EPA and State of New Jersey Propose Settlement with Bank of America for Monmouth County, NJ Superfund Site Cleanup

On May 15, 2023 the U.S. Environmental Protection Agency (EPA) announced a proposed settlement with Bank of America to address the White Swan Cleaners/Sun Cleaners Area Groundwater Contamination Superfund Site in Wall Township, Monmouth County, New Jersey. Under the proposed agreement, Bank of America, the current owner of the White Swan property, will be required to fund and perform vapor intrusion and groundwater cleanup work at an estimated cost of $29 million.

"With this settlement EPA is holding Bank of America accountable for its share of the cleanup at the White Swan site," said Regional Administrator Lisa F. Garcia. " After years of investigation and cleanup efforts, this is a significant step towards resolving the contamination issues at the site for the benefit of the community, the environment, and public health."

“The New Jersey Department of Environmental Protection and U.S. Environmental Protection Agency are committed to protecting the health of those who live and work in the vicinity of the White Swan Cleaners/Sun Cleaners site,” New Jersey Commissioner of Environmental Protection Shawn M. LaTourette said. “We have partnered together to test indoor air at hundreds of business and residential properties and installed ventilation systems on dozens with vapor intrusion concerns. This settlement with Bank of America ensures that long term cleanup, including remediation of contaminated groundwater and future vapor mitigation work, will be funded by the responsible party, not by the taxpayers.”

Bank of America became legally responsible for the site when it bought the White Swan property through a series of bank mergers and acquisitions in 2004.

Bank of America also will reimburse EPA for certain aspects of its cleanup work, paying $10.8 million, and pay up to $1.5 million for future EPA oversight costs. As part of the agreement, Bank of America will construct and then run the groundwater pump and treatment system for four years to capture and clean the most highly contaminated groundwater at the site.

The company will pay up to a total of $6.5 million to the State of New Jersey to settle its liability for cleanup and removal costs, to voluntarily resolve its liability for natural resource damages (NRD), and to address long-term operational needs of the treatment system. This amount includes $3.7 million for cleanup costs and $2.8 million set aside in an escrow account for any future groundwater system operation and maintenance or added vapor intrusion work needed after the State takes over the cleanup.

Vapor intrusion occurs when volatile organic compounds (VOCs) from contaminated soil and groundwater seep into buildings, potentially exposing occupants to harmful chemicals. EPA has found that the former dry-cleaning operations of White Swan Cleaners and Sun Cleaners were the sources of soil and groundwater contamination. VOCs from the contamination can easily evaporate into the air and cause health hazards. EPA added the site to the National Priorities List (NPL) in 2004. In the course of the cleanup, EPA and the New Jersey Department of Environmental Protection (NJDEP) have installed several indoor air ventilation systems after conducting indoor air testing on residential and commercial properties. In 2018, EPA also oversaw Bank of America’s removal of contaminated soil from the White Swan property. Cleanup of the Sun property, which is not related to the White Swan property, is being funded by EPA.

https://www.epa.gov/vaporintrusion/what-vapor-intrusion

The proposed consent decree, which has been lodged in the U.S. Federal District Court of New Jersey, is subject to a 60-day comment period. The Department of Justice and EPA will evaluate the comments and decide whether to proceed and then, if appropriate, seek final approval by the court.

For more information, to view the proposed consent decree and to give comments, please visit: https://www.justice.gov/enrd/consent-decrees

For additional background, please visit the White Swan Cleaners/Sun Cleaners Area Ground Water Contamination Superfund site profile page.

U.S. Environmental Protection Agency (EPA) www.EPA.gov
Press Release dated May 15, 2023
https://www.epa.gov/newsreleases/epa-and-state-new-jersey-propose-settlement-bank-america-monmouth-county-nj-superfund

An externality of groundwater depletion: land subsidence and residential property prices in Phoenix, Arizona

Abstract:

One of the main physical effects of the depletion of aquifers is land subsidence – the lowering of the land-surface elevation as a result of groundwater overdraft. A second effect is the development of earth fissures as a result of the horizontal movement of sediments during subsidence. To determine the value of these effects we investigated the impact of land subsidence and earth fissures on residential property values in Maricopa County, Arizona. Using 82,716 arms-length property sales between 2004 and 2010, we estimated a fixed effects hedonic price model. We found that existing and future land subsidence, and earth fissures had a negative impact on the property values. The mean value of properties located in land subsidence features was lower than those located outside land subsidence features, and the disamenity associated with earth fissures was largest for properties located in land subsidence features.

...

http://geochange.er.usgs.gov/sw/changes/anthropogenic/subside/

Table 3 presents estimated percentage home value depreciation associated with (1) existing land subsidence only, (2) earth fissure only, and (3) a combination of earth fissure and existing land subsidence, and (4) future land subsidence only. The results show the value of residential properties in existing subsidence features in Maricopa County to be 9.86% lower than the value of properties outside existing land subsidence zone if no earth fissures are within 500 meters, 11.07% lower than the value of properties outside existing land subsidence features, if there is an earth fissure within 500 meters. Outside existing land subsidence features, the value of properties, is found to be 5.38% lower when there is an earth fissure within 500 meters, and 6.81% lower when properties are in future land subsidence zones. The reduction in the capitalised value of residential properties within existing land subsidence features was $24,570 and $27,646 for, respectively, properties beyond or within 500 meters of an earth fissure. The reduction in the capitalised value of properties outside existing land subsidence features was $18,329 and $19,399 for, respectively, properties within future land subsidence features, or within 500 meters of an earth fissure.

...

A first approximation of the capitalised value of the subsidence externality of groundwater extraction in the West valley is the mean reduction in house prices in the affected area multiplied by the number of housing units in that area. Using 2010 census data to identify the number of housing units in the West Valley subsidence feature, we estimate the capitalised value of the externality to be $4,327,586,4315 in 2010 dollars. Since the geographical scale of the West Valley subsidence feature is not constant, we can also get a first approximation of the change in the value of the subsidence externality, by investigating the change in the number of residential housing units affected by subsidence. Figure 5 maps the West Valley subsidence feature at intervals in the period 2004–2014. It shows the change in the area affected by subsidence over that period. Using census data to convert this to housing units, and the percentage change in mean property values between 2010 and 2014 to adjust the nominal value of the subsidence externality, a first approximation of the growth in the capitalised value of the externality in the West Valley subsidence features in this period is $875,912,355, the 2014 value of the aggregate externality being $5,203,498,786.

Quantifying Global Impacts to Society from the Consumption of Natural Resources during Environmental Remediation Activities

Summary:

Environmental remediation activities often require the management of large volumes of water and the consumption of significant amounts of local natural resources, including energy and fossil fuels. Traditionally, proposed remedial approaches for a specific cleanup scenario are evaluated by overall project implementation cost, time frame of the cleanup, and effectiveness to meet cleanup goals. A new paradigm shift, referred to as sustainable remediation, has influenced the remediation industry to consider environmental, social, and economic impacts from cleanup activities. An environmental footprint analysis is the most common method to evaluate environmental implications of cleanup approaches. Presently, these footprint tools do not associate the environmental implications with global impacts. In this article, the method has been extended to integrate the social cost of carbon emissions to quantify global impacts. The case study site is a former aircraft parts manufacturing facility that caused chlorinated solvent contamination in soil and groundwater beneath the building. A groundwater pump-and-treat system was initially installed, followed by its gradual phase-out with concurrent phase in of in situ bioremediation. The case study evaluates the monetized societal benefits from quantifying carbon emission impacts of the proposed cleanup approaches and alternative scenarios. Our results suggest that societal impacts based on monetized carbon emissions can be reduced by 27% by optimizing the remediation processes. The sensitivity analysis results elucidate how variation in carbon prices and social discount rates can influence cleanup decisions for remediation projects.

...

The social cost of an environmental metric links local consumption of natural resources to monetized global impacts. As shown in table 1, the costs borne by society, represented by the social costs of CO2-eq and noncarbon emissions from electricity generation, decreased over time by phasing out the P&T system and incorporating bioremediation. The cumulative social cost calculated using a 2.5% discount rate is $29,894.67 for scenario I and $21,792.59 for scenario II, a difference of $8,102.08 (i.e., an overall 27% reduction in monetized global impacts).

https://en.wikipedia.org/wiki/Permeable_reactive_barrier

To put the costs borne by society from remedial activities into a broader context, the monetized global impacts calculated for scenarios I and II at a 2.5% discount rate were used to predict the costs society may bear from cleaning up the remaining hazardous waste sites in the United States. The US EPA projected that a total of 169,000 hazardous waste sites will require cleanup between 2004 and 2033, excluding small underground storage tank sites (US EPA 2012b). These site cleanups vary dramatically owing to the size of the property and the amount of time required to remove and/or contain the contamination. The case study site is relatively small compared to a typical remediation project. In order to use the case study site as a broad representation of typical cleanup sites, the costs borne by society (using a 2.5% discount rate) from scenarios I and II was scaled up fivefold to get a lower and tenfold to get a higher range for an average per-site social cost of remedial activities. Thus, the rough average per-site social cost of remediation might be:

    Scenario I: $150,000 to $300,000
    Scenario II: $110,000 to $220,000

Estimated remediation-related social costs for the remaining 169,000 hazardous waste sites would range between $19 billion and $51 billion. This calculation illustrates that CO2-eq emissions from the local consumption of resources as part of remedial activities over an extended period of time has the potential to be a significant contributor to monetized global impacts.
Choosing an Appropriate Discount Rate

http://tinyurl.com/gunhpfl

Markets, contracts, and uncertainty in a groundwater economy

Abstract:
Groundwater is a vital yet threatened resource in much of South Asia. This paper develops a model of groundwater transactions under payoff uncertainty arising from unpredictable fluctuations in groundwater availability during the agricultural dry season. The model highlights the trade-off between the ex post inefficiency of long-term contracts and the ex ante inefficiency of spot contracts. The structural parameters are estimated using detailed micro-data on the area irrigated under each contract type combined with subjective probability distributions of borewell discharge elicited from a large sample of well-owners in southern India. The findings show that, while the contracting distortion leads to an average welfare loss of less than 2 percent and accounts for less than 50 percent of all transactions costs in groundwater markets, it has a sizeable impact on irrigated area, especially for small farmers. Uncertainty coupled with land fragmentation also attenuates the benefits of the water-saving technologies now being heavily promoted in India.

...

Our environment is characterized by considerable land fragmentation coupled with a high fixed cost of borewell installation, on the order of US$1000 (excluding the pump-set). Fragmentation is driven by the pervasive inheritance norm dictating equal division of land among sons and the prohibitive transaction costs entailed in consolidating spatially dispersed plots through the land market. 

...

Our estimate of buyer bargaining-power η translates (cf., definition of δ in Table 5) into a 3.7% efficiency loss due to holdup in the per-irrigation arrangement, which is an upper bound on the overall contracting distortion. The incremental cost of cultivating leased land versus own land, γ, is precisely estimated at less than 1%.

...

Beginning with scenario (1), borewell owners with smaller plots, ceteris paribus, are more likely to sell groundwater and hence incur proportionally greater transaction cost than those with large plots. The difference between the dashed consolidation line and the transaction cost rebate line indicates the size of the uncertainty-induced contracting distortion; it averages about 1.5% of the total rabi surplus generated by the borewell, similar in magnitude to the average fixed transaction cost of 1.8%. For the same reason as before, the contracting distortion is greater for borewell owners with smaller plots. Interestingly, comparing the right and
left panels of the figure, the impact of groundwater market frictions on area irrigated is, in percentage terms, roughly triple its impact on welfare.

http://tinyurl.com/htvtzxn