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Playing by new rules: tougher environmental rules are in the offing, but a new state law will help owners of contaminated property.

Environmental regulation is getting such that even the experts can't always predict what the government will do next, or when. What business and industry need to do is pay close attention as the rules of the game change.

A host of industries, for example, will need to comply with new storm-water runoff regulations by this fall; these rules have been made relatively clear by the Environmental Protection Agency. Less clear are the air-quality regulations that the EPA is supposed to issue as part of the 1990 amendments to the Clean Air Act. Again, many industries are likely to be affected, but with President Bush and Vice President Dan Quayle currently campaigning against new regulations, no one dares to predict just when these regulations will take effect, or what they'll eventually look like. Meanwhile, a new state program is taking shape to help property owners who go to the trouble to clean up environmental problems on their land, though some of its details are still on the drawing board as well. Needless to say, it's a good time to have an expert on hand.

Though it's difficult to make generalizations about things so complex and diverse, Vasiliki Keramida can make at least one. The president of Ontario Environmental Inc. in Indianapolis says the underlying philosophy of today's newer environmental laws has shifted. "With the majority of regulations now, the bottom line is to try to reduce the materials and sources that cause pollution, rather than treat pollution in the end. That's the big difference." Take the new storm-water runoff regulations, for example. "Each industry or business that's affected will have to submit at some point a prevention plan. That's really a big, big difference."

The first of October is the big day on the storm-water front. By then, affected industries will have to submit to the Indiana Department of Environmental Management--which will implement the federal program in the Hoosier state--permit applications that include general details about facilities and manufacturing activities as well as specific details about what runs off the property when it rains. Environmental consultants this summer will be keeping a close eye on the weather forecast, so that they may have their testing equipment set up when a real gully-washer hits.

"They're specifically trying to regulate point-source discharges from industrial facilities," explains Ray Kent, vice president and chief engineer for Farlow Environmental Engineers in Indianapolis. Point-source discharges are different from, say, the herbicides that may run off a farmer's field, which has been treated over hundreds of acres. A point-source discharge, he says, "is something you can measure from a point," such as a drain or a drum of some chemical. In theory, a point-source discharge should be easier to control.

The government basically wants industries to get a handle on what substances are leaving their property through storm sewers and drainage ditches. It wants to know what the sources of those substances are. And it wants industries to try to prevent the substances from getting into the storm water in the future.

There are three types of storm-water runoff permits that will be available, reports Anne Slaughter Andrew, an environmental law specialist and partner with the firm of Baker & Daniels, which has offices in Indianapolis, Fort Wayne, South Bend and Washington, D.C. According to Andrew, "general permits typically cover a wide range of activities and are not tailored to a specific industry. The general permit application process is designed to ease the administrative burden on the permitting agency."

And what's easier for the regulator can be easier for the regulated, as well. "The general-permit application," says Kent, "does not require as much data to get the permit."

Businesses that don't fit the government's guidelines for a general permit may file for a group permit, through which a group of similar applicants can go through the permitting process together. The most detailed application is the one for the individual permit, which Andrew notes "will allow a facility to benefit from site-specific preventive or corrective measures because the permit application and data generated are specific to the particular facility."

The permit that a business ends up getting will spell out exactly what will need to be done to control storm-water runoff enough to satisfy the regulators. In some cases, Andrew predicts, businesses will be required to keep certain toxic effluents out of the runoff or at least within certain numeric guidelines. "Permits for other storm-water discharges are expected to contain requirements to implement best-management or pollution-prevention practices." Simply put, the success of pollution-prevention efforts will be crucial in some cases, while in others just making the effort will be enough to keep regulators happy. For the most part, the choice of which standard to apply will depend on how dangerous the potential pollutants are.

The good thing about the storm-water runoff regulations is that they're now spelled out in writing. Like many regulations, however, in most cases it'll take a lawyer or an environmental consultant or both to figure out how to file for a permit, what type of permit to apply for, or even if a permit is required at all. In many cases, says Keramida, businesses can learn whether they need to comply by looking up their Standard Industrial Classification code and comparing it with a list from the regulators.

If all that's not complicated enough, the data-gathering part of the process is likely to create potentially comical scenes of consultants tuned into The Weather Channel all day, then scurrying out to a test site when the forecast looks ominous enough. Notes Keramida, tests must follow a sufficiently big storm, not just a light sprinkle, and consultants must determine from the regulations just how bad a storm must be in a given area to qualify. Then the consultants must rely on the weather forecasters and Mother Nature. "When the weather report says rain is coming, if rain falls within the right range there needs to be a sampling procedure taking place." But if a storm fizzles out too soon, the sampling that day might end up being a bust.

Though the mention of new environmental laws may elicit groans from many in business, a state program now under development may draw some cheers instead. The Voluntary Remediation Program is designed to help property owners who are stuck with land they can't sell because of environmental contamination, says Geoff Glanders, president of August Mack Environmental Inc. in Indianapolis.

The problem is that banks are squeamish about lending money to buy land that has environmental trouble. They often remain squeamish even after a cleanup is done because there's never been any guarantee that the cleanup would satisfy regulators. Says Glanders, "People have been doing cleanups, but there's no assurance that they've cleaned up enough." Until now, that is.

This program is a mechanism for the state Department of Environmental Management to review and approve cleanups done voluntarily. It'll issue a certificate of completion, a form that says it's been done properly, and the state will issue a covenant not to sue the property owner.

The program was approved in the most recent Indiana General Assembly session, and is due to be in operation about a year from now. Obtaining the certification will cost applicants money, and so will the cleanup, but sellers that haven't been able to unload land without the program will find it worth the extra price. "Industry is very excited about this program," Glanders says, "and the banking community is very excited, too."

Industry is less certain about new clean-air regulations that are expected to come out of Washington in the not-too-distant future--maybe. Congress made significant amendments to the Clean Air Act in 1990, and it's now the EPA's job to issue regulations based on those amendments. "There are supposed to be literally hundreds of new regulations over the next few years," Glanders says. "There are several major components, including protecting the ozone layer, reducing acid rain and reducing air toxins."

Existing Clean Air Act regulations cover just a handful of pollutants, he says, while the amendments are supposed to add more than 180 new substances that companies will be responsible for keeping track of. Bigger manufacturers, he says, are likely to be already aware of just about everything that their plants are emitting, but smaller firms may not be. "We're doing audits to determine if companies are emitting any of these new pollutants," he says.

"Where we'll see significant amounts of testing are some of the smaller generators," agrees Dave Hogue, president of the Corporation for Environmental Management in Indianapolis. "They may not have had a strong compliance program in place." If companies are emitting substances on the new hit list, it helps to know now, so they'll have time to change their manufacturing processes or install pollution-control devices before the last minute.

The question, notes Hogue, is when the last minute will turn out to be. Encouraged by the vice president's Council on Competitiveness, the President Bush has put on hold most new federal regulations to give the economy time to get on its feet. Even when regulations finally are issued, it's hard to say what they'll look like because Quayle's council has been exerting increasing pressure on federal regulators to soften the rules they promulgate. All that leaves environmental consultants scratching their heads. "We're really kind of curious what the final regulations are going to be," Hogue says.

When the answers arrive, companies like Hogue's will try to alert businesses that may not be aware of how the new rules will affect them. "Once we understand what the intent of the regulations is going to be, we'll actively market toward the segments of industry that may not have had to deal with this in the past."

Not that there's any lack of work for environmental consultants and engineers while regulations are on hold. There are plenty of reporting requirements and cleanup challenges to deal with as it is. Take underground storage tanks as an example.

"You can't just take in a crew and start knocking these things down anymore," says Jason Lenz, project manager for All-Tech Environmental of Muncie, which removes and installs above-and below-ground storage tanks and provides some consulting services. "Anytime you remove or install a system, you have to provide a report. You have to abide by all the rules and regulations."

That's not easy to do. Because Lenz's company works beyond Indiana's borders, workers have had to become familiar with the environmental laws of Ohio, Michigan and Kentucky as well as those of Indiana. Although essentially similar, each state has its own unique brand of environmental law.

Indiana also recently adopted a licensing procedure for workers involved in removing tanks. The company's workers already are licensed in Ohio and Kentucky, where certification is required. "Michigan doesn't have one yet, but I'm betting they will," Lenz says. The additional regulation adds to the cost of completing projects.

The financial sting of increased environmental regulation is felt in numerous places. Many clients are surprised at the expense that comes from doing state or federally mandated laboratory tests, says Jim Loughran, vice president and general manager of A&L Great Lakes Laboratory. The Fort Wayne lab does analytical work on environmental and agricultural samples.

For example, Loughran says, some of his customers have raised their eyebrows in surprise and dug a bit deeper in their pockets after having tests done on the soil surrounding an underground storage tank that is being removed.

"When somebody has a tank to pull out of the ground, before they can fill it in the state wants to know if it leaked," Loughran says. "That's good. It protects the ground water. But the state has added some more tests." In each petroleum test, more items must be searched for and examined. As a result, a test that once took an hour to complete now requires 11 hours to finish.

A&L Great Lakes also has stepped up the testing it does on municipal sludge that is applied to farm land. "There's a lot of concerns about toxic compounds in the sludge," Loughran says. A test that once measured amounts of items such as lead, zinc and copper also looks for arsenic, mercury and chromium, as well as the presence of pesticides and other potential cancer-causing substances. The change has pushed the price of a sludge test from $125 to $1,300, he says.

At Spill Recovery of Indiana, increased regulation has led to increased training for drivers who haul hazardous materials. A new driver hoping to be licensed must pass a written exam as well as a test of practical knowledge, says Diana Ludwig, vice president of environmental services.

The Indianapolis-based company's operations also have been affected by events thousands of miles away. Congress passed the Oil Pollution Act of 1990 after the accident involving the Exxon Valdez that dumped millions of gallons of oil in Alaska. The new regulations have affected every industry that recovers oil, Ludwig says. "More training is required, procedures are updated."

Evansville's National Laboratories does analysis work for units of government and industry. "The environmental lab testing industry is regulation-driven," explained Ken Haynie, sales and marketing manager for the company. "The permitting requirements generate a need for reporting." Haynie's business could continue to grow because of new rules and regulations. Next year, for example, new testing requirements for drinking water take effect.

All of this illustrates the need to call on the experts in order to keep up with the changing and unpredictable regulatory climate. "Technically it's not difficult," says Steve Nye, president of EIS Environmental Engineers in South Bend. "It's just having a good understanding of what's needed to maintain compliance. Things can change so fast even state agencies can't keep up in providing guidance."

Preparing for changes in the law can make good business sense, Nye says. "If a company has the financial or people resources to get ready, it gives them an edge," he says. "They're not behind the eight ball. If you wait too long, you can be forced to take action that might not be the most cost effective."

Typically, the companies hurt the most by changes in the law or regulations are businesses and industries that don't have the environmental staff that a larger firm might employ, Nye says. "It's the smaller companies that can have the most trouble and that need to plan ahead."

In 1990, the state's Department of Environmental Management opened an Office of Technical Assistance to help keep business abreast of changes in state and federal law.

In addition to supplying technical information and sponsoring workshops and conferences, the office is trying to help companies do more than simply meet the minimum environmental guidelines called for in the law. Companies are being encourage to think long-range, says Joanne Joyce, assistant commissioner.

"Our goal is to work with business and industry and shift them to a prevention mode," she says. For example, industries that use toxic substances might be told about substitute solvents that can be recycled. Others are being encouraged to plan ahead for changes in the law.

"Household waste is only about one-third of the waste stream," she says. "The rest is business and industry, and we're trying to do something about that. And the good point is this can be a positive for the bottom line." Shifting to cost-effective systems that recycle substances such as solvents or degreasers can eliminate the cost of disposing of such items, Joyce says.

"Industry needs to rethink the process and sometimes use substances at the beginning that are non-toxic," she says. "Then they don't have to worry about the cleanup or disposal at the end. There's a lot of new technology, safe substitutes that many smaller companies in Indiana might not be aware of."

Joyce concludes: "Generally, companies want to do the right thing. We find some want to prepare as soon as there is an inkling of changes in the law coming down the line."
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Title Annotation:Environment
Author:Skertic, Mark; Kaelble, Steve
Publication:Indiana Business Magazine
Date:Jul 1, 1992
Words:2662
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