The Evolution of Environmental Risk Management
Sullivan, Edward, Sylvester, Michael, Risk Management
Since the infamous Love Canal scandal that ultimately resulted in the creation of the Superfund legislation, the lore of environmental risk management is replete with stories of catastrophic losses, including escalating cleanup costs, innocent purchasers saddled with cleanup responsibility, toxic tort lawsuits and "brownfield" sites that sit underutilized and undervalued due to uncertain environmental contamination. Until recently, there were few options for effectively managing such risks. While stakeholders are becoming more comfortable with environmental risks, the various evolving risk management tools available are still not widely adopted. This mindset results in underutilized and undervalued brownfields and seemingly permanent balance sheet liabilities for some stakeholders. Fortunately, a subtle shift in long-held attitudes is now occurring.
Three primary factors have contributed to this: (1) the development of more effective and time-efficient site characterization and remediation techniques; (2) more available options for risk financing and transfer; and (3) the use of more sophisticated methods for evaluating environmental risks. With new tools in hand, and evolving mindsets, environmental risks can now be viewed as just another risk factor that, if effectively assessed and managed, can maximize the return-versus-risk ratio for stakeholders.
New Site Characterization and Remediation Techniques
Traditionally, the investigation of an environmentally impaired property progressed in a regimented manner where environmental samples were collected in discrete phases. This iterative process could take years or in many cases, more than a decade to complete. Such a time-consuming process was usually incongruent with the short time frames allowed for due diligence in property transactions. The ultimate remedy would most often involve pumping and treating ground water at an on-site treatment facility in a process that was often expected to take decades to complete.
Today, there are a number of new site characterization techniques that can be used to rapidly evaluate the environmental conditions or fill in significant data gaps at a property, often within the strict time frames involved in property transactions. The Triad Approach is a rapid site characterization process developed by the United States Environmental Protection Agency (EPA), which utilizes systematic planning, dynamic work plans, and on-site field analytical and sample screening methods to replace the above iterative process with one seamless field sampling effort. Systematic planning ensures that all stakeholders (property owners, regulators, etc.) agree on the sampling strategy and project end goals. The dynamic work plan contains a series of "what if" decision trees that are used as the basis for making field decisions on where to collect additional samples without the need for a work stoppage for regulatory approval. Field analytical services provide real-time sample results for use in making on-site decisions. These sample results are often available within a matter of hours as opposed to the several weeks required under the traditional process. The end result is that sites can be characterized in a matter of weeks to facilitate brownfields and other property transactions by resolving the uncertainty regarding environmental conditions and financial liability.
Other new site characterization techniques are capable of rapidly identifying areas of soil or groundwater contamination using remote sensing techniques without the need to collect soil or groundwater samples for laboratory analysis. The membrane interface probe is a probe sensor capable of identifying zones of soil or groundwater contamination by detecting contaminant molecules in situ. The laser-induced fluorescence probe detects the presence of petroleum hydrocarbons, which fluoresce in response to a ultraviolet light source on the probe. Geophysical surveys including radar, electrical and magnetic imaging techniques are becoming more sophisticated as well, allowing scientists to "see" into the earth by using a series of instruments and detectors on the ground surface. …