The incalculable cost of Superfund

Published March 1, 2000

In December 1999, the nation “celebrated” the nineteenth birthday of one of the most ill-conceived environmental laws on the books–Superfund.

Enacted in 1980 to provide a mechanism for the cleanup of heavily contaminated properties, the statute has instead guaranteed that most sites falling under its jurisdiction aren’t restored for years. The biggest obstacle is Superfund’s self-defeating liability scheme. Designed to ensure the “polluter pays” for cleanup, the liability provisions are so draconian as to be unworkable.

For example, Superfund exposes anyone with any connection to a site to liability for all cleanup costs, even if their activity was legal at the time. Superfund’s vast liability net can ensnare people and companies who had nothing to do with contaminating a site, but who may have owned the property or conducted business related to the site.

These “potentially responsible parties” (PRPs), as they are known, try to lessen their own burden by having their attorneys seek out other parties who may have been involved. The result is litigation that can go on for years, during which time the property lies in limbo. Cleanup at a typical litigation-ridden Superfund site costs $25 million and takes 10 to 12 years.

How much has Superfund cost? We don’t know and we never will. The Environmental Protection Agency (EPA) recently put the tab at $57 billion, but the agency really has no idea what the program has cost and no interest in finding out–much less letting the public know.

According to EPA officials familiar with the program, the agency doesn’t keep records on what PRPs have had to pay over the years. Even if it did, this wouldn’t begin to tell the whole story. Those entangled in the statute’s web of litigation have had to pay lawyers and consultants, something known as “transaction costs.”

Money that a business spends on attorneys is cannot be spent on new equipment, research and development, or contributions to employees’ retirement plans. And these lost opportunities due to Superfund are not limited to the private sector.

Property lying dormant for years as a result of its Superfund status produces little or no revenue, and the revenues that are not collected cannot be spent on new hospitals, schools, roads, bridges, or any other infrastructure improvements. Moreover, properties located near a Superfund site also decline in value, adding to the burden the statute imposes on affected communities.

EPA makes things worse

EPA makes an already-deplorable situation even worse by its grossly inefficient administration of the Superfund program. There is massive duplication of work carried out by EPA employees in the agency’s Washington headquarters and in its ten regional offices. Typically, people caught up in Superfund’s liability web are billed by EPA attorneys and other “environmental protection specialists” in the agency’s Office of Off-Site Remediation Enforcement in Washington, and also by attorneys and “environmental protection specialists” in the regional office that oversees the site in question. (The term “environmental protection specialists” covers EPA employees who are neither attorneys nor scientists.)

The double-billing of PRPs–complete with two sets of attorneys charging for the same work and two sets of “environmental protection specialists” following suit–is a practice the agency has been carrying on for years. It contributes nothing to the restoration of a contaminated site, but simply adds to the waste the program imposes on the rest of the country.

Little bang for the buck

All the sacrifices imposed by Superfund are being made for few, if any, public-health benefits. According to a landmark study published in the October 28, 1999 issue of the British science journal Nature, there are serious gaps in EPA’s knowledge of how the chemicals it regulates interact with the environment.

Because EPA has ignored an area of science known as chirality, its data on industrial chemicals are in many cases completely worthless, the study says. Chiral chemicals have molecules that come in mirror-image twins. How these molecules react when they encounter pollution-degrading microbes in the soil, determines whether they become harmful or benign.

Without knowing how chiral chemicals will be affected by their encounter with microbes in the soil, “environmental measures aimed at reducing the effects of pollutants are being formulated largely in the dark,” notes the study’s lead author, EPA scientist David Lewis. For nearly two decades, this science gap has allowed EPA to impose Superfund cleanup standards that are scientifically flawed and have contributed immeasurably to the cost of this misbegotten program.

Whither Superfund reform?

As awful as Superfund is, however, efforts to reform the program have gone nowhere. Superfund serves the narrow interests of some very powerful parties. These include EPA, which jealously guards the powers Superfund has bestowed on it; lawyers and consultants, who make a fortune leading bewildered clients through Superfund’s maze of regulations; the companies that conduct cleanups, who have profited handsomely from Superfund’s stringent cleanup standards; and the big, Washington-based environmental groups, which share EPA’s interest in maintaining a tight federal grip over local communities.

In fiscal year 1999, EPA spent $1.5 billion administering the Superfund program. One in every five dollars the agency spends on “environmental protection” goes to the failure that is Superfund.

Bonner R. Cohen is a senior fellow at the Lexington Institute in Arlington, Virginia.