Superfund Reform- What Can We Expect?

While the Trump Administrations primary environmental agenda has been focused on deregulation, one area EPA Administrator Scott Pruitt has prioritized is Superfund (i.e. CERCLA).  Superfund is meant to investigate and cleanup the dirtiest sites in the country.  However, its long and complicated investigation, remedy selection and cleanup implementation processes have slowed cleanups to a crawl.  It is certainly a program much in need of an overhaul.

Administrator Pruitt created a task force to provide recommendations for improvement of the Superfund program.  The Administrator stated his goal was to "restore the Superfund program to its rightful place at the center of the agency's core mission."  

The task force was given five goals:

  • Expedite cleanup and remediation;
  • Reinvigorate cleanup and reuse efforts by PRPs;
  • Encourage private investment to facilitate cleanup and reuse;
  • Promoting redevelopment and community revitalization; and
  • Engage with partners and stakeholders.

Ideas were evaluated in each of these areas.  The Administrator notes that some of the 42 strategies recommended will take time, including rule changes.  However, he identified strategies that he has directed the task force to immediately implement, including::

  1. Take immediate action at sites where the risk to human health are not fully controlled;
  2. Use interim or removal actions more frequently to address immediate risks;
  3. Prioritize sites for Remedial Investigation and Feasibility Studies (RI/FS) that require immediate action;
  4. Identify contaminated sediment or complex groundwater sites where adaptive management can be implemented;
  5. Evaluate redevelopment potential for NPL sites;
  6. Track remedy selection in real time with Superfund Enterprise Management Systems;
  7. Focus resources on NPL sites with most reuse potential;
  8. Identify sites for PRP-lead cleanup to spur redevelopment;
  9. Submit the total indirect costs charged to PRPs for 2016 and 2017
  10. Encourage PRPs to work with end users to voluntarily perform assessment and cleanup to spur redevelopment;
  11. Use purchase agreements for potential Bona Fide Prospective Purchasers outlining their actions necessary to preserve their BFPP status;
  12. Use unilateral orders against recalcitrant PRPs to discourage proactive negotiations of response actions; and
  13. Maximize deletions and partial deletions of sites that have been cleaned up.

For the task force's full report click here.

What can we learn from the List of Priority Items?

Vapor Intrusion 

The most immediate take away is that sites that present vapor intrusion risks to on-site or adjacent property owners will be a priority.  In the last five years, vapor intrusion has become a major focus of both U.S. EPA and State EPA's.  

The vapor intrusion pathway is often seen as the most immediate and direct public health threat presented by sites.  Therefore, it is logical to assume that and Superfund sites that present vapor intrusion risks will be prioritized.  Based on the strategies outlined above, it is very likely that we will see an increase in the use of unilateral enforcement by the EPA Region's to address vapor intrusion risks.  

Slow Moving Sites

The task force has targeted sites that have taken "far too long to remediate."  The task force will establish a "Administrator's Top Ten List" that will get weekly attention.  Sites that have been on the NPL for five years or longer without "significant movement" will be reviewed.  

Unfortunately, without a major overhaul to the National Contingency Program (NCP) which governs Superfund, the report and recommendations are highly unlikely to result in significant acceleration of cleanups.

Sites with Redevelopment Potential

Several of the Administrator's recommendations focus on targeting sites with redevelopment potential.  For these sites it is possible that the Agency will be more flexible to voluntary cleanup programs that could put land back into productive use more quickly.  Following the traditional long and drawn out investigation, remedy selection and implementation will not put property back into productive use quickly.

EPA has shown greater flexibility toward accepting state brownfield voluntary cleanup programs.  The focus on redevelopment by the task force provides an opening to PRPs and developers to, perhaps, leverage greater acceptance of these state voluntary brownfield cleanup programs. In reality, leveraging state voluntary cleanup programs may be best opportunity to accelerate cleanup at Superfund sites.

Green New Deal? Green Trinkets and Empty Packages in the Stimulus Bill

I have been following discussion regarding the green elements of the Presidents Stimulus Package, known as the American Recovery and Reinvestment Act of 2009.  There is certainly a lot directed toward environmentally related projects, especially renewable energy development.  Leading some to call these provisions the "Green New Deal." 

What is the real story behind some of the spending that has been reported?  You certainly can find information all across the web and on government sites that simply lists the amount of money in the bill and which program it has been directed.  However, detail about what the money will really be used for can be hard to find.

Bottom line, some provisions are better than others.  For instance, much of the money directed toward U.S. EPA will pay for existing projects.  This includes prior grant applications, clean ups already under contract or projects previously selected for funding.  So, for many of you expecting great new opportunities for EPA related projects, I don't think the bill offers you that much. (with the exception of diesel engine related grants- see below).

The renewable energy side of the equation is a totally different story.  There are continued and new tax incentives as well as new grant opportunities.  There is a lot in the bill and it will literally pay to stay on top of what is available. 

I.  EPA Side- the American Recovery and Reinvestment Act of 2009 specifically includes $7.22 billion for projects and programs administered by EPA

Below is a description of the major areas of funding as well as an analysis of whether this funding presents new opportunities. EPA has established a web site page with helpful links that discuss the opportunities in the Stimulus Bill relative to the money designated for EPA.

Brownfields:  There is over $100 million directed to U.S. EPA's brownfield redevelopment program.  I was intrigued regarding this new slug of money for it could present another great opportunity for clients outside of the Clean Ohio program.  However, after asking for more details from U.S. EPA, I learned that this money is basically already spent.  The U.S. EPA intends to use it for projects that requested funding back in 2008 but were not funded due to an over abundance of proposals.  While its good news more projects are getting funded, I believe U.S. EPA could have even received better project proposals if they would have allowed for new applications. 

Diesel Emission Retrofits Act (DERA):  The Stimulus directed over $300 million in new money to fund the DERA program. DERA is the federal grant program that pays for diesel engine retrofits, repowers and replacements.  Last years allocation was only $50 million for the entire country.  So the Stimulus does provide real, new money for this program.  U.S. EPA intends to spend the money quickly so watch U.S. EPA's website and Recovery.gov to jump in with your project.

Underground Storage Tank (USTs) Cleanups: $200 million was provided to U.S. EPA's Leaking Underground Storage Tanks (LUST) Program, EPA provides resources to states and territories for the oversight, enforcement and cleanup of petroleum releases from underground storage tanks (USTs). EPA estimates that every year 7,570 new releases occur which just adds to the sites that have not yet been completed.  There could be as many as 116,000 sites requiring clean up actions in 2009. However, it appears the funding will be used to help pay for clean ups of abandoned tanks rather than create a new grant program.  Here is additional detail from the from the Convenience Store News regarding the Stimulus package:

Other measures relevant to c-stores include a final approval of $200 million for the Leaking Underground Storage Tank (LUST) Trust Fund, which assists in the cleanup of abandoned gas stations, but will not pay for inspections or to assist state reimbursements programs.

Superfund Cleanups: $600 million was provided to U.S. EPA's superfund program.  However, these funds will be obligated mostly through existing contracts and Interagency Agreements.  In 2009 there could be as many as 20 Superfund sites ready for construction, but not funded due to budget shortfalls. The Recovery funds will begin to address those sites, plus accelerate construction at many of 600 sites where work has been limited in the past by funding constraints.

Clean Water State Revolving Fund and Drinking Water State Revolving Fund: $4 billion for assistance to help communities with water quality and wastewater infrastructure needs and $2 billion for drinking water infrastructure needs. A portion of the funding will be targeted toward green infrastructure, water and energy efficiency and environmentally innovative projects. (guidance on the green infrastructure component)

Ohio EPA has begun soliciting projects for its Drinking Water and Wastewater Revolving Loan Programs.  However, projects must already have been planned and reviewed by Ohio EPA for inclusion on project planning lists.  For instance, drinking water projects must be on the Drinking Water Project Priority List (PPL).

II.  Renewable Energy- the American Recovery and Reinvestment Act of 2009 bill is anticipated to provide around $43 billion for renewable energy in the form of tax breaks and other incentives

The extended entry includes a summary of the renewable energy incentives and investment as assembled by the American Council on Renewable Energy (ACORE). (the link provides you a hard copy of the ACORE document- which does a great job of assembling the relevant information for renewable energy incentives- or see the extended entry for a summary).

Tax Incentives
Three-Year Extension of Production Tax Credit (PTC): The bill provides a three-year extension of the Production Tax Credit (PTC) for electricity derived from wind facilities placed in service by December 31, 2012. The tax credit extends to other renewable energy sources such as geothermal, biomass, hydropower, landfill gas, waste-to-energy and marine facilities placed in service by December 31, 2013.

Investment Tax Credit (ITC) Accessible to All Renewable Energy: The bill provides project
developers of wind, geothermal, biomass and other technologies eligible for the PTC, the option
of instead utilizing the 30% ITC that previously only applied to solar and other clean technology
projects.

Repeals Subsidized Energy Financing Limitation on ITC: The bill would allow businesses
and individuals to qualify for the full amount of the ITC, even if their property is financed with
industrial development bonds or other subsidized energy financing.

Grant Program in Lieu of Tax Credits: The bill allows project developers to apply for a grant
from the Treasury Department in lieu of the ITC. The grant will be equal to 30% of the cost of
eligible projects that start construction in 2009 or 2010. It will be issued within sixty days of the
facility being placed in service or, if later, within sixty days of receiving a grant application.

Increases Credit for Alternative Fuel Pumps: The bill increases the size of credits for
installing alternative fuel pumps at gas stations from 30 to 50% ($30,000 to $50,000) for taxable
years 2009-2010.

Advanced Energy Manufacturing Credits: The bill provides $2 billion worth of energyrelated
manufacturing investment credits at a 30% rate.vi These credits apply to projects creating
or retooling manufacturing facilities to make components used to generate renewable energy,
storage systems for use in electric or hybrid-electric cars, power grid components supporting
addition of renewable sources, and equipment for carbon capture and storage (CCS).

Plug-in Electric Drive Vehicle Credit: The bill increases the tax credit for qualified plug-in
electric drive vehicles for the first 200,000 placed in service. The base amount of the credit is
$2500. Batteries with at least 5 kilowatt hours of capacity have a credit of $2917. The credit is
further increased by $417 for every kilowatt hour in excess of 5 kilowatt hours, but cannot
exceed $5000.viii The credit is allowed to be taken against the alternative minimum tax (AMT).ix
Five Year Carry-Back Provision for Operating Losses of Small Businesses: The bill would
extend the carry-back period for net operating losses (NOL) from two to five years for tax years
2008 and 2009. An eligible NOL includes the NOL for any taxable year ending in 2008 or if the
taxpayer chooses, any taxable year beginning in 2008. An election under this provision may only
be taken for one taxable year.

Extends Bonus Depreciation: The bill extends, through 2009, the temporary increase of bonus
depreciation to 50% that Congress enacted last year. These write offs can be applied to capital
expenditures ranging from $250,000 to a newly increased threshold of $800,000.
 

Direct Spending
Total Direct Spending for Renewable Energy and Energy Efficiency: The bill provides $16.8
billion in direct spending for renewable energy and energy efficiency programs over the next ten
years.

Grid Development: The bill provides $11 billion to modernize the nation's electricity grid with
smart grid technology.xiii This includes $4.5 billion for the DOE Office of Electricity Delivery
and Energy Reliability for activities to modernize the nation's electrical grid, integrate demand response equipment and implement smart grid technologies.xiv In addition, $6.5 billion is
provided for two federal power marketing administrations to assist with financing the
construction, acquisition, and replacement of their transmission systems.xv The bill also
increases federal matching grants for the Smart Grid Investment Program from 20% to 50%.

R&D, Demonstration Projects: The bill provides $2.5 billion for renewable energy and energy
efficiency R&D, demonstration and deployment activities.

Advanced Battery Grants: The bill provides $2 billion for grants for the manufacturing of
advanced batteries and components. This includes the manufacturing of advanced lithium ion
batteries, hybrid electrical systems, component manufacturers, and soft-ware designers.xviii
Defense Energy and Efficiency Programs: The bill provides $300 million to the DOD for the
purpose of research, testing and evaluation of projects to energy generation, transmission and
efficiency.xix The bill provides an additional $100 million for Navy and Marine Corps facilities
to fund energy efficiency and alternative energy projects.

Study of Electric Transmission Congestion: The bill requires the Secretary of Energy to
include a study of the transmission issues facing renewable energy in the pending study of
electric transmission congestion that is due to be issued in August 2009.xxi
Bond and Loan Programs

Clean Energy Renewable Bonds (CREBs): The bill provides $1.6 billion of new clean energy
renewable bonds to finance wind, closed-loop biomass, open-loop biomass, geothermal, small
irrigation, hydropower, landfill gas, marine renewable, and trash combustion facilities.xxii Onethird
of the authorized funding will be available for qualifying projects of state/local/tribal
governments, one-third for public power providers and one-third for electric cooperatives.

Renewable Energy Loan Guarantee Program: The bill provides $6 billion for a temporary
loan guarantee program for renewable energy power generation and transmission projectsxxiv
that begin construction by September 30, 2011.xxv Up to $500 million of the overall $6 billion
can be used for the development of leading edge biofuels that have been demonstrated and have
commercial promise to substantially reduce greenhouse gas emissions.xxvi