EPA Pushes Industry on Passaic Cleanup Design

By Brian Dabbs

April 4 — The Environmental Protection Agency took another step in recent days to push companies to pony up the resources necessary to design a cleanup plan and ultimately remediate toxic contamination in the Lower Passaic River.

However, the potentially responsible parties (PRPs) aren't yet onboard, industry representatives said. None of the major players have publicly committed to dedicating those resources in line with record of decision (ROD) released March 4 .

A top EPA official said he expects them to come around once the threat of litigation and unilateral agency action settles in.

The $1.4 billion record of decision, a sprawling compilation of documents, tackles remediation for the lower eight miles of the Passaic.

That leg of the river runs alongside Newark, N.J., an industrial heavyweight for much of American history. It also includes one of the largest Superfund sites nationwide, Diamond Alkali, a Newark facility that produced Agent Orange and other pesticides in the 1960s, contaminating the land and river with dioxin.

The EPA disseminated timelines for design-phase action in letters to the PRPs March 31, Region 2 Superfund Director Walter Mugdan told Bloomberg BNA the same day, adding that the agency is aiming to lock in place a design scheme “by the later part of the summer if not earlier.”

But the buy-in from industry is still uncertain, according to statements from the parties issued to Bloomberg BNA.

Industry Pushback

A spokesman for the Occidental Chemical Corp., the entity the EPA points to as a the primary culprit for Passaic contamination, deferred Bloomberg BNA to Maxus Energy Corp. for comment. Maxus previously agreed to indemnify OCC of liabilities and costs associated with it's industrial activities in the area, OCC spokesman Eric Moses told Bloomberg BNA.

Mike Turner, president of the public affairs group Burton Trent, which represents Maxus and another OCC-associated company Tierra Solutions Inc., told Bloomberg BNA those OCC affiliates are still analyzing the path forward.

Meanwhile, a spokesman for the Lower Passaic River Study Area Cooperating Parties Group (CPG), a consortium of Passaic PRPs that includes BASF, DuPont and Chevron, hit back at the cleanup plan in a statement to Bloomberg BNA.

“[The ROD] focuses only on the lower eight miles and preempts the conclusion of the comprehensive $150 million study that the CPG has conducted under EPA's supervision, and which demonstrates that a targeted remedy for the river is not only protective, but also consistent with the law and EPA policy,” Jonathan Jaffe told Bloomberg BNA, while declining to field Bloomberg BNA questions on EPA interaction with industry since the ROD release.

Still, Mugdan said EPA is currently aiming to nail down construction allocation.

“We’re not at this stage in the game asking anybody to sign on the dotted line and do the actual construction,” Mugdan said. “At the moment, it’s just the design that we’re focusing on. That’s a very big deal.”

Design Complexity

The EPA says the design phase is slated to take three to four years.

“We're talking about a billion and a half dollar project here, which is going to take place in a heavily populated, urban area with lots of bridges,” said Mugdan, an author of the ROD.

The agency prefers that one company, or a small consortium, spearhead the design scheme, Mugdan said, hinting that the onus will fall on OCC and it's partners. Mugdan didn't refer to OCC by name, but pointed to an EPA press conference immediately following the ROD release. At that event, EPA Regional Administrator Judith Enck called out the company as the lead contributor to the contamination.

OCC and other companies polluted the Passaic with large quantities of dioxins, polychlorinated biphenyls, mercury, metals and pesticides, including Agent Orange, the EPA said.

Design, Construction Overlap

Industry members will independently allocate responsibilities for the design and construction phases of the remediation operation, which are likely to overlap, Mugdan said.

The EPA predicts the full project will take 10 years to 11 years.

“You have to actually locate and then build an entire on-land treatment system where the wet mud that gets dredged out of the water will then be brought to that plant,” Mugdan said. “The water will be squeezed out of it; the water has to be treated to better than drinking water standards so that it can go back into the river. And then the dried mud has to be loaded onto, probably rail cars, and shipped to permitted disposal facilities elsewhere in the United States.”

During the design and construction phases, companies will have to arrange and secure barges, tugboats, excavators, an onshore location to board and offload personnel and equipment and a control center akin to air traffic control, as well as air monitoring equipment onsite and in surrounding communities, all of which has to be approved by the EPA, Mugdan said.

The lower eight-mile stretch requires different dredging styles, he added.

“Thousands of pages of very, very detailed technical documents will be developed throughout this program,” Mugdan said.

EPA will also offer smaller companies and those with less responsibility the opportunity to pay a cash sum and no longer participate in design activities, and be somewhat shielded from further litigation, he said.

“Our hope is to reduce the number of entities that have a sort-of ongoing participation in the actual work because it’s too cumbersome and it causes them to incur these transaction costs we think unnecessarily,” Mugdan said. “And it causes us to incur additional transaction [costs], as we have to interact with more or different companies or these interactions become more complicated.”

Industry Division

Burton Trent's Turner didn't respond to a BNA inquiry on the interaction between EPA and the OCC affiliates since the release of the cleanup plan, but said his clients are still digging into the ROD documentation.

(Click image to enlarge.)

Industry Views on Lower Passaic Superfund Cleanup

“Maxus/Tierra continues to study the ROD and, having submitted extensive comments regarding process and substance, we need to evaluate to what extent EPA has adequately addressed those comments before commenting,” Turner told BNA.

Jaffe, of the Cooperating Parties Group, meanwhile, lashed into OCC for its role in the contamination.

“We do appreciate that the EPA recommends significant responsibility for the clean-up must be assigned to Occidental Chemical Corp., which has liability for the former Diamond Alkali plant in Newark, known for notoriously dumping dioxin into the River to make Agent Orange,” Jaffe told Bloomberg BNA. “Occidental Chemical Corp. is not a member of the CPG.”

General Motors and Chemtura Corp., also non-CPG members, told Bloomberg BNA they are absolved of remediation liability due to bankruptcy, while General Electric said it's responsibility is minimal.

“GE's role on the Passaic is very limited; we had no significant discharges to the river,” spokesman Joan Gerhardt told Bloomberg BNA. “Therefore, GE does not expect to be directly involved with implementing the remedy EPA selected. We will continue working with EPA and the other parties throughout the regulatory process.”

Reconciliation Down the Pike?

The EPA's Mugdan, however, said industry reluctance is likely to dissipate after the expected costs of litigation and the threat of EPA coercion resonate.

Companies regularly agree to allocated design and construction schemes as part of remediation of Superfund sites nationwide, he said.

“Nobody will probably be happy with it; everybody will probably think they’re paying more than they should, and their percentage is higher than it should be,” he told Bloomberg BNA. “But eventually it’s like settling any other litigation or dispute where, if you can reach a settlement that everybody can swallow hard and accept, that’s preferable than going through the pain and uncertainty of litigation. Now that doesn’t always mean that you’re able to do that.”

Even in the event of failure to consent, the EPA won't be left out on a limb, Mugdan warned.

CERCLA provides EPA a mechanism, known as a unilateral administrative order, to force completion of various remediation stages.

“That tool that Congress gave us is extremely powerful. We use it cautiously, and we use it thoughtfully because it is so powerful; it has a lot of very heavy penalties for non-compliance that are built into it,” he said. “So if we did not get the consent of the responsible parties to carry out, let’s say, this design phase of the work, then we would resort to a unilateral administrative order and require them to do the work. We much prefer to do it consensually.”

To contact the reporter on this story: Brian Dabbs in Washington at bdabbs@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com