Presenting a live 90 ‐ minute webinar with interactive Q&A Superfund Settlements: Leveraging Superfund Settlements: Leveraging Recent Developments Impact of Burlington Northern, the New EPA Settlement Process, the Superfund Tax and More TUES DAY, DECEMBER 7, 2010 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific T d Today’s faculty features: ’ f l f Walter Mugdan, Director of the Emergency and Remedial Response Division for Region 2, U.S. Environmental Protection Agency , New Y ork Michael W S Michael W. S teinberg S teinberg, S enior Counsel Morgan Lewis & Bockius Washington D C enior Counsel, Morgan, Lewis & Bockius , Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Superfund Settlements Superfund Settlements and Negotiations and Negotiations Walter Mugdan Director, Emergency & Remedial Response Division U.S. EPA Region 2 New York, NY Mugdan.Walter@epamail.epa.gov 212 637 4390 212-637-4390 Michael W. Steinberg Morgan Lewis & Bockius Morgan, Lewis & Bockius Washington, D.C. msteinberg@morganlewis.com 202.739.5141 December 7, 2010 4
Outline Outline Superfund Trends p I. EPA Negotiation Process for PRPs II. Burlington Northern & Santa Fe Railway Co. III. v. U.S ., 129 S. Ct. 1870 (May 4, 2009) v. U.S ., 129 S. Ct. 1870 (May 4, 2009) Superfund Alternative Approach (“SAA”) IV. “Best Practices” for Superfund Negotiations V. 5
6 Superfund Trends d d T f S
CERCLA at 30 CERCLA at 30 ~ 41,000 sites assessed (of ~ 44,500) 41,000 sites assessed (of 44,500) ~ 1680 proposed, final and deleted NPL sites ~ 1095 Sites with all construction complete 1095 Sites with all construction complete ~ 11,000 removal actions at ~ 8,000 sites ~ $18 billion in EPA cleanup expenditures Enforcement Program (to 2009): Enforcement Program (to 2009): ~ $26 billion worth of cleanup work by PRPs ~ $5 3 billion in cost recovery $5.3 billion in cost recovery 7
Superfund Trends NPL Listings were down for several years (2005- 2008 average = 13/yr final listings) but have 2008, average = 13/yr final listings), but have increased again (2008-2010, average = > 19/yr). RA starts and Construction Completions are RA starts and Construction Completions are down in recent years Pipeline funding (pays for site assessment work) Pipeline funding (pays for site assessment work) has decreased RA funding flat g More orphan sites; decreased percentage of PRP funding More Complex/Costly sites 8
More Orphan Sites States more likely to retain sites with viable PRPs, and refer orphan sites to EPA State referrals to EPA may increase due to y economic stress Many state agencies facing reductions in staff y g g State cleanup funds may be depleted More private party bankruptcies More private party bankruptcies RCRA corrective action sites may be referred to Superfund when companies become p p unable to pay for cleanups 9
More Fund-Lead Sites More Fund Lead Sites Historically PRPs paid approx 70% of Historically, PRPs paid approx. 70% of Superfund site cleanup costs (combination of PRP-lead cleanups and cost recovery) of PRP lead cleanups and cost recovery). Currently, about 50% - 60% of costs paid by PRPs by PRPs. 10
Construction Completions (CC) 67% of sites have CC Non-CC sites are generally more complex Non CC sites are generally more complex Of 527 non-CC sites, 40% are federal facilities (generally large/complex); or high cost (> $50 M) (generally large/complex); or high cost (> $50 M) By contrast, federal facilities and high cost sites make up 12% of all sites with CC. a e up % o a s tes t CC Non-CC sites average 4.2 Operable Units/site; CC sites average 1.8 OUs/site. g / 60% of non-CC sites have construction underway, but at only 12% of these is it the final construction project. 11
More Complex & Costly Sites p y Compared to the early years of the Superfund Compared to the early years of the Superfund program, in recent years smaller/less complex sites were more often retained by states and handled under RCRA, VCP or brownfields programs. The “average” site referred to EPA by states is therefore now more complex/costly than in the past l / tl th i th t As “traditional” waste sites have been addressed, there has been increased attention to “Mega-Sites” there has been increased attention to Mega-Sites (e.g., urban rivers and large mining sites) 12
EPA’s Integrated Cleanup Initiative Launched FY-2010; 3-year effort Launched FY 2010; 3 year effort Accelerate site assessments Evaluate NPL listing issues including new Evaluate NPL listing issues, including new pathways (e.g., vapor intrusion), state concurrence policy, and SAA concurrence policy, and SAA Accelerate cleanups Consider improvements to contracting process Consider improvements to contracting process New performance metrics Applies not only to Superfund but also RCRA Applies not only to Superfund, but also RCRA Corrective Action, UST & Brownfields 13
Funding Funding Congressional appropriations essentially flat over many years; therefore reduced buying power over time 2009: $600 M extra stimulus funding Very costly cleanups are typically funded over multiple years V tl l t i ll f d d lti l Ongoing cleanups represent first priority for continued funding in a given year funding in a given year At historic annual funding levels, it may not be possible to start new fund-lead constructions in coming year(s) President has proposed reauthorization of Superfund tax Even if enacted, does not guaranteed increased appropriations appropriations 14
Superfund Trends – Future of NPL Listings? NPL listing may be the slowest most NPL listing may be the slowest, most complicated, and costliest way to clean up a contaminated site. State cleanups typically faster, less expensive (e.g., Licensed Site Professionals), more pragmatic, less stigmatizing g g Each new site listed on the NPL represents a de facto long-term commitment of EPA resources to achieve cleanup. t hi l A typical NPL update with just 5 new “mega-sites” means EPA is “guaranteeing” > $250 MM in long- g g $ g term funding, with no appropriation in place for those out-years. 15
Superfund Trends – Future of NPL Listings? (cont'd) Given finite resources, a new site should not be listed if other approaches will work, such be listed if other approaches will work, such as: State enforcement State voluntary cleanup program RCRA corrective action program Superfund removal action Other federal program (e.g., TSCA, FUDS) 16
Superfund Trends – Future of NPL Listings? (cont'd) Instead, NPL listing should be “the tool of last resort.” EPA has long maintained that it views NPL listing as “the tool of last resort” the tool of last resort E.g., EPA’s 1997 response to GAO on delays in NPL cleanups But it’s hard to say, because listing is not transparent From 1983-2008, EPA gave no explanation at all of why it was listing sites on the NPL Since 2008, EPA briefly explains “need for listing” Since 2008, EPA briefly explains need for listing Example: Black River PCBs site in NY (Sept. 2010): “ The State of New York referred the site to EPA because the PCB contamination warrants further investigation.” 17
Superfund Trends – Future of NPL Listings? (cont'd) Unclear whether EPA’s rulemaking process for NPL listings meets minimum requirements of NPL listings meets minimum requirements of Administrative Procedure Act Proposed rules must facilitate a genuine p g interchange with commenting parties, rather than mere bureaucratic sport. Final rules must include a statement of basis and purpose sufficiently detailed to allow searching judicial scrutiny of how and why the hi j di i l ti f h d h th rules were adopted. 18
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