Flooded Houston Retailers Face Waste Disposal Challenges

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By Adam Allington

Many retailers and other local businesses in Houston damaged by Hurricane Harvey are facing a critical challenge in disposing of hazardous waste, and government agencies are offering little regulatory relief.

Stores that were damaged by floodwaters or lost power for an extended time may have to dispose of many products made with chemicals, such as household cleaners and pesticides. Likewise, medications and refrigerated pharmaceuticals—like insulin—may no longer be fit for sale and must be properly disposed of according to federal and state regulations.

In some cases, that means cleanup efforts for contaminated retail sites may take a long time and could further exacerbate a critical shortage of groceries and medicine, as well as cost retailers billions dollars in lost sales. In response to the situation, Texas Gov. Greg Abbott (R) did provide some relief from environmental rules, but hazardous waste disposal regulations still apply.

A Complex Cleanup

“You may see some relaxation of certain deadlines because of the urgency of the situation, but the requirements for disposal of hazardous waste according to the Resource Conservation and Recovery Act (RCRA) are still in effect,” said Noelle Wooten, an environmental and regulatory attorney in the Charlotte, N.C., offices of Kilpatrick Townsend.

“You could see some relaxation on things like the amount of time companies can store waste on site,” Wooten said. “But if a retailer is a registered generator of hazardous waste—if they sell paint, cleaners, or anything like that—RCRA will apply.”

EPA did not respond to a request for comment on any relaxation of RCRA rules.

‘The Phone Hasn’t Stopped Ringing’

Maricha Ellis, vice president of sales for the waste disposal firm Stericycle Environmental Solutions, told Bloomberg BNA the company has seen an extraordinary increase in demand over the past several weeks.

“The phone hasn’t stopped ringing since two days after [Harvey made] landfall,” said Ellis.

The company is working with several major national retailers in the Houston area, many of which were forced to close most or all of their locations as roadways and parking lots filled with water and silt. Now they’re under pressure to reopen as quickly as possible.

“Retailers need to move quickly,” she said. “As soon as the flooding is cleared and travel on roads is possible, people are going to need groceries, medication, toilet paper,” and other goods.

To get those locations open however, isn’t as simple as cleaning up water and maybe replacing some drywall.

“For example, you can’t just throw pharmaceuticals in the trash, you can’t just toss out cleaning products that are no longer able to be sold.”

Ellis said even the packaging and transportation of hazmat goods needs to be handled in accordance with rules set out by the Pipeline and Hazardous Materials Safety Administration.

“The first thing we do is send our supervisor to assess damage,” she said. “The next step is to segregate the waste into various streams, package for compliant transportation, and then find qualified drivers to take it all away.”

Depending on the amount of damage, the process can take anywhere from a few days to weeks or months. In cases where the location is a complete loss, Ellis said, the company is still on the hook for all costs associated with hazardous waste disposal and remediation of the site.

Waivers for Pharmacies

In the cases where cleanup and remediation needs to take place, the cost implications are significant, especially for small businesses. Under normal circumstances, pharmacies are often allowed to return unused or expired medicines for a refund. In the case of a natural disaster, they might be responsible for both the cost of lost inventory, as well as the cost for disposal at a Transport Storage Disposal Facility.

In addition to the cleanup of stores, many Gulf Coast pharmacies are facing supply shortages precisely at the same time patients are struggling with increasing health and medical needs.

“In a situation like we are seeing with Hurricane Harvey, things pop up,” said Mitchel Rothholz, chief strategy officer for the American Pharmacists Association.

“There’s the basic stress of the situation, but also things like cuts, wounds, immunizations; tetanus becomes more important as people are out there getting punctures and cuts.”

Rothholz told Bloomberg BNA that some of the bigger pharmacy chains can bring in mobile pharmacies to assist neighborhoods that are flooded and relieve the supply shortages. Likewise, he said, most states grant disaster waivers for pharmacies to remove certain administrative barriers that may get in the way of patient care.

“Things like regulations on prescriptions refills,” said Rothholz, “or licensing rules that allow pharmacists to come in from out of state to help out.”

A One-Two Punch

As Hurricane Irma bears down on Florida, it threatens to hit retailers there with stronger winds than Harvey hit Houston with just two weeks ago.

Wal-Mart Stores, Inc. is expecting to close more stores in Florida than it did in Texas. Consumers are reacting to the news by buying up gasoline and emptying grocery store shelves.

But even with a pre-storm increase in sales, the net impact for retailers is universally bad. “It doesn’t balance out, because money doesn’t move for such an extended period of time,” said Scott Bernhardt, president of Planalytics, a firm that tracks the economic impact of weather events.

Bernhardt said Harvey wiped out an estimated $1 billion in retail sales (actual sales lost, not purchases that were moved up or deferred). Bernhardt told Bloomberg BNA that he expects the impact for Irma to be even greater—somewhere in the area of $1.5 billion in sales gone.

Houston Recovering as Irma Looms

Since the worst of the floodwaters receded over the Labor Day weekend, most grocery stores in Houston have been reopening as flooded roads gradually clear. Kroger has reopened 108 of 110 locations. Walmart is nearly back online as well.

“We had 134 locations offline at peak of closure,” said Walmart spokesman Ragan Dickens. “As it stands today, we have two stores, and one fulfillment center, that are still closed.”

Dickens told Bloomberg BNA that while the massive amount of rain in Houston was primarily a logistics challenge from flooded roads and railways, the impacts in Florida could create different cleanup challenges.

“It’s currently in an all-hands-on-deck situation preparing for Irma,” said Dickens.

Dickens said Wal-Mart has dispatched 800 trucks from across the country to the Florida region to keep stores stocked with Hurricane-essential items, such as water, batteries, and flashlights.

The National Oceanic and Atmospheric Administration has rated Irma as a potentially catastrophic, Category 5 storm, with dangerously high winds.

If an evacuation order is given in Florida, Dickens said the company’s main focus will be to first get staff out in time. “And then immediately go into the environmental assessment and recovery once we are cleared to reopen.”

To contact the reporter on this story: Adam Allington in Washington at aallington@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

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