A version of this Policy Perspective was originally published in the December / January 2001 issue of Brainstorm magazine (www.BrainstormNW.com).

Policy Perspective No. 1016
January 2001

Tainted water, tainted money: Portland's Superfund site

The Willamette River is 187 miles long and drains a 12,000 square mile basin. For more than 150 years, the River has been used for navigation, recreation, commercial fishing and waste discharge.

Unfortunately, these uses have come with a price. The River was so polluted in the 1920s that dissolved oxygen levels were too low to support most species of fish, and bacteria levels made the water unsafe for any human use.

But in the 1950s, civic and business leaders started to attack these problems. Throughout the basin, private industries and municipalities began installing sophisticated waste control systems. The result of these investments is that today, the River supports a diversity of marine life and is regularly used by recreationists.

Despite these efforts, however, Oregonians cannot completely escape the legacy of prior practices. At the lower end of the River, in and near Portland, river-bottom sediments are contaminated with pesticides, PCB's, and other toxic chemicals. While it's unlikely that this contamination poses any immediate environmental or public health threat, knowledge about longer-term effects is limited.

In 1997, Oregon's Department of Environmental Quality (DEQ), approached the federal Environmental Protection Agency (EPA) with a proposal to jointly conduct an intensive study of sediments in the Portland Harbor. The Portland Harbor is a 6-mile stretch of the river between the southern tip of Sauvie Island and Swan Island. It is the most heavily industrialized section of the River, and has been home to manufacturing and ship building/repair businesses for over a century.

DEQ's decision to approach EPA for special grant money did not raise any concerns at the time. For decades, EPA and DEQ have had amicable relations, and EPA has funded many special projects. But this grant proved to be different.

EPA approved the request, and collaborated with DEQ to conduct an extensive analysis of sediments. Two years and some $400,000 later, the joint study was released. The study identified elevated levels of various contaminants in shallow, near-shore sediments, throughout Portland Harbor.

DEQ responded by identifying all the affected stakeholders in the Portland Harbor (e.g., neighborhood associations, property owners, tribal groups) and working collaboratively to draft a Portland Harbor Sediment Management Plan (PHSMP). The Plan was paid for largely by the Portland Harbor Group, comprised of commercial and industrial property owners within the affected stretch of the river. The PHSMP lays out the technical approach for investigating the nature and extent of contamination, and assessing risk to human health and the environment from contaminated sediments. It also provides the framework for achieving investigation and necessary cleanup at both specific sites and throughout the Harbor.

The assumption of DEQ officials working on the document was that this was a local problem that could be remedied through local action. EPA officials, however, had a very different response. Despite the lack of any immediate threat to public health or the environment, EPA officials began making plans to list the Portland Harbor as a hazardous waste site under the federal Superfund program. Part of their rationale was that since the grant money had come from a "pre-remedial" fund under Superfund, remediation should also take place through Superfund.

The DEQ, the Governor's office, and a variety of affected property owners worked to fend off Superfund listing. When the DEQ released the PHSMP in June, 1999, the cover letter from Governor Kitzhaber stated:

This plan reflects the best thinking, and the firm commitments, of all the parties who will be crucial in moving forward on Portland Harbor. While the State of Oregon has and will continue to look to the EPA to list sites on the federal National Priorities List, the progress already made in developing the PHSMP, DEQ's commitment to continue work in a timely manner, and the environmental progress being made at individual sites clearly indicate that a federal Superfund listing is not needed to achieve the desired environmental outcomes in Portland Harbor.

Unfortunately, the Portland Harbor sediment study had been funded with Superfund money, and that money turned out to be a tar baby. On July 27, 2000, EPA published a notice in the Federal Register announcing its intent to list the Portland Harbor as a federal Superfund site. It is widely expected that the Harbor will be officially designated a Superfund site in early 2001.

Looking back, DEQ Hazardous Waste Manager Mike Rosen ruefully admits that, "we were definitely naïve about the money. We never saw the Harbor as a Superfund site. If we did it again, we'd have a different perspective."

Superfund: "A disaster"

It's difficult to think of a government program with a wider gap between goals and results than the federal Superfund program. Known legally as the Comprehensive, Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), Superfund was ostensibly designed to identify and clean up the worst hazardous waste sites in the nation. Four hundred sites were initially chosen for the Superfund National Priorities List (NPL), which has since grown to include over 1,200 sites.

However, only a tiny fraction of listed sites-perhaps one percent-have ever proven to need emergency action. The notion that Superfund designation means a community faces a toxic waste crisis is a complete myth. The only "crisis" is that faced by individuals associated with a waste site, because the procedures EPA uses to identify alleged polluters and assign liability for clean-up costs are arbitrary, punitive, and probably unconstitutional.

First of all, EPA treats accused polluters-so-called "Potentially Responsible Parties," or PRP's-as wrongdoers, yet the agency has no responsibility to prove that they were guilty of causing pollution, that they contaminated the site in question, or even that serious risk from the site exists. Under the statute, any firm, organization, or government unit that contributed any amount of waste to a site, transportation firms that carried the waste, former operators or owners of sites, and even financial institutions that became owners through default of a borrower can be held to a standard of retroactive, strict, joint and several liability. Every one of those words has a specific meaning.

Retroactive: though completely law-abiding at the time, a firm that may have contracted with a waste hauler to dispose of waste on a legal site twenty years ago can be held liable for the full cost of cleaning the site today. The same is true for the waste hauler.

Strict: if evidence is presented indicating that a particular firm, individual or organization did, in fact, participate in the development of a Superfund site, then the party can be held liable. There is no defense based on negligence or standard of care.

Joint and several: any one party or group of parties can be held fully liable for the cost of mitigating a site, no matter how many other parties are involved. This promotes a "feeding frenzy" of litigation, as PRPs sue as many other PRPs as possible in efforts to escape designation as the "deep pocket" for a clean-up.

Even worse, parties that cave in to EPA pressure and agree to pay for clean-up without litigation can successfully shift much of the financial burden to non-settling parties, simply be negotiating good deals early. For example, party A may be responsible for 90% of the contamination; but if they settle with EPA and agree to pay for only 20% of the clean-up costs, the remaining burden is automatically shifted to non-settling parties B and C, who together contributed only 10% of the toxic materials.

The fact that non-settling parties can be bound by the decision of a settlement to which they were not involved is clearly a violation of the due process clause of the U.S. Constitution. As legal scholar Christopher D. Man put it, "Congress certainly stretched its powers to the limit by retroactively imposing several billion dollars in damages through CERCLA's strict, joint and several liability scheme. Yet this scheme crosses the constitutional breaking point by providing that parties who do not accept this liability promptly, and who do not enter settlements to that effect, will have their liability determined for them by the remaining tortfeasors and EPA. It is certainly a perverse form of justice that allows self-interested parties to decide how much third parties will pay to them as a sanction for those third parties deciding to exercise their constitutional right to judicial review."

In addition to this unjust process of allocating liability, EPA does not have to prove that the contamination in a Superfund site is posing harm to anyone nearby. It can order cleanups for them without showing (or even claiming) that the health benefits from the cleanups will outweigh the costs, or that the lowest cost technique will be used.

And worst of all, accused parties can do little to challenge the EPA's decisions, except at the very end of the remediation process, which may take more than a decade. Even then the burden is on them to prove that EPA has acted arbitrarily or capriciously or has violated its own procedures.

As former Assistant Attorney General Roger Marzulla put it, "With only slight exaggeration, one government lawyer has described a…[CERCLA] trial as requiring only that the Justice Department lawyer stand up and recite: 'May it please the Court, I represent the government and therefore I win.'"

High costs, low benefits

While these legal and procedural issues are important by themselves, the most basic problem with Superfund is that it is accomplishing very little for public health or the environment. Huge amounts of money are routinely spent for very little environmental gain.

By 1999, American taxpayers, consumers and corporations had spent over $20 billion on Superfund. As of January 1998, the program had only cleaned 504 of the 1,243 hazardous waste sites in the program, and it's likely that some "clean-up" actually caused new problems by disturbing long-dormant pollutants at inactive sites. According to a government audit, approximately 50% of all clean-up funds go to transaction costs, most of which are lawyer's fees.

Many people who become drawn into the Superfund web quickly become disillusioned. A public statement signed in 1993 by Sonna Rose and others in Triumph, Idaho, who had been battling EPA over the clean-up of abandoned mill tailings in their town, sums up this attitude:

This has been the most frustrating and most difficult experience of our lives. The EPA has changed us from card-carrying members of the environmental community into people who have no faith in the environmental protection currently being administered in our country. We believe that Superfund and the EPA…have jointly become the environmental tragedy of all of the people. The EPA is spending billions of dollars of our money, to make lawyers rich, and the environment is paying the price. Nothing is getting cleaned up, and communities like ours are ruined for nothing.

A more emotionally detached, but equally critical, conclusion was reached by the Congressional Office of Technology Assessment in 1988: "OTA's research, analysis, and case studies support the view shared by most observers that Superfund remains largely ineffective and inefficient. Technical evidence confirms that, all too frequently, Superfund is not working environmentally the way the law directs it to."

In 1993, President Clinton put it even more bluntly: "Superfund is a disaster."

Trying to avoid Superfund

When it became apparent that EPA planned to nominate the entire Portland Harbor for the NPL, the DEQ offered a number of reasons as to why this was best left to state control. The most obvious reason is that local cleanup efforts have already been underway for at least the past decade. Property owners are now completing environmental investigations and cleanup at 10 sites, under the oversight of DEQ through the state's Voluntary Cleanup Program. In addition, three more sites are at the beginning stages of remedial investigation, two are subject to DEQ consent orders for cleanup, and two are already federal Superfund sites.

Any belief the EPA may have had that the DEQ would not be properly stringent in enforcing health standards were unfounded; the DEQ's maximum allowed risk level for carcinogens that could potentially affect a human being are even more strict that the extremely conservative EPA risk assessment guidelines.

In addition to public health measures, the DEQ's legal authority expressly protects individual threatened and endangered fish and wildlife, oil and petroleum products are specifically covered within the cleanup law, and generic remedies are available to streamline and expedite remedial actions.

The DEQ also has access to an Orphan Site Account, in the event that no financially solvent responsible party can be made to cover the costs of remediation. This is especially relevant because the taxes formerly levied on chemical compounds to finance federal clean-up activities have expired, and Congress has not yet renewed them. In essence, the actual "fund" in the Superfund program is broke.

Ultimately, the ability of the Oregon DEQ to maintain state authority over the cleanup hinged on the agency's ability to broker a tolling agreement among property owners in the Harbor. What the tolling agreement does (or would have done) is suspend the statute of limitations on the ability of natural resource trustees (i.e., federal environmental agencies plus some Native American tribes) to recover the costs of remediation from PRPs.

The Portland Harbor Group was unable to convince all of its members to sign the tolling agreement. While this obviously complicated matters greatly, the negotiation process was made even more unwieldy, as DEQ named fifty more PRPs after completing a $750,000 upland contaminant investigation.

The primary reason businesses refused to sign the tolling agreement was that it would have exposed them to excessive financial risk. By handing over that kind of power to a government agency, a business is agreeing to abide by decisions upon which they will have little or no input, and certainly no ultimate authority. Unlike a court of law, there is no right to defense in the formulation of a bureaucratic mandate for the affected parties. It is analogous to handing a blank check to the government, with no legal recourse should the amount demanded exceed what is thought of as just (or even economically feasible) by the supposedly responsible party.

In response to the DEQ plan, the Portland Harbor Groups offered its own tolling agreement and contamination investigation plan; the Oregon DEQ saw these plans as a step back and refused to give them approval. This led to a schism in the Group, as Cascade General and GATX left the association in March of 2000. DEQ also failed to agree with four of the six tribes named as trustees in any potential remediation.

Eventually, the remaining businesses in the Portland Harbor Groups (in addition to the City of Portland) agreed to sign the tolling agreement. However, both the Harbor Group and the DEQ failed to convince the other PRPs to join in signing the agreement. Consequently, the effort to broker a deal dissolved in a morass of red tape, inability to coordinate interests among disparate groups, and a lack of willingness to cooperate on all sides.

In July, Governor John Kitzhaber signed off on the agreement to allow EPA to place the Portland Harbor on the NPL, and any hope of maintaining state investigation and cleanup authority disappeared.

The future: What should be done?

The pending Superfund listing has put a damper on voluntary clean-up activity within the Harbor. Private landowners are reluctant to make unnecessary financial commitments, because no one knows how much liability EPA may ultimately assign to each party. According to Allen Sprott of Cascade General, "many of the property owners were going to pay for a common data collection effort, then do individual remediation projects. Now that's not going to happen. Everyone is waiting around now."

According to Mike Rosen, who was managing the project prior to EPA takeover, DEQ will be in charge of on-shore investigation, while EPA will handle river sediments. Any actual clean-up is likely to be years away.

What complicates the problem even further is the fact that the National Marine Fisheries Service (NMFS) listed Columbia River steelhead trout as a threatened species under the federal Endangered Species Act (ESA) in 1998, and listed Chinook salmon as threatened in 1999. Since the Columbia River system includes rivers and streams in the Portland area, the listings mean the City of Portland must take steps to protect salmon and steelhead.

Toxic waste remediation activities under Superfund may conflict directly with the goals of salmon and steelhead restoration. Any kind of work done with river sediment - especially if it involves physically moving sediment to another site - may threaten salmon and steelhead more than if authorities just left it there. But since no one really understands how serious the contamination actually is, we can't even project what the clean-up activities (if any) will be.

Moreover, the ESA itself suffers from serious flaws. If we are supposed to "restore" fish runs, what does that mean? How will we know it when we get there, and how will the fishery be protected from other threats beyond the control of Portland Harbor property owners (e.g., ocean conditions, natural predation, pollutants from other sources, etc.). As Dean Marriott, director of Portland's Bureau of Environmental Services, put it, "We don't know what the [ESA] target is yet, and we don't know what 'done' should look like."

Because both the ESA and the Superfund program are so punitive to property owners, it's difficult to see how all this federal "help" is going to actually accomplish anything. The negative synergy of the two programs is simply creating unnecessary conflict and delay, when what we need is cooperation and trust.

Although some Oregon political leaders have pledged to help find more government funds, probably the best thing that Congress could do for Portland is repeal the Superfund law in its entirety, and move EPA into the role of information provider. In a new, non-regulatory role, EPA might be very effective in helping communities answer such questions as, What is an acceptable level of contaminant exposure? What is the most effective way to carry out remediation?

Right now, all the EPA really does is enforcement. This is good for lawyers, but it gets in the way of actually cleaning up the environment.

The majority of states have their own hazardous waste clean-up programs enacted under state law, and those programs have impressive track records. Minnesota is cleaning up sites for less than $5 million each and completing cleanups in only a few years. By comparison, it costs approximately $25 million to 30 million to clean up a single site in the federal program, and the work can typically take 10 to 15 years.

States have also taken the lead in redeveloping "brownfields"-abandoned industrial sites that remain undeveloped because of liability concerns. In fact, Portland recently received a federal grant to implement a brownfields "showcase" project. Together with DEQ's program and ongoing voluntary cleanup projects by property owners, this clearly shows that local leaders are ready and willing to step up and solve problems in the Willamette.

The myth of Love Canal and the Frankenstein it created

One of the enduring myths of Superfund is that it is a program designed primarily to address flagrant problems of hazardous waste contamination. In that vein, the contamination of Love Canal in upstate New York in the mid-1970's is frequently mentioned as the reason Superfund needed to be enacted. Even a spokesman for a large property owner in Portland Harbor, who was otherwise well-informed on the subject, remarked that "Superfund has done a good job of cleaning up really egregious sites like Love Canal."

In fact, Love Canal was one of the best-designed toxic waste sites in America, and only became a problem due to the irresponsible behavior of the Niagra Falls school board. In 1941, Hooker Chemical Company (now a subsidiary of the Occidental Chemical Corporation and operating under a different name) initiated feasibility studies to determine the suitability of using an unfinished canal for disposing of waste chemicals from its petrochemical plant. The canal had originally been dug to provide cheap hydroelectric power for a proposed "model city" near Niagra Falls, but was never finished due to changing circumstances. The sixteen-acre tract of land was located in an undeveloped area, and Hooker noted that the canal site was ideal for the disposal of chemical residues, since by design it was built to retain water and had impermeable clay walls.

In 1942 Hooker obtained permission to use the site for disposal. The company eventually disposed of 21,800 tons of waste, in large drums covered with clay. In 1953, the company discontinued use of the site.

Soon thereafter, the Niagra Falls school board began aggressive negotiations to purchase the former canal for a new school site. Hooker was reluctant to sell, but in April of 1953, facing the threat of eminent domain by the school board, the company sold the property for the token sum of one dollar.

Despite numerous written and verbal warnings by Hooker officials about the risks of disturbing the site, the Board of Education built the school right on top of the canal. City officials then proceeded to develop the neighborhood, and built 100 houses directly next to the canal and another 139 across the street.

Not until the late 1970s did problems begin. After six years of abnormally heavy rains, the canal apparently overflowed its banks in 1976. Although this problem was not Hooker's fault, the company paid for remediation work. Subsequent studies by EPA and others found no problems with drinking water or contamination of nearby Lake Ontario.

Nonetheless, media-savvy activists succeeded in garnering a steady stream of newspaper headlines describing Love Canal as a "disease cesspool" and a "public health time bomb". Elected officials from Albany to Washington, D.C. felt compelled to "do something." One month before the presidential election of 1980, President Jimmy Carter personally traveled to Love Canal and signed an unprecedented agreement to have the federal government buy out families in 463 homes, at a cost of $17.2 million. A court later ordered Hooker/Occidental to pay $20 million to 1,328 residents for health and mental damages allegedly incurred by the leakage of chemicals.

In the end, not a single illness was ever attributed to living next to the former waste site. Yet Love Canal lives on in the consciousness of Americans as the "poster child" for Superfund.

Ironically, Love Canal has returned to normalcy. James Carr, Planning Director of the Love Canal Revitalization Agency, described the area in 1990 as having "all the characteristics of a terrific neighborhood", which explained why there was a waiting list of over 200 people seeking to move back in.

Superfund is a program in search of a problem. It's time to get the federal government out of hazardous waste regulation altogether, and allow people living closest to the land to take control of their own destiny.

Cascade Policy Institute is a tax-exempt educational organization as defined under IRS code 501(c)(3). Cascade neither solicits nor accepts government funding, and is supported by individual, foundation, and corporate contributions. Nothing appearing in this document is to be construed as necessarily representing the views of Cascade, or as an attempt to aid or hinder the passage of any bill before any legislative body.