April 13th, 2017

A gas-tly mess?

6 minute read

by Mike Brown

 

As the UK’s landfill infrastructure rapidly approaches its retirement, this seismic change in how waste is managed is spitting out a range of issues that our current system is ill-suited to manage.  I’ve previously examined issues of how aftercare is funded, and the resilience challenges that a move away from landfill will bring – but it also has implications for the future of landfill gas operations.

The interests of landfill management and landfill gas production are not perfectly aligned. The landfill management relies on gas extraction as a critical part of ensuring compliance with the odour (and safety) management aspects of the site’s permit. To achieve this, the ideal situation is to have the pumps that extract the gas sucking as hard as possible, as this will minimise the amount of gas that escapes. That approach, however, will not optimise gas utilisation, as it will tend to lead to air ingress into the landfill and result in a more dilute, less profitable stream of gas.

 

Well functioning?

Further, the production of landfill gas depends on a whole manifold of pipework on the surface, combined with vertical gas wells penetrating the landfilled waste. Landfills settle as the waste degrades, meaning that this infrastructure on the site needs regular upkeep if the flow of gas is to be maintained. It’s also important for gas production that the landfill remains reasonably air- and water-tight, and that the level of leachate in the site does not become excessive.

These interests can be balanced straightforwardly enough when the landfill operator is also the gas operator. However, many landfill operators have sold off the rights to exploit the landfill gas opportunity on their sites to independent specialists. This clean organisational split doesn’t mirror the highly interdependent operational realities, but in practice most potential conflicts are resolved, either through the terms of the contract between the two entities, or through negotiation. The arrangements can differ significantly from site to site. For example, depending on the specifics of each individual contract, maintenance work on the wells, pumps and pipes may be carried out by the site operator, or by the gas company, or some combination of the two.

However, as landfill site operators become financially stressed, the differences between their interests and those of the gas company may come to the fore. That has not been a big issue in the past, when almost all landfills were operated by businesses that had a very clear interest in maintaining their “fit and proper person” status with the Environment Agency – whether because the site was still operational, or because the business had other waste sites. Even if things sometimes went wrong, keeping a good relationship with the regulator was absolutely critical.

 

Landfill Gas Monitoring

Knowing methane, knowing you: landfill gas production is reliant on good site maintenance. Photo: Mary Anne Enriquez (CC BY-NC-ND 2.0), via Flickr.

 

But now, we’re entering uncharted territory where landfills are less integrated into the waste management system. In the past, very few operators have exited the industry without selling their landfill assets on to another operator, but it now seems inevitable that landfill operators will leave the sector. This process may start with the smaller, single site operators who will close their site as demand drops and won’t be looking to invest in new, more capital-intensive waste facilities such as energy from waste incinerators. Larger waste operators will of course remain within the industry, but as their landfill portfolios increasingly become liabilities rather than profit centres, they may see the potential advantages of moving them into separate companies. Cory’s recent ‘sale’ of its landfill business to a reinsurance firm, Armour Group Holdings, is the first example, and I anticipate that more may follow.

 

Out of site

If the gas operation has been sold off, a closed landfill site will produce little or no income for its operator; they will simply be incurring ongoing expense (for around 60 years) managing the aftercare of the site so as to ensure ongoing compliance with their permit conditions. If it becomes apparent that there isn’t enough money set aside, will the operator keep on doing the work necessary to keep the landfill gas flowing when they have little financial interest in doing so? And what happens if the operator decides to abandon the site, or goes under? Who then will mitigate landfill settlement and manage leachate levels? It’s unlikely that many landfill gas rights contracts foresaw this possibility, or comprehensively accounted for it.

The situation may be even worse in the event that the landfill operator walks away before the site is completed. If that occurs, the capping of the site, preparation of wells and completion of the pipe network may be left unfinished, allowing gas to escape into the environment, excessive leachate make and oxygen ingress, thus reducing the returns available to the gas contractor.

Either way, this situation would be deeply problematic for an independent gas company and may be completely outside of their control. Nevertheless, as a permit holder (for their gas engine) present on the site, there is a risk that they might end up having to put a great deal of effort into dealing with the regulator, who will be exploring who should take on the absent operator’s obligations – which may include the parent company, the landowner, or the previous owner.

Landfill gas companies, used to a healthy relationship with a competent operator, should be carefully observing the UK’s transition away from landfill and should be mindful of their current and future interests. They need to use whatever influence they have to make sure that, as the quantity of waste received at landfills declines, the landfill operators keep on top of the engineering and operational work needed to ensure that, before, during and after closure, the site is in a condition that will allow the expected level of gas to be generated.

The transition the UK waste sector is undergoing is truly momentous, but recognition of this fact seems to be slow to dawn, even on those most affected by it. The retirement of our landfills will need to be handled almost perfectly if we are to avoid creating substantial new risks, affecting landfill gas companies and the regulators tasked with holding site operators to account for compliance with their permits in the long term. I’d therefore invite readers to consider – are you confident that regulators and operators have understood the challenge, and are ready to respond to it?

 

Mike Brown

 

 

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5 Comments on "A gas-tly mess?"

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Richard Tipping
Guest
Hi Mike, Yes an interesting conundrum, which really should have been understood and acted upon some time ago. The recent closure of the RO for new projects has more or less scuppered interest for small power generation and accompanying gas management on old closed landfills. This is a great shame, since it provided landfill owners a ‘free lunch’ opportunity where they had gas management and extraction costs taken care of in exchange for gas rights, even at 50kW capacity! The industry has been sluggish in the extreme, but is always lamenting the loss of revenue and costs of landfill aftercare.… Read more »
James Fulford
Guest

Hi, interesting article Mike. I enjoy your occasional series looking at the risks of moving away from landfill.

Why is the recent Cory sale described as a ‘sale’ please? What should I infer from the quotes please? I can guess of course, but is it possible to be more explicit?

J

Marcus Holden
Guest

I couldn’t agree more, however there is a similar issue with landfill gas operators handing back sites to waste operators who no longer have (or perhaps never had) the in house skills to operate, maintain and develop the landfill gas systems on their sites

Mike Brown
Guest

Hi Marcus – That’s a really good point. I’m focusing on the knock-on effects of the demise of landfill but anything that increases the challenges of landfilling will no doubt make matters worse. It would be interesting to look at how landfill operators allow in their after-care provisions for the costs associated with taking back control of all aspects of landfill gas management.

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