By Elizabeth Dilts
NEW YORK (Reuters) - Power producers' coal ash disposal ponds like the one that leaked toxic sludge into a North Carolina river in February may soon become a thing of the past.
After six years of deliberation, the U.S. Environmental Protection Agency in May will decide on changes to the Clean Water Act that would direct power companies to remove dangerous impurities, including carcinogens, from coal ash wastewater before releasing it into rivers that supply drinking water.
While the new regulations will not prohibit riverside coal ash disposal sites, the increased cost of wastewater treatment - up to $1 billion for the industry each year - could persuade power producers to move such sites inland, experts and industry groups said.
The ash, a by-product of burning coal to produce electricity, is a major industry in the United States. While much of it is mixed with water and stored in huge shallow ponds, nearly half is recycled and used as a strengthening agent in cement for roads and bridges nationwide.
At least 30,000 tons of arsenic-laced coal ash were released into North Carolina's Dan River in early February when a pipe broke under Duke Energy Corp's 27-acre (11-hectare) ash pond. Officials found a second leak on February 10.
The spills prompted a criminal investigation by the U.S. Attorney's Office in Raleigh. North Carolina Governor Pat McCroy asked Duke to move the pond, at the now-retired Dan River Steam Station in Eden, farther inland from the river. Duke is already mired in a long-running legal battle with the state over the storage of coal ash waste.
"If the Effluent Guidelines had been in place, they might have stopped this disaster," said Frank Holleman, senior attorney at the Southern Environmental Law Center, which has sued Duke over several of its coal ash ponds.
The guidelines "might have pressured these utilities to move the ash further away from water supplies," Holleman said.
The EPA has been considering changes to the Clean Water Act's Effluent Guidelines since 2008, after the worst U.S. coal ash spill in history sent 5 million cubic yards of the substance into a Tennessee river, contaminating hundreds of acres of land.
Since then, the EPA has collected more than 200,000 public comments. The process was delayed at various points as industry groups requested that the new wastewater rules coincide with other new guidelines for coal ash disposal.
Recycled and treated coal ash is present in three-quarters of all concrete used in the U.S. transportation infrastructure and in most highways and bridges in California, according to the American Road & Transportation Builders Association.
Industry groups have opposed the tougher guidelines as they stand, saying the methods of testing and treatment of wastewater are not economically viable.
"EPA has listed a number of technology options, some of which appear reasonable and appropriate, but most of which if adopted would impose substantial costs on the generation fleet without providing corresponding benefits," the Edison Electric Institute trade association said in a letter to the EPA on September 20.
A Duke spokesman declined to comment for this article, but in a letter to the EPA in September, the company said there was no proof that wastewater testing was cost-effective or feasible.
The EPA said it followed established rulemaking procedures. The agency is under a court order to make a decision by May 22 on what rules it will issue.
Other changes to regulations proposed since 2008 have already affected parts of the coal ash business.
For example, regulators are considering whether to label the material a hazardous waste, which would allow the EPA greater oversight of its disposal.
Just the mention of the hazardous waste label has slowed activity in certain parts of the industry.
John Ward, head of government relations for the American Coal Ash Association, said recycling of the material had declined since regulators began considering the hazardous waste term.
If recycling had continued at pre-2008 levels, Ward's group estimates, there would be 25 million tons less coal ash in ponds today.
A decision on the wastewater regulations not only would clear up the uncertainty that has slowed the recycling business, Ward said, it also might have kept spills into rivers and lakes from happening.
"The facilities that are all causing the problems here are all regulatable under the Clean Water Act," Ward said. "If the EPA had stuck to their schedule on getting their rule finished, maybe that would have prevented this."
(Editing by Edward McAllister and Lisa Von Ahn)