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Implications of Emerging Contaminants on Site Cleanup Costs
Under the Safe Drinking Water Act (SDWA), the United States Environmental Protection Agency (USEPA) is required to identify, review, and evaluate potential contaminants that may be present in drinking water for regulatory decision-making. The list of potential contaminants of concern that may be present in drinking water sources (e.g. groundwater) are referred to as Contaminant Candidate List (CCL). By law, the USEPA is required to publish a CCL every five years. The latest draft list which was published in February 2008, contained 93 chemicals and 11 microbes. Eventually, the USEPA will make a determination on whether to regulate these “emerging” contaminants or not. Examples of recent emerging contaminants that are on the CCL include methyl tert-butyl ether (MTBE), perchlorate, 1,2,3-trichloropropane (1,2,3-TCP), and N-nitrosodimethylamine (NDMA).
State water quality regulators and the water entities responsible for extraction, treatment and supply of drinking water that are required to comply with federal and state drinking water regulations monitor the Nation’s water supplies for the emerging contaminants as part of the information gathering process to support the USEPA’s CCL policy making process. In addition, the water purveyors are required by law to monitor and report to the public if these emerging contaminants are present in their water supplies. These regulatory requirements coupled with the lack of adequate information regarding the potential health effects of the chemicals have created uncertainty and concern over the potential long-term liability posed by these contaminants to the water purveyors. This regulatory climate has had several results. First, the required monitoring of water supplies for emerging contaminants has resulted in identification of new polluted sites (e.g. City of Rialto and perchlorate). Upon discovery of the emerging contaminants in water supplies, the water purveyors have conducted limited investigations and identified potential industrial sources of the contaminant and subsequently filed suit for property damage and cost recovery. These actions have resulted in increases in legal defense costs, investigation costs (most groundwater investigations are related to deeper aquifers that carry significantly more investigation costs), and potential future remedial costs. Second, the identification of contaminants at existing polluted sites has resulted in expanded investigations and costly modification to existing remedial systems (e.g. Baldwin Park Operable Unit in the San Gabriel Valley Superfund Site for 1,2,3-TCP). The chemical and physical properties of the emerging contaminants tend to be different from the existing known contaminants and therefore, the nature and extent of the contaminant (e.g. size of the plume) may be significantly different that previously known for the other contaminants. In addition, the remedial technologies in place for groundwater cleanup are often ineffective in removing the emerging contaminant from the groundwater, therefore, requiring a different and likely more costly remedy. In the absence of standards, the site cleanup regulators are relying on extremely low and conservative numerical cleanup goals that are based on health protective guidance values. These low cleanup target values pose a technological challenge and limit the remedial options available for remedial system modifications. Overall, insurers are exposed to greater risk and costs from claims that involve emerging contaminants. The detection of an emerging contaminant at a known polluted site can result in renewed investigation and potential modifications to the remedial strategy. The costs for the investigation and remediation can be significant for the reasons described earlier. Environmental impairment liability policies may be impacted by these emerging contaminants if the policy does not specifically exclude the chemicals as known contaminants. For more information, please contact Alborz Wozniak at (925) 403-6200.
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