cover.”
- “Maintaining and operating the leachate collection system in accordance with the requirements in [40 CFR Section] 258.40, if applicable. The Director of an approved State may allow the owner or operator to stop managing leachate if the owner or operator demonstrates that leachate no longer poses a threat to human health and the environment.”
- “Monitoring the ground water in accordance with the requirements of subpart E of [40 CFR Part 258] and maintaining the ground-water monitoring system, if applicable.”
- “Maintaining and operating the gas monitoring system in accordance with the requirements of [40 CFR Section] 258.23.”
The site-specific permit for a landfill may specify additional terms for PCC that should be considered for
each landfill unit. The biological breakdown of waste can result in the formation of landfill gas and the
release of leachate, which comes from (1) the moisture in the waste, (2) precipitation into the landfill
cell before closure, and (3) the infiltration of precipitation through the final cover. Leachate recovery
volumes typically peak in the first few years after closure and decrease to a steady-state volume at some point before PCC is complete. The modeling of leachate generation is commonly used for estimating
the annual treatment costs; however, since there may not be sufficient data available in the first few
years of PCC for a company to estimate volumes or the decline curve for the remaining PCC period, care
should be taken to update ARO cost estimates regularly on the basis of observed volumes. Similarly, the
estimation of landfill gas generation is possible and can be extrapolated to allow a company to estimate
the operating life of the gas management facilities, and care should therefore be taken to update the
cash flow estimates underlying the ARO.
Leachate generation rates should be assessed annually for most landfills, and the leachate treatment
costs included in the ARO should be reevaluated. Leachate generation can indicate other landfill closure
health issues and can function as a barometer for future costs. Generation that does not decline could
indicate issues with landfill cap construction, which may require repair at additional costs. Significant
leachate generation may also extend the PCC period required to show stability and no further risk to
human health and the environment.
As discussed above, closure for landfill cells may be staged and may not occur as a single event. This
staged closure may affect the PCC period since the start of the 30 years of PCC for a cell may differ
from the start of the PCC period for other cells or the landfill as a whole. Many state regulators require
some type of closure verification to be submitted before they will consider closure to be complete. The
acceptance of this closure verification should be used as the basis for beginning the PCC period. When
certification of closure is not available, evidence should be sought to validate any assumption that PCC
has begun for a particular cell or closure area. Since the groundwater monitoring network encapsulates
the entire site and can rarely be isolated to any portion of the landfill, PCC for groundwater monitoring
typically does not commence until the complete closure of the landfill. In addition, surface maintenance,
security and site access, utilities, and administrative functions are commonly provided at an overall site
level and may be required for the full PCC time frame after the final closure at the site.
5.2.4 Contingent Liability at a Solid Waste Facility
As discussed in Chapters 1
and 4,
it is possible that liabilities arising at a solid waste
facility are not within the scope of the guidance in ASC
410-20 on AROs but represent other contingent or
environmental remediation liabilities within the scope of
ASC 450 and ASC 410-30. See Chapter 1 for further discussion
of the scope of ASC 410-20 and ASC 410-30. See also
Deloitte’s Roadmap Contingencies, Loss
Recoveries, and Guarantees for
further discussion of the scope of ASC 450.
The type of environmental contamination liability incurred in the normal
operation of solid waste facilities, and
associated with the retirement of those assets,
most likely includes the costs of any site cleanup
not specifically included in the operating permit
but still required at closure. Examples of such
site cleanup are:
-
Cleanup, repair, or remediation of infrastructure or access roads and parking areas associated with the landfill.
-
Remediation of soil and groundwater affected by a truck washing facility.
-
Remediation of equipment maintenance facilities on-site.
-
Remediation of storm water management impoundments on-site.
The above examples are remediation activities that are required only as a result of the normal operation
of a landfill and only at the time of retirement of all or part of the facility. However, remediation that
is required before or after the closure of the site may not be a result of the normal operation of the
landfill, as in the following examples:
- Remediation of soil and groundwater affected by accidental discharges and spills on-site.
- Remediation of groundwater affected by a leaking landfill. While an argument could be made that leaks are a normal and expected event arising from historically constructed landfills, an environmental remediation liability may exist when (1) the leakage is beyond what is expected from the normal operation of the landfill and (2) remediation is required before retirement of the asset. For additional discussion, see Chapter 1.