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Industrial Wastewater – CERCLA Allocation Project

Understanding CERCLA Cost Allocations

Part of the EPA’s mandate under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) is to remediate sites listed under the National Priorities List (NPL) that contain hazardous waste (also called Superfund sites).

For any site that requires remediation, the primary responsible parties (PRPs) will go through a cost apportion process to establish the settlement amount. The cost allocation process may depend on the types of contamination, the number of PRP’s involved, the site category, and various other factors.

The act applies to past and present owners, operators, generators, and transporters of hazardous waste. Therefore, understanding CERCLA’s cost allocation process and knowing what pitfalls exist can help entities determine their liability and share of responsibility for the remediation of a specific site.

CERCLA Cost Allocation Processes

Since the act passed in 1980, some entities expressed their frustration with the CERCLA cost allocations process due to the high transaction fees. To streamline the process, the Office of Site Remediation Enforcement (OSRE) reached out to entities involved with the apportioning of Superfund site costs. Although the findings in the document aren’t legally binding, it does provide entities with best practices when navigating the cost allocation process.

The costs that the EPA can enforce on a Superfund site include:

  • Direct costs: Any expense traceable to a specific cleanup activity.
  • Annual contracting costs: Costs of contractors providing training or services to a variety of sites.
  • Indirect costs: Expenses calculated by the EPA for the administration and operations of the agency.

4 Best Practices for CERCLA Cost Allocation

The higher costs incurred by PRPs during the allocation process are usually derived from the retroactive, strict, joint, and several liability schemes involved. If settlement efforts fail, the litigation costs and transaction fees can increase exponentially. To avoid this, the OSRE found that appointing an allocator at the beginning of the process could help reduce the costs while also enabling a fair and equitable outcome for the parties involved.

It’s common for PRPs to establish an allocation committee that develops the allocation methodology. The committee will appoint an independent allocator who will follow a process to help them reduce the costs and allocate liabilities between the parties fairly.

1. Establishing Procedural Rules

Rules regarding ex parte communications, appeals, and resolving disputes will ensure the parties conduct a fair allocation process. The primary goal of the procedural rules is to achieve an expeditious settlement with the EPA without resorting to excessive litigation between the parties.

2. Data Collection and Information Gathering

After the parties agree to the procedures, the allocator can start gathering data and information relating to the Superfund site. Using the EPA’s 104(e) rule, allocators can use information requests relating to site and disposal records, conduct interviews, and issue questionnaires to involved parties.

3. Applying Allocation Factors to PRPs

Using the procedural rules, allocators assign proportionate costs to each PRP. Factors that influence the cost may include the amount of waste involved, the toxicity of the materials, the degree of involvement of a party, and the level of cooperation of each PRP. Allocations may also differ between classes of parties such as generators and transporters or owners and operators.

4. Finalizing the Allocation Report

The allocator will finalize their findings in a report and issue it to the allocation committee. The committee and parties can then review and recommend changes, before finalizing the findings and issuing the final report. Objections may arise from the ability to pay determinations, parent and successor issues, or the toxicity and volume of materials involved. Once all the parties agree with the allocator’s findings, they can engage with the EPA to negotiate the final settlement amount.

EEC Environmental’s Compliance and CERCLA Cost Allocation Services

EEC Environmental’s services can help parties to navigate the CERCLA cost allocation process. For both public and private entities, EEC Environmental’s engineers, litigators, and technical resources can assist in every step of the process.

To find an acceptable outcome and for a better understanding of the CERCLA cost allocation process, contact one of EEC Environmental’s regional offices today.

TSCA and the Pollution Prevention Act Compliance

Understanding an Environmental Site Assessment

ESA and the Pollution Prevention Act ComplianceAn ESA, short for Environmental Site Assessment, is an evaluation of a property for the purposes of identifying any existing or potential environmental issues. ESAs are ordered during the due diligence period of the sale of a property by lenders and purchasers to avoid contamination liabilities. ESAs are completed for commercial, industrial, and multi-family residential properties as well as undeveloped land. The Phase I ESA is also completed to support the “innocent landowner defense” pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The evaluation begins with a Phase I ESA and is followed by a Phase II ESA if necessary.

What Is a Phase I ESA?

The objective of the Phase I ESA is to assess the environmental condition of the property and identify recognized environmental conditions (RECs), as defined by the American Society for Testing and Materials (ASTM), in connection with the property.  The Phase I ESA comprises the following steps:

  • Site inspection for petroleum products, hazardous chemical storage areas, chemical spills, underground storage tanks, clarifiers, sumps, and pits, among other things
  • Review of federal, state and local governmental files
  • Review of historical sources including aerial photographs, topographic maps, city directories, fire insurance maps, recorded land title records, building department records, and environmental reports
  • Interviews with tenants, current and past owners, key site managers, neighbors and government officials
  • Review of public records of neighboring properties that are hazardous or contaminated as per federal and state regulations to evaluate contamination risk
  • Review of the physical setting of the property, including general geology, topography, and hydrogeology
  • A review of recorded land title records, regulatory agency records, and State Institutional Controls/Engineering Controls databases for environmental liens or activity and use limitations (AULs)
  • Review potential vapor encroachment conditions (VECs) at the property
  • Out-of-scope, optional considerations may include mold, lead, radon, asbestos, wetlands, flood zone, and seismic hazards

What Is a Phase II Environmental Site Assessment?

If RECs are identified during a Phase I ESA, a Phase II ESA may be requested. Phase II ESAs involve sampling of groundwater, soil, soil vapor, and indoor air to check for chemicals such as petroleum hydrocarbons, volatile organic compounds, metals, and other contaminants. The following tasks may be conducted during the second phase to verify the existence and concentrations of hazardous substances:

  • Surficial soil and water sampling
  • Subsurface soil, soil vapor, and groundwater sampling
  • Geophysical testing to identify buried drums and tanks
  • Sampling of indoor air to evaluate health risks to occupants
  • Installation of groundwater monitoring wells to evaluate groundwater beneath the site and neighboring properties

What Standards Should Be Followed for an Environmental Site Assessment?

Phase I ESAs must meet the most updated standards established by ASTM and the All Appropriate Inquiries Rule (AAI) under CERCLA. Phase II ESAs must comply with applicable USEPA, State, and local regulatory agency requirements. The assessments must be performed by environmental experts with professional registrations who are trained in the fields of geology, hydrogeology, environmental science, engineering, biology, and chemistry, among others.

EEC Environmental has over 20 years of experience providing consulting services to a variety of clients. If you are in search of an environmental site assessment company, need remediation help with a contaminated site or simply have questions regarding any of the assessment steps or services, contact us and one of our experts will assist you.