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Stop Superfund waste.

President Clinton's economic plan is a clear attempt to re-order federal spending priorities by putting more money into "investments" that will spur economic growth and increase national wealth, while cutting unproductive activities. One important way he could further his agenda would be to push for reform of one of today's most misguided efforts: the Superfund hazardous waste cleanup program. The President has already paid lip service to this goal, telling business leaders in a February 11 speech at the White House that, "We all know it doesn't work--the Superfund has been a disaster."

Superfund, created by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) in the wake of the emergency at the Love Canal landfill in Niagara Falls, New York, was designed as a $1.6-billion program to contain the damage from and eventually clean up a limited number of the nation's most dangerous abandoned toxic waste sites. But in short order it has evolved into an open-ended and costly crusade to return potentially thousands of sites to a near-pristine condition. The result is a large and unjustifiable waste of our nation's resources at the expense of other critical societal needs.

No one questions that the nation has a major responsibility to deal with hazardous waste sites that pose a serious risk to public health and the environment. It is the manner and means by which the federal government has pursued this task, however, that are wasteful. Superfund legislation has given the U.S. Environmental Protection Agency powerful incentives and great clout to seek the most comprehensive, "permanent" cleanup remedies possible--without regard to cost or even the degree to which public health is at risk. Although the EPA does not always choose the most expensive remedial solution, there is strong evidence that, in many cases, waste sites can be cleaned up or sufficiently contained or isolated for a fraction of the cost, while still protecting the public and the environment. Further, EPA's selection of "priority" cleanup sites has been haphazard at best. Indeed, it has no system in place for determining which of those sites--or the many potential sites it has not yet characterized--pose the greatest dangers.

A 180-degree turn in policy is needed. When the Superfund program comes up for reauthorization next year, Congress should direct the EPA to abandon its pursuit of idealistic cleanup solutions and focus the program on practical risk reduction, targeting those sites that pose the greatest health risks and tying the level and cost of cleanup to the degree of actual risk. Only by making such a fundamental change can the nation maximize the benefits of its increasingly huge investment in the remediation of hazardous waste sites.

Costs are escalating

Estimates for cleaning up, under current practice, the more than 1,200 sites on the EPA's "national priority list" (NPL) range from $32 billion by EPA (based on a $27 million per-site cost) to $60 billion by researchers at the University of Tennessee (based on a $50 million per-site cleanup cost). These estimates are likely to be well below the ultimate cost, since EPA can add an unlimited number of sites to the list. The agency plans to add about 100 sites a year, bringing the total by the year 2000 to more than 2,100. But more than 30,000 inactive waste sites are being considered for cleanup and the universe of potential sites has been estimated at about 75,000. Most experts believe that far fewer--from 2,000 to 10,000--will eventually be cleaned up. The University of Tennessee researchers make a best guess of 3,000 sites, which would put the cost at $150 billion (in 1990 dollars) over 30 years, not including legal fees.

This $150 billion might be acceptable if the U.S. economy were buoyant and limitless funds existed for other needs. It most certainly would be justified if many sites posed unacceptable dangers to the public. But neither of these situations exists.

Skewed priorities

A key flaw in Superfund is that most of its effort and money are directed to a relatively small number of "priority" sites, while thousands of others are ignored and, in most cases, not even sampled or studied. For this reason, it is doubtful that the NPL includes all the worst sites.

"Deadly" chemical landfills buried under residential neighborhoods have hardly been typical of the sites EPA has placed on the NPL. Indeed, EPA's efforts to create a system for ranking hazards have not been geared to actually finding the riskiest sites but to satisfying the letter of the CERCLA law. In the first ranking scheme, sites were evaluated for various threats and a score of 28.5 (on a scale of 100) was determined to be sufficient for an NPL listing. However, the listings were not necessarily based on an actual determination of the degree to which they posed threats to public health or the environment. Rather, the sites were included because Congress had determined that 400 sites must be on the NPL, and a score of 28.5 resulted in 413 listings.

Several years ago, the ranking scheme was made much more elaborate, with threats from contaminants in the air, water, and soil weighed differently. The same maximum score of 100 and listing score of 28.5 were used. Why? EPA said that it was "not because of any determination that the cutoff represented a threshold of unacceptable risk presented by the sites" but because the 28.5 score was "a convenient management tool." So much for the rigors of a system designed to cull the Love Canals from town dumps.

A 1991 report by a committee of the National Research Council (NRC) strongly faulted EPA's methods of selecting sites and setting priorities. The report said that EPA has no comprehensive inventory of waste sites, no program for discovering new sites, insufficient data for determining safe exposure levels, and an inadequate system for identifying sites that require immediate action to protect public health.

In a perfect world, every "dirty" site would be cleaned, regardless of the degree of risk it presented. In practice, this is impossible, so we should be spending more to prioritize in order to focus our limited resources on real risks.

Extreme remedies

However it is accomplished, once a site makes the NPL, money is no object in the remediation process. This was not necessarily the case under the original 1980 Superfund law. CERCLA left some ambiguity about how extensive the cleanups had to be--whether only reasonable risks needed to be eliminated or whether the site had be returned to a preindustrial condition. When it enacted the Superfund Amendments and Reauthorization Act (SARA) in 1986, however, Congress, motivated by a deep distrust of the Reagan-era EPA, took a hardline stance. SARA, which increased funding for the program to $8.5 billion and ordered action to begin at ever more sites, directed EPA to give preference to cleanup remedies that "to the maximum extent practicable" lead to "permanent solutions." The emphasis on permanence was further reinforced by a requirement that cleanups must comply with any "applicable or relevant and appropriate requirement" (ARAR) in any other state or federal law relating to protection of public health and the environment.

SARA was deeply flawed. For one thing, it effectively forced EPA to continue remedial action even after all realistic risks at a site had been eliminated. One example is the Swope Superfund site, a former solvent reclamation facility in Pennsauken, New Jersey. Although all major sources of contamination had been removed from the site, EPA ordered the installation of a $5-million vapor extraction system to remove more contaminants. The purpose was to protect groundwater in case any private wells were sunk in the future. But EPA neglected to consider the fact that private wells had been banned in the area.

SARA's requirements also serve to exclude the use of other far less costly remedies that would give the public the same or at least acceptable protection from harm. For example, at the Bridgeport Rental and Oil Services Superfund site in Logan Township, New Jersey, EPA ordered the construction of an onsite, $100-million incinerator after PCBs were found in several sludge samples. In making its decision, EPA used the ARAR requirement to retroactively apply the federal Toxic Substances Control Act (TSCA), which requires incineration of currently generated wastes if samples indicate that PCBs in the soil exceed 500 parts per million.

The absurdity of the plan became apparent when EPA decided to create an onsite landfill to dispose of the heavy metal residues from the incineration. Given that a landfill was to be created anyway and that PCBs at the site were so scarce that EPA had to import them for trial burns of the incinerator, the agency could have opted to contain the sludge on site in the first place--using existing proven technologies--while more than adequately protecting the public at an estimated one-fifth of the cost of incineration.

A similar tale is unfolding at another Superfund site in Carlstadt, New Jersey, which is contaminated with solvents, PCBs, and heavy metals. A trench has been cut around the site to an underlying impervious soil layer and then filled with clay to prevent any migration of the contaminants. The site has also been pumped dry to protect groundwater and capped to keep out rain. Remediation work has cost about $7 million, and DuPont as well as other responsible parties have pledged to maintain these containment systems for as long as necessary. However, despite the absence of any current or reasonably foreseeable public exposures, EPA may decide to require incineration of the top 10 feet of soil at an estimated cost of several hundred million dollars. This would be a foolish waste of money.

EPA must also consider that extreme, costly remediation solutions often are not without costs of their own. Incineration, for instance, cannot destroy metals. Does the public really benefit when lead is released into the air as a byproduct? By the same token, when contaminated soil is ordered excavated and carted elsewhere, one neighborhood gets a "permanent" solution, whereas another gets a landfill with toxic residues.

Risks exaggerated

Superfund legislation is not the only force driving EPA to seek "permanent" solutions. EPA decides on a remedy only after assessing the risks at a site. However, EPA often uses unrealistic assumptions that exaggerate the risks and lead to excessive actions. For example, according to the Hazardous Waste Cleanup Project, an industry group in which DuPont has been involved, EPA may make estimates of exposure based on a scenario in which an individual is assumed to reside near a site for 70 years, to consume two liters of water every day during those 70 years, and to obtain all of that water from

groundwater at the site. It has even made exposure estimates based on the length of time a child will play (and eat dirt) on a site in the middle of an industrial location surrounded by a security fence. Each of these scenarios is highly improbable.

Questions involving risk assessment are, of course, going to be contentious ones for some time to come. Clouding the Superfund debate is the fact that there is no scientific consensus as to the precise magnitude of the dangers posed by chemicals typically found at Superfund sites.

The existence of toxic wastes at a site does not necessarily mean that they pose a threat to nearby residents. Epidemiologic studies of waste sites have severe technical limitations, and it is difficult at best to determine whether exposure to hazardous wastes can be blamed for medical problems when a long gap exists between exposure and disease. Even at such a well-known site as Times Beach, Missouri, where the entire community was evacuated, research in recent years has shown that the potential health risks were relatively small or even nonexistent.

The most comprehensive assessment of the risks from Superfund sites came in the 1991 NRC report, which concluded that "current health burdens from hazardous-waste sites appear to be small," but added that "until better evidence is developed, prudent public policy demands that a margin of safety be provided regarding public health risks from exposures to hazardous-waste sites."

No one can argue with a margin of safety. However, that is not the focus of the current Superfund program, which, far more than any other environmental program, makes no rational attempt to link costs with benefits. EPA's own Science Advisory Board, in a 1990 report that attempted to rank the environmental problems for which the agency is responsible, concluded that old toxic waste sites appeared to be "low to medium risk." Other hazards, such as radon gas in homes and cigarette smoke, were considered to pose much larger risks.

The liability mess

The bulk of the Superfund tab will be picked up by industry, through taxes imposed under CERCLA, out-of-pocket cleanup costs, or settlements with insurance companies. Industry recognizes that it must assume its fair share of the financial and operating burden of the cleanup effort, and it acknowledges that Superfund has compelled it to become exceptionally vigilant not only in disposing of toxic wastes but also in minimizing their generation in the first place. But it objects to a system in which EPA seemingly has put a higher priority on pinning the blame and the bill on companies than on ensuring the protection of public health.

CERCLA dictated a "polluter-pays" philosophy to deal with what had largely been lawful disposal of wastes. CERLCA and court interpretations of it also have created an extremely broad liability scheme. Virtually any company remotely involved in a site--waste generators, haulers, site owners or operators, and even, in some cases, the companies' bankers--could be held responsible. One or a few companies could be forced to pay the entire bill, even though they were only minor participants and other parties were involved--a provision called joint-and-several liability. No limits were imposed on the amount of money that could be extracted from "guilty" parties.

One problem with this liability system is that it completely lacks cost accountability. With industry paying for most of the cleanup, the funds are not in EPA's budget and thus do not have to compete in budget battles with other cash-starved federal programs. And given the strictness of the law, why should EPA regulators subject themselves to possible congressional criticism by selecting a less-than-perfect solution, especially if money is no object? But let us not kid ourselves. Although this money may seem "free" to Congress, EPA, and the public, companies must make up the difference by raising prices, cutting investment and jobs, or taking other undesirable actions.

An even more damning problem is that the liability provisions have spawned countless legal brouhahas that are consuming a large and increasing share of Superfund resources--even as the cleanup process itself has languished. (The average length of a site cleanup is 8 years, and fewer than 100 sites have been "permanently" remediated.) In the approximately 70 percent of Superfund sites that involve multiple parties, companies must fight with the EPA, among themselves, and with their insurance companies over who dumped what, when, and how much--questions extremely difficult to answer many years after the alleged "dumping" is thought to have occurred. Some experts believe that these "transaction costs" will eventually account for more than 20 percent of all Superfund expenditures. This is a boon for lawyers but a waste for the nation.

Legal costs--as well as burdensome technical and administrative expenses--could potentially be greatly reduced if Congress would allow EPA to take a more practical approach to risk reduction. Unlike other environmental laws, such as the Clean Air Act and Clean Water Act, which have sought to deal with problems in successive stages, Superfund's emphasis on finding a one-time, complete, and permanent solution magnifies the stakes to all parties, prolonging disputes and greatly increasing the costs. If companies could count on a more realistic remediation approach, they might be more willing to compromise, which could lead to faster cleanups.

The liability mess could get completely out of hand if Congress goes along with a patently unfair proposal to exempt municipalities from liability at closed municipal landfills, which account for about 20 percent of NPL sites. Municipal governments argue that most of these landfills largely contain household wastes not covered by Superfund and thus they should not be billed for the cleanup. But in many cases this is not true. For example, at the Kramer Superfund site in Mantua, New Jersey, municipal governments contributed the greatest share of hazardous substances. Despite this, EPA is no longer even naming municipalities in cost-recovery suits. (EPA's tendency to selectively enforce the law has been increasing. At Kramer, EPA sued 25 parties even though hundreds were potentially responsible.)

Industry recognizes that many municipal governments are severely strapped for revenues. Yet companies, which provide jobs and help create the tax base needed to support municipal services, should not be milked to pay for Superfund shares properly owed by others.

One last concern with the liability provisions is that they may be having a chilling effect on new investment at sites in older urban areas--areas that sorely need such investment. The reason is that any party that buys such a property would be caught in Superfund's liability web. For example, investors seeking to build a coal-fired power plant in an area with a projected need for such a use recently approached DuPont about buying a property that had been used for manufacturing for more than 100 years and clearly contains some contaminated soil. Virgin land is not needed for a site to burn coal, and risk assessments indicated that workers could be protected with commonsense steps such as paving. But efforts to get reasonable compromises from regulators on containing the site proved fruitless, and now the investment will not be made, at least in this area.

Steps to reform

It is time for a major redirection of the Superfund program. Congress should tell EPA to abandon its focus on idealistic cleanup remedies and emphasize practical risk reduction. Instead of continuing its haphazard site selection and unjustifiably costly cleanup remedies, EPA should first define the universe of sites that may present real health risks and then take steps to deal with the most immediate dangers, taking costs into consideration. Once a national inventory has been established, extensive site evaluations can be undertaken, with the purpose of setting priorities for cleanup. Only after these actions are taken will we be able to make non-hysterical decisions as to how much we should invest in cleaning these sites, balancing such factors as risks, costs, and other societal needs.

It is particularly crucial that remedy decisions be based on the expected future use of the land and the costs and practicality of the proposed solution. If residential development is planned near the site, the cleanup may need to be extensive. In many cases, however, especially when another industrial use is planned on or near an old waste site, use of containment technologies may be sufficient to protect against risk of exposure. In the most troublesome cases, where major remediation is necessary, costs are high, and existing technology has limitations, it makes much more sense to isolate the site until more cost-effective treatment techniques are developed or increased land values justify a large investment.

In making these decisions, it would be helpful if EPA had much better information on the benefits and costs of different levels of cleanup. Currently, less than 1 percent of EPA's Superfund budget goes for research on the scientific basis for evaluating Superfund sites. Much more should be spent. EPA also should increase its research on the environmental consequences of different types of remedial actions, such as whether incineration actually increases risk by transferring hazardous substances from the ground or water into the air.

The liability provisions of the Superfund program also need to be changed. DuPont and companies in the chemical, petroleum, and other industries favor replacing the very unfair joint-and-several liability provision (making one or a few companies liable for all the costs, even though many others, often defunct, were also responsible) with proportional liability. In other words, responsible parties would pay only in proportion to the share of the cleanup costs associated with the wastes that they contributed at a site. EPA would then be forced to either find and sue all responsible parties or pay for the remainder of the cleanup costs itself. EPA is already authorized to pay for cleanup costs in cases where parties cannot be found or cannot afford to pay--shares which are often sizable. But in practice it has sought to recoup all cleanup costs under the joint-and-several provision. Proportional liability would inject more fairness into the process, and since the polluter-pays principle would be retained, it would continue to encourage responsible parties to pressure EPA to pursue the most cost-effective cleanup remedy. Most important, proportional liability would impose much-needed financial discipline on EPA, since it would be forced to pay for more of the cleanups out of its own budget. For the first time, EPA would have to consider whether the benefits were worth the costs.

Proportional liability would not, of course, solve the problem of how to divide up responsibility in the first place. One possible way out of this morass is to formalize in the law an alternative dispute resolution process in which any or all potentially responsible parties could participate. It would be chaired by neutral parties satisfactory to all. Its findings on shares could be appealed to the courts, but any party that concurred with the decision would be authorized to pay its share and exit the process. This solution would help cut site contention, reward cooperative parties, and leave messy litigation to those unwilling to pay their fair shares. It would also diminish Superfund's luster as a federally mandated entitlements program for lawyers.

More extensive reform of the liability provisions has been proposed by the insurance industry, which wants to eliminate all liability at sites in which more than one party is involved and in which waste disposal occurred prior to enactment of either CERCLA in 1980 or SARA in 1986. Site cleanup would then be paid out of the Superfund budget, financed by increased taxes on industry, including insurers. Although this proposal would eliminate contentious fights over specific site responsibility, substantially cut transaction costs, and possibly speed up site cleanups, it would be unacceptable to DuPont and other parties at Superfund sites if the new taxes were unfairly levied on the same companies already paying disproportionately large shares of the current Superfund cleanups.

Finally, the liability scheme must be changed so that prospective owners of older urban sites are not deterred from making new investments in them. New owners should certainly not be held responsible for contamination that they did not cause. One approach would be for current owners to demonstrate, before sale, that their sites, while not pristine, are adequately contained and do not pose unacceptable risks to the public. The new owner would be expected to maintain or monitor whatever containment system was developed. If EPA later did a more extensive site evaluation and determined that greater threats existed, the new owner would not have to pay. In addition, current owners should be able to make new investments in their property if they demonstrate that the sites are adequately contained.

The limits of our national wealth have not been so obvious since the 1930s. More than ever, we must make choices among competing, compelling demands for scarce resources. We recognize that a dollar spent on defense cannot be spent on health care. We must also recognize that a dollar spent on hazardous waste cleanup is similarly unavailable. As with other federal programs, Superfund spending must be balanced and managed. This can be done if we refocus our Superfund investment on real risks, give EPA a stake in doing its job cost-effectively, and bring more fairness into the process.

Bernard J. Reilly, corporate counsel at DuPont, has been managing the legal aspects of the company's Superfund program since 1986.
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Title Annotation:Issues in Focus: Getting Down to Business
Author:Reilly, Bernard J.
Publication:Issues in Science and Technology
Date:Mar 22, 1993
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