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EPA Issues Guidance on Non-Affiliation Requirement for CERCLA Landowner Defenses

EPA has issued new guidance addressing the non-affiliation requirement for the landowner liability protections available under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) for bona fide prospective purchasers (BFPPs) and contiguous property owners (CPOs).  The statute provides that landowners seeking to avoid CERCLA liability cannot be “affiliated with” another party who is potentially liable under CERCLA.  The new guidance, titled “Enforcement Discretion Guidance regarding the Affiliation Language of CERCLA’s Bona Fide Prospective Purchase and Contiguous Property Owner Liability Protections,” addresses the “affiliated with” language of CERCLA and complements EPA’s previously issued Tenants Guidance.  The new guidance should be of interest to owners of contaminated property and entities interested in buying and developing brownfields as well as neighboring landowners. 

The new guidance discusses prohibited affiliations identified in CERCLA, the burden of proof, initial considerations in determining whether a disqualifying affiliation exists, two statutory exceptions, and four additional relationships that generally should not be considered to be disqualifying affiliations.  EPA emphasizes that the analysis is fact-intensive   Affiliation Guidance at 2. The crux of the analysis is whether the relationship was created to avoid CERCLA liability.  Id. at 7.  If so, the affiliation will disqualify a purchaser of property or owner from BFPP or CPO liability protection. 

Affiliations expressly prohibited by CERCLA include:  (1) direct or indirect familial relationships; (2) contractual, corporate, or financial relationships; and (3) business reorganizations of a business entity that was potentially liable.  Id. at 2-3.  The entity seeking the liability protection has the burden of proof to establish the non-affiliation requirement and all of the other elements of the BFPP or CPO defense.  Under CERCLA, CPOs may request from EPA a “no action assurance letter” or settlement that provides protection against cost recovery or contribution.  BFPPs may seek comfort/status letters, BFPP-doing-work-agreements, or prospective purchaser agreements in limited circumstances.  Id. at 3.  

The new guidance directs EPA personnel to consider following four issues before exploring whether there is a prohibited affiliation: (1) whether the person seeking liability protection under the BFPP or CPO provisions is otherwise a potentially responsible party (PRP) i.e., an owner/operator at the time of disposal, a transporter, or an arranger for the disposal of hazardous substances; (2) whether the entity is in fact the same entity as a PRP or is potentially liable under other principles of corporate law, such as successor liability; (3) whether a business entity asserting BFPP or CPO status is the result of a reorganization of a liable party through bankruptcy or other corporate restructuring.; and (4) whether the party with whom a person may have an affiliation is actually a PRP at the facility.   Id. at 4-5. 

Next, the new guidance discusses the two statutory exceptions to contractual, corporate, and financial relationships that do not disqualify a purchaser of property or owner from BFPP or CPO liability protection.  The first statutory exception applies only to BFPPs and is for contractual, corporate, or financial relationships that are “created by the instruments by which title to the facility is conveyed or financed.”  Deeds, title insurance, agreements with a third-party lender, or other agreement that makes transfer of title possible would fall within this exception.   Id. at 6.  The second statutory exception applies to bothBFPPs and CPOs and is for contractual, corporate, or financial relationships that are “created by a contract for the sale of goods or services.”  EPA states that it will adopt a plain language definition of goods and services and gives a contract for snow removal as an example of a contract for a service that would not be considered to be a disqualifying affiliation.  Id. at 6-7. 

Additionally, EPA examines “special considerations” in applying the non-affiliation requirement and identifies the following four relationships that “it generally intends not to treat as disqualifying affiliations”:  (1) relationships at other properties: (2) post-acquisition relationships; (3) documents that typically accompany title transfer; and (4) tenants seeking to purchase property they lease.  Id. at 7.  

Relationships at Other Properties: EPA intends to focus on only those affiliations that may be related to the contaminated property or the source property.  For example, if the buyer and seller have existing lease agreements at other properties unrelated to the contaminated property, EPA will likely treat the buyer as if it were a BFPP so long as the buyer has complied with all of the other BFPP requirements.  Id. at 8-9. 

Post-Acquisition Relationships:  A BFPP or a CPO that enters into a familial, contractual, corporate, or financial relationship with a PRP after the acquisition of the property will generally not be considered to have a disqualifying affiliation with the PRP.  For example, if a buyer acquires a contaminated industrial park from a seller who was an owner during the time of the disposal at the industrial park and the seller later leases a warehouse within the industrial park to the buyer, EPA will generally treat the buyer as a BFPP.  Id. at 9.   

Documents that Typically Accompany Title Transfer:  Generally, EPA does not intend to treat indemnification, insurance, and other agreements that are typically created as part of the transfer of title as disqualifying affiliations.  Id. at 9.  EPA clarifies that it means indemnification agreements that allocate responsibility for cleanup costs between a purchaser and seller and do not relieve a party of its CERCLA liability.  The guidance in a footnote distinguishes the indemnification agreement that was at issue in the Ashley II decision.  Ashley II of Charleston, LLC v. PCS Nitrogen, Inc., 746 F. Supp. 692 (D.S.C. 2010), motion to certify appeal granted, 2011 WL 5827786 (D.S.C. Nov. 17, 2011).  See article titled “Bona Fide Prospective Purchaser Requirements Interpreted by Federal District Court,” posted on the Jackson Kelly PLLC Energy and Environment Monitor on December 29, 2010.  EPA describes the agreement in Ashley II as a “liability release agreement” and emphasizes that the purchaser failed to satisfy the “no affiliation” requirement due to a release agreement, in which the purchaser agreed to release the seller as to environmental liability at the site…, and the purchaser’s subsequent efforts to dissuade EPA from taking an enforcement action against the seller.”  Id. at 9 n. 17.  

Tenants Seeking to Purchase Property They Lease:  The non-affiliation analysis in the case of a lease involves examining the potential liability of both the tenant and the landlord.  If neither the tenant/purchaser nor the landlord is liable as a PRP, then the lease would not be a prohibited affiliation.  If the tenant/purchaser is a PRP, then the tenant/purchaser cannot qualify as a BFPP or CPO.  If the landlord is a PRP, then an analysis of the site-specific facts will be required.  EPA recommends that before purchasing the property, the tenant contact the appropriate EPA Regional office to resolve the tenant’s liability concerns.  The Affiliation Guidance does not change EPA’s previously issued Tenants Guidance.  Id. at 10.         

This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author, see here.

USEPA Guidance on Petroleum Brownfields

The USEPA, Office of Underground Storage Tanks (OUST) has released several plans and documents over the last several years to assist stakeholders to identify and reuse properties contaminated by petroleum hydrocarbons.  Such information is available from the OUST at www.epa.gov/oust/pubs, and includes the following:

• Petroleum Brownfields Action Plan: Promoting Revitalization and Sustainability.
• Petroleum Brownfields: Developing Inventories.
• Petroleum Brownfields: Selecting a Reuse Option. 

Most recently, in July 2011, the OUST released Opportunities for Petroleum Brownfields.  The OUST describes this 58 page document as a “tool to help state, tribal, and local public officials, communities, developers, nonprofit organizations, and other stakeholders identify and tap in the potential of these sites and reap the associated environmental, economic, and aesthetic rewards of their revitalization.”  

In general, Opportunities for Petroleum Brownfields is a good overview document, but one that is short on technical information.  Therefore, it seems that its target audience is at the local governmental level or an individual or organization that is new to the petroleum brownfields arena.  Of particular value to such individuals or entities is the identification of resources that are available at the National, State, Local, and Private level.  As would be expected, the document is strongest on the National (i.e., for the most part Federal) resources that are available, but also provides contact information at the State level for State Brownfields programs.   

Finally, Opportunities for Petroleum Brownfields categorizes the types of petroleum hydrocarbon brownfields sites present in the U.S. and provides examples of reuse of such sites by category.  For reference, of interest is the description of the five categories of petroleum brownfields sites: 

• Commercial.  Properties with former uses related to the retail or wholesale of products and services, as well as those that served a specific institutional, public, or civic need.  Gasoline stations are the most common former use under this category.
• Industrial.  Sites formerly used for predominantly light-to-heavy manufacturing operations.  Sites ranging from oil refineries to steel and iron manufacturing to food production are included in this category.
• Transportation.  Sites in the transportation category predominately had a former use related to supporting the movement of goods and services in both the public and private sectors.  Most of the sites in this category are related to the rail industry.
• Residential.  Property formerly used for predominately residential purposes.  Generally, these properties are related to home heating oil tanks and locations where tanks had been historically present, but then the property was later developed for residential purposes.
• Open Land.  Property predominately unused but environmentally compromised.  In particular, USEPA focuses on oil field related activities. 

This article was authored by Greg Tieman, Acacia Environmental Group LLC. For more information on the author see here. 

US Conference of Mayors 2010 Brownfields Report

In November 2010, the US Conference of Mayors released a report titled “Recycling America’s Land, A National Report on Brownfields Redevelopment (1993-2000).”  The 2010 report differs from the previous eight reports, since it provides data on the progress of brownfields redevelopment in select urban areas since 1993.  The basis for the information provided in the report is data collected via a questionnaire sent to cities participating in the brownfields program.  Ninety-nine cities responded to the questionnaire; however, none of the cities were located in West Virginia.  It should be noted that the US Conference of Mayors is an organization that represents cities with populations of 30,000 or more.  The survey solicited information on the number of brownfield sites, acres of land affected, and benefits of brownfields redevelopment (e.g., jobs created and tax revenue generated).  The following significant trends in brownfields redevelopment since 1993 were reported: 

• 84 cities have successfully redeveloped brownfields sites since 1993.  Of these cities, 65 cities reported they have redeveloped a total of 1,010 brownfields sites encompassing 7,210 acres.
• 70 cities are currently redeveloping 906 brownfields sites encompassing 4,683 acres.
• 50 cities reported that tax revenue of $309 million has been generated from 654 brownfields sites.  In addition, 58 cities reported that if their brownfields sites were redeveloped, approximately $872 million to $1.3 billion in additional tax revenues could be collected.
• 54 cities reported that 161,880 jobs (64,730 pre-development/97,150 post-development) were created at 2,118 brownfields sites.
• The cities identified the following most significant programs for redeveloping brownfields sites:
  • USEPA site assessment funds.
  • Private sector investment.
  • USEPA clean-up funds.
  • State programs such as Voluntary Clean-up Programs.

This report is very brief and is only 26 pages.  The report can be downloaded from http://www.usmayors.org/pressreleases/uploads/November2010BFreport.pdf. 

This article was authored by Greg Tieman, Acacia Environmental Group LLC. For more information on the author see here. 

Bona Fide Prospective Purchaser Requirements Interpreted by Federal District Court

A federal district court sitting in South Carolina has rendered the first reported judicial decision interpreting the reasonable steps or appropriate care requirements of the Bona Fide Prospective Purchaser (BFPP) defense under the Comprehensive Environmental Response, Compensation, and Liability Act of 1990, 42 U.S.C. §9601 et seq. (CERCLA).  Reasonable steps or appropriate care is one of the requirements that must be met by a prospective purchaser of contaminated land to avoid CERCLA liability. The decision was rendered on October 13, 2010, in Ashley II of Charleston, LLC v. PCS Nitrogen, Inc., No. 2:05-cv2782-MBS, 2010 WL 4025885 (D.S.C. Oct. 13, 2010). 

 

The decision is significant because it is the first reported case interpreting the reasonable steps or appropriate care requirements of the BFPP defense. It is also important for West Virginia landowners, developers, and others interested in brownfields in West Virginia because any appeal will be filed in the United States Court of Appeals for the Fourth Circuit, the appellate court for federal district courts sitting in West Virginia as well as South Carolina. Finally, the decision is noteworthy because it provides examples of specific actions by a prospective purchaser and the evidence offered at trial to prove those actions that one district court has held either do or do not satisfy the elements of the BFPP defense.

 

Briefly, a BFPP is a party or tenant of that party who acquires ownership of a brownfield after January 11, 2002, the date of enactment of the Small Business Liability Relief and Brownfields Revitalization Act, which added the BFPP defense to CERCLA, and who satisfies the following eight requirements by a preponderance of the evidence:

 

1. Establishes that all disposal of hazardous substances on the facility occurred before the purchaser’s acquisition of the facility.
2. Undertakes all appropriate inquiry (AAI) before acquiring title to the property. AAI is typically met by conducting a Phase I site assessment using the relevant ASTM standard. AAI must be conducted or updated within one year before the date on which the party takes title to the property and certain aspects of the AAI must be updated if conducted more than six months before the date of acquisition.
3. Provides all legally required notices with respect to the hazardous substances found on the facility.
4. Exercises appropriate care by taking reasonable steps to stop any continuing release, prevent any threatened future release, and prevent or limit human, environmental, or natural resource exposure to previously released hazardous substances.
5. Provides full cooperation, assistance, and access to persons authorized to conduct a response action or natural resource restoration.
6. Complies with all land-use restrictions and does not impede the effectiveness of any institutional controls at the facility.
7. Complies with information requests and administrative subpoenas under CERCLA.
8. Establishes that the purchaser is not potentially liable for response costs, is not affiliated with a potentially responsible party (PRP) through a family, contractual, corporate, or financial relationship, and is not the result of a reorganization of a business entity that was potentially liable.

CERCLA §101(40), 40 U.S.C. §9601(40).

. 

In Ashley, the district court found that the new owner of a brownfield that had been used to operate a fertilizer plant and a container cleaning and storage facility failed to satisfy elements 1, 4, and 8. Ashley, 2010 WL 4025885 *54-57. The district court’s rulings on the actions taken by the prospective purchaser and the evidence offered at trial to establish the eight elements of the BFPP defense are discussed below. 

 

1.         All Disposals of Hazardous Substances Must Occur Before Site Acquisition: The district court held that the new owner did not prove this element. Relying upon the definition of “disposal” in CERCLA and the Fourth Circuit’s broad interpretation of the term “disposal,” the district court concluded that the new owner failed to prove no disposals occurred on the site after its acquisition of the site. The district court found it “likely” that there were disposals after the new owner removed only the buildings but not the concrete pads, trenches, and sumps used to collect wastewater generated by the container cleaning process and to capture spills of any hazardous materials because “the sumps contained hazardous substances, were cracked, and were allowed to fill with rainwater.” Id. at *23 & 54. The district court reasoned that the new owner did not conduct testing to determine if disposals occurred during its ownership and specifically noted that the new owner did not test under the concrete pads, sumps or trench to see if the soil under those structures was contaminated although a protocol required the new owner to undertake such testing. Id. at *30. In addition, the district court struck at trial expert testimony that no disposals occurred after the new owner’s acquisition of the site for failure to disclose the expert’s opinion before trial. Id. 

 

2.         All Appropriate Inquiries: The district court found that the new owner properly conducted the AAI. At the time of the new owner’s due diligence for one parcel, interim standards were in place to meet the AAI standard which could be met by complying with ASTM Standard E1527-00 or the previous ASTM Standard, E1527-97, and at the time of the new owner’s due diligence for the other parcel, the final standards for performing AAI were in effect and could be met by complying with ASTM Standard E1527-05. Id. at *55 & n. 12 & 13. The defendant corporation whose predecessor had operated the fertilizer plant “point[ed] to some inconsistencies between…Phase I reports and the relevant ASTM Standards.” The district court found that “such inconsistencies lack significance,” explaining that: “What is important is that [the new owner] acted reasonably; it hired an expert to conduct an AAI and relied on that expert to perform its job properly.” Id. at *55. 

 

3.         All Legally Required Notices: Because the record did not establish that any releases of hazardous substances occurred on the site after the new owner purchased the site, the district court found that the new owner met its burden of proving that it made all legally required notices. Id. 

 

4.         Exercise of Appropriate Care/Reasonable Steps: The district court found that the new owner did not exercise appropriate care with regard to hazardous substances found at the site. Id. at 55-56. The new owner hired an environmental engineer to ensure that it complied with all BFPP requirements, provided security, conducted periodic inspections, fenced, gated, and posted no-trespassing signs. Id. at *28. Notwithstanding these actions, the district court found that the new owner had not exercised appropriate care with respect to the sumps, a debris pile, and a crushed rock cover on the site. EPA contended that Congress intended the “reasonable steps” requirement to be “consonant with traditional common law principals and the existing CERCLA due care requirement.” Under the CERCLA due care requirements, a party must establish that it “exercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of such hazardous substance, in light of all relevant facts or circumstances.” EPA looks to existing case law on due care as a reference point for evaluating the reasonable steps requirement. EPA takes the position that “doing nothing in the face of a known or suspected environmental hazard would likely be insufficient.” Id. at *55. The district court noted that EPA’s Interim Guidance on BFPP Status provides that the AAI will most likely inform the BFPP as to the nature and extent of contamination on the property and what might be considered reasonable steps regarding the contamination, i.e., how to stop continuing releases, prevent threatened future releases, and prevent or limit human, environmental and natural resource exposures. Here, the Phase I identified the sumps and concrete pads as recognized environmental conditions. Id. at *24. There was standing water on the pads and in the sumps, which overflowed regularly and reached the cracks in the pads and the edge of the pads. One sump had a crack twelve inches deep. The district court concluded that the new owner’s investigation was insufficient to establish that the structures did not leak. Id. at *31-32. The district court found that the new owner may have exacerbated the conditions when it demolished the buildings but failed to clean out and fill in the sumps leaving them exposed to the elements. Experts at trial testified that the new owner should have capped, filled, or removed the sumps at the time it demolished the buildings. Id. at *56. The district court also found that the new owner’s failure to prevent a debris pile from accumulating on the site, investigate the contents of the debris pile, and remove the debris pile for over a year indicated a lack of appropriate care. Id. When the debris pile was finally removed, the hazardous waste manifests showed that the new owner removed hazardous substances from the site, including hydrochloric acid and waste paint. Id. at *30. Subsequent sampling of the soil under the debris pile indicated the presence of hydrocarbons and elevated levels of benzo(a)pyrene and other contaminants. At the time of this sampling, buckets, tires, and a bottle of engine oil that contained fluid remained on the site. Id. at 31. Finally, the district court found that the new owner failed to maintain the crushed rock cover on the site, noting that the cover had deteriorated. Id. at *56.   

 

5.         Full Cooperation, Assistance and Access: When the new owner acquired the site, it notified EPA of its ownership and asked EPA to advise if EPA desired the new owner to take specific action. Specifically, the new owner “explicitly requested that EPA inform [it] if EPA desired ‘specific cooperation, assistance, access or the undertaking of any reasonable steps with respect to the Site.” Id. at *28. Further, the district court found that the new owner cooperated with EPA since it acquired the site. The district court concluded that this was sufficient evidence to meet the new owner’s burden of proof on their requirement of full cooperation, assistance, and access. Id. at *56.

 

6.         Institutional Controls: The new owner’s environmental engineer testified at trial that there were no land use restrictions or unusual institutional controls in place at the site and that the new owner was in compliance with any controls in place, and his testimony was not contradicted. Accordingly, the district court found that the new owner met its burden of proof that it was in compliance with any land use restrictions at the facility and was not impeding any institutional control employed at the facility in connection with the response action. Id. at *57.  

 

7.         Compliance with Requests and Subpoenas: The new owner’s environmental engineer testified that the new owner had complied with all EPA information requests and subpoenas, and an example of the new owner’s response to an EPA information request was introduced at trial. Id. at *29 & 57. The district court therefore found that the new owner had met its burden of proof that it had complied with information requests and subpoenas. Id. at *57.  

 

8.         No Affiliation: The district court held that the new owner failed to prove this element. In purchasing the site, the new owner entered into releases and environmental indemnity agreements with the sellers. The agreement with the operator of the container cleaning facility expressly provided that: “this indemnity is not intended, and shall not be construed, to abrogate or diminish [the new owner’s] status as a [BFPP]….” Id. at *21-22 & 24. With respect to the parcel where the fertilizer plant had operated, the new owner wrote to EPA a letter, stating that: “if EPA insisted on pursuing a claim against the [sellers] it would discourage [the new owner’s] future development efforts.” Id. at *31. The district court found that the new owner had released and indemnified prior owners at the time of disposal from environmental liability for contamination at the Site and had “attempted to persuade EPA not to take enforcement action to recover for any harm at the Site caused by [the indemnitees].” Id. at *57. The district court concluded that the new owner in indemnifying the past owners took the risk that the past owners might be liable for response costs. The district court further reasoned that the new owner’s “efforts to discourage EPA from recovering response costs covered by the indemnification reveals just the sort of affiliation Congress intended to discourage.” Id. Accordingly, the district court said that the new owner’s affiliation with the past owner of the portion of the site that contained the fertilizer plant precluded application of the BFPP defense. Id. The district court did not address the language in the indemnity agreement with the operator of the container cleaning facility that sought to preserve the BFPP defense. The district court also held that the new owner was a potentially responsible party and failed to meet its burden of proof because it was the “current owner of the majority of the Site on which hazardous materials are still leaching through the soil.” Id. at *57. There was no allegation that the new owner was the result of a reorganization of a business entity that was potentially liable. Id. 

 

This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author, see here.

U.S. EPA’s Draft Plan for Siting Renewable Energy on Brownfields and Mine Sites

            U.S. EPA recently released its draft plan to develop renewable energy on Superfund, Brownfields, former landfills, and mining sites. The draft plan was released October 14, 2010, and is part of the RE-Powering America’s Land Initiative that the Agency commenced in September 2008. The draft plan will likely be of interest to parties responsible for remediating sites, the renewable energy sector, utilities in states like West Virginia having renewable portfolio standards, and state and local governments, to name a few. For the text of the draft plan, click here. 

 

Advantages noted by U.S. EPA for siting renewable energy facilities on potentially contaminated lands and mine sites include: they offer thousands of acres of land with few site owners, have critical infrastructure in place, and provide an economically viable reuse for sites with significant cleanup costs or low real estate development demand. In addition, U.S. EPA emphasizes the government programs that support cleanup and reuse and the amount of potentially contaminated land and mine sites available for renewable energy projects. According to U.S. EPA, there exist almost 15 million acres of U.S. EPA-tracked potentially contaminated properties, of which 917,000 acres have achieved cleanup goals and have controls in place, and at least 3.2 million acres of abandoned mine land.   U.S. EPA also notes that siting renewable energy on potentially contaminated land and mine sites prevents urban sprawl, reduces greenhouse gas emissions, and provides job opportunities. 

 

            The draft plan, titled “RE-Powering America’s Land Initiative Management Plan,” is the result of meetings with stakeholders in 2009. The draft plan outlines U.S. EPA’s goals, objectives, action items, and timelines over a 2-year period for advancing the siting of renewable energy on potentially contaminated lands and mine sites. While the stakeholder meetings focused on barriers to using contaminated sites for renewable energy projects and how to overcome those barriers, U.S. EPA does not commit to any additional liability relief provisions in the draft plan. 

 

            The draft plan identifies three goals and five objectives and twenty action items for measuring and achieving the goals. The three goals are: (1) “provid[ing] incentives and technical assistance for siting renewable energy on contaminated land”; (2) creat[ing] a unified federal approach to promote siting of renewable energy on contaminated land”; and (3) “improving communication and sharing of data on siting renewable energy on contaminated land to enable stakeholders to successfully reuse sites for renewable energy.”   

 

Technical Assistance (Goal 1): U.S. EPA plans to develop a “SWAT” team of experts from across the Agency (e.g., Office of Enforcement and Compliance Assistance, Superfund, Brownfields, Resource Conservation and Recovery Act), with a main point of contact in each Region, to be “on call” to respond to questions from developers and communities. U.S. EPA also plans to issue guidance by March 2011 for siting renewable energy while cleanup is ongoing. U.S. EPA plans to issue guidance for siting renewable energy post cleanup but does not give a timeline for the post cleanup guidance. In addition, U.S. EPA plans to develop draft technical guidance on siting photovoltaic (PV) solar on closed landfills. U.S. EPA plans to identify the environmental, legal, and technical considerations necessary to site renewable energy on landfills and to create a “how-to” document by April 2011.

 

To assist communities in identifying and reusing sites for renewable energy, U.S. EPA plans to develop criteria and issue a solicitation in Winter 2011 for pilot projects on Superfund, Brownfields, petroleum-contaminated properties such as former gas stations, and former landfills or mining sites. U.S. EPA will also develop a training model that includes workforce development training for siting renewable energy on contaminated land that can be incorporated in the OSWER-wide Workforce Development Training by Spring 2011. 

 

To enhance capacity and outreach to states and local governments, U.S. EPA plans to develop a handbook to identify what needs to be done to site a renewable energy project on contaminated land by Spring 2011 and to offer training by Fall 2011. The training would provide state employees the skills to conduct a basic screening of sites to determine renewable energy potential. 

 

U.S. EPA also plans to explore ways to use its Google Earth Tool to add sites from other sources. U.S. EPA plans to develop pilot initiatives to include sites from state programs, other federal agencies, and also plans to explore ways for interested parties to add a site to Google Earth. U.S. EPA plans to initiate these pilots in Summer 2011.

 

Mapping tools already available include a Google Earth interactive mapping tool, searchable data spreadsheet and shapefile, and national and state renewable energy maps, and data guidelines. The mapping tool can be searched by renewable energy technology or type of contaminated site and provides the site’s location, site name and identification information, cleanup status, U.S. EPA Region and program managing the site, a link to the site’s cleanup status information, acreage, renewable energy resource availability, and existing infrastructure and attributes such as nearby roads and buildings.  The state and national maps include U.S. EPA-tracked sites as well as some state-tracked sites. For example, West Virginia’s renewable energy map includes West Virginia U.S. EPA-tracked sites with biopower and biorefinery potential and West Virginia abandoned coal mine areas with wind, solar, biopower, biorefinery, and geothermal potential.

 

Incentives (Goal 1): U.S. EPA plans to explore opportunities to promote model RE-Powering incentives in Renewable Portfolio Standards (RPS) and Renewable Energy Certificates (RECs). U.S. EPA’s OSWER Center for Program Analysis and Regions 8 and 9 will begin working with state groups on model language for an RPS incentive at the state level during Winter 2011. U.S. EPA is also engaged in the REC market by buying RECs to be a green-powered agency. U.S. EPA plans to use its purchasing power to buy its RECs from renewable energy generation facilities on contaminated sites. 

 

U.S. EPA’s incentive fact sheets include information about federal and state funding, tax incentives, technical assistance and other incentives that are available for renewable energy generation and contaminated land redevelopment. West Virginia’s incentive fact sheet, for example, includes: the Direct Loan Program of the West Virginia Economic Development Authority; Special Assessment for Wind Energy Systems; West Virginia Renewable Energy Program; Tax Exemption for Wind Energy Generation; Industrial Expansion and Industrial Revitalization Credit for Electrical Power Producers; net metering; Northern and Southern WV Brownfields Assistance Centers; and West Virginia Voluntary Remediation Program.

 

            Unified Federal Approach (Goal 2): U.S. EPA plans to partner with other federal agencies to promote RE-Powering America’s land in their programs and work with federal land owners to site renewable energy on contaminated land. U.S. EPA plans to work with the U.S. Department of Energy on siting renewable energy on contaminated land and to establish a federal partnership workgroup to, among other things, incorporate incentives for siting renewable energy on contaminated lands into other federal agencies renewable energy grant/loan guarantee programs, tax incentives, and outreach programs. U.S. EPA also plans to work with federal land owners such as the Bureau of Land Management, U.S. Forest Service, National Park Service, and Office of Surface Mining, to identify revisions to existing national or field guides to encourage the siting of renewable energy projects on federal or mixed-ownership lands. 

 

            Improved Communication (Goal 3): To improve how the Agency delivers information, U.S. EPA plans to develop case studies tied to specific barriers to siting renewable energy on contaminated sites and post on the Agency’s website case studies of sites that have overcome these barriers. U.S. EPA plans to use the case studies to develop fact sheets and Frequently Asked Questions and Answers on each of the barriers. U.S. EPA also plans to evaluate the advantages of siting renewable energy on contaminated lands, including reduced permitting time, lower land costs, and less public opposition. Further, U.S. EPA plans to expand the tool box of resources so that the tool box becomes a clearinghouse of information, including innovative financing information and links to existing resources prepared by stakeholders. The enhanced tool box is expected to be available in Spring 2011. 

 

Because the RE-Powering America’s Land Initiative involves many groups with whom U.S. EPA does not traditionally communicate, such as renewable energy developers, U.S. EPA plans to update its communication strategy to improve outreach, such as DVDs, webinars, videos and video town hall meetings, and podcasts. U.S. EPA also plans to develop targeted materials to reach out to utilities. The utility outreach will begin in Winter 2011. Further, U.S. EPA plans outreach to the financial industry and economic development groups beginning in Fall 2010. 

 

            To clarify liability to address perceived barriers, U.S. EPA plans to “[r]eview existing liability tools to determine if new tools [such as liability release provisions] are needed to specifically address liability concerns unique to renewable energy development,” “[d]evelop new tools if warranted,” and to “[c]ompile existing tools in one place.” U.S. EPA expects to have a checklist of liability tools completed by Fall 2010 and to complete the assessment of those tools by Winter 2011.

 

U.S. EPA will also develop case studies that explain how developers were able to lease contaminated sites. In addition to the case studies, U.S. EPA will develop a fact sheet for potential lessees of contaminated property for renewable energy generation. U.S. EPA expects to begin developing case studies and posting them on its website in Fall 2010. Fact sheets are expected to be completed in Fall 2010. 

 

            To evaluate, measure, and report on the effectiveness of the RE-Powering America’s Land activities, U.S. EPA plans to track renewable energy on contaminated lands projects and collect specific data that can be used to measure progress and environmental benefits, measure the Agency’s progress meeting its management plan milestones for each action item, report progress annually, and evaluate the effectiveness of the RE-Powering Initiative by developing a report with findings and recommendations for improving the program. 

 

            For additional background on U.S. EPA’s RE-Powering America’s Land Initiative, see article by Barbara D. Little on the Energy & Environment Monitor posted October 22, 2008, and titled “Former Mining and Industrial Property Sites Prime Candidates for Development of Renewable Energy”.

 

This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author, see here.

Personnel Changes at U.S. EPA Region 3 and WV DEP

Ken Ellison, Director of the Division of Land Restoration of the West Virginia Department of Environmental Protection (WV DEP), announced certain personnel changes at U.S. EPA Region 3 and WV DEP to attendees of the 2010 West Virginia Brownfields Conference held at the Charleston Marriott September 8 and 9, 2010. The announcements were made during the session on State and Federal Regulatory Updates.   

 

With respect to changes at U.S. EPA Region 3, Director Ellison told those attending the conference that on July 6, 2010, Ronald Borsellino became the new Director of U.S. EPA Region 3’s Hazardous Site Cleanup Division. The Hazardous Site Cleanup Division oversees all activities regarding the Oil Pollution Act and Comprehensive Environmental Response, Compensation and Liability Act, commonly known as Superfund and is responsible for determining goals, priorities and objectives for the Superfund and oil programs as well as overseeing the work of federal responsible party cleanups. Among other responsibilities, the division develops strategy to reuse Superfund sites and supports the redevelopment of Brownfields. Director Borsellino is a career U.S. EPA professional. Before coming to U.S. EPA Region 3, he served in U.S. EPA Region 2 as the Acting Director of Planning and Protection, Deputy Director of Policy and Management, and Chief of the Air Programs Branch. Director Borsellino replaces Abraham Ferdas who is now Director of U.S. EPA Region 3’s Land and Chemicals Division. The Land and Chemicals Division’s responsibilities include, among other things, the public’s right-to-know about hazardous chemicals in their community, asbestos emissions, recycling and recovery; pesticides, and lead-based paint. It also regulates underground storage tanks containing petroleum or hazardous substances.

 

With respect to personnel changes at the WV DEP, Director Ellison announced that the Division of Land Restoration would be adding two new supervisory positions. By way of background, Director Ellison explained that the statistics indicated that up to fifty percent of the WV DEP staff would be eligible for retirement over the next couple of years and that Governor Manchin and WV DEP Secretary Huffman had directed the WV DEP to look at succession planning. Director Ellison emphasized that it was “extremely important” that the Division of Land Restoration have a “good working relationship” with the regulated community, licensed remediation specialists, developers, and others involved in remediation and redevelopment of sites that are contaminated or perceived to be contaminated in West Virginia. Director Ellison stated that to provide “customer service” the Division of Land Restoration needed to retain its knowledge and history of the “rhyme and reason” associated with the sites issued certificates of completion under the West Virginia Voluntary Remediation Program. He explained that to retain this institutional knowledge, new employees would need additional supervision. He stated that Don Martin would move to Deputy Director and that two new supervisory positions would be added – one supervisor/manager would be responsible for administrative matters, such as grant funds and leaking underground storage tank accounts, and the other supervisor/manager would be responsible for RCRA and Superfund sites. Finally, Director Ellison reported that both he and Don Martin are planning to retire within the next two years. 

 

This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author, see here.

EPA Awards Brownfields Grants to WV

On April 19, 2010, the USEPA announced the award of $800,000 in Brownfields assessment grants to four West Virginia communities. According to the USEPA Region III news release, the four grant recipients are as follows:

 

• Fayette County Commission ($200,000) to assess and prioritize brownfields properties throughout Fayette County. To date, there are an estimated 400 brownfields properties identified by the county as needing attention. 

 

• City of Nitro ($200,000) to assess and update the city’s brownfields sites.  To date, 54 underused and vacant brownfields sites have been identified in Nitro.  Brownfield assessments will provide the city with a more thorough inventory of contaminated sites that have potential for reuse as small-scale commercial properties, greenspace, and recreational facilities.

 

• City of Parkersburg ($200,000) to assess and prioritize brownfields properties in Parkersburg.  The brownfields assessments are expected to help facilitate cleanups and create economic opportunities for the city.    

 

• WVDEP ($200,000) to assess properties along the historic U.S. Route 60 Midland Trail, a national scenic byway located along a 119-mile trail in the Appalachian Mountains.  Brownfields assessments will clarify conditions at the sites and help facilitate reuse of the sites for historical interpretive stops along the trail and attract tourism and tourism-related jobs to the area. 

Overall, the USEPA announced that it will award $78.9 million to fund 304 grants through the Brownfields Assessment, Revolving Loan Fund, and Cleanup Grants program. These grants will be awarded to communities in 40 states, four tribes and one U.S. Territory.  This funding will be used for the assessment, cleanup and redevelopment of brownfields properties, including abandoned gas stations, old textile mills, closed smelters, and other abandoned industrial and commercial properties. Nationwide, the USEPA announced it will fund 304 grants through the Brownfields Assessment, Revolving Loan Fund and Cleanup Grants programs, as follows:

 

• 188 assessment grants ($42.56 million) to conduct site assessment and planning for cleanup at one or more brownfields sites as part of a community-wide effort. 

 

• 17 revolving loan fund grants ($17 million) to provide loans and subgrants to communities to begin cleanup activities at brownfields sites. Revolving loan funds are generally used to provide low interest loans for brownfields cleanups.

 

• 99 cleanup grants ($19.36 million) to provide funding for grant recipients to perform cleanup activities at brownfield sites they own. 

Information on the USEPA brownfields program is available at www.epa.gov/brownfields/ and information on grant recipients is available at   www.epa.gov/brownfields/grant_info/index.htm.

 

This article was authored by Greg Tieman, Acacia Environmental Group LLC. For more information on the author see here. 

Alert for Brownfields Program Projects - “Buy America” Provision

The American Recovery and Reinvestment Act (Recovery Act), which became effective during February 2009, included $100 million in appropriations to the federal Environmental Protection Agency (EPA) for Brownfields Program grants. The EPA has allocated $40 million of the Recovery Act funds to supplement current Revolving Loan Fund (RLF) grantees.  It is likely that a portion of this supplemental RLF funding will be used by non-federal governmental entities for construction of concrete or asphalt caps on brownfields projects or to construct alternate drinking water systems by non-federal government entities with RLF supplemental funding. It has been determined by the EPA that when a non-federal governmental borrower or subgrantee uses RLF funds for remediation activities at a public building or as part of a public work project, the “ Buy American” provision of the Recovery Act will apply. The Buy American provision states that the construction, alteration , maintenance or repair of a public building or public work, requires that iron, steel, and manufactured goods used, be produced in the United States.   This clarification was published in the Federal Register, Volume 74, page 31732, on July 2, 2009. If you are working on a Brownfields project that involves federal funds awarded after April 30, 2009, you should confirm whether or not your project is impacted by the “Buy American” provision and if so, take appropriate action, including documentation of your purchases. 

This article was authored by William Chambers, Acacia Environmental Group LLC. For more information on the author see here.

Waste Issues Addressed in EPA’s FY 2010 Budget Proposal

On May 12, 2009, EPA Administrator Lisa P. Jackson testified before the U.S. Senate Environment and Public Works Committee on EPA’s budget proposal for fiscal year 2010. Administrator Jackson announced that President Obama is requesting $10.5 billion for EPA’s FY 2010 budget. The Administrator stated that: “This budget represents a 37 percent increase over [the agency’s] FY 2009 budget -- the highest level ever for EPA.” The budget proposal includes funding for a number of waste-related issues, including research and development, programs focused on the cleanup of contaminated sites, and funding for EPA’s partnerships with state, local, and tribal governments.  

Among U.S. EPA’s research and development programs, the FY 2010 budget proposal contains $14.5 million to enable the Integrated risk Information System (IRIS) to increase assessment production and reduce the agency’s backlog of assessments for chemicals previously identified as priority needs. This is $5 million increase over EPA’s FY 2009 budget. 

With respect to EPA programs focused on the cleanup of contaminated sites, the budget request contains funding for EPA’s Superfund, Brownfields, and Leaking Underground Storage Tank (LUST) Programs. For Superfund, the proposed budget is $1.3 billion, an increase of $24 million over last year. Administrator Jackson testified that the funding would be used to enhance enforcement and removal work as well as support in the Superfund program. The budget request also includes a proposal to reinstate the Superfund Tax that expired in 1995. Beginning in FY 2011, EPA projects that the taxes should generate $1 billion per year, rising to $2 billion per year by 2019. In addition to the Superfund budget, the proposal for the Brownfields program totals $175 million, a $5 million increase from FY 2009. This funding proposal includes $149.5 million for Brownfields State and Tribal Assistance Grants to continue to provide Brownfields assessment, revolving loan fund, clean-up, and job-training grants. The $128 million LUST budget includes $113 million for the LUST Trust Fund. Administrator Jackson testified that while almost 80 percent or 377,019 of all reported leaks have been addressed to date, a backlog of almost 103,000 cleanups still need to be addressed. 

The 2010 budget also includes funding to support EPA’s partnerships with state, local, and tribal governments. EPA is requesting $106.3 million for Hazardous Waste Financial Assistance Grants. These grants are used for implementation of the Resource Conservation and Recovery Act hazardous waste program, including permitting, authorization, waste minimization, enforcement, and corrective action activities. The 2010 budget also provides $14.6 million for lead grants. Administrator Jackson testified that the funding will be used for work under the new Lead Renovation, Repair, and Painting Rule to prevent lead poisoning through the training of workers who remove lead-based paint, the accreditation of training programs, the certification of contractors, and renovation education programs.  

Finally, EPA’s FY 2010 budget proposes $600 million for enforcement and compliance across all environmental media and EPA programs. This represents the largest enforcement and compliance budget in history and an increase of $32 million from FY 2009. For additional information on EPA’s FY 2010 Budget Proposal, contact Gale Lea Rubrecht at 304-340-1200 or galelea@jacksonkelly.com. 

This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author see here.

One Cleanup Program – A Rational USEPA Initiative

Beginning in the 1970s, the federal government began to enact a series of environmental regulations that included provisions that addressed the cleanup of properties that had become contaminated due to historic or recent activities.  Examples of these cleanup programs included the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA: also known as Superfund); the Resource Conservation and Recovery Act (RCRA) Corrective Action Program; the Toxic Substances Control Act (TSCA); and the Leaking Underground Storage Tank (LUST) Corrective Action programs.  In addition, many states adopted counterpart statutes as part of obtaining primacy of these federal programs at the state level.  In addition, in the 1980s and 1990s, many states began to enact state brownfields and voluntary cleanup programs.  As these various federal and state programs matured and evolved over time, differences began to become apparent between the programs, in particular, their methodologies used to achieve remedial cleanup and hopefully, the ultimate redevelopment and reuse of formerly contaminated properties. 

One result of these differences that have developed between the programs is that situations can arise where adjacent properties with the same types of contamination can ultimately be cleaned up to significantly different levels based on which environmental program was used to perform the cleanup.  For example, groundwater often has elevated concentrations of benzene at former gasoline stations in the United States.  As reported by the federal Agency for Toxic Substances & Disease Registry (ATSDR), benzene is a known carcinogenic chemical compound that is associated with releases of gasoline to the environment.  Under a state leaking underground storage tank (LUST) corrective action program, groundwater at these LUST sites is often required to be cleaned up to federal and/or state drinking water standards.  For benzene, this clean up standard is 5 parts per billion.  However, under a state brownfields or voluntary cleanup program, the same benzene contamination in groundwater will likely not need to be remediated to anywhere near as low a concentration, and elevated concentrations of benzene often are permitted by the state regulatory agency to remain in groundwater at concentrations of up to several thousand parts per billion.  Numerous other such examples could be cited.

In a practical sense, what does this difference mean to an entity responsible for cleaning up this LUST site?  Under the state LUST corrective action program scenario, cleanup of groundwater typically requires implementing active remediation programs that can require several years to complete at costs of hundreds of thousands of dollars.  The same LUST site, if cleaned up under a state brownfields or voluntary cleanup program scenario, can often be successfully remediated and placed back into productive use in a six month period at a cost that often ranges from fifty to seventy-five thousand dollars.  As has been noted by the West Virginia Chamber of Commerce in its 2008 Policy Issue paper entitled One Cleanup Program – Uniform Standards for Environmental Remediation, “these inconsistent standards have lead to uncertainty and questioning by both the regulated community and the public.”

In an effort to rectify the different methodologies incorporated into the cleanup of contaminated properties under the current patchwork of federal and state programs, in 2003 the United States Environmental Protection Agency (USEPA) adopted the “One Cleanup Program” initiative.  The goals and objectives of this USEPA initiative are described in a policy paper that is available at www.epa.gov/oswer/onecleanupprogram/.  Overall, the USEPA stated that the One Cleanup Program initiative is designed to “improve the coordination, speed, and effectiveness of cleanups” and to achieve the following programmatic goals:

·        More consistent and effective cleanups.

·        Clear and more useful information about cleanups.

·        Better cross-program performance measures.

The initiative involves USEPA cleanup programs dealing with brownfields, federal facilities, leaking underground storage tanks, RCRA, and Superfund.  Consistent with this initiative, several states have pursued authorization from the USEPA of their own state-level One Cleanup Programs.  One state that has successfully obtained USEPA approval of its One Cleanup Program is Wisconsin, which received approval on December 6, 2006 of its program in the form of a Memorandum of Agreement (MOA) between USEPA Region V and the Wisconsin Department of Natural Resources.

At present, both the West Virginia Department of Environmental Protection (WVDEP) and the Pennsylvania Department of Environmental Protection (PADEP) are negotiating MOAs with USEPA Region III to authorize One Cleanup Programs for these states.  A consistent theme amongst all three state programs is the use of each state’s brownfields/voluntary cleanup program and their risk based cleanup standards to develop site-specific cleanup levels at properties being remediated.  Typically, site-specific standards reflect both the current and future land-use at a property (e.g., residential versus industrial) and are an integral component of developing realistic cleanups of contaminated properties.

In summary, the WVCOC in their Policy Issues paper clearly enumerates the benefits of the USEPA Once Cleanup Program initiative and the value, not only to West Virginia, but to the nation as a whole as follows:

“The citizens of our state will be better served by the elimination of inconsistent cleanup standards and by assurance that when a site is remediated it meets all statutory and regulatory requirements established by both state and federal agencies.  Business in West Virginia will benefit through expedited cleanups and by reducing the uncertainties where multiple environmental programs may apply to a site.  The state’s economy will benefit by having more properties that may have been cleaned up and are available for productive reuse.”

This article was authored by Greg Tieman, Acacia Environmental Group LLC. For more information on the author see here.