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Oil Giants Eye Novel Portland Harbor Superfund Cleanup Incentive

May 22, 2019, 10:31 AM

The city of Portland, state of Oregon, and the EPA have come up with a novel way to encourage companies to clean up Portland Harbor faster: Offer them a $24 million incentive.

The approach has drawn praise from former Environmental Protection Agency officials and a community leader. But a group representing state environmental officials said it’s too early to tell whether the approach could be duplicated elsewhere.

The city and state are both potentially responsible for pollution at the harbor, home of one of the most complex and expensive Superfund cleanups. Their governments have proposed setting up a fund that would not only relieve some of their liability, but offer companies money to tackle the design aspect of the $1 billion cleanup quickly.

Several parts of the Superfund site have “many” parties that are potentially liable, the city’s proposal said, but no party or group of parties have agreed to design the cleanup there. Companies that are potentially liable for contamination include BP West Coast Products LLC., Shell Oil Co., and Exxon Mobil Oil Corp.

None of the companies responded to Bloomberg Environment’s requests for comment.

Portland’s century-long history of shipping, industrial, and commercial activity left a toxic soup behind, contaminating the Willamette River’s water and sediment with pesticides, petroleum, and other chemicals.

The EPA designated a 10-mile stretch of the Willamette River the Portland Harbor Superfund site in 2000. The agency is working on cleaning up the river’s “hot spots,” or sections that have the most pollution.

‘Creative Idea’

Usually the EPA relies on its enforcement authority to get companies to do the work, but “this kind of stands that idea on its head,” said Stan Meiburg, a former EPA deputy regional administrator and acting deputy administrator until 2017. He called the approach a “creative idea.”

Charlie Howland, a former EPA senior assistant counsel for the agency’s mid-Atlantic region, agreed with Meiburg. Howland hasn’t worked on the Portland Harbor site, but handles Superfund matters at Curtis, Mallet-Prevost, Colt & Mosle LLP.

“This approach could be very useful for prompting cleanup action at typical urban sediment sites, whose contamination often came from many sources, ” Howland said in an email.

The EPA announced the incentive May 10, but the agency, city, and state have yet to officially sign off on it, said Annie Von Burg, environmental policy manager for the city of Portland’s Bureau of Environmental Services.

Portland’s city council will discuss the proposal at a public meeting May 22.

Carrot or Stick

Some aspects of the incentive echo the EPA’s decades-old guidance and recent Superfund task force recommendations, but the overall proposal is unusual, attorneys working with clients on Superfund issues told Bloomberg Environment.

Agency guidance dating back to the 1980s provides a framework for using EPA’s Superfund money as well as company funding to pay for cleanup at a single site, rather than one or the other, but does not simultaneously address financial incentives. In 2017, the EPA’s Superfund task force recommended using incentives to accelerate the cleanup process, but it didn’t note whether the incentives could be funded by potentially responsible parties.

As part of the agreement that the agency, Portland, and Oregon have proposed, the city and state would each contribute $12 million to a fund. The EPA would then take money from that fund to offer companies an incentive to complete cleanup work on the sections for which they’re responsible.

The companies must start negotiations with the EPA by the end of June and finish plans by the end of this year to receive $80,000 per designed acre.

If the companies don’t follow through, they are subject to EPA enforcement action, according to the city.

“We hope all responsible parties will step up to take advantage of this unique funding opportunity,” EPA Administrator Andrew Wheeler said in an agency press release. Portland Harbor is on the administrator’s list of Superfund sites that need “immediate, intense action.”

Don Welsh, executive director of the Environmental Council of States, said each Superfund site is different, so it’s hard to tell whether this type of agreement could be used elsewhere.

“I do think it’s a good example of EPA and the state working together to navigate a unique situation at Portland Harbor,” he said.

Pooling Funds

The EPA decided in 2017 that 365 acres of contaminated Portland Harbor sediment should be covered with a protective cap or dredged from the Willamette River to reduce human and wildlife exposure to contaminants, including polychlorinated biphenyls and dioxins. The agency estimates total cleanup costs for the site at $1 billion.

The city of Portland “has potential liability scattered throughout the 10-mile site,” the city’s impact statement for the proposal said.

“Rather than enter into numerous agreements to perform remedial design, the City and State find it more efficient and financially advantageous to pool their funds and place them in a trust,” the city’s proposed ordinance said.

The incentive “allows us to play an important role in moving the cleanup design forward while focusing on the harbor as a whole instead of smaller sites,” Kate Kondayen, a spokeswoman for Oregon Governor Kate Brown, said in an email.

Jackie Calder, chair of the Portland Harbor site’s Community Advisory Group, said she’s glad the incentive is being offered. The harbor was declared a Superfund site in 2000, and local residents have been hoping for progress toward cleanup since then.

“It’s time that somebody got things moving,” she said.

To contact the reporter on this story: Sylvia Carignan in Washington at scarignan@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Chuck McCutcheon at cmccutcheon@bloombergenvironment.com