Just What We Need: More Community Engagement in Superfund Sites
Last week, EPA’s Office of Solid Waste and Emergency Response announced release of its Community Engagement Implementation Plan. Who could be against community engagement? It’s as American as apple pie. It’s environmental justice. It’s community input into decisions that affect the community. It’s transparency and open decision-making.
Call me a curmudgeon, but I’m against it. Study after study shows that, in terms of the actual risks posed by Superfund sites, we devote too many of our environmental protection dollars to Superfund sites, when we should be focusing on air and water. Why do we keep doing this? Because the community demands it. As Peter Sandman has noted, perceptions of risk are driven only partly by the actual hazard posed. To a significant degree, those perceptions are more driven by outrage over the situation. In some circumstances, what Sandman calls outrage management makes sense, but I’m skeptical that EPA’s community engagement initiative is really about outrage management.
In any case, here’s the public policy question of the day. Does it really make sense to spend scarce environmental protection resources, not to reduce risk, but to reduce outrage?
Energizing Brownfields
It has always amused me how many people are involved with Brownfields work as compared to how few projects have been completed. It is tough to make the economics work on a Brownfield development in the best of times. Thanks to clean energy rules and incentives this may be changing.
Brownfields and clean energy have several synergies. Brownfields are often in industrial corridors, with great infrastructure and proximity to electrical grids. Biomass projects in particular need access to efficient transportation networks in order to move large volumes of material. Clean energy projects such as solar, wind and biomass plants work well with risk based remediation and institutional controls required for cost effective risk management at a Brownfields sites.
Add to these synergies a vast array of incentives, mandatory quotas and grants for clean energy and we just may have a path to economic viability for some Brownfields projects. EPA has a task force known as ER3 to help facilitate such projects. Keep your eye on a project in Charlotte, North Carolina known as ReVenture Park which seems destined to put wind energy, wastewater treatment and a biomass plant on a large, complex CERCLA/RCRA site.
When a Discharge Isn't
For all environmental lawyers and especially for business advisors and bankruptcy lawyers, a very important case was decided by the 7th Circuit Court of Appeals in fall 2009. The case concerns the effect of a bankruptcy discharge from a 1986 bankruptcy filing versus an affirmative Resource Conservation and Recovery Act (“RCRA”) clean-up injunction. The question is whether the injunction is a discharged claim in bankruptcy. The Court of Appeals concludes a mandatory injunction to perform clean-up does not equate to an equitable remedy giving rise upon breach to a right to payment, which is the covered equitable remedy subject to discharge.
Here, the formerly bankrupt company’s reorganization left it no choice but to have this particular clean-up conducted by a third party at an estimated cost of $150,000,000. The Court found, however, the clean-up order did not result in a right to payment because RCRA does not allow either a demand for clean-up costs or any monetary relief.
Finding that all equitable orders will inevitably require the ordered party to spend money to comply, the Court concludes discharges are limited to matters where the claim gives rise to a right to payment. Such situations arise where an equitable decree can not be executed and results in a right to seek money damages and not merely those that impose a cost on the defendant.
This case reaches a conclusion contrary to a 6th Circuit case and is distinguishable from the landmark Supreme Court ruling in Ohio v. Kovacs. In Kovacs a receiver was appointed to take possession of the debtor’s assets so it could obtain money to pay for an ordered clean-up, and the Supreme Court found the receiver, therefore, was seeking money rather than an order that the debtor clean up the contaminated site.
The holding in this 7th Circuit case is certainly one that will likely reverberate around the country for years to come. United States v. Apex Oil Co., Inc., 579 F.3d 734 (7th Cir. 2009).
UPDATE ON THE POULTRY LITIGATION IN OKLAHOMA Poultry litter is not a solid waste under RCRA
The Oklahoma State Attorney General sued several poultry companies for polluting the Illinois River and its watershed in Eastern Oklahoma as a result of the application and disposal of poultry litter in the watershed. State of Oklahoma v. Tyson Foods, Inc. et. al. Case No. 05-CV-329-GFK(PJC). The suit alleged claims under CERCLA, RCRA, and nuisance among other things. You are referred to the articles posted March 9, 2009 an September 3, 2009 for particulars regarding the claims.
Two weeks before trial, the Cherokee Nation moved to intervene in the case as a necessary party, but the Judge wouldn’t allow it. The Court decided that the damages claims would not be tried, but that the injunctive claims as well as the state penalty claims could be tried with the absence of the Cherokee Nation in the suit. The reasoning was, among other things, that the Cherokee Nation would be potentially prejudiced if the remaining damage claims went forward without it, but that would not be the case if the remaining injunctive claims and state law penalty claims were tried. Although the Cherokee Nation filed an immediate appeal with the Tenth Circuit, it did not ask that the case be stayed pending the outcome of the appeal.
The case has now been tried to the Court. It began on September 24, 2009 and only this month concluded with closing arguments. However, during the trial the Court ruled, in response to a Rule 52(c) motion, among other things, that:
- Poultry litter is an agricultural commodity for which there is both a market and a market value in the watershed.
- Poultry litter has market value because it can be beneficially used as a fertilizer and soil amendment.
- The State did not produce sufficient evidence to convince the Court that farmers, ranchers or other applicators of poultry litter in the Illinois River Watershed land-applied poultry litter within the watershed solely to discard it.
- Under the applicable law and the evidence produced at trial, poultry litter is not a “solid waste” under RCRA, and therefore the State’s RCRA claim was dismissed.
This ruling is very important because of the focus on nutrient issues under the Clean Water Act Nonpoint Source Pollution. EPA states on its website that “States report that nonpoint source pollution is the leading remaining cause of water quality problems.” Indeed, EPA has a “National Nutrient Strategy” and is focusing more on these issues than ever before.
A Rant Against Superfund
As some of my clients know all too well, I’ve been spending a lot of time on some Superfund matters recently. Although I can’t remember a period when I didn’t have at least one moderately active Superfund case, significant immersion in complex remedial decision-making and negotiations provides an unwelcome reminder just how flawed CERCLA is. Almost 20 years after the acid rain provisions of the Clean Air Act ushered in wide-spread acceptance of the use of market mechanisms to achieve environmental protection goals and the state of Massachusetts successfully privatized its state Superfund program, the federal Superfund program, like some obscure former Russian republic which remains devoted to Stalinism, is one of the last bastions of pure command and control regulation.
Can anyone tell me why the remedy selection process takes years and costs millions of dollars – before any cleanup has occurred or risk reduction been achieved? Can anyone tell me why, after the remedy has been selected, EPA has to spend millions of dollars – charged back to the PRPs, of course – to oversee the cleanup? Oversight costs can easily exceed 10% of cleanup costs, while oversight during the remedial design and feasibility study process sometimes seem to be barely less than the cost of actually performing the RI/FS.
While there are certainly a multiplicity of causes, there are two factors which greatly contribute to the problem. One was, coincidentally, highlighted in a post today by my friend Rob Stavins. As Rob noted, unlike the acid rain program, which was new at the time, the Superfund bureaucracy is well entrenched and there are a number of actors with a vested interest in maintaining the status quo.
The second issue relates to the genesis of the Superfund program, as well as its continuing raison d’être. Whenever EPA has ranked relative risks from different environmental hazards, Superfund sites come in at the bottom. However, if you think back to Superfund’s origins, what comes to mind? Love Canal and the Valley of the Drums – and some concerned near-by residents who rallied around a cause to ensure that the problem would be addressed. As renowned risk communications expert Dr. Peter Sandman has noted, there is not necessarily a significant correlation between actual risk levels and public outrage, and it’s not possible to decrease outrage simply by providing accurate information about risks.
In short, the public is outraged by hazardous waste sites and does not trust PRPs to clean them properly. All of those EPA oversight costs are, in large part, intended not to decrease risk, but to lower outrage. Outrage is understandable in some circumstances, and efforts to reduce it are laudable, but is it really an appropriate use of scarce environmental protection resources to spend the money that gets poured into Superfund sites?
There has to be a better way. Indeed, there is a better way. It’s called a privatized system in which PRPs have to meet well-defined cleanup standards, but are allowed to do so on their own, in whatever manner is most cost-effective, subject to audits by regulators. Privatized programs such as the one in Massachusetts are not perfect. However, their flaws – which largely stem from a failure to fully support privatization -- pale in comparison to the waste that is the federal program under CERCLA.
In other contexts, I’ve called on the Obama administration to embrace regulatory reform. Why not start with Superfund? Notwithstanding Rob Stavins’ point about the difficulty of overturning an entrenched status quo, if the states could do it, why not the federal government?
Besides, I have an entrenched personal reason for seeking Superfund reform. This stuff drives me nuts.
