The present shift in policy associated with the Lawrence Livermore National Laboratory (LLNL) report moves the ultimate long-term environmental responsibilities and liabilities away from the government and onto land owners and banks. This shift in responsibility is nothing less than revolutionary in the environmental field. These changes, which can be seen on a national basis, are due to past unrealistic reactions of the regulating community trying to safeguard society and the environment by setting soil and groundwater compliance goals with little consideration of the financial burdens. In the process, countless businesses and individuals went bankrupt trying to comply.

There are national political trends that are large, so large that the movements initiating these changes come deep within our society. These changes reflect our desire for a different role of government in our society and a more limiting environmental protection. In the early 1960s, visionary writers such as Rachel Carson, the author of Silent Spring, helped to catalyze the environmental movement. By the mid 1960s, there were still few government environmental regulations and fewer of these were enforced.

By the late 1960s and early 1970s, America woke up to realize that point source pollution from the country's industrial and agricultural centers had left the air, water and soils impacted beyond safe levels. By the time Lake Erie was declared dead in the early 1970s, and Cleveland's Cuyahoga River caught on fire, it became apparent that corporations in America required additional oversight and monitoring by the Federal, state and local governments to insure clean air and safe drinking water. Popular demonstrations culminating with "Earth Day" brought new energy to a widespread, grass-roots environmental movement in this country. Eventually President Nixon set up the U.S. Environmental Protection Agency (EPA). The focus of his environmental agenda clearly shifted from a public health responsibility of inspecting meats and sanitary facilities to an engineering and regulatory responsibility which included the assessment and remediation of soils and groundwater, and the development of clean air process equipment.

The major changes we are seeing now in mid 1990s are nothing less than a complete reevaluation of the governmental role in protecting the environment. President Clinton is the first president since President Johnson who has not delivered new and significant environmental legislation. Although most of the highly visual point sources of industrial pollution have been corrected, the less accessible and invisible soil and groundwater contamination still exist in large part in this country. In spite of few successfully closed EPA Superfund sites, the high intensity popular demonstrations regarding environmental protection of the past have been limited in the 1990s.

The philosophical changes that have occurred on a national level over the past few years include having less government regulation. As for soil and groundwater remediation of fuel hydrocarbons, major changes are occurring in California, creating a regulatory shock wave. The California Leaking Underground Fuel Tank cleanup program has been around for well over a decade. In July, 1994, a complete review of the California Leaking Underground Fuel Tank cleanup procedures was requested by the California State Water Quality Control Board. The California State Water Quality Control Board requested the review to be performed by Lawrence Livermore National Laboratory and the University of California at Berkeley, Davis, Los Angeles, and Santa Barbara. Participation in the review process was also supported by the petroleum industry. Finally in October, 1995, the Lawrence Livermore underground storage tank study was completed. The Executive Director of the State Water Resources Control Board proposed that laws no longer direct responsible parties to design and implement active, engineered corrective remediations at sites where the regulators deem less active approaches to be acceptable.

What this means to property owners and business owners is that once the substantial portion of the hydrocarbon contaminated soil or source material has been removed, active pump and treat or vapor extraction systems may no longer be required. Up to now, changes in the regulatory climate with respect to hydrocarbon contamination do not affect sites located in sensitive environments such as fractured rock aquifers, adjacent rivers, bays or marshland or sites having metals, pesticides or chlorinated solvent contamination.

It is clearly recognized that the LLNL document is not really a scientific report. No comprehensive compilations of associated data, charts, figures and tables were included in the LLNL report. Rather, the LLNL report is a policy document reflecting realistic financial limitations of the California Underground Storage Tank (UGST) Fund. If viewed as a policy document and not as a scientific document, the LLNL report attempts to limit the regulatory community's requirements for government agencies to supervise assessments and remediations. The LLNL report ultimately allows for site closure to occur more easily than in the past, thereby spreading the UGST Fund financial resources to a greater population of contaminated sites.

To put the LLNL report into perspective, up until last year, gaining regulatory acceptance of a site which appeared to be a low risk to society and the environment was rarely accomplished quickly or without great expense. In the past, some regulators required that all contamination be removed down to non-detectable levels. This resulted in driving businesses and individuals into bankruptcy due to these technically unrealistic clean-up expectations.

Based on the implications of the LLNL report and other recent changes in the California UGST Fund, most sites in California are likely to be perceived as low risk sites. Consequently, regulatory acceptance is achieved far more easily than in the past. The present shift in this new policy transfers the environmental responsibilities off the government and on to land owners, banks and their associated consultants and lawyers. Even with a site closure letter from a regulator, a land owner may still have the long term liability of chemical exposure to tenants and adjacent property owners.

Business practices will change in order to protect against this greater responsibility needed to minimize financial exposures. Landowners and banks may be required to accept deed restrictions and devaluations caused by the elevated environmental contamination on a property even though the property meets regulatory site closure criteria. The "stigma" or devaluation of environmentally impacted sites is real. Two 1996 cases were reviewed, one in Marin County and one in San Luis Obispo county. Both cases illustrated devaluations of up to 50 % on impacted properties compared to the appraisals of similar non-stigma property values. The loss in real value in both cases exceeded $400,000 per parcel. Adjacent properties may also have been affected by significant loss of value associated with the environmental stigma or offsite movement of contaminants. Even with regulatory changes, these real losses, especially to innocent adjacent property owners, may encourage lawsuits against owners of impacted properties to recover lost real estate value.

In addition, the one-in-a-million cancer risk studied in the ASTM Risk Base Corrective Action (RBCA) and other similar models do not evaporate just because a regulator has granted site closure. Banks eventually will independently create risk criteria which will be driven by the perception of business risk. Other recent national and state government decisions regarding reform, such as welfare reform, propose to transfer government oversight into personal responsibility. Following this same trend in the environmental area, it will be the personal responsibility of the landowner to minimize environmental liability to tenants and adjacent property owners. Government will supply minimal oversight and monitoring to insure that immediate and significant human health dangers are mitigated. The driving force in human health protection in the workplace has been OSHA, not the EPA. The OSHA toxic exposure laws will remain strong to insure worker safety, even if environmental regulations are eased. The recent environmental changes reflected in the LLNL report may not necessarily address the one-in-a-million cancer risk, or satisfy a prudent investor or bank. The property owner will be fully responsible for any and all environmental liabilities beyond that minimal level of safety provided by government.

To minimize pollution related risks, many land owners will hire reputable specialists to evaluate adjacent property risks and the risks of human exposure that are not addressed by the regulatory agencies. Therefore, a need for more scientifically based studies will become critical in minimizing future long-term environmental liability. Consultants will be required to provide more value to property owners and banks. The long term environmental risks will not be evaluated or minimized by government regulators. Due to the minimal regulatory oversight that has become more commonplace over the past year or so, leading consultants have begun to provide far more scientifically and statistically based analysis rather than generalized professional judgments. Therefore, environmental consultants will acquire additional long term environmental liabilities associated with their work assessing and analyzing the long term environmental risks for land owners.

The recent national shifts in environmental policy as well as the more local changes and the LLNL report reflect a national trend of more personal responsibility for land owners, less governmental intrusion into the long-term environmental liability area and greater importance for scientifically-based evaluations of environmental risk to business. Consultants can provide their clients with value by quantifying risks and uncertainties and helping landowners and banks cope with long term environmental risks.

___________________ 

Stephen J. Baker, a Certified Hydrogeologist, is president of HydroSolutions of California, a Nevada City, California based consulting firm. James A. Jacobs, a Certified Hydrogeologist, is president of the San Francisco Chapter of the Groundwater Resources Association and California and president of the California Section of the American Instate of Professional Geologists. He is president of FAST-TEK Engineering Support Services. Both authors have over 18 years of experience each.

Mr. Stephen J. Baker, HydroSolutions of California; P.O. Box 922, Nevada City, CA 95959; Phone: (916) 478-1260; Email: HSCI@gv.net.

Mr. James A. Jacobs, FAST-TEK Engineering Support Services, P.O. Box 10123, San Rafael, CA 94912, Phone: (415) 455-1899.