The Nickel Report

In 1980, a lame duck Congress passed the nation’s first legislation, the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §9601 et seq. (CERCLA), to address the cleanup of toxic waste disposal sites. Comprehensive amendments were passed six years later. Over the next 30 years, EPA’s enforcement powers were used with increasing regularity and consistency to study, begin, and often complete cleanups at hundreds of the nation’s contaminated waste sites. The program has always had its critics, but not until the current administration has there been a fundamental reassessment of its basic cost-benefit structure, just as is being done with many other federal programs.

While EPA Administrator Pruitt has not yet stated what the new administration intends to do to change, fix, or break down the program, these seem to be some of the salient objectives:

• Reduce the workforce needed to run the program
• Shift greater responsibility to the states
• Reduce the amount of federal dollars devoted to the program
• Reset the balance between the volume of pollutant reduction achieved relative to the cost of achieving the reductions
• Expedite the cleanup process

If the administration adopts some or all of these objectives, these are some features of the program to watch:

Relaxed Cleanup Standards

The selection of remedial action objectives and cleanup level targets is a site-specific exercise that involves an evaluation of the public health and environmental objectives to be achieved at a contaminated site. An EPA directive or perhaps only a general instruction to focus on what may be realistically achievable in the short term at a given site might be delivered to Agency staff even in the absence of formal changes to existing guidance for the remedy selection process. The cost of cleanups and the time taken to undertake them then could be reduced significantly.

Promotion of Settlements

In an Agency straining under potential budget cuts, the enhanced use of existing settlement authority may be one way to obtain funds for cleanup work. A policy that encourages the negotiation of cash out settlements, particularly de minimis settlements with smaller contributors of waste, could serve the dual purpose of securing funds needed to conduct or oversee cleanup work and reducing costs for industry.

Reducing Financial Assurance Costs

The requirement that companies obtain letters of credit or post surety bonds to guarantee the performance of cleanup projects gained momentum in the wake of the 2007 financial crisis. Major companies used bankruptcy laws to limit their cleanup payments, leaving more to be paid by the remaining parties and the federal government. In the coming years, with a more vibrant economy, the need for these guarantees might appear less compelling relative to the overall costs they impose on businesses. The current extension of time granted to evaluate the last administration’s proposed financial assurance rules for the hard rock mining industry may be indicative of the new administration’s potential receptiveness to changes in the program to ease the financial burden on the regulated community. EPA also might be receptive to less costly alternative means, such as corporate guarantees, of providing the requisite security and setting lower targets for financial assurance guarantees. The new administration also may be prepared to rely upon state programs to satisfy the assurance standards.

More Cooperation in Design and Construction Projects

Remedial investigations, feasibility studies and remedial action (or cleanup) projects are typically performed by private party contractors with oversight by EPA staff and EPA-hired contractors. With more limited EPA staff and more limited budgets for EPA contractors, there may be an increased incentive for EPA and private parties to work cooperatively to move faster through the CERCLA cleanup process. Today, we often encounter contentious back-and-forth disputes over each deliverable in the investigation of a site and the design of a cleanup plan. That negotiation process could be streamlined by reducing the number of occasions when written submissions to EPA must be reviewed, along with reductions in the time for the Agency to complete those reviews.

Statutory Fixes to Remove Litigation Uncertainty

The Superfund statute remains one of the most litigated federal laws. It has made more than a few trips to the Supreme Court for interpretation. Despite nearly 37 years of litigation, there are many issues that remain unresolved and spawn excessive litigation. These involve the standards for contribution and cost recovery claims, the statute of limitations applicable to those claims, and the expansive “all relevant equitable factors” standard that courts apply to allocate costs among liable parties. Fixing these ambiguities might not be a priority in the early months of the new administration, but some fixes may be considered seriously when Congress takes a hard look at the statute in the years ahead. The new administration, and the Congress, also could consider changes that would shift more implementation responsibilities to the states. Nothing is immune from scrutiny, but generating a consensus for significant legislative changes to the program has not happened in more than 30 years.