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    February 28, 2018 Articles

    Superfund Reform on the Horizon

    The Superfund Task Force released a list of 42 recommendations on how to restructure and improve the Superfund cleanup process.

    By Megan Baroni

    Enacted in 1980, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund, was designed to manage cleanup of the country’s most contaminated sites. 42 U.S.C. § 9601 et seq. For years, CERCLA has been used to identify sites for remediation, many of which were contaminated by historic operations. CERCLA was often characterized as a statute that would, at some point in the future, lose its importance in the patchwork of environmental laws. As historically contaminated sites were remediated under CERCLA, the list of sites on the National Priorities List (NPL) would dwindle, and investigation and remediation of active sites would be covered under other environmental programs, such as the Resource Conservation and Recovery Act. 42 U.S.C. § 6901 et seq.

    In 2018, nearly 40 years after CERCLA’s enactment, the program remains alive, though perhaps not well. Sites continue to enter the program, but the investigation and remediation process for many sites is long and inefficient. Often plagued by lengthy litigation battles between potentially responsible parties (PRPs), drawn-out investigation and remedial design periods, and long approval processes, CERCLA sites tend to take on a life of their own. These inefficiencies have detracted from the statute’s goal of accomplishing the cleanup of our most contaminated sites.

    U.S. Environmental Protection Agency (EPA) Administrator E. Scott Pruitt would like to change that. His recent efforts and resulting EPA actions seem destined to change the trajectory of Superfund.

    EPA Administrator Reform Efforts
    Since taking over as administrator, Pruitt has taken a number of actions in an attempt to reform the Superfund process.

    Consolidation of authority aims to improve efficiency. First, he issued a memorandum, “Prioritizing the Superfund Program,” delegating authority to the administrator for approval of Superfund remedies estimated to cost $50 million or more. EPA employees are directed to get the administrator’s office involved in large, expensive sites as early as possible and throughout the remedy evaluation process to ensure efficiency and consistency.

    Task force was created to improve Superfund cleanup. Administrator Pruitt also convened a task force to provide recommendations on how to restructure and improve the Superfund cleanup process. The task force was directed to consider the following:

    • Streamlining and improving protections such as bona fide prospective purchaser status, “comfort letters,” and prospective purchaser agreements
    • Developing nontraditional approaches for financing cleanups
    • Reducing EPA administrative/oversight costs
    • Streamlining and improving remedy selection at sediment sites
    • Improving stakeholder involvement (state and local governments, public-private partnerships)

    In July 2017, the Superfund Task Force released its Superfund Task Force Recommendations. There are 42 recommendations in total, broken down into five goals: “Expediting Cleanup and Remediation,” “Re-Invigorating Responsible Party Cleanup and Reuse,” “Encouraging Private Investment,” “Promoting Redevelopment and Community Revitalization,” and “Engaging Partners and Stakeholders.” The recommendations include suggested improvements that hit on the considerations set forth above, as well as others, all in the name of efficiency.

    A number of the task force recommendations focused on things that the EPA can do to target and streamline cleanups. For example, the task force recommended that the EPA develop a target list of NPL sites that are moving too slowly toward completion, including a Top 10 Administrator’s Emphasis List for sites that need “immediate and intense action.” Superfund Task Force Recommendations, supra,at 1. These sites should be evaluated to determine and address obstacles to completion, and monthly reports should be submitted to the administrator to track progress. The task force also encouraged the EPA to expand the use of adaptive management at complicated sites. Adaptive management, an approach that focuses resources at complex sites, requires the development of an overall site strategy with measurable decision points and allows for adaptation in the face of uncertainties that result in changes to site conditions. The task force recommended that the EPA develop a directive to encourage the use of adaptive management, including interim records of decision and other early actions for complex sites.

    The task force also focused on efficiencies that could be created for PRPs actively engaged in investigation and remediation. Some of these recommendations include offering oversight incentives, such as decreased oversight costs, to cooperative, high-performing PRPs and reducing financial assurance requirements for cooperating PRPs. On the flip side, the task force recommended some measures to penalize recalcitrant PRPs, such as the active use of unilateral administrative orders for PRPs that are using negotiation with EPA as a delay tactic.

    The task force would like to encourage novel investment approaches for PRP-led cleanups. It encouraged identification of opportunities for third-party investment in PRP-led cleanups. For example, it recommended establishing a work group to evaluate the use of insurance, annuities, indemnification, or other tools for third parties interested in buying or selling the risk of cleanup. The task force also recommended the use of model agreements, such as bona fide prospective purchaser agreements, as well as meaningful comfort letters to encourage third-party investment.

    The task force also focused on reuse and redevelopment of contaminated sites. It recommended a number of approaches to try to increase the number of sites that are ultimately put into productive reuse. The task force recommended prioritizing reuse and redevelopment considerations in the investigation and remediation process by integrating reuse outcomes in remedial planning. It also recommended better promotion of sites that have meaningful reuse options to community stakeholders, redevelopers, and investors, among others. Through these efforts, the task force hopes not only that contaminated sites can be cleaned up but also that they can become productive again.

    Implementation of Task Force Recommendations
    The EPA efforts indicate that, at least to some extent, it is considering the task force recommendations and intends to move forward toward implementation.

    At the end of 2017, the EPA made good on one of the task force recommendations, announcing a list of priority sites, or those targeted for “immediate, intense action.” The sites are not necessarily described as the most contaminated sites but rather as those with “site-specific issues that will benefit from the Administrator’s direct engagement.” EPA, Questions and Answers for the Superfund Sites Targeted for Immediate, Intense Action, EPA.gov (last updated Dec. 11, 2017).

    It is not yet clear exactly how these sites will be treated differently, but the EPA provides the following examples of potential actions that might be taken at these sites:

    • Encouraging and supporting timely negotiations with potentially responsible parties;
    • Working with all interested parties to determine whether a site will be listed on the NPL;
    • Facilitating finalization of remedy decisions; and
    • Facilitating dialogue with interested parties on redevelopment opportunities.

    Id.

    Then, in January 2018, the EPA released the Superfund Redevelopment Focus List, an initial list of sites on the NPL with the greatest redevelopment and commercial potential. This initial list was compiled based on previous outside interest, access to transportation, and land values, among other things. The designation, along with increased EPA focus, is intended to identify potentially interested businesses and industries and keep them informed of new redevelopment opportunities.

    Conclusion
    While budget cuts and declining staff could stand in the way of meaningful progress, the EPA has already shown some initiative in considering the Superfund Task Force recommendations and moving forward. Some of the recommendations may be more difficult to implement on a nationwide basis. However, we might begin seeing PRPs attempting to use the recommendations to negotiate for novel or flexible approaches at individual sites, even in advance of sweeping implementation by the EPA.

     

    Megan Baroni is a partner at Robinson + Cole in Stamford, Connecticut.

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