Superfund and Natural Resource Damages Litigation ... · Vol. 9, No. 1 February 2014 Superfund and...

1Superfund and Natural Resource Damages Litigation Committee, February 2014

February 2014Vol. 9, No. 1

Superfund and Natural Resource DamagesLitigation Committee Newsletter

EDITORS’ NOTEAshley A. Peck, Carolyn L. McIntosh, andWhitford Remer

We are pleased to bring you another issue of theABA SEER Superfund and Natural ResourceDamages Litigation Committee Newsletter. In thisissue, we feature five timely articles that providepractical insight to Superfund and NRDpractitioners.

Three of our articles were originally presented aspart of a panel discussion at the ABA SEER 21stFall Conference in Baltimore, and will allow thosewho could not attend the conference to enjoy someof the content. These articles provide an in-depthlook at significant Superfund sites where unique andinnovative approaches have recently been employedto address challenges. We also feature an article onearly natural resource damages restoration for theDeepwater Horizon spill that will provide aninformative update on efforts at this critical site. Ourfinal article provides practical insight on thechallenges of dealing with technical evidence atCERCLA sites.

As always, we would like to extend thanks to thisissue’s contributors on behalf of the entire committeemembership and ourselves as newsletter vice chairs.Contributions help increase thoughtful dialogueamong the Superfund and NRD bar and ourcommittee members. We welcome submissions frommembers and practitioners of all stripes, and would

be pleased to discuss proposed topics with anyonewho is interested. Please spread the word, and feelfree to contact us using the e-mail addresses below.

Carolyn L. McIntosh is a partner in the Denveroffice of Patton Boggs LLP and chairs the firm’sEnvironment, Health and Safety Practice Group.Her practice focuses on Superfund litigation andremediation issues, federal land use approvalprocesses, and environmental permitting andcompliance matters primarily for natural resourcedevelopment and transportation clients. Shemay be reached [email protected].

Whitford Remer is a policy analyst at theEnvironmental Defense Fund in Washington, D.C.Whit is the lead for Deepwater Horizon NRDissues at EDF and focuses exclusively on coastalrestoration in Louisiana. He also closely followsthe ongoing oil spill civil litigation. Whit may bereached at [email protected].

Ashley A. Peck is an associate in theEnvironment, Energy, and Natural ResourcesPractice Group at Holland & Hart LLP in SaltLake City, Utah. Her practice involvesenvironmental litigation and compliancematters, with an emphasis on site remediation,natural resource damages, and water qualityissues. She may be reached [email protected].

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2 Superfund and Natural Resource Damages Litigation Committee, February 2014

Superfund and Natural ResourceDamages LitigationCommittee NewsletterVol. 9, No. 1, February 2014Ashley A. Peck, Carolyn L. McIntosh, andWhitford Remer, Editors

In this issue:

Editors’ NoteAshley A. Peck, Carolyn L. McIntosh, andWhitford Remer ........................................ 1

The Gowanus Canal Superfund Site,Brooklyn, N.Y.: Effective CERCLA Toolsfor a Sediment Mega-SiteBrian E. Carr ............................................ 3

Lessons Learned from TechnicalApproaches Applied at the Lower FoxRiver CERCLA SiteNancy K. Peterson ................................... 7

The Rio Tinto Mine Site, Elko County,Nevada: A CERCLA Case StudyAdam S. Cohen andElizabeth H. Temkin ............................... 12

Overview of Early NRD Restoration in theDeepwater Horizon Oil SpillWhitford Remer andSara Gonzalez-Rothi Kronenthal ............ 17

Understanding the Limitations ofTechnical EvidenceKirk T. O’Reilly ....................................... 21

Copyright © 2014. American Bar Association. Allrights reserved. No part of this publication may bereproduced, stored in a retrieval system, ortransmitted in any form or by any means,electronic, mechanical, photocopying, recording,or otherwise, without the prior written permissionof the publisher. Send requests to Manager,Copyrights and Licensing, at the ABA, by way ofwww.americanbar.org/reprint.

Any opinions expressed are those of thecontributors and shall not be construed torepresent the policies of the American BarAssociation or the Section of Environment,Energy, and Resources.

March 6-7, 2014ISBA’s 13th Annual ConferenceIIT Chicago Kent College of LawChicago, ILPrimary Sponsor: Illinois State Bar Association

March 20-22, 201443rd Spring ConferenceThe Grand America HotelSalt Lake City, UT

April 10-11, 2014ABA Petroleum Marketing Attorneys’ MeetingThe Ritz-Carlton HotelWashington, DC

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June 4-6, 201432nd Annual Water Law ConferenceThe Red Rock Resort, Casino and SpaLas Vegas, NV

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THE GOWANUS CANAL SUPERFUND SITE,BROOKLYN, N.Y.: EFFECTIVE CERCLA TOOLSFOR A SEDIMENT MEGA-SITEBrian E. Carr

Introduction

The Gowanus Canal is a 1.8-mile-long, man-madecanal located in a mixed residential-commercial-industrial area of Brooklyn, New York. Constructedin the mid-1800s, it became one of the nation’sbusiest industrial waterways, serving threemanufactured gas plants (MGPs), coal yards,tanneries, paint factories, and chemical plants. Bythe late 1870s, the stagnant canal was already aninfamous public nuisance. A century of studies andineffectual measures have failed to adequatelyaddress the problems. Contamination is measured inpercent levels; pathogen counts regularly exceedtesting limits.

In April 2009, the canal was proposed for inclusionon the Comprehensive Environmental Response,Compensation, and Liability Act (CERCLA)National Priorities List (NPL). New York City(NYC) and certain developers argued thatCERCLA’s slow-paced process would impedecleanup and redevelopment. In March 2010, EPAplaced the site on the NPL and committed to meetingNYC’s cleanup schedule.

EPA’s record of decision (ROD) for a $500 millioncleanup was issued in September 2013. This articlesummarizes various methods used to address thechallenges presented.

Background

Prior to canal construction, the area consisted ofGowanus Creek and surrounding marshes. Duringthe Dutch colonial era, the creek was dammed topower mills. By the mid-1840s, the marshes wereconsidered detrimental to Brooklyn’s rapid growth.In 1849, New York State authorized canalconstruction to promote commerce anddevelopment.

The legislation and plans recognized that the canalwould be stagnant but proposed flushing measureswere skipped. Once built, the canal served as anopen sewer for sanitary waste and industrialeffluent, including polycyclic aromatichydrocarbons (PAHs), polychlorinated biphenyls(PCBs), pesticides, metals, and volatile organiccompounds (VOCs). Paint and dye factorydischarges led to the canal’s notorious “LavenderLake” nickname.

Various unsuccessful measures were taken toaddress pollution, including directing more sewageto the canal to improve flow. In 1911, a mechanismcalled the Flushing Tunnel was completed.Designed to improve circulation and flush outpollutants, it consisted of a mile-long, 12-footdiameter tunnel from the harbor to the canal headpumping via a large ship propeller. It operated withmixed results until failing in the mid-1960s.

Passage of the Clean Water Act (CWA), sewagetreatment plant construction, and declining industryreduced discharge severity. The Flushing Tunnelwas reactivated in 1999, operating until 2010 whenNYC determined that proper modernization wasneeded.

Bordering residential neighborhoods include ParkSlope, Cobble Hill, Carroll Gardens, and RedHook. Properties abutting the canal are primarilycommercial/industrial, but high density residentialrezoning began in 2009. Though low-lying canalneighborhoods flood frequently from both minor andmajor storms (e.g., Hurricane Sandy), the Brooklynreal estate boom makes more rezoning likely.Several businesses utilize the canal for barging;canoers and boaters are regularly present. Fishing,including subsistence fishing by surroundingenvironmental justice communities, occurs despitestate fish advisories.

Tools for Expediting Cleanup

NYC asserted that Superfund would delay cleanupand impede development:


And under the [City] Plan, the entire lifecycle ofthe project through remedial constructioncompletion would take just over nine years,significantly shorter than the average New YorkState Superfund listing. The . . . criticaladvantage of the shorter cleanup . . . will besooner elimination of potential human health andenvironmental exposures. For this and otherreasons, the City opposes an NPL listing . . .

In response, EPA publicly committed to the City’stime frame. To accomplish this, EPA has employed arange of approaches, detailed below.

Using Existing DataSince the 1870s, dozens of public, private, andacademic studies have been conducted. NYC hascompiled four separate major reports on CWAcompliance since 1983. The U.S. Army Corps ofEngineers (USACE), National Grid (the utilitysuccessor responsible for remediating the threeformer MGPs), and private developers have issuedinnumerable reports regarding the canal anduplands. EPA leveraged these efforts to produce acomprehensive compilation of studies.Redevelopment studies continued to generate data.To fill data gaps, EPA determined that an EPA-ledremedial investigation/feasibility study (RI/FS)would produce faster, better controlled workproduct, while increasing public credibility ascompared to prior potentially responsible parties(PRP) studies.

Focused Technical ApproachEPA focused its technical approach on producing theinformation necessary for the next remedial step.EPA also prioritized the problems posed by a givensource. For example, PRPs argued that further pre-ROD study of 200-odd canal outfalls was needed.EPA’s RI determined, consistent with prior NYCdata, that all but a few were inactive and hadnegligible discharges, particularly compared to the377-million-gallon annual combined sewageoverflow (CSO) discharges. Instead, EPA willenforce against unpermitted pipe owners or simplyseal the outfalls. Similarly, EPA consideredmodeling developed by NYC, the USACE, and

National Grid, but disagreed that lengthy pre-RODrefinement was needed. Variability in CSOdischarges, infrastructure, and other inputs createscomplex conditions with no true model baseline.Overall conditions in the canal, tiny compared tomost sediment sites, are readily understood. Todelay cleanup for limited benefits would only leaveprincipal threats in place. EPA will considermodeling for refining the design.

The ROD also focuses on the technical approach.The dredging remedy includes complete removal ofaccumulated soft sediments, capping only native,coal tar-contaminated sediment at depths whereremoval is infeasible. The 600,000-cubic-yarddredge volume is small and well defined comparedto other sites. The PRPs favored capping most softsediment, limiting dredging, and disposal. Thoughpotentially feasible, it would be less reliable.Capped soft sediments would be more prone tofailure due to structural instability, organicdecomposition, and vessel-related damage from ashallower cap.

NYC also asserted that deepening the canal wouldreduce the dissolved oxygen (DO) benefits of therefurbished Flushing Tunnel, impairing CWAcompliance. Absent supporting data and given priorNYC reports suggesting that removal wouldimprove DO by reducing sediment oxygen demandand biochemical oxygen demand, EPA prioritizedremoval. If DO proves to be an issue, added sandcan reduce canal depths cheaply.

Iterative Report ReleaseEPA determined that proactive informationdissemination would reduce delays by promoting aninformed discussion and increased projectconfidence. EPA has actively distributedinformation, electronically whenever possible viaEPA’s Gowanus webpage and Facebook. Majorreports were released in draft as produced. The RIwas issued in January 2011 and the FS in December2011. For each, EPA held numerous formal andinformal public meetings. This iterative approachand ongoing dialogue ensured public familiaritywith technical issues when the proposed plan was


released in December 2012. EPA will continuethese efforts during design and construction.

Stakeholder Coordination—UplandsEPA has been proactive in coordinating with themany canal stakeholders. EPA and New York StateDepartment of Environmental Conservation(NYSDEC) have agreed to a coordinated scheduletying the roughly $500 million MGP cleanups to thedredging remedy, which will start at the head of thecanal. To align the remedial schedules, in January2012 NYSDEC directed National Grid to expeditedesign of a cutoff wall for the former Fulton MGPfacility, near the head of the canal, to preventsubsurface tars, or non-aqueous phase liquid(NAPL) migration.

NYSDEC/NYC CWA CoordinationAs a delegated state, NYSDEC has the CWAenforcement lead. NPL designation of two NYCsediment sites, Gowanus and Newtown Creek, hasalso elevated public attention to the impacts fromCSOs on these water bodies. EPA’s Superfundprogram has collaborated with NYSDEC and EPA’sown water programs to ensure an effective,comprehensive remedy.

In 2010, NYC began upgrades to the FlushingTunnel, an adjoining pump station, and a failedsewer main. For such work to proceed, EPApromptly made CERCLA remedy consistencydeterminations and provided technical comments.The Flushing Tunnel was restarted in December2013 with its modern pumping system, functionaleven at low tide, increasing flows by 40 percent.

EPA supports CWA coordination for cost-savingpurposes. Under its CWA order, NYC must dredgeCSO sediment mounds at the canal head by 2018.Since this shallow CSO dredging and cappingwould need to be redone for EPA’s remedy, EPA isseeking to incorporate this dredging, saving some$15–$20 million.

NYC’s current $150 million CWA infrastructureupgrades will greatly reduce CSO impacts to themid- and lower canal. EPA determined that

CERCLA controls are needed for contaminatedCSO solids in the upper canal. Rather than allowNYC to determine whether to build additional CSOcontrols under its CWA Long Term Control Plan(LTCP) process, due in June 2015, the RODselected CSO retention tanks as the controltechnology, the cost for which was estimated at $78million based on the assumption that two tanks, one8-million and one 4-million gallons in size, wouldbe needed. NYC had previously screened out suchtanks under the CWA using a $400 million estimate.

In concurring on the ROD, NYSDEC stated that theLTCP will, at a minimum, meet EPA’s remedialperformance goals for CSO solids control. EPA hascommitted to align the two programs to the extentpractical, while prioritizing the CERCLA remedyand timeline. Accordingly, the Superfund designwill be informed by NYC’s LTCP development.EPA believes that major cost savings can berealized through synergies and economies of scale.For example, using the CERCLA permit exemptionand locating CSO tanks at City-owned propertywhere the Fulton MGP source removal work will beconducted will save major permit, acquisition, andconstruction costs.

PRP CoordinationTo maximize the available technical andenforcement resources, EPA collaborated with thePRPs where possible. Although EPA chose to do afund-led RI/FS, in April 2010 EPA entered intoadministrative consent orders (ACOs) to have NYCand National Grid install groundwater wells atproperties that they currently or formerly owned.Each ACO also contained provisions allowing theparties to propose additional work. Under theseprovisions, both NYC and National Grid haveconducted supplemental investigation work,modeling, and other studies.

EPA has also collaborated on the PRP searchprocess with NYC, National Grid, and other parties.PRPs submit background information on current andhistoric owner/operators for EPA review. EPAroutinely shares the responses obtained from


information requests to encourage additionalresearch and analysis.

Community Advisory GroupsCommunity advisory groups (CAGs) are standardoutreach tools for Superfund sites. The Brooklyncommunity surrounding the canal is both wellinformed and highly involved. As a result, theGowanus CAG is believed to be the largestSuperfund CAG in the country, often meetingweekly. Although CAGs often have divisionsinternally or with EPA, the Gowanus CAG stronglyendorsed EPA’s proposed plan. The CAG includesmany creative advocacy groups, promoting acleaner canal through free canoe rides, canalregattas, a fictional Gowanus Swim team, greenstreets, the arts, and many other methods.

Development StakeholdersThe Gowanus area, whose sewer shed extends asfar as the Barclay Center Arena, is undergoingintense redevelopment pressure. As noted,developers opposed NPL nomination in 2009. In2013, no developers opposed the cleanup plan. Thisis likely due to EPA’s responsive, multi-levelengagement with the development community. EPAtakes no position on land use, but seeks to minimizeproject impacts and promote synergies.

For example, EPA participates in the localBrownfield Opportunity Area (BOA) program withvarious state and local agencies, the public, andland owners. After a 2011 “Low Line” designcontest on increasing canal access attracted entriesfrom around the world, EPA provided informationalsupport for the 2012–2013 sequel called“Waterworks.” Waterworks produced local andinternational submissions for designs to replace theNYC park atop a contaminated MGP parcel with anew park atop CSO retention tanks.

Most importantly, EPA engages directly withdevelopers and buyers. EPA makes data andproject-related information readily available. EPAalso routinely provides appropriate comfort lettersupon request. In December 2013, Whole Foodsopened a market directly on the canal, following a

state brownfields cleanup that EPA reviewed duringthe RI and determined to be consistent with theanticipated cleanup. Like the Barclay Center Arena,Whole Foods will greatly alter the investmentmarket. EPA is preparing to enter into a bona fideprospective purchaser removal order with theLightstone Group, which has begun construction of700 residential units along the upper canal. Inexchange for liability protection deemed necessaryfor project financing, this AOC will result in furthersite characterization and remedial work, including aNAPL hot spot bulkhead containment wall.

Streamlining Bulkheads RepairsThe canal shoreline consists entirely of bulkheads,many 150 years old and in poor condition.Accumulated sediments help support these failingwalls, impeding dredging. Almost four miles ofbulkhead will require upgrades or shoring atsignificant expense. As a further complication, in2006 the Gowanus Canal Historic District,including the bulkheads, was found eligible for theNational and State Registers of Historic Places bythe New York State Historic Preservation Office(SHPO) following a USACE study.

To date, owners wishing to repair bulkheads neededmulti-agency approvals. Timber crib and boulderconstruction leave steel sheet piling driven on thewater side as the only practical upgrade. Resultingcanal encroachment raises property ownershipconcerns for NYC, habitat encroachment concernsfor NYSDEC, preservation concerns for SHPO, andneeds USACE sign-off.

EPA has a variety of approaches to expeditebulkhead replacement and reduce costs. Central tothis is EPA’s lead agency self-designation for in-canal work and CERCLA section 121 permitexemption use. With these efforts and anticipatedMGP remedy containment walls, EPA hopes to have60 percent of bulkheads replaced outside of directproject costs.

This effort commenced in August 2013 when EPAissued a removal AOC to Benson Metals Corp.,which operates a scrap metal recycling facility, 12


days after the facility’s bulkhead collapsed into thecanal. EPA and NYSDEC directed Benson to installa turbidity curtain, submit debris removal plans, andstabilize the bank. EPA had previously approvedBenson’s bulkhead design as part of planned futurework. Post-collapse, EPA asserted the permitexemption and acted as the conduit to obtainapprovals from other agencies. EPA has alsocreated a wetlands mitigation bank. Using thismodel, EPA is already negotiating another sixbulkhead AOCs.

Timely EnforcementTimely enforcement has reinforced EPA’scredibility. During installation of 90 monitoringwells for the RI, for example, the sole party refusingaccess was issued an order within 24 hours. EPAplans to continue prompt, flexible enforcement. EPAcommenced remedial design (RD) negotiations onthe day the ROD was announced and reachedagreement in December 2013 for NYC and NationalGrid to start RD work under their existing AOCs,pending final RD orders in early 2014. Thereafter,EPA will begin negotiating a global remedial actionsettlement to continue the timely, comprehensiveGowanus Canal cleanup.

Brian E. Carr is an assistant regional Counsel withthe U.S. Environmental Protection Agency,Region 2. Since coming to EPA in 1994, he hasserved in the New York/Caribbean SuperfundBranch of the Office of Regional Counsel. Hismajor cases have included the Gowanus CanalSuperfund site in Brooklyn before its proposal in2009 and the Hudson River PCBs Superfund sitesince 1998. Brian may be reached [email protected].

LESSONS LEARNED FROM TECHNICALAPPROACHES APPLIED AT THE LOWER FOXRIVER CERCLA SITENancy K. Peterson

Introduction

The Lower Fox River and Green Bay siteencompasses 39 miles of highly industrialized riverin northeastern Wisconsin and Green Bay, thelargest bay of Lake Michigan. Polychlorinatedbiphenyls (PCBs) are the primary contaminant ofconcern, and are found in the river channel and baysediments. Consumption of PCB-contaminated fishis the primary risk to human and ecologicalreceptors. Federal, state, and tribal entities havebeen engaged in natural resource damageassessment and restoration activities since 1995,and the U.S. Environmental Protection Agency(EPA) and the Wisconsin Department of NaturalResources (WDNR) are jointly overseeing responseactivities.

The site is a case study in contrasts. Legal disputeshave been challenging to resolve. The United Statesand the State of Wisconsin (State) filed enforcementlitigation in 2010, and the eight parties that thegovernments consider responsible for the PCBshave been litigating allocation issues since 2008.Eleven published opinions later —with the districtcourt having decided a remedy challenge,divisibility defenses, the interface betweenComprehensive Environmental Response,Compensation, and Liability Act (CERCLA)sections 107 and 113, the scope of “arrangerliability,” and allocation based on culpability—theparties are now briefing (on nearly all issues) at theU.S. Court of Appeals for the Seventh Circuit.

Yet the site is also characterized by notablecooperative successes on the technical side. Theremedy in the six-mile-long upstream reach of theriver, known as “Operable Unit 1” (OU1) or LittleLake Butte des Morts, was completed in 2010. Post-remedy sampling in OU1 has shown a markeddecline of PCB concentrations in water, sediment


(94 percent decline in the surface-weighted averageconcentrations) and fish (74 percent decline inwalleye). Cooperation on technical evaluationsacross the site—involving representatives of thegovernments, oversight teams, and many of thepotentially responsible parties (PRPs)—hasresulted in a more cost-effective and protectiveremedy.

Site History

In the late 1800s, paper mills were built along thebanks of the Lower Fox River from Lake Winnebagoto Green Bay, Wisconsin. The river supplied theabundant water needed to make paper, and traversedan area blanketed with forestland. By 1950, the“Fox Valley” boasted the largest concentration ofpaper mills in the country. In contemporary newsaccounts, the river was described as “the mostpolluted river in all Wisconsin.” The aroma thenassociated with paper mills was commonly referredto as “the smell of money,” as the area enjoyed oneof the highest per capita income levels anywhere inthe United States.

In 1955, one of the local mills began manufacturingNCR®-brand carbonless copy paper andsubsequently was purchased by NCR Corporation.Between 1955 and 1971, the invisible microcapsulecoating applied by that mill to the copy papercontained PCBs. That mill, in turn, sold itswastepaper to a handful of the other local mills thatused wastepaper as stock material in lieu of virginpulp. The coating process and the recyclingprocesses all resulted in discharges of wastewatercontaining PCBs.

Regulatory Approaches to the PCB ProblemAfter nearly two decades of study and cooperativeefforts between state regulators, academics, andlocal industry, the U.S. Fish and Wildlife Service(FWS) stepped in with notice of a natural resourcedamage assessment in 1995. EPA, WDNR, thefederal trustees (FWS and the National Oceanic andAtmospheric Administration), and two tribaltrustees (the Menominee Indian Tribe of Wisconsinand the Oneida Tribe of Indians of Wisconsin)

subsequently entered into an official cooperativearrangement in 2001, which sometimes masksunderlying philosophical, policy, and technicaldisagreements.

The remedial phase began in earnest with EPA’sissuance of notice letters in 1997 requestingperformance of a remedial investigation/feasibilitystudy (RI/FS). Negotiations ensued. For reasons notcompletely understood, the agencies refused thePRPs’ offer to perform the RI/FS. That early choicewas the first of a few major decisions (by theagencies and PRPs alike) that illuminate theprotracted dispute side of this story.

The site has been divided into five geographicoperable units (OUs), with OUs 1-4 being reachesof the river defined by dams and OU5 being the Bayof Green Bay (see figure 1 below).

In late 2002/early 2003, EPA issued two separaterecords of decision (RODs) for OU1 and OUs 2-5.In both RODs, the selected remedy was dredging,except that natural recovery was selected for OU2


(where the river contains relatively little softsediment) and OU5 (the Bay of Green Bay). TheRODs estimated that approximately eight-millioncubic yards of sediment would be removed, andprojected the remedy cost for all OUs atapproximately $350 million. However, the RODswoefully underestimated many cost components ofthe dredging remedy.

Joint Post-ROD Technical EvaluationsOne OU1 party believed that engaging the agenciesin joint technical and cost evaluations wouldimprove outcomes, and negotiated an administrativeorder on consent to perform the OU1 remedialdesign in 2003. The design work led to a consentdecree to perform the remedy, in which another OU1party joined. The OU1 consent decree containedunique features (highlighted below) that incentivizedall parties to refine the remedy in an iterativefashion, and to implement it cost-effectively.

In 2004, two parties located in OUs 2-5 agreed toperform the design of that remedy. Performing thedesign provided a means to gather additional data,more thoroughly evaluate remedial technologies,and engage the agencies and oversight team in morecooperative decision making. The resultingcollaborative technical process across all OUsprovided a forum for representatives of partiesdisputing cost allocation to cooperate nonethelesson improving the remedy implementation. Based onthe collaborative design work, EPA issued amendedRODs for OU1 and OUs 2-5 in 2008. The amendedRODs adopt an “optimized remedy,” consisting ofdredging, capping of specified areas, and sandcovering of low concentration sediments.

Mediation of Cost Allocation IssuesAnother cooperative process at the site—mediationof the cost allocation issues—met with more limitedsuccess. After the RODs were issued, one of theparties brought in a consultant, Marsh USA, tostructure a mediation process designed to reach aglobal settlement, including insurers of all the PRPs.While a global settlement was not achieved, certainaspects of that process (highlighted below) led toimproved understandings of site issues and then to

settlements between several individual PRPs andtheir carriers.

Litigation CommencesThe United States and the state filed an enforcementaction in 2010 to obtain declaratory and injunctiverelief requiring the eight recipients of a 2007 EPAunilateral order to jointly and severally performresponse work in OUs 2-5. The governments alsosought recovery of their own oversight and responsecosts and natural resource damages. The litigationhas been phased. In 2013, the district court grantedthe requested declaratory and injunctive relief onthe response work. Meanwhile, in the allocationlitigation, the district court entered a judgment in2013 against NCR, holding it 100 percent liable forresponse costs and natural resource damages in OUs2-5 based on fact-finding on the parties’ relativeculpability.

Current StatusRemedial work is complete in OUs 1-3 and portionsof OU4. The remaining remedial work in OU4 isexpected to be completed in 2017. Long-termmonitoring and cap maintenance activities willcontinue for decades. The estimated cost of allresponse work implementing the “optimizedremedy” is now $800–$900 million, about $500million more than the original ROD estimates for anall-dredging remedy and as much as $500 millionless than the all-dredging estimates of sometechnical consultants at the time the original RODwas issued.

The Big Challenges

Two aspects of this site pose big challenges. On thetechnical side, the remedial challenges derive fromthe basic site conditions: the PCBs are spreadthroughout 39 miles of river sediment at varyingconcentrations beneath a flowing river. Theamended RODs require that nearly 20,000kilograms of PCBs be addressed at concentrationsas low as 1.0 ppm. But those PCBs are distributedthroughout approximately 8,000,000 cubic yards ofsediment. That is equivalent to addressing a smallroomful of PCBs dispersed, in constantly varying


concentrations, throughout a building five times thesize of the Empire State Building! On the legal side,the challenges derive from the simple fact that onlyeight PRPs are confronting a $1 billion problem.This means each 1 percent share of the siteallocation translates into a $10 million price tag.

While the legal issues at this site are worthy ofcommentary, the remainder of this synopsis willfocus on technical approaches implemented at thesite. Three strategies are outlined below that led tothe PRPs’ success in reducing the “size of theoverall pie,” even while the “slice of pie” issuescontinue to be litigated. The lessons learned mayhelp resolve disagreements at other sites.

Developing and Sharing Key Information toFacilitate CooperationAt a complex, multiparty site, it can be challengingto identify and flesh out the information that willdrive decision making by the key stakeholders. TheMarsh-led mediation process at the site adopted acomprehensive approach to the initial sharing ofinformation, which could hold promise at othersites.

All parties previously had disclosed significanthistorical information, including their insurancecoverage information, in answers to CERCLAsection 104(e) information requests. Marsh analyzedthat information and invited representatives from allPRPs and all carrier groups with significantexposure, along with representatives from theUnited States and the state, to an informationalmeeting. The governmental authorities presentedtheir views of the matter, explained the remedy anddescribed what should transpire for a globalresolution to occur. PRPs presented theirviewpoints. A mediator previously agreed upon bythe parties initiated negotiations. Although a globalsettlement was not reached, several individual PRPssubsequently used that mediator and the groundworkdeveloped in the global process to negotiatesettlements with their own insurers.

The greatest benefit of the global mediation was theearly, in-person sharing of facts and perspectives by

each of the key stakeholders. Everyone saw andheard the same presentations, and came toappreciate the complexities of the site. These earlymeetings of key stakeholders helped facilitate thecooperation that has occurred subsequently at thissite.

Incentivizing Regulators to ReevaluateRemedial ApproachesThe individual mills that signed up to perform theremedial design in OU1, and then in OUs 2-5, did soto gain some control over technical evaluations thathad been lost when the agencies took over the RI/FS. To incentivize the agencies to revisit andreconsider their technical analyses underlyingremedy selection, the OU1 parties negotiatedseveral special provisions in the OU1administrative order on consent for the remedialdesign and in the OU1 consent decree for theremedial action.

The “Work to be Performed” provisions in thedesign order included a specific section,“Supplemental Investigations.” In that provision, theresponse agencies acknowledged that voluntary,supplemental investigation of conditions in andupstream of OU1 would be performed. Theresponse agencies affirmatively agreed to reviewand comment promptly on work generated during thesupplemental investigation activities. Thiscooperative comment process led to formation oftechnical work groups and two parallel RODamendments, one that applies to OU1 and the otherto OUs 2-5. The ROD amendments modified theoriginal “all-dredging remedy” to an “optimizedremedy.” Rather than focusing solely on dredging toachieve remedial objectives, the optimized remedyemploys a mix of remedial technologies—includingdredging, armored capping, and sand covering ofareas with low PCB concentrations—to meetperformance standards.

In addition, the OU1consent decree containedspecial provisions that were intended to focus theagencies’ attention on costs as incurred, to improvethe agencies’ estimates of future costs, and toprompt reconsideration of the overall cost-


effectiveness of the all-dredging remedy. The OU1parties, rather than agreeing to perform all responsework required by the original OU1 ROD, insteaddeposited into a specially created OU1 escrowaccount the amount of money approximating theROD cost estimate for the all-dredging remedy; theyalso agreed to perform remedial work until themoney in the escrow account ran out. The agenciesreceived a copy of each invoice before paymentfrom the escrow account and had the option toobject (but never did). The consent decree alsoprovided for notices to be sent when the escrowaccount balance decreased to $6 million. Thenotices then would lead either to the OU1 partiesadding monies to the escrow account or to thetermination of most consent decree rights andobligations.

The OU1 consent decree was never terminated.Instead the technical evaluations described belowresulted in the two ROD amendments. Afterissuance of the OU1 ROD amendment, two OU1parties entered into an amended OU1consent decree,and completed the remedial actions specified in theamended OU1 ROD.

Establishing Joint Technical Work Groups toImprove Remedial Results and Cost-EffectivenessAs work on the remedial design and the remedialaction intensified, the governmental agencies and thePRPs agreed to form a series of joint technical workgroups. The work groups provided frequentopportunities for in-person discussion. Theyenabled incremental progress in a variety of areassuch as data collection, model evaluation, cappingoptions, the calculation of the sediment surface-weighted average concentration, and planning forlong-term monitoring. The work groups alsoallowed PRP technical representatives to explorealternative approaches with the governmentalagencies and oversight contractors before submittingformal work plans. The plan approval process wasstreamlined because agency representativesinformally had considered many concepts during thework group discussions.

Ultimately, EPA issued the ROD amendments tochange the original “all-dredging remedy” to the“optimized remedy,” providing for armored cappingor sand covering in lieu of dredging in specifiedsubareas of the site. The optimized remedy resultedin cost savings of $50 million in OU1 alone, and atthe same time significantly improved theeffectiveness of the remedy. Notably, after remedycompletion in OU1, the surface-weighted averageconcentration of PCBs in the sediment was 94percent lower than the pre-dredge concentration,and 50 percent lower than would have beenexpected from dredging alone. This reduction insediment surface concentrations had a nearimmediate and positive impact on fish. Within ayear of OU1 remedy completion, PCBconcentrations in fish tissue in OU1 began toapproach background concentrations. PCBconcentrations in walleye declined 74 percent, andfish consumption advisories were revised to allowmore frequent eating of OU1 fish. Futureimprovements are expected as sedimentation fromupstream and the surrounding watershed continuethe natural recovery process.

Nancy K. Peterson is a partner in the Energy &Environmental Law Group at Quarles & BradyLLP. She has successfully resolved complex,multiparty environmental and insurance claimsthrough negotiation, mediation, and litigation,and also counsels clients on transactions andenvironmental compliance. Nancy can bereached at [email protected].


THE RIO TINTO MINE SITE, ELKO COUNTY,NEVADA: A CERCLA CASE STUDYAdam S. Cohen and Elizabeth H. Temkin

Introduction

Sites remediated under the ComprehensiveEnvironmental Response, Compensation, andLiability Act, 42 U.S.C. §§ 9601–9675 (CERCLA)present multiple challenges for government agenciesand responsible parties. Parties grapple withcomplicated technical issues, lengthy cleanups,disputes over liability and allocation, competingregulatory agendas, and excessive and uncertaincosts. Successful projects often are ones thataddress these issues using an innovative approach.The Rio Tinto Mine site in Elko County, Nevada, isone such project. The parties recently entered into aconsent decree providing for state-lead oversightand a well-defined schedule for remedyimplementation and achievement of performancestandards. The potentially reliable parties (PRPs)agreed among themselves on the allocation of futurework and cost obligations in a way that facilitatedglobal settlement with the governments. To createthe certainty needed to support these settlements, thecompanies contracted for the implementation of theremedy at an insured, fixed price. This articlereports on some of the challenges faced by theinvolved parties and how those challenges wereresolved.

Site Background and History

The Rio Tinto Mine site is a former undergroundcopper mine. The disturbed portion of the sitecovers about 400 acres. Mill Creek runs from westto east through the site and joins with the OwyheeRiver approximately one mile downstream. Heavymetals and acid drainage from mine tailingsimpounded in the Mill Creek valley affectdownstream surface water quality.

The first significant administrative action taken toaddress post-mine closure environmental conditionsoccurred in 1986 when the former operators enteredinto an administrative order on consent with the

Nevada Department of Natural Resources, Divisionof Environmental Protection (NDEP) to preventMill Creek from flowing into the tailingsimpoundments. The companies formed the Rio TintoWorking Group (RTWG) sometime later to facilitatefuture cleanup actions. The RTWG companies andthe NDEP entered into a series of consent ordersproviding for the stabilization of the tailings pilesand other measures to improve downstream waterquality.

The site is not on the National Priorities List.However, it is being addressed under CERCLA in amanner consistent with the National ContingencyPlan (NCP) pursuant to EPA’s Superfund alternativeapproach. Starting in the mid-2000s, the RTWGcompanies worked with NDEP, EPA, the DuckValley Indian Reservation of the Shoshone-PaiuteTribes, and other interested stakeholders toward aglobal settlement to provide for implementation of afinal remedial action by the RTWG in exchange forcovenants not to sue from the agencies underCERCLA and state law. Remedial alternatives werepresented in the proposed plan published in October2010. NDEP and EPA executed the record ofdecision (ROD) on February 14, 2012. The consentdecree was entered on May 20, 2013, providing forreimbursement of NDEP and EPA response costs,settlement of natural resource damages, performanceof the selected remedial action, and covenants not tosue. Remedy construction began in June 2013 and isexpected to continue for three to five years. Surfacewater monitoring will continue for at least another20 years.

Remedy Description

Tailings materials will be excavated from the MillCreek valley and placed in an on-site repository.The excavation will be partially backfilled withclean fill, and Mill Creek will be realigned to itsapproximate native orientation. A liner will beplaced in the realigned creek channel and coveredwith protective soil and rock. Features intended tofacilitate fish passage through the reconstructedchannel will also be installed, and riparian areaswill be revegetated.


Downstream surface water quality will bemonitored during and following remedy constructionin accordance with protocols included in the ROD.The Water Quality Compliance Protocol establishesthe performance standards for the remedy, describesthe methods to be used for conducting water qualitycompliance monitoring, and identifies additionalactions that may be required if compliancemilestones are not achieved at the times specified.The Ambient Monitoring Protocol will generate datathat can be used to confirm that releases from theunderground mine workings are not degradingsurface water quality. If such influences aredetected, additional response actions may berequired.

Challenge #1: Competing State and FederalOversight

Overlapping interests of state and federal agenciesgreatly affected the consent decree strategy. Historydemonstrated that the RTWG companies and NDEPcould work together cost-effectively. At the sametime, the companies needed a global settlementresolving all government claims under both statelaw and CERCLA. While EPA may have deferred toNDEP if remedial action proceeded without directEPA involvement, there would be no guarantee thatEPA would not assert its authority under CERCLAto require additional investigations or furtherresponse actions. But in pursuing the goal ofmaximum binding effect of the settlement, thecompanies had to grapple with the potentialinefficiencies of dual oversight, or worse—inconsistent direction from NDEP and EPA. Fromthe start, the strategy was to involve EPA in theglobal settlement process, but also to continuallymake sure that NDEP would have the lead role.NDEP itself strongly advocated for this role; and,ultimately, the RTWG companies, NDEP, and EPAwere able to develop a consent decree andmanagement consultation process that achieved abalance of authority satisfactory to all parties. Thisrequired certain deviations from EPA’s modelconsent decree provisions, and at times doggednegotiations among the various interests involved.

The ROD states that NDEP was the lead agency inthe selection of the remedy, with concurrence fromEPA. NDEP is also the lead agency forimplementation and oversight of the remedy. State-lead sites are not unprecedented under CERCLA,but they are not particularly common either. Of 30recent CERCLA consent decrees we foundinvolving both the EPA and states as parties, weidentified only two where the state was clearlyassigned a lead remedial action oversight role.Subpart F of the NCP sets forth the requirements forstate involvement in CERCLA response actions.These regulations stem from section 121(f) ofCERCLA, 42 U.S.C. 9621(f), which requires thepromulgation of regulations providing for“substantial and meaningful involvement by eachstate in initiation, development, and selection ofremedial actions to be undertaken in that State.”Section 300.515(e) of the NCP provides morespecific guidance on the state role in remedyselection and preparation of the ROD. For sites likeRio Tinto, where Superfund monies are not beingused, a state may proceed under its ownenforcement authority, select the remedy, andprepare a ROD, either with or without EPAconcurrence.

The RTWG companies pursued a global settlementapproach memorialized in a consent decree enteredinto with the State of Nevada and the United States(and also the tribes), which established the lead rolefor NDEP, provided for EPA’s concurrence atcertain key points in the remedial action process,and offered both state and federal covenants not tosue. NDEP developed the proposed plan and theROD. EPA was identified as the support agency andconcurred with the selected remedy. The consentdecree assigns approval authority for the remedialdesign and other work plans and submittals toNDEP, subject to EPA’s right to provide comments.NDEP will perform periodic site inspections andwill be primarily responsible for direct agencyoversight during remedy construction. Otherresponsibilities allocated by the consent decreeinclude the following: certification of completion ofremedy construction and certification ofachievement of performance standards requireconcurrence of NDEP and EPA; NDEP may require


further response actions if it determines the remedyis not sufficiently protective; EPA may also requirefurther response actions, but only if it first engagesin management consultation with NDEP; and eitheragency may issue a work takeover notice, but EPAcannot implement a work takeover without firstallowing NDEP to take over the work.

At times, the dual involvement of state and federalagencies slowed the global settlement process, asNDEP and EPA struggled with formulating thebalance between lead agency and support agencyauthorities in the absence of precedent and on-pointmodel consent decree language. To address this, theRTWG companies assumed a more proactive rolethan what might be typical for other sites. Thecompanies were instrumental in crafting theremedial framework and drafting key CERCLAdocuments, including the proposed plan, ROD, andconsent decree. This activism helped to bring theglobal settlement process to a timely conclusion.The end result—a clearly articulated remedialapproach, schedule, and balance of agencyauthorities—should facilitate a more efficient andcost-effective remedial action.

Challenge #2: Multiple PRPs

Before the RTWG companies could settle with thegovernment, they first had to resolve theirrespective liabilities for past and future responsecosts. Because the companies performed differenttypes of mining-related operations during sequentialperiods of time, there were questions about theextent to which each company contributed to theongoing water quality impacts. These questionsinvolved complex technical issues and legal issuescommon to many CERCLA sites, includingsuccessor liability, parent-subsidiary defenses,orphan shares, and equitable allocation.

While intercompany liability issues weresignificant, the RTWG companies recognized thebenefits of approaching NDEP and EPA together. Asa cooperating group, the RTWG would have agreater influence on the nature and design of thefinal remedy. Without that unity, there was concernthat EPA would assume the lead oversight role,

triggering a lengthy remedial investigation/feasibility study (RI/FS) process and increasedcosts.

To resolve these issues, the RTWG companiesutilized a mediator highly experienced in CERCLAallocation issues. The companies presentedinformation on the source, fate, and transport of thewater quality impairment and developed their legaldefenses. Ultimately, the companies reachedagreement on an allocation that would facilitatefurther global settlement negotiations with thegovernments. The agreement established a formulafor allocating costs and assigned lead responsibilityto one party for remedy implementation.

The settlement approach included a streamlinedprocess for remedy implementation and protectionsagainst open-ended future expenditures. Theallocation formula and assignment of responsibilitywere made contingent on the retention of acontractor that would perform the remedial actionfor an insured fixed price. The companies believedthat a fixed-price approach would be less expensivethan a time-and-materials arrangement (an outcomethat has largely been borne out); and the associatedreduction in overall cost liabilities, coupled withgreater certainty, allowed each company greaterflexibility to reach agreement. The companies set adollar limit for remedy construction, insurancecoverage, and operations and maintenance. Thecompany with lead responsibility for remedyimplementation would retain the fixed-pricecontractor for an amount less than the spendinglimit, purchase the insurance, and manage the fixed-price contract. In exchange for certain otherconsideration, the lead company would release andindemnify the other companies, but the indemnityand other settled obligations would only beeffective if the lead company actually entered intoan insured, fixed-price cleanup contract that met thecost limitations and other criteria established by thesettlement agreement.

Within a short time after execution of the settlementagreement, the lead company selected a qualifiedcontractor to perform the remedy from amongseveral solicited bids. The company and the


contractor coordinated in purchasing insurancecoverage against cost overruns, third-party pollutionclaims, and regulatory reopeners. Although bidswere solicited prior to final remedy selection andissuance of the ROD, there was sufficientinformation available at the time of bidding aboutthe nature and scope of the likely final remedialaction to allow the contractor to set a guaranteedprice that satisfied the cost limitation set by thecompanies’ settlement and allocation agreement.This was due, in part, to NDEP’s preapproval forthe remedial design/remedial action work planbefore the execution of the consent decree.

Challenge #3: Remedy Implementation andCost Control

An important requirement for the overall settlementand implementation strategy was cost certainty andcontrol. This was achieved through a combination offixed-price contracts for remedy construction andpost-construction monitoring, cost-cap insurance,and pollution premises liability insurance providingcoverage for unknown pollution conditions andthird-party claims. The pollution premises liabilitypolicy also includes reopener coverage for workthat may be required after remedy construction.

The first fixed-price contract assigns responsibilityto the contractor for the performance of all work andpayment of all expenses required to achievecertification of completion of remedy construction.The risk of cost overruns and schedule delays areassigned to the contractor. The contract alsocontains warranties and indemnities against post-certification work requirements and expensesarising as a result of any defects in design orconstruction. Cost-cap insurance protects thecontractor if costs exceed the contract price.Reporting costs, agency oversight costs, stipulatedpenalties, and most other expenses associated withremedial action implementation are the contractor’sresponsibility. This scheme creates incentives tocontrol costs and accelerate remedy completion.

The second fixed-price contract covers the five-yearperiod after remedy construction, during which timethe contractor will perform the monitoring and

maintenance required to confirm achievement of theperformance standards in the consent decree.Contractor obligations are similar to those requiredby the remedy construction contract, although theamount of activity and the value of the contract aresignificantly less.

Remedy construction costs are paid according to apre-set schedule as construction milestones arecompleted and documented in payment requests. Allfunds necessary to pay the contract prices will bedeposited into trust accounts during the first threeyears of the remedial action. Payment distributionsfrom the trust accounts must be preapproved by thelead company. Approval depends on confirmationthat the associated construction milestone has beencompleted.

The trust accounts were set up to satisfy therequirements for an “environmental remediationtrust” under the Internal Revenue Code and theapplicable Treasury Regulations (section 671 of theInternal Revenue Code of 1986, as amended, and theimplementing Treasury Regulations at 26 C.F.R. §1.677(a)-1(d) and § 301.7701-4(e)). This ensuresbeneficial tax treatment for remediation expenses atthe time funds are distributed.

The consent decree acknowledges that placement offunds into the trust accounts shall satisfy thefinancial assurance obligations of the companies forcompletion of the remedial action. In the event of awork takeover, NDEP or EPA will be able to use thefunds to complete the remedial action. In this way,the companies avoid the additional burden andexpense of purchasing more traditional forms ofperformance guarantees.

Challenge #4: Establishing and AchievingPerformance Standards

The tailings will be removed from Mill Creek, andthe channel will be reconstructed within the firstthree-to-five construction seasons. However,recovery of surface water quality is projected totake longer, since groundwater movement throughthe alluvium will be required to return the system tonatural conditions. The RTWG companies and the


agencies developed a multi-tiered approach thatwill simultaneously recognize the short-termcompletion of remedy construction and also allowfor the long-term achievement of surface waterquality objectives.

The consent decree establishes two points at whichNDEP and EPA will certify completion of remedialaction milestones: (1) when all constructionactivities are completed; and (2) when waterquality-based performance standards are achieved.After the first certification, reporting and oversightrequirements will be reduced, and remedial effortswill focus on water quality monitoring. The secondcertification marks the transition from remedialaction to long-term operations and maintenance. Atthat point, water quality monitoring will cease,financial assurances will be released, and on-siteactivities will be limited to maintaining therepository cover. Cost-cap insurance will covercost overruns prior to the first certification.Premises pollution liability insurance will coverreopeners and unanticipated expenses after thatpoint.

The parties developed a water quality complianceprotocol that establishes a series of water qualitymilestones to be achieved following completion ofremedy construction. The protocol also identifiesfurther response actions that may be required if themilestones are not achieved within the time periodsspecified. NDEP and EPA approved the protocolduring pre-consent decree negotiations, so it couldbe included in the ROD. The protocol’s waterquality milestones are defined in the consent decreeas the performance standards for the remedialaction. Milestones are set at five-year intervals tocoincide with five-year reviews performed byNDEP and EPA under CERCLA section 121(c).

If performance standards are not achieved in theOwyhee River within ten years after remedyconstruction and in Mill Creek within twenty yearsafter remedy construction, reevaluation of thestandards or implementation of additional remedialmeasures may be required. But adherence to theprotocol means that additional remedial measuresshould not be considered until that time and should

not be required until after less extreme options havebeen evaluated. Once performance standards areachieved, the RWTG companies can request thesecond certification, enabling the transition to long-term operations and maintenance.

Conclusion

The approaches discussed here should help toensure the efficient and cost-effectiveimplementation of the remedy. The Rio Tinto Minesite demonstrates that state lead oversight is aviable option under CERCLA, although a PRPseeking a state lead may need to be more proactivein pushing a global settlement to conclusion. Thiscase study also shows that resolving allocationdisputes among PRPs can benefit the globalsettlement process, and that establishing aframework for fixing remediation costs over timecan facilitate allocation. Finally, building a degreeof certainty about future remedial design anddecision making into a consent decree and ROD,through preapproval of the remedial action workplan and incorporation of compliance protocols, canreduce the open-ended nature of remedial action.

Adam Cohen is a partner in the EnvironmentalPractice Group at Davis Graham & Stubbs LLP inDenver, Colorado. Mr. Cohen’s practice focuseson environmental litigation, administrativeenforcement, permitting and compliance, andsite remediation. He may be reachedat [email protected].

Elizabeth Temkin is a partner at Temkin Wielga &Hardt, with over 25 years of experience inenvironmental litigation and transactional workthroughout the West. Ms. Temkin helps clientsdevelop better strategies to manage potentialliabilities and costs associated with complicatedSuperfund sites and large brownfieldsredevelopment projects. She can be reached [email protected].


OVERVIEW OF EARLY NRD RESTORATION INTHE DEEPWATER HORIZON OIL SPILLWhitford Remer andSara Gonzalez-Rothi Kronenthal

Introduction

Prior to 1989, a patchwork of international, federal,and state law governed oil pollution events. Twodisasters—the IXTOC I and Exxon Valdez—almostten years apart, prompted legislative action todefine a regime to prevent, respond to, and establishliability for these types of events: the Oil PollutionAct of 1990 (33 U.S.C. §§ 2701 et seq.) andaccompanying Natural Resource DamageAssessment regulations (15 C.F.R. 990.10 et seq.).The Deepwater Horizon oil disaster is putting thatregime into action. In the shadow of the law,government agencies and the responsible partieshave begun a unique first step, known as earlyrestoration, to address the damage in the Gulf ofMexico. This article provides a brief history of theOil Pollution Act, introduces the Natural ResourceDamage Assessment, and takes a deeper look atongoing early restoration efforts in the Gulf ofMexico. Civil penalties under the Clean Water Actpending before U.S. District Court Judge CarlBarbier are not discussed.

History

On June 3, 1979, the IXTOC I well blew out in thedeep waters of the Bahia de Campeche in the Gulfof Mexico. Two Mexican state-owned oilcompanies and a Texas-based company wereresponsible for the rig. Given sovereign immunitypractice and U.S. admiralty law, damages from thespill were largely unpaid. In response, Congresscreated the Oil Spill Liability Trust Fund as part ofa 1986 Budget Reconciliation Act; however, the lawdid not provide funding or authorize expenditures.

Almost ten years later, on March 24, 1989, theExxon Valdez oil tanker crashed into Bligh Reef inPrince William Sound, Alaska. Even with a fairlyrobust settlement, over 20 years of litigation

followed. In 1990, based in large part on lessonslearned following IXTOC and Exxon, Congressenacted the Oil Pollution Act (OPA) to fund the OilSpill Liability Trust Fund, allow for expenditures,and consolidate and strengthen response andliability into a single statute.

As compared to the Clean Water Act (33 U.S.C. §§1301 et seq.), OPA created an oil spill responseprocess and established liability for actual damageto natural resources held in the public trust.Specifically, OPA provides for an early responseled primarily by the federal on-scene coordinator(for a marine spill, the U.S. Coast Guard). The on-scene coordinator has the authority to use the OilSpill Liability Trust Fund for response and removalactivities as provided in the National ContingencyPlan. These costs can be recovered from thepotentially responsible party or parties (PRPs).OPA also establishes a scientific and legal process,known as the Natural Resource Damage Assessment(NRDA), whereby natural resources trustees canrecover from parties responsible for the spill: costsof restoring natural resources damaged by the spill;lost use of the natural resources; and costs ofassessing the damage.

NRDA

During the Natural Resource Damage Assessment,state, tribal, and federal trustees catalogue the natureand extent of the damage to “natural resources,”defined to include “land, fish, wildlife, biota, air,water, ground water, drinking water . . . and othersuch resources . . .” (33 U.S.C. § 2706). The NRDAtrustees then estimate the “costs of restoration,rehabilitation, replacement, and/or acquisition ofequivalent resources” for the benefit of the public(43 C.F.R. § 11.38(a)).

The NRDA process may require decades. Forexample, even in the Exxon Valdez circumstancewhere the oil was relatively geographicallyconfined, scientific assessments of the spill areongoing 20 years later. For Deepwater Horizon thequantity, distribution, depth, and geographic reach ofoil combined with migratory patterns, ocean


currents, and a dynamic ecosystem creates acomplex assessment process. Adding to thedifficultly is the apparent lack of baseline data in theGulf of Mexico, which provides a point of referenceto pre-oil spill conditions.

Recognizing that such a long assessment processwould have resulted in a protracted time lagbetween acute response and restoration, exactly oneyear and a day following the Deepwater Horizonblowout, federal and state NRDA trustees andBritish Petroleum (BP) announced they had reacheda historic and unprecedented agreement to begin upfront restoration. On April 21, 2011, under the“Framework for Early Restoration AddressingInjuries Resulting from the Deepwater Horizon OilSpill,” BP agreed to commit up to $1 billion to fundearly NRDA restoration projects in the Gulf Coastregion.

Early Restoration: A New Tool?

The framework agreement provided each of theseven trustees overseeing restoration of the GulfCoast with $100 million with the remaining $300million to fund additional state-sponsored projectsselected by the Department of the Interior (DOI) andthe National Oceanic and AtmosphericAdministration (NOAA). The Trustee Council wasinitially comprised of representative from the fiveGulf Coast states (Florida, Alabama, Mississippi,Louisiana, and Texas), DOI, and NOAA. OnSeptember 10, 2012, President Obama added theU.S. Environmental Protection Agency and the U.S.Department of Agriculture as advisors to the TrusteeCouncil (Exec. Order No. 13,626, 76 Fed. Reg.56,749 (Sept. 10, 2012)).

The framework agreement is significant for anumber of reasons. Most notably, the agreementmarks the first time a PRP has made such asignificant up front investment for restoration.NRDA regulations permit the trustees to conductemergency restoration actions to mitigate the acuteimpacts of an incident prior to completing the fulldamage assessment, provided certain conditions aremet (15 C.F.R. 990.26). In the case of the

Deepwater Horizon, the trustees and BP bothrecognized that the magnitude of the spill and therich ecosystems of the Gulf Coast requiredsignificant and expedited up-front restoration. Theframework agreement was negotiated pursuant to theNRDA regulations as an emergency restorationaction. While the regulations provide generalguidelines on how emergency restoration actionsshould be identified and implemented, a great dealof discretion is given to the trustees on how to carryout restoration. For that reason, the structure of theframework agreement is unique.

While the framework agreement complementsexisting NRDA regulations, it reads more like afive-page, one-billion dollar contract between BPand the trustees than a proscriptive, structuredrestoration plan. The agreement seeks to “commenceimplementation of early restoration projects thatwill provide meaningful benefits to acceleraterestoration in the Gulf as quickly as practicable”(Early Framework Agreement, p.1). Under theagreement, the trustees, BP, and the public canpropose projects. In January of 2014, 942 projectshad been submitted for consideration. BP reservesthe right to ultimately agree to or veto eachproposed project. The condition that BP mustapprove each project is unique to the frameworkagreement. In a traditional NRDA case, trusteespropose a full restoration plan to PRPs andgenerally a settlement is reached, rather than theproject-by-project approach adopted for DeepwaterHorizon early restoration. Under the project-by-project approach, BP has the ability to evaluate andnegotiate the offsets and public perception of eachproject. Perhaps most important to Gulf Coastrecovery, the framework agreement embraces andencourages cooperation between BP and trustees atthe outset of the incident.

On April 18, 2012, the first phase of projects underthe framework agreement was announced. In the firstphase, the trustees proposed $62 million worth ofrestoration projects focused on marsh creation,oyster restoration, artificial reef placement, andhuman use projects. A second, much smaller phaseof projects totaling $9 million was announced on


December 21, 2012. These projects focused on birdand turtle habitats in Florida, Alabama, andMississippi. Finally, in May of 2013 the trusteesagreed to fund $627 million worth of projects, with$318 million dedicated to barrier island restorationalong Louisiana’s heavily oiled coastline.

Projects proposed under the framework agreementmust be consistent with section 1006 of the OilPollution Act and NRDA regulations at 15 C.F.R. §§990. The agreement imposes an obligation to makethe environment and the public whole in relation tonatural resources or services injured as a result ofthe spill, and to compensate for interim lossesresulting from the incident. The projects must have anexus to damages related to the spill, be consistentwith the anticipated long-term restoration plan, andcarry a reasonable price tag.

Baseline Data

The Deepwater Horizon NRDA is one of the mostwidely studied, complex, and well-fundedenvironmental restoration processes undertaken todate. One of the greatest challenges for the trusteesis developing the scientific baseline to whichinjured natural resources must be restored. Thisscientific question has significant legal and financialimplications and is central to achieving fullrestoration. Adding to the complexity are changesmade to the Gulf Coast environment by humans longbefore the Deepwater Horizon disaster occurred.Coastal Louisiana is at the confluence ofsubsidence, sea-level rise, a flood risk reductionsystem that starves coastal and riverine wetlands ofnutrients and freshwater, and management of theMississippi River in a way that shunts sediment offthe coastal shelf rather than into the natural delta.The U.S. Geological Survey estimates thatLouisiana has lost 1900 square miles of coastal landsince 1930. Deepwater Horizon NRDA scientistsare faced with distinguishing marsh loss due tooiling from that due to other processes; whether oilcompounded the erosion; and if so, by how much.Land is not the only complexity: fish and wildlifemove, and predators eat prey. It will be a challengeto determine the multifaceted and interconnected

impacts to migration patterns, breeding, and the foodweb. The Gulf Coast is a complex, dynamic, andrich ecosystem. Developing a baseline condition forthe hundreds of species, and thousands of miles ofcoastline, wetlands, and blue water is anextraordinary task.

NRDA scientists are not without allies in thisenormous task: BP has provided both funding andagreed to cooperative assessments. Aside from thehundreds of millions of dollars pledged by thecompany to fund long-term research, BP recentlyannounced plans to make all of its scientific data onthe disaster public. While the data dump may seemoverwhelming at first (there are at least 2.3 millionwater column samples) cooperative agreementsdeveloped up front by BP and the trustees reducedduplicative sampling. By providing up-front fundingand sharing data sets for analysis, cooperativeassessments and studies can reduce interim naturalresource losses, assessment costs, and legal costs.

Additional Considerations

Several of the early restoration projects announcedthus far compensate for the loss of human use ofnatural resources. This may be in part due to thecontinued litigation regarding the extent of BP’sliability for natural resources damages. Theevidence required to justify to the public theselection of ecosystem restoration projects is likelyto be integral to the ongoing case.

The variety of projects to restore public use ofnatural resources may be a result of public orpolitical pressure on trustees from impactedcommunities. Restoring ecosystem function willoften take longer than building a boat ramp, forexample, and Gulf Coast residents are anxious tosee tangible progress.

It may also simply take longer to complete theassessment of impacts to the resources themselves.For example, the impact of fishery closures directlydue to the spill was relatively quickly quantified—but the long-term impact on fish reproduction isnecessarily a longer process. As a result, studies to


determine the fate of the oil and the long-termimpact to natural resources are ongoing.

While Exxon was settled on Clean Water Actclaims, the United States and the state of Alaskaincluded a “reopener” clause in the event futureenvironmental damage was discovered. Thegovernments have been unsuccessful in theirattempts to use the clause to address lingering oil.(United States v. Exxon Corp., No. 3:91-CV-0082,41 ELR 20046 (D. Alaska Feb. 15, 2012)). Theexperience in Exxon may influence trustees to try togather as much information as possible to ensure asettlement contemplates potential future harm. Thecooperative assessment process will be an asset inthat sense. Agency-PRP cooperation, especially inthe form of cooperative assessments, is an emergingtrend in the NRDA field. Such arrangements maysymbolize a turning point in how future NRDAs arehandled. The billion-dollar question will bewhether future PRPs follow in BP’s footsteps ascooperative participants up front.

Conclusion

The Gulf Coast is an incredibly rich and diverseecosystem. Natural resources are the cornerstone ofthe region’s economy. Wildlife tourism supports 2.6

million jobs and generates over $19 billion inannual spending. In 2009 the region provided morethan 90 percent of the nation’s offshore oil andnatural gas production, 33 percent of the nation’sseafood, and 13 of the top 20 ports by tonnage. TheDeepwater Horizon oil spill damaged both the GulfCoast economy and its rich environment. Thetrustees responsible for restoring this critical andfragile ecosystem have a difficult task ahead. Butwith commitment and cooperation on the part of BPand the trustees, and with innovative restorationtools such as the early framework agreement, thereis hope the Gulf will recover.

Sara Gonzalez-Rothi Kronenthal is a senior policyspecialist at the National Wildlife Federation inWashington, D.C. Sara serves as the nationalpolicy lead on coastal issues and restoration ofkey coastal resources in the Gulf of Mexico,America’s Everglades, and the Mississippi RiverDelta following the Deepwater Horizon oildisaster. She may be reached [email protected].

Whitford Remer is a policy analyst at theEnvironmental Defense Fund in Washington, D.C.Whit is the lead for Deepwater Horizon NRD issuesat EDF and focuses exclusively on coastalrestoration in Louisiana. He also closely follows theongoing oil spill civil litigation. Whit may bereached at [email protected].


UNDERSTANDING THE LIMITATIONS OFTECHNICAL EVIDENCEKirk T. O’Reilly

Whether assessing risk, determining damages,apportioning liability, or allocating costs, decisionsmade under the Comprehensive EnvironmentalResponse, Compensation, and Liability Act(CERCLA) are often based on the results oftechnical investigations. Such results include bothquantitative measurements, such as the concentrationin a particular sample, and more subjective findingsconcerning past actions or future risks. Due to theinterdisciplinary nature of environmental science,understanding the intricacies of the methodologiesand assumptions underlying claims and conclusionsmade in remedial investigations, feasibility studies,or natural resource damages assessments can be achallenge to trained engineers and scientists. Thetask of evaluating technical evidence is even moredifficult for attorneys, decision makers, and localcitizens involved in the Superfund process.

While not focused on CERCLA or evenenvironmental science, a recently publishedcommentary (503 NATURE 335 (2013)) presents 20tips for interpreting scientific claims. As noted bythe authors Sutherland, Spiegelhalter, and Burgman,their goal is to help the non-scientist interrogatetechnical advisors and to grasp the limitations ofscience-based evidence. Realizing that sufficienttraining for all parties using technical information isimpossible, the commentary provides tips forimproving “interpretive scientific skills.”

Although not unique, technical issues associatedwith Superfund raise challenges because decisionshave to be made in the face of significantuncertainty. Whether determining if a releaseresulted in an impact to sediment with a complexchemical baseline or predicting the risk of smallexposures to a compound over many years, theinherent variability can greatly exceed detectableeffects. While review of Sutherland et al.’scommentary is recommended for all environmentalpractitioners, these five points are of particular

relevance to the evaluations of technical evidence atcomplex CERCLA sites.

• No measurement is exact. Laboratoryvariability, and more importantly theheterogeneous distribution of chemicals,impacts conclusions about the nature andextent of contamination. This can be aparticular problem when trying to reachrisk-based treatment goals that are neareither background or analytical detectionlimits.

• Bias is rife. Ignoring the potential bias ofparties involved, experimental design canbias study results in unanticipated ways. Forexample, the selection of sample locationswill influence the evaluation of averageconcentrations or contaminant distribution.

• Correlation does not imply causation.Setting a lower bar than the courtroom, thepeer-reviewed literature is full of exampleswith insufficient evidence to support claimsof causation. The problem is often worse atSuperfund sites where parties assumesediment contamination is the cause ofmeasured fish tissue concentrations, and thenuse food web models to find a correlation.

• Extrapolating beyond the data is risky.Whether assessing risks or predicting thelong-term efficacy of a remedial alternative,critical decisions are often made based onthe results of models that conduct just suchextrapolations.

• Dependencies change the risks. Riskassessment is a mix of science and policy.Results depend as much on policy-drivenassumptions as on toxicological or chemicaldata. While often cited as a unit less value, itis important to remember the calculated riskis specific to a receptor exposed under theassumptions used in the assessment. Whilethe influence of some assumptions, such asthe fish consumption rate of the localpopulation, is easy to understand, otherassumptions such as the role of trophic leveltransfers in food webs, are more difficult toconsider.


When reviewing technical evidence orcommunicating with experts, it is important todifferentiate between what are measurements,findings, hypotheses, or opinions. Many of thefindings that serve as the basis for major decisionsat CERCLA sites, such as calculated health risks orpredicted recovery rates, are only the results ofcomplex models that incorporate many untestedassumptions. While useful, these models do notidentify facts about a site, and the value of the outputultimately depends on the validity of theassumptions. Uncertainty cannot be eliminated atcomplex sites, but it should not be ignored. As withany evidence, there is often more to the story thanoriginally meets the eye.

Kirk T. O’Reilly is senior managing scientist withExponent’s Environmental Sciences Practice inBellevue, Washington, and Chair of the ABA’sSuperfund and NRD Litigation Committee. Hemay be reached at [email protected].

2014 CALL FOR NOMINATIONS

THE SECTION INVITES NOMINATIONS FOR THE FOLLOWING AWARDS:

Environment, Energy, and Resources Dedication toDiversity and Justice AwardRecognizes people, entities, or organizations that have madesignificant accomplishments or demonstrated recognizedleadership in the areas of environmental justice and/or acommitment to gender, racial, and ethnic diversity in theenvironment, energy, and natural resources legal area.

ABA Award for Distinguished Achievement inEnvironmental Law and PolicyRecognizes individuals and organizations who havedistinguished themselves in environmental law andpolicy, contributing significant leadership in improvingthe substance, process or understanding ofenvironmental protection and sustainable development.

Environment, Energy, and Resources GovernmentAttorney of the Year AwardRecognizes exceptional achievement by federal, state,tribal, or local government attorneys who have workedor are working in the field of environment, energy, ornatural resources law and are esteemed by their peersand viewed as having consistently achieved distinction inan exemplary way.

Law Student Environment, Energy, and ResourcesProgram of the Year AwardRecognition of the best student- organized educationalprogram or public service project of the year addressing onissues in the field of environmental, energy, or natural resourceslaw. The program or project must have occurred during the2013 calendar year.

State or Local Bar Environment, Energy, and ResourcesProgram of the Year AwardRecognition of the best CLE program or public service projectof the year focused on issues in the field of environmental,energy, or natural resources law. The program or project musthave occurred during the 2013 calendar year.

Nomination deadlines: May 5, 2014.These Awards will be presented at the ABA Annual Meeting inBoston in August 2014.

For more information:www.ambar.org/EnvironAwards

www.ambar.org/EnvironSpring

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