Companies handling risk and liabilities for the country’s most contaminated sites said the EPA should facilitate packaging multiple sites into a single, faster cleanup project.
Diversifying a portfolio of sites hedges against some of the risks of negative consequences at a site, like unanticipated cleanup costs or newly discovered contaminants, companies told Bloomberg Environment. Those portfolios can range from a handful to more than a hundred sites, including some of the country’s most contaminated properties.
The Environmental Protection Agency is considering suggestions about how to manage the environmental liabilities Superfund sites present. An attorney whose clients handle multiple sites suggested a portfolio approach could help companies get the sites—and their costs—off their balance sheets faster.
Companies who routinely take on environmental risks, such as Environmental Liability Transfer Inc., based in St. Louis, Mo., are already using a portfolio approach. They buy multiple contaminated sites from a company under one deal, cleaning them up at a faster rate than if the company had sought individual buyers for each site or managed the cleanup themselves.
For example, oil and gas giant Royal Dutch Shell PLC, also known as Shell, handed over more than 150 of its sites in Canada and the U.S. to Environmental Liability Transfer Inc. for to put them back into productive use.
None rose to the level of Superfund sites, Shell spokesman Ray Fisher told Bloomberg Environment in an email. Shell retains its role as the responsible party at those sites.
“A portfolio approach can ensure the sites are restored efficiently while maintaining focus on safety and environmental protection,” Fisher said in an email.
Environmental Liability Transfer said they have cleaned up a “significant portion” of those projects.
Interest in Portfolios
More companies are interested in trying a portfolio approach, Brian Israel, partner and chair of the environmental practice group at Arnold & Porter Kaye Scholer LLP in Washington, said at a June 5 EPA meeting. Israel represents companies who have millions of dollars in environmental liabilities, including Honeywell International Inc. and Dow Chemical.
In some cases, it’s more economical and consistent with a company’s corporate strategy to put multiple sites in a portfolio, rather than handling them one by one, Israel told Bloomberg Environment.
“If you aggregate sites, then you aggregate risks,” Marc Faecher, chief risk officer at the TRC environmental consultancy’s New Providence, New Jersey office, told Bloomberg Environment.
The EPA also could benefit by getting more contaminated sites cleaned up, he said.
Sites on the EPA’s National Priority List—also known as Superfund sites—are the most contaminated in the country.
EPA Administrator Scott Pruitt and an agency task force are focusing on accelerating those cleanups, which can take years or decades to remediate depending on the site. The agency also is pushing those sites toward redevelopment by getting third parties to invest in their cleanup.
Push for Predictability
Faecher said EPA should support not just the portfolio approach, but also the concept of third parties accepting environmental liabilities. The agency can do that by selecting consistent remedies, he said.
“EPA needs to make the process more predictable to make the cost modeling more understandable,” he said. "[If] I don’t know what the remedy’s going to be, or if the remedy’s going to change dramatically ... all of that is going to drive up costs.”
The speed of cleanups also matters, he said.
“You need to be able to get the site done quickly and efficiently in order for environmental liability transfers to work,” he said. The EPA’s Superfund task force recommendations, released last year, indicate the agency is on its way to accomplishing that, he said.
Colleen Kokas, executive vice president for Environmental Liability Transfer Inc. in the Philadelphia, Pa. area, agreed.
“We have seen significant change come from EPA with respect to new guidance, revision, and modification to existing tools,” she told Bloomberg Environment. “We’re very optimistic that they are advancing policies and guidance to allow for more Superfund sites to be put into private cleanup.”
To read more from Environment & Energy Report pleaseOR Request Trial