Environmental Remediation:   What’s the Scoop?

  • Panelists:  Daniel C. Gardner, Senior Project Manager, Vertex
  • Dan Sullivan, Vice President/Principal Hydrogeologist, Roux Associates, Inc.
  • Michael Naughton, Co-Chair Environmental Group, Chiesa Shahinian & Giantomasi
  • Gregory Kelder, Vice President, Brandywine Group of Insurance and Reinsurance Companies (moderator)

Summarized by Bina Dagar

There are 1,322 sites on the National Priorities List (NPL) of most hazardous sites.  Only 375 have been cleaned up; for example, Love Canal came off the list ten years ago.  Five sites have been added to the NPL list in 2015, and seven have been proposed for addition to the list.  The EPA’s new Superfund sites in 2015 include one dry cleaner, of the 40,000 with potential exposures nationwide.  According to a 2015 A.M. Best report, environmental losses for the U.S. property/casualty industry are estimated at $42 billion. Cleanups, in the past, involved digging up soil and groundwater extraction; today, advanced science technology encompasses injecting biological organisms into the soil and using trees with large leaves to extract and reduce soil contamination.  Unique to sites contaminated with sediments are the staggering cleanup costs, which in the future are expected at upwards of $1 billion for certain sites.

The panel of experts in their respective fields gave the audience an overview of the following:

  • EPA Enforcement Priorities/Activity assures compliance with the nation’s environmental laws and takes enforcement action when laws are violated;
  • Significant sites have unprecedented costs such the Lower Passaic River, NJ and Portland Harbor, OR;
  • Redevelopment of land areas are driving remediation efforts.  The EPA did a study a decade ago, showing that 350,000 contaminated sites got discovered by accident, and five percent of these have estimated costs over $50 million;
  • Natural Resource Damages (NRD) Compensation for loss of natural life such as fish, eagles, etc., are getting costlier to the public.  The NRD’s are converted to capital and distributed among the participating responsible parties (PRP’s);
  • Vapor intrusion, LNAPL, and Free Product relates to the migration of vapor from a subsurface source to inside a building such as radon.  The EPA has updated a 2002 Vapor Intrusion document this year that distinguishes petroleum vapor intrusion, which reacts differently than other contaminants, such as chlorinated contaminants.  Another key change is a reference to OSHA permissible exposure limits (PEL) being outdated. LNAPL, which is present in most sites where petroleum discharge has occurred, can drive costs significantly higher;
  • Environmental litigation developments influence costs to the insurance industry with the understanding that technological defenses are available to defendants, for allocation of these claims can be staggering. 

Takeaways from this presentation are the astounding cleanup costs, for example, the lower 8.3 miles of the 17 miles of the Lower Passaic River are estimated at $1.73 billion for bank to bank dredging.  At Portland Harbor, a site of historic industrial operations, in-water contaminant sediment remediation costs, per an EPA feasibility study, is proposed at $2 billion or more.  The estimated cost to the insurance industry can depend on where insurers sit on the primary to excess spectrum.  Moreover, exposures vary from site to site and state to state.  There is a huge market of insurance buyers in the retroactive market.