SWANA Defends LFGTE Tax Credit

Brook Raflo Assistant Editor

Working with members of both the U.S. House of Representatives and the U.S. Senate, the Solid Waste Association of North America (SWANA), Silver Spring, Md., is optimistic that the 107th Congress could boost landfill gas-to-energy (LFGTE) projects. But some recycling advocates fear that support for landfills could mean a setback for the recycling and composting industries.

U.S. Representative David Camp, R-Mich., has agreed to reintroduce a bill during this congressional session — modeled after last year's HR 3466, which never came to a vote — to provide tax credits for LFGTE projects.

This is a much needed step to encourage newer landfill facilities to recover, rather than flare, the methane that results from organic waste decomposition, says SWANA CEO John Skinner. Since the previous LFGTE tax credit expired in 1998, facilities no longer are building recovery systems, he says, because such systems are not economically feasible.

But Peter Anderson, president of Recycle Worlds Consulting, Madison, Wis., says a landfill gas tax credit amounts to a subsidization of disposal at the expense of composting and recycling alternatives.

“I have no problem with a closed landfill receiving a tax credit,” he concedes. “What I'm concerned about is giving operating landfills a tax credit, because that impacts what choice we make today about how to handle the organic fraction of the waste stream — the food waste, yard trimmings and unrecovered paper.”

While Anderson respects Skinner's and SWANA's efforts to make existing landfills safer and more energy-efficient, he says the LFGTE issue skirts finding long-term solutions to the methane problem. Eventually, the elaborate landfill liner systems, currently required under Subtitle D regulations, will fail, he says. While the life of barriers is probably decades, the environmental threat from decomposing organic wastes can last hundreds of years, he continues.

Additionally, landfill gas recovery systems capture only 50 percent of the gas at best, Anderson says. By contrast, composting systems can recover up to 80 percent of the gases released during decomposition, he says. Thus, instead of disposing of organic wastes in landfills, Americans should source-separate these wastes and compost them, he adds.

Skinner says that these arguments against an LFGTE tax credit miss the point. “It's not a question of recycling and composting vs. landfills,” he says. “It's a question of what's the best way to design and operate landfills.”

And, the tax credit does not amount to a windfall for landfill operators, Skinner adds. “A tax credit doesn't make landfilling cheaper. It makes the use of the gas economically feasible.”

More than 50 percent of organic wastes currently are being disposed of in landfills, Skinner continues. “It's idealistic to think that all organic waste will be recycled right now. Meantime, we should operate landfills in the best way possible.”

Whether the U.S. Congress will see LFGTE tax credits as a means to this end remains to be seen. So far, Rep. Camp has not found co-sponsors for the bill he plans to introduce this session.

SWANA's tax credit hopes in the Senate rest in part with Senator Charles Grassley, R-Iowa, who recently was nominated as chairman of the Senate Finance Committee. As the original author of Section 45 of the Internal Revenue Service (IRS) Tax Code that provides tax credits for renewable energy producers, Grassley has proven his support for renewable energy incentives. However, Grassley's office did not return phone calls requesting the Senator's stance on LFGTE tax credits.

But recently, Senators Frank Murkowski, R-Alaska, and Jeff Bingaman, D-N.M., gave SWANA new reasons to hope for success this session. Murkowski introduced a bill, S 389, with a provision to extend Section 45 to include landfill gas as a renewable energy source. Additionally, Murkowski's bill would resurrect Section 29 of the IRS Tax Code, which already includes landfill gas as a renewable energy source.

Bingaman also has introduced a landfill gas-friendly bill, S 596. But while Bingaman's bill is similar to Murkowski's, it would not include landfill gas in Section 29.

“These bills are a huge success and we're very excited,” says Holly Smithson, SWANA's manager of legislative and regulatory affairs. “Our education efforts have made some headway, and we will continue to educate both chambers on the important role landfill gas can play in their pursuit to resolve our energy dilemma.”

How these separate initiatives will eventually blend to become law remains uncertain, Smithson admits. Nevertheless, SWANA expects a decision on LFTGE tax credits by Sept. 2001.