By: Gordon Davidson, Senior Advisor for Technology, Partnerships & Redevelopment, THG

September 2014

In 1973 the Organization of the Petroleum Exporting Countries (OPEC) stopped selling oil to the United States.  This energy embargo led to the common sight of gas station signs indicating that there was no gas to be sold today.  Americans, and western powers generally, had to develop new strategies regarding energy to ensure that a global geo-political crisis of this kind did not occur again.  Thus was ushered in the era of energy efficiency and a broadening of the societal mind-set of sustainability.

Although the parallels are not perfect, this energy crisis and the subsequent transformation of the way in which energy was produced, transmitted, measured, and consumed could be used as a foreshadowing of how we view water both globally and locally.  The great line from Shakespeare’s The Tempest, “What is past is prologue,” may have some applicability here.

Energy was cheap and its provision was taken for granted.  Electricity was generated and distributed through a heavily regulated system that had hardly changed in decades.  Resistance to change was strong, but change, nonetheless, was occurring, because of necessity, including concerns over air pollution, global warming, and dependency.

When it came to this world of energy, Lord Kelvin’s credo, “to measure is to know,” could be modified to mean, “to measure is to finance.”  Beginning with something as simple as a smart meter, worldwide investments in energy efficiency and renewable technologies grew dramatically, demand response became mainstream, cities became smarter, and domestically fresh eyes were put on the staid universe of electric utilities and the sources of energy.   Deregulation picked up steam, creative financial models were developed, and fracking transformed the energy landscape.  Innovation happened.

The water embargo is not a singular event like it was for energy, but a joint-venture between Mother Nature and human behavior.   Systemic shifts in weather patterns are leaving huge swaths of land parched and cracked, illogical water usage is causing shortages, and pollution is rendering enormous volumes of water unusable.  Billions of people are at risk as a result. Just as it was for energy, we are now beginning to understand the true value of water and that this “intrinsic” pricing based on better measurement and clearer social goals will drive innovation and investment, especially where water, energy, and agriculture intersect.

Venture capitalists and strategic investors will play a key role in the development and commercialization of technologies that foster the “circular economy” – that is the use, reuse, recovery, and restoration of water.  Information technology will be the platform that links these factors together and allows users and managers the ability to measure and price water at every step along this sustainable pathway.  More precision will change behavior and foster more investment.

The largest investment will be in infrastructure.  For the U.S. alone, the investment needed to upgrade water utilities is estimated to exceed $1 trillion.  To get an idea of how water utilities are going to address this challenge, one only needs to read “The Value of Water – A Compendium of Essays by Smart CEO’s” by Donna Vincent Roa and the Value of Water Coalition.  This remarkable book is a window into sustainable and innovative thinking that throws off the dust collected by years of a status quo mindset.   In other words, this isn’t your father’s water utility.

Water utility executives are drawing lessons from Singapore, Israel, and Western Australia, listening to corporate executives from Coca-Cola and the pharmaceutical industry, and exploring financing alternatives with Wall Street.  We will see more public-private partnerships such as the KKR/United Water deal with the Bayonne Municipal Utilities Authority in New Jersey, more use of “green” bonds such as the issuance of green century bonds by DC Water, and more innovation across the board.  New companies, like Aquees, which provides a software/smart metering and technology purchase platform, will emerge.  As infrastructure and technology investment grows, there will be a ripple effect all through the water supply-chain creating jobs and improving lives, including those who have limited access to clean water.

When the 1973 oil embargo slammed into the early stages of the sustainability movement, the way we as a society looked at energy changed forever.  We are at a similar inflection point for water.  We’ve always known, a priori, that water has value.  But now that we don’t have enough of it, or enough of it in the right places, or enough of it that is clean, the value we as a society place on water is changing.

Change, initially, will come slowly, as it did for energy.   But, like energy, a simple step forward signals the future.  So, when the installer of the smart water meter comes into your business, your office building, your apartment building, and your home, think of Lord Kelvin and let that person in.

Gordon Davidson is a serial entrepreneur and thought leader in the environmental, water, and energy arenas.  He is a former senior executive at US EPA and a Senior Advisor to The Horinko Group.

By: Cathryn Courtin, THG

June 2014

Recent months have seen a number of accidents resulting from crude oil shipment by rail.  On April 30, a train loaded with crude derailed in Lynchburg, VA, causing three tankers to burst into flames.  Nearby residences and businesses had to be evacuated, and 30,000 gallons of oil were spilled into the James River.  On December 30, a train derailed and exploded near Casselton, ND, spilling 400,000 gallons of crude.  Last year, a series of rail accidents in the U.S. and Canada culminated with a major derailment in Lac Mégantic, Quebec, which resulted in an explosion killing 47 people and wiping out a large part of the town’s business district.

Shipments of crude oil by rail have dramatically increased in recent years.  This influx has in part been caused by the rapidly increasing oil and gas development in the Bakken formation in North Dakota and Montana, the Eagle Ford and Permian Basins in Texas, and in the Canadian oil sands.  Routes from new production fields to refineries often do not have pipelines or where pipelines exist, they are operating at maximum capacity.  Given the standstill on new pipeline project approvals, companies have moved to rail and trucks to transport crude oil and other fluids associated with oil and gas development.  This has resulted in a staggering increase in the amount of crude shipped by rail, up from 9,500 carloads of crude oil in 2008 to 400,000 in 2013.

Many of the most serious rail accidents have been intensified by the flammable nature of the light crude that is being transported, in most cases from the Bakken region.  This type of crude contains more natural gas liquids than traditional heavy crude, the variety produced from the Canadian oil sands.  The Department of Transportation’s (DOT) Pipeline Hazardous Materials Safety Administration (PHMSA) released a safety alert in January 2014 to notify stakeholders of this issue and reinforce the requirement to properly test and classify hazardous materials prior to transportation.

In an effort to further prevent accidents, DOT’s Federal Railroad Administration (FRA) and PHMSA have launched “Operation Classification” in the Bakken region, a compliance initiative aiming to verify that shippers are accurately classifying the oil being shipped so that federal, state, and local safety practitioners know what to expect in case of an accident.

Regulatory efforts to bolster safety have continued with more urgency following each incident.  On May 8, DOT issued an emergency order requiring railroads to notify State Emergency Response Commissions (SERCs) when making large shipments (1 million gallons, or about 35 tank cars, or more) of Bakken crude oil (under current practices, railroads are not required to notify states of movements of hazardous cargo).

In announcing this new rule, a DOT official stated, “the number and type of petroleum crude oil railroad accidents…that have occurred during the last year is startling, and the quantity of petroleum crude oil spilled as a result of these accidents is voluminous in comparison to past precedents.”

Simultaneous to the release of the emergency order, FRA and PHMSA issued a safety advisory urging shippers of Bakken crude oil to choose the tank cars of the highest level of integrity and safety from their fleets for these shipments.

Parallel efforts to increase safety include conducting special inspections, moving forward with a rulemaking to enhance tank car standards, and discussing with railroads immediate voluntary actions they can take such as reducing speeds, increasing inspections, choosing the safest routes, using new brake technology, and investing in first responder training.

The rulemaking on tank car standards aims to update standards for the DOT-111 type of railroad car, which are used to transport crude oil and other hazardous and nonhazardous liquids.  Many groups and politicians have encouraged PHMSA to release the proposed standards quickly.  The National Transportation Safety Board (NTSB) has warned that these tank cars are prone to spills, tears, and fires in derailment for 20 years now.  Canada’s Minister of Transport announced proposed regulatory changes in January 2014 that would require additional safety measures for new tank cars.

New standards in the U.S. have been making slow progress since 2011, and the rulemaking process was officially initiated by PHMSA in September 2013.  The rules are expected to ensure the safety of DOT 111 tank cars transporting Class 3 (flammable and combustible) Packing Group I (great danger) and II (medium danger) materials.  There is an ongoing debate between stakeholder groups, however, on the best method and best timeframe for this—by retrofitting old cars, phasing out old cars, setting standards for new cars, or some combination of those approaches.

OMB announced on May 1, 2014 that PHMSA had submitted a notice of proposed rulemaking (NPRM) for “Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains.”  This follows the advanced notice of proposed rulemaking (ANPRM) published last September.  This timeline of activity suggests that the rulemaking process is proceeding faster than average for PHMSA.  A final rule, however, is not expected before 2015.

Following the recent accidents in Canada, the Canadian government has taken a number of additional actions to improve the safety of rail shipments.  In October 2013, they passed laws requiring classification tests on crude oil before transporting or importing it through Canada.  More recently, in April 2014, Canadian regulators announced that they would require emergency plans from railroads for responding to explosions and would require shippers to upgrade to the safest, newest models of tank cars within three years.  Since cross border rail shipments must meet the safety requirements of both countries, this requirement will spur upgrades in the U.S. and likely encourage similarly protective U.S. regulations.

Origin of Regulatory Regime

The oil and gas exemption from the federal Resource Conservation and Recovery Act (RCRA) precludes EPA from regulating the transportation of oil and gas development related fluids including hydraulic fracturing fluid, wastewater, and crude oil.  The federal bodies responsible for non-pipeline transportation regulation include the Federal Highway Administration (FHA) and the Federal Railroad Administration (FRA), for transportation by truck and rail, respectively.

DOT’s PHSMA is responsible for the safe transport of hazardous materials in all modes of transportation.  The requirements issued by PHSMA are enforced by FRA with respect to railroads.  NTSB investigates accidents and makes recommendations for preventing them in the future but has no regulatory authority.

When an incident occurs involving the release of oil, the National Oil and Hazardous Substances Pollution Contingency Plan, or the National Contingency Plan (NCP) regulates the response to the spill.

If oil is spilled into navigable waterways, shorelines, or other resources of the United States, the Clean Water Act, as amended by the Oil Pollution Act of 1990, Section 311(c), provides explicit federal authority to respond.

Related Efforts Under EO 13650

While DOT works to improve crude oil transportation safety through FRA and PHMSA’s authorities, the Department has simultaneously been working with EPA, Department of Labor, Department of Homeland Security, and a number of other federal agencies to respond to Executive Order (EO) 13650, Improving Chemical Facility Safety and Security, issued in August 2013.  The EO was administered in response to the West, Texas chemical explosion and aims to improve the safety of chemical facilities.  Among other things, it requires agencies to enhance their coordination, information collection and sharing, and collaborate to modernize key policies, regulations, and standards.

While not directed at the transportation of crude oil, the requirements of this EO that relate to crude oil are those that encourage agencies to ensure that state, tribal, and local emergency response commissions have ready access to key information and work with chemical facility owners and operators to improve response procedures, information sharing, and collaborative planning.

With respect to the “modernizing policies, programs, and requirements” clause of the EO, options for improvement were released by OSHA for public comment on January 3, 2014.  The public comment period closed on March 31, 2014.  One of the considerations listed was broadening OSHA’s Process Safety Management (PSM) standard and EPA’s Risk Management Program (RMP) rule to address additional substances and types of hazards such as those derived from upstream oil and gas facilities.  This round of public feedback will inform the agencies’ plans going forward but does not supersede the standard notice and comment process should a rulemaking be pursued.

EPA’s RMP requires operators of facilities that manufacture, use, store, or otherwise handle certain listed flammable and toxic substances to develop risk management programs that include a hazard assessment, prevention mechanisms, and emergency response measures.  OSHA’s PSM standard sets requirements for the management of highly hazardous substances to mitigate accidents that might endanger workers.

OSHA published a Request for Information (RFI) in the Federal Register in early December 2013 and accepted comments on potential revisions to its PSM standard until March 31, 2014.  On May 22, 2014, EPA submitted a request to OMB for approval of an RFI related to the RMP rules.  Developments on these parallel regulatory efforts are expected in the coming months.

Neither the RMP nor the PSM rules currently apply to crude oil, but expanding the rules to cover oil and gas facilities has the potential to improve the safety of facility storage of substances like crude oil and community preparedness in surrounding areas.

A status report for the President covering all ongoing efforts under EO 13650 was released by the EO working group co-chairs in May 2014.  Actions taken to address the general requirements of the EO may work to improve the coordination of federal agencies, state and local planning commissions, and communities in training for, planning for, and responding to accidents, should they occur.

The Long Slog: What Lies Ahead for the Financing of Our Nation’s Inland Waterways Infrastructure, a column featured in the January 2014 edition of the American Water Resources Association’s IMPACT Journal, is authored by Brendan McGinnis, Director of The Horinko Group’s Water Resources Policy, Development and Sustainable Communities team. In it, the author examines the path to smart modernization of the nation’s inland waterway infrastructure. Given the critical importance of this outdated and underfunded infrastructure, innovative financing strategies such as public-private partnerships must be explored to take the next step in finding a solution to this urgent problem.

To read the full article, visit

The Horinko Group will release a new white paper focusing on green and sustainable remediation in January, 2014.  The report will describe the many ongoing efforts, including successes, challenges, and key lessons for the future, to advance remediation practices in the United States and internationally that are more protective of our environment and our communities.  This month’s Featured Column is the Forward to the white paper, by THG’s President Marianne Horinko.


At the advent of our nation’s cleanup programs, we were tackling some serious and daunting risks: Valley of the Drums; leaking municipal landfills; acid mine drainage; and waterways marred by the visible sheen of oil.  In response, the U.S. Congress and the states enacted a number of laws that enabled the remediation of these contaminated properties.  Many of the techniques employed in the early years of implementing these laws were often invasive and resource intensive.  Mass removal of soil and sediments, long–term extraction and treatment of groundwater, and treatment by means of incineration were common elements of any cleanup.

Like medical science, however, our remedies have matured and become more sensitive to the needs of the “patient”—the environment that we are treating.  We have found that much more surgical removal techniques, combined with innovative in situ treatment may be better than complete excavation.  Construction of near-shore confined disposal facilities for dewatered sediments can prevent greenhouse gas emissions caused by long-term off–site transportation.  Most importantly, involving the community in the near– and long–term impacts of the remediation leads to cleanups where the future of the ecosystem—including the cleanup and its neighbors—are much more socially and economically successful.

The U.S. is fortunate to have pioneered the environmental remediation of contaminated sites.  Now, as we enter our third decade, we are poised to share our experience with the global community.  Even more critically, we are prepared to lead by example as the economy revives, in part due to a resurgence in our manufacturing base and enhanced domestic energy supplies.  Our nation has always excelled at technical innovation and our ability to work collectively for the greater good.  Green and Sustainable Remediation (GSR) is the perfect example of that innovation and collaboration leading to better results for our environment and our culture.

Our hope is that this white paper will spur practitioners and policymakers to consider GSR practices in all of our efforts to repurpose and enhance our lands.


Marianne L. Horinko

President, The Horinko Group

Authored by: Julie Kilgore, President, Wasatch Environmental, Inc. and William R. Weissman, Retired Partner, Venable LLP

November 2013

ASTM International, Inc. (ASTM) has issued a revised version of its widely used Phase I Environmental Site Assessment (ESA) due diligence standard.  Originally developed in 1993, the Phase I standard is used to conduct research into the previous ownership and uses of a property to identify the potential for releases of hazardous substances or petroleum products that could lead to potential future liability.  The most significant revisions occurred in 2005 to meet the new requirements enacted by Congress in the 2002 Brownfields Amendments to the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as CERCLA or Superfund).  Following ASTM’s 2005 revisions, EPA referenced the 2005 Phase I standard as compliant with the “All Appropriate Inquiry” (AAI) regulation and hence an acceptable alternative procedure for satisfying AAI requirements.

Because all ASTM standards have a maximum shelf life of 8 years, ASTM’s Phase I Task Group began a careful review of the 2005 standard in 2010 to simplify the language and clarify provisions that experience had shown were sometimes misunderstood in conducting Phase I assessments.  The new E1527-13 standard is the result of that review, and it now supersedes the 2005 standard.  Copies may be obtained at  EPA has proposed a similar reference of the 2013 revision as compliant with the AAI rule and expects to take final action on the proposed reference by year-end.

There are three primary sets of users for ASTM E1527:

  • Purchasers of commercial property seeking to qualify for one or more of the CERCLA liability defenses for innocent property owners;
  • Municipalities and quasi-governmental agencies applying for federal brownfields grants;
  • Lenders who finance commercial property transactions for evaluating and managing environmental risks as part of their loan determination.

The ASTM E50 Task Group determined that several of the provisions in the 2005 standard were confusing and resulted in varying interpretations that produced inconsistencies in how information was presented to the end user.  The aim of the E1527-13 standard was to clarify these ambiguities, simplify some of the definitions, and facilitate greater consistency in applying the standard.  In a document EPA prepared comparing the 2005 and 2013 standards to determine consistency with the AAI rule, the Agency determined that “the newly revised standard, although essentially congruent to the ASTM E1527-05 Phase I Environmental Assessment Standard, provides some clarifications and additional guidance for the environmental assessment of commercial properties and determining whether or not there are recognized environmental conditions at a property or conditions indicative of releases or threatened releases of hazardous substances at a property.”  See EPA, Summary of Updates and Revisions to ASTM E1527 Standard Practice for Environmental Site Assessment Process – How E1527-13 Differs from E1527-05, available at!documentDetail;D=EPA-HQ-SFUND-2013-0513-0003.

A few commentators have circulated statements that E1527-13 introduces significant new costly requirements pertaining to a range of subject areas, including vapor intrusion, agency file reviews, and characterization of remediated properties.  These dire predictions are wildly exaggerated and contrary to both EPA’s and the ASTM task group’s understanding of E1527-13.  Only those who misread the 2005 standard as allowing environmental professionals to dispense with requirements that were never intended to be discretionary may face material changes in their Phase I implementation strategy.  This  minority of environmental professionals is now on notice that even if they continue to use the 2005 standard, they can no longer justify an inadequate environmental assessment by relying on the ambiguities in the outdated 2005 standard.  The clarifications in the 2013 standard provide ample guidance on what constitutes “good commercial and customary practice” for a Phase I assessment consistent with EPA’s AAI rule.  It would therefore be useful to explain the clarifications in E1527-13 and to dispel some of the myths circulating in the media.


The primary challenge with “vapor” is the tendency to use of the terms “vapor intrusion” and “vapor migration” interchangeably.  An evaluation of the potential for vapor to be present inside a building as a result of a release has never been part of a Phase I in the past and is not part of a Phase I with the new revision.  The objective of a Phase I ESA is to identify the presence or likely presence of hazardous substances or petroleum products on the property due to a release.  Whether that release or suspected release is affecting soil, groundwater, or indoor air is a matter of further evaluation and is not part of the Phase I assessment.

What is new in the revised ASTM standard is a definition for “migrate” or “migration.”  This definition states that  “migrate” and “migration” refers to the movement of hazardous substances or petroleum products in any form, including solid and liquid at the surface or subsurface, and vapor in the subsurface.  There is no requirement to identify in the Phase I ESA which form the environmental professional suspects the hazardous substance or petroleum product may be present on the target property, but rather to understand the various pathways and how the hazardous substance or petroleum product is likely to migrate on to the property.

Agency File Reviews

There was considerable discussion within the ASTM task group on the issue of agency file reviews with active participation by all interested stakeholders.  The aim was to strike a reasonable balance to achieve the objectives of AAI without creating an undue and unnecessary marketplace burden.

It is important to note that there is no mandate to obtain regulatory agency file records in all Phase I ESAs.  The flexibility that was built into the revision was in direct response to the diverse opinions on the subject and is consistent with the AAI rule.  Nevertheless, there are several important points about reviewing agency records that need to be noted:

  • The task group found that many consulting firms performing Phase I ESAs throughout the country were already following the flexible procedure now prescribed in E1527-13.  What was often missing in past Phase I reports, however, was the environmental professional’s rationale for why a review of those records was not conducted.  There are a number of valid reasons for dispensing with a search for agency records.  For example, the environmental professional could determine that the database information was sufficient to allow a finding that there is a recognized environmental condition on the property.  The professional might consider certain factors to justify concluding that a neighboring property was not a risk to the subject site.  Or the professional might conclude that needed records were not available within reasonable time or cost constraints, or perhaps the needed information was available from another source.  All of these reasons are permissible within the framework of E1527-13.
  • A major reason that the agency file review issue became contentious during the task group development of the 2013 standard is that some environmental professionals have used the ambiguities in the prior 2005 standard to avoid conducting the appropriate research altogether, even though the objectives of AAI had not been met.  The task group sought to address this concern by stating clearly that performing the agency file review is not optional, but if the environmental professional concludes that it is unnecessary in a particular ESA (such as the reasons listed above), the justification for that omission must be included in the Phase I report.  E1527-13 puts those who may have assumed that the agency file review was optional under the 2005 standard on notice for future Phase I ESAs that their past interpretation is not consistent either with the intent of E1527-05 or the explicit language of E1527-13.

Definitions of Recognized Environmental Conditions and De Minimis Condition

The definition of recognized environmental condition (REC) has been simplified to track more closely EPA’s statement of the objective of the AAI rule to identify “conditions indicative of releases and threatened releases of hazardous substances on, at, in, or to the subject property.”  The new definition makes no substantive change to what the Phase I assessment seeks to identify.  The term “de minimis condition,” which is not a REC, has been given a separate definition, again without making a substantive change to the term.

Remediated Properties

Under the 2005 standard, properties that had undergone remediation were identified as “historic recognized environmental conditions” (HREC), but the standard was unclear how the environmental professional should treat properties that had been addressed to a standard that allowed contaminants to remain in place.  E1527-13 clarifies the ambiguity by bifurcating remediated properties into two categories:

  • HRECs are properties that have undergone a site remediation in the past that met unrestricted land use standards at the time of the cleanup, and the standard for unrestricted land use remains unchanged at the time of the Phase I assessment.  These properties need not be identified as RECs in the Phase I report.
  • “Controlled recognized environmental conditions” or CREC is a new term and applies to a property where a past release has been addressed and where some contamination remains subject to implementation of some type of formal or informal control, common in cases of a risk-based cleanup.  Under the 2005 standard, there were inconsistent interpretations whether such a property would fall within the definition of a REC or HREC, but under the 2013 standard this condition is clearly treated as a subset of a REC.  The evaluation process by the environmental professional does not change under either the 2005 or 2013 standard.  The adoption of the CREC term signals to potential purchasers of properties that not all RECs are necessarily bad or warrant aborting the property transaction.  Rather, the CREC signals that contamination is present on a property that is subject to some kind of control and alerts the prospective property owner that after acquiring the property, the new owner has continuing obligations to comply with any land use restrictions and not to impede the integrity or effectiveness of any institutional control.  Failure to satisfy these continuing obligations could result in forfeiture of otherwise available future CERCLA liability defenses.

In sum, E1527-13 contains relatively modest changes to the prior Phase I standard aimed at clarifying ambiguous or confusing language in the 2005 standard to produce more consistent results in Phase I assessments.  In responding to an inquiry on whether to begin using E1527-13 before EPA publishes its final action on referencing E1527-13, EPA staff advises that it is “encouraging folks to go ahead and use the new standard (E1527-13).  If you comply with E1527-13, you essentially are compliant with E1527-05 (only with a bit more rigor).”  We expect that the transition to E1527-13 will be swift and smooth.

Julie Kilgore is President of Wasatch Environmental, an environmental science and engineering firm based out of Salt Lake City, Utah.  She has 20 years experience in environmental assessment, investigation, remediation, and regulatory agency coordination.   Kilgore is the chair of Committee E50 on Environmental Assessment, Risk Management, and Corrective Action.  Kilgore also chairs the task group responsible for developing E 1527, Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, and served on the ASTM International Board of Directors. 

William Weissman focused his law practice for more than 45 years on administrative law matters with an emphasis during the past three decades on environmental regulation, legislation and litigation.  He concentrated on regulatory, compliance and enforcement issues arising under the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).  He has been an officer of the ASTM E50 Committee on Environmental Assessment, Risk Management and Corrective Action since 1998 and is a member of the E1527 Phase I Task Group and its Legal subgroup.

Authored by: Steve Hoffmann, Founder of WaterTech Capital LLC
October 2013

The notion of sustainable water use, even before an attempt to measure it as a process or define it as a goal, involves the normative determination of the cultural value of water sustainability. Human institutions are shaped by our core values, whatever they may be, and that is why a sustainability ethic must permeate global belief systems.  As the social value of water sustainability is elevated to a social norm, water institutions will begin to change.  The strength of this core belief will determine the extent to which policy can effectively utilize market processes in the pursuit of sustainability.

There exists, however, an ethical disconnect between the institutionalized governance of a natural resource, which arguably constitutes the planet’s most valuable biogeochemical cycle, and the supply and demand fundamentals of water as a necessarily economic commodity.  It is becoming increasingly clear that water scarcity results as much from an inefficient institutional structure as from the physical limitations imposed by the dynamics of availability.

Institutional frameworks embody the formal and informal rules that govern human activity.  As a subset, water institutions govern virtually all aspects of water — preservation, development, allocation, regulation, management, and sustainability.  The challenge is that most water institutions were shaped by the ideological premise (core value) that water should be (is) an exclusively social good.  Having developed in a period of relative abundance, the treatment of water as a public good did not expose the allocational shortcomings.   Now, for all reasons, we are experiencing increasing volatility (and extremes) in the spatial and temporal scarcity of water.

The resulting imbalance in the supply and demand for water has revealed allocational limitations inherent in our current institutional approach to water.  While this may not yet be a crisis, it is a serious problem.  By definition, ‘water stress’ conditions erode the foundation of social structures as manifested in food insecurity, poverty, disease, and potential conflict.  The factors contributing to the institutional failure are complex and powerful:

—   Globalization fed by the high–throughput economies of industrializing countries.

—   Historic shifts in global population ecology.

—   Degradation of easily accessible water supplies and emerging contaminants.

—   Substitution of capital for ecosystem services in ‘managing’ the growing imbalances in water supply and demand.

—   Climate variability compounded by a loss of ecosystem services.

While one could easily take a Malthusian stance and imply planetary limits to economic growth, such a position simply demonstrates the asymmetry of anthropocentrism.  The principles of ecosystem sustainability arise more from the laws of thermodynamics and the conservation of matter than from the dominance of a particular species.  Nonetheless, the human reality is that ecosystem services contribute to GDP in significant ways: (a) the production of natural resources, (b) the dilution and detoxification of wastes, (c) climate stability, and (d) biodiversity.  Simply put, water (with its growing consumptive uses and its essential ecological functions) is emerging as a critical constraining/enabling component of global economic growth.

Unfortunately, under governing frameworks that centrally allocate resources and institutionally set prices artificially low, ecosystem services are exploited as a means of ‘managing’ the imbalances rather than properly valued for their essential role in the search for sustainability.  This framework yields the opposite of sustainability.  Human capital is inconsequentially substituted for nature’s capital; that is, resources are inefficiently allocated.  Water resource sustainability ultimately dictates the utilization of market processes that are invoked, to some degree, by all economic systems.

In the economic sphere, the seemingly debilitating challenge is that ‘water’ has characteristics of a common natural resource, a public good, and a commodity.  It can be considered ubiquitous globally but scarce locally; it is renewable but can be depletable; it has no substitutes but can be recycled; it is an economic input as well as a prerequisite for life; and while access to healthy drinking water is regarded as a human right, water can also be privately owned and transferred as a legal property right.

Not only is this mix confounding from an ecological perspective, but it also forces the application of disparate and unwieldy economic principles that are called upon to determine the proper role of market mechanisms in advancing sustainable solutions.  Given the preoccupation of neo–classical economics with utility maximization, optimality, and externalities, it is not surprising that the role of market mechanisms within the larger process of water resource sustainability is not well modeled. Socioeconomic questions surrounding water must be addressed (and gains from sustainability quantified by ecological economists) in order for water institutions to adapt to changing social values and embrace the institutional economics of water. This is the logic behind the opening assertion that water sustainability must be a core value.

What does water institutional change look like?   An illustration is contained within the Sustainability Assessment & Management process recommended by the National Research Council in its ‘Green Book’ report.  The study analyzed the incorporation of sustainability concepts across all EPA programs and details an operational framework for integrating sustainability as one of the key drivers within its regulatory responsibilities.  The report, in essence, is a description of the institutionalization of sustainability, one that embraces an impetus for market processes.  This is derived from the application of ‘sustainability tools’ such as ecosystem services valuation, environmental benefit–cost analysis, integrated assessment models, and sustainability impact assessments.  Quantitative tools like these have important implications for the measurement of meaningful performance indicators and enabling market–based mechanisms in the optimization of the social and economic benefits of environmental protection.

While regulatory bodies such as the EPA are at the forefront of institutional change in the sustainable governance of water, a significant point to be made is that the full spectrum of water institutions must reflect the changing socioeconomic status of water — from irrigation districts to municipal governing boards.  Nowhere is it clearer that the value of sustainability has yet to be even remotely priced into water, than in the institutional methods employed to actually set water rates.  Again, our institutions are shaped by our values.

Water rate schedules are not only the price charged for access to water but a reflection of the broader goals and policies of the institutions involved in rate making.  This reality generates the ever–present discussion of the low price of water, to the exclusion of actually examining the underlying beliefs.   Water institutions at the local (grass roots) level must transition from the politics of equity and fairness embedded in the cost of service model to the broader inclusion of environmental justice.  An ethic of water sustainability as a core value would greatly reduce the clash between social equity and the incentives required for intergenerational sustainability.

But the focus should not be on a commodity price that is expected to serve as an equilibrating mechanism for water supply and demand.  Despite attempts to metaphorically (‘blue gold’) and strategically (‘water is the next oil’) compare the economics of other resources to the prospects for water, there are surprisingly few similarities that would portend a meaningful ‘commodity’ price, let alone a spot market for facilitating transactions.  A more instructive comparison occurs at a product level.  Consider that crude oil distills down into dozens of products, each representing distinct economic goods that respond to signals from market processes.  Many of the practical challenges associated with water resource sustainability could be clarified, if not resolved, by the application of market processes at a product level; i.e., by the unbundling of ‘water’ into ‘water goods’.

The following diagram is a stylized visualization of a framework for analyzing the potential contribution of market processes in the context of water sustainability (a detailed analysis is presented in The Horinko Group’s webcast, Investing in Water: The Rationale Beyond the Talking Points).  This analytical framework seeks solutions to the tradeoff mentioned between social equity and economic incentives that is invariably at the center of water policy.


Where market processes advance sustainability criteria, sending the proper institutional signals begins with the long overdue move away from treating water as a stand–alone public good.  The private good characteristics inherent in many of the consumptive uses of water must be recognized.  This is accomplished by unbundling ‘water’ into product–level water goods such as: water rights, which, as legal property rights, are as close as you can get to a private good; residential tap water, which is artificially characterized by water institutions as a public good; industrial process water where the benefits are already internalized in the private sector; desalinated water, which is certainly priced through a market process but has less–expensive substitutes; and so on.

The diagram maps the position of water goods according to the qualitative mix of the two attributes used in economics to classify goods as common resources, public goods, near–public goods, or private goods.  The attributes are excludability and rivalry in consumption.  As can be seen, many water ‘products’ inherently exhibit the characteristics of economic or private goods.  This framework can be used as a sustainability tool to identify water uses where the characteristics of private goods can be institutionally attributed in order to invoke the allocational efficiency of market processes.  Sewage sludge is a good example.  When the EPA enacted the Section 503 regulations defining the conditions for the beneficial use of sewage sludge, this product of the wastewater treatment process was transformed into biosolids, a private good around which a market developed.  This institutional change is shown in the diagram by a shift in the positioning of sewage sludge to that of biosolids; representing a mix of more excludability (due to a market price for biosolids) and greater rivalry in consumption (biosolids are beneficially consumed). The idea is that many water uses can be made more sustainable through changes to the institutional rules that govern them.

Reused water is another example of the benefit from institutionalizing market–based processes through the attribution of private good characteristics.  If there are sustainability benefits embedded in reclaimed water (but a supplier can’t exclude somebody else for non–payment) then you can compensate for this market failure by institutionalizing the internalization of the external social benefit.  The supplier of the good is getting paid.  It’s clear that the offset is a form of direct subsidy, but at the product–level, the unintended consequences of cross–subsidization (bundling) are eliminated from policy considerations.  Incentives (subsidies) or disincentives (taxes) can override the conditions of nonrivalry and nonexclusivity that deter private solutions.  This is similar to the economic logic behind a system of tradable emission permits.

The enabling nature of institutional change can be applied to the challenge of unfunded mandates in the looming stormwater regulations.  Stormwater exhibits significant public good characteristics, much like raw source water.  By creating a separate stormwater utility, however, the costs associated with the management of stormwater, if comprehensively identified, can be internalized with the customer as with water and wastewater utilities.  By unbundling stormwater costs of service from the water and/or wastewater rate structures, the utility can create a separate cost of service model that reflects the economic realities associated with meeting the rapidly increasing stormwater regulations and addressing the problematic issue of combined sewer overflows.

The water utility industry itself is a natural advocate for water institution change.  Water utilities are recognizing the critical importance of market processes (not to be misinterpreted as deregulation) within the comprehensive regulatory structure.  Markets could absorb some financial risk, thereby reducing institutional impediments to their own sustainability.  Severn Trent, one of the ten privatized water utilities in the UK, issued a report that envisioned the gradual insertion of ‘market–like’ mechanisms into the water utility sector in order to meet the challenges of climate change and sustainability.  The problem seen was that the policy and regulatory framework in the UK encourages a risk–averse approach to meeting standards that favors costly capital–intensive infrastructure solutions over more sustainable operating solutions, thereby placing too great a reliance on debt financing and jeopardizing the financial stability of the regulated water utility business.

The force behind water institution change is the increasing social value placed on the notion of sustainable water use.  As core values and cultural belief systems change to include an ethic of water sustainability they will influence the institutional landscape associated with water governance.  And where governing institutions are looking at private sector participation as a funding mechanism, the institutional economics of water have an important role in sending the proper market signals necessary to facilitate a more efficient and sustainable allocation of water resources.


Steve Hoffmann is Founder of WaterTech Capital LLC and Senior Advisor of Water Sector Sustainability and Investment to The Horinko Group.  The Horinko Group’s Resource Solutions division seeks to promote an understanding of how market processes can be utilized to facilitate solutions to complex water resource sustainability issues. The nexus between water sustainability and market processes is the subject of the recent webcast, “Investing in Water: The Rationale Beyond the Talking Points” (The Horinko Group/Steve Hoffmann, May 2013).

5th National Conference on Ecosystem Restoration

July 30, 2013, Chicago, IL

A Case for an Incremental Adaptive Management Approach to Ecosystem Restoration and Resiliency – Moving from Compliance-Driven Outputs to Stewardship-Driven Outcomes in the Mississippi River Basin

By: Patrick S. McGinnis, Senior Advisor, The Horinko Group

THG’s Senior Advisor for Water Resources, Pat McGinnis, was invited to participate in a panel at the 5th National Ecosystem Restoration Conference last month in Chicago.  The panel entitled, “Community Approaches Among Successful Regional Ecosystem Management Initiatives,” was moderated by colleague, Mark Gorman, Policy Analyst at the Northeast-Midwest Institute.  Due to an emergency dental procedure, Mr. McGinnis was forced to cancel his presentation, but has furnished his written remarks prepared in advance of the conference

I want to begin by reflecting on a piece that appeared ten years ago published by the American Society of Ecology entitled, “Sustaining Healthy Freshwater Systems.”

The authors tell us in our pursuit of water for cities, farms, and industry, we are largely ignoring or at least failing to adequately protect the benefits of water that remains in-stream to sustain healthy aquatic ecosystems.

They offer three observations, which I believe are still relevant to ecosystem restoration considerations today –

  • First, dynamic patterns of flow, within the natural range of variation will promote the integrity and sustainability of freshwater systems;
  • Second, aquatic ecosystems require that sediments, chemical and nutrient inputs, and plant and animal populations fluctuate within natural ranges, neither experiencing excessive swings beyond their natural ranges nor being held at constant levels; and,
  • Third, current piecemeal and consumption-oriented approaches to water policy cannot solve the problems confronting our increasingly degraded freshwater ecosystems.

To conclude, they leave us with six recommendations to begin more effectively addressing how water is viewed and managed –
1) Frame water management policies to explicitly incorporate freshwater ecosystem needs;

2) Define water resources to include watersheds, so that freshwaters are viewed within a landscape or ecosystem context;

3) Increase communication and education across disciplines to facilitate an integrated view of freshwater resources;

4) Increase restoration efforts using well-grounded ecological principles;

5) Maintain and protect remaining freshwater ecosystems that have high integrity; and,

6) Build recognition for society’s dependence on naturally functioning ecosystems.

I think their last recommendation to educate society regarding our dependence on healthy natural systems is still the one needing the most attention because, for me, it holds the most promise for informing a fact-based narrative on how we need to proceed.

These recommendations published in 2003 could have easily been published ten years earlier in 1993, and perhaps ten years before that.

So, here we are in 2013, some thirty years later, still struggling to make the socially relevant case for informed restoration and stewardship directed at achieving system resiliency.

As I look at where we are today, moving gradually from a top-down command and control model of governance and management to something perhaps not altogether bottom-up, I really have to wonder about our grassroots capacity.

Meanwhile the pursuit of green technology and a green economy may be shifting the popular case for greening to a business argument.  Revealing the business case for natural system resiliency may finally validate our dependence on natural systems.

For the remainder of my time, I want to reflect on where we’ve been, where we are, question a few assumptions that may still be holding us back, and offer a few recommendations on how we may make a greater impact.

My own lessons have been learned in the Mississippi River Basin, and I believe a number of programs and initiatives from the Mississippi Valley are instructive in how we may proceed.

Allow me to first pose a few questions for you to ponder as we proceed –

How do we strategically communicate the importance of resilient natural systems?

And, as we learn more about natural systems, how much attention must we as resource professionals also direct towards understanding people and communities so that we can reveal a socially-relevant context for restoration that people can and will embrace?

What are tangible results?

And, how do we proceed in a manner that not only achieves results, but utilizes those results to instruct and inform and make a clearer case for sustainable practices?

And, how do we de-mystify what is actually needed so that we can further empower the well intentioned?

As I reflect on where we have been, I know my own journey has been one of routinely challenging and testing old assumptions.  I think we have to continue to do so on several fronts.

Here are ten areas that I think are worthy of additional attention –

1) Local projects focused on improving local habitat serve a purpose, but we cannot let those efforts satisfy our desire to reclaim, rehabilitate, and to restore.  We need to better communicate the case for system-based processes to restore natural hydrology, reconnect floodplains, and improve water quality.

2) I often refer to compliance driven versus stewardship driven efforts.  My experience convinces me that too many outputs are compliance driven to offset or mitigate the negative impacts of some ‘higher’ use.  On the Mississippi River, navigation, flood control, agricultural production, industrial development, and urbanization have been the objective, while restoration too often has been reduced to the cost of doing business.  Stewarding the natural resources we depend on, and which livable communities are built on, can no longer be a cost of doing some other business.

I believe we need to change the narrative and reinterpret the programs and authorities we use to advance restoration to something more organic that is driven by a stewardship doctrine.

3) I also wonder how many restoration outputs are actually producing system outcomes.  Aggregating “one and off’ outputs and claiming some multiplier effect may be distracting us from moving to a truly integrated approach that incrementally tackles bigger challenges and produces outcomes not just outputs.

4) Ever since the signing of the floodplain management Executive Order in the late 1970s the overall effort has looked more like regulated floodplain development than floodplain management – again, compliance driven rather than stewardship driven.

National flood insurance reform is an indicator that we are becoming more aware of the social costs of floodplain development, but we still have a long ways to go.  This year many of us regionally are observing the 20th anniversary of the historic 1993 flood.  Here in the State of Illinois, since 1993, almost 4,000 repetitive loss structures have been purchased and the land converted to open space.  With that said, we still struggle to communicate and account for the externalized costs of floodplain encroachment.

We have federalized local flood protection, federalized flood insurance, and some federalized farm programs that are keeping too many of us in the 5% of the continental U.S. that is subject to recurrent flooding.  We have to look at all the costs associated with floodplain encroachment and make sure we aren’t incentivizing it.

5) Many are calling for improved river management.  However, in too many aquatic ecosystems, there simply is no river management period.  There are programs that influence a river’s condition, but most are not directed at comprehensive system management.

In the case of the Upper Mississippi River System, managing flows to support navigation or to attenuate flooding, while also attempting to augment shoreline vegetation with seasonal draw downs within the constraints of existing navigational pool regulation, does not somehow add up to management.

So, when we call for improved management, what I hope and believe we are really seeking is to actually begin management or stewardship.  We cannot simply push funds into existing programs that influence the river only to find that balanced river management does not enjoy the status and funding of other agency priorities and therefore remains a compliance driven afterthought or cost of pursuing some other purpose.

6) Turning attention to the grassroots or community level, living next to a river, gulf, bay, lake, or wetland has a direct and profound influence on nearby communities.  These communities tend to have a greater and more visceral sense of their place in the watershed.  These gateway communities can be a starting place to build a stewardship ethic in watersheds but they have to be engaged and their capacity to add value strengthened.

7) On the matter of community empowerment, community colleges are locally relevant and trusted institutions and can serve as portals into local communities.  Positioning community colleges to team with land grant universities in order to programmatically bring the benefits of land grants more deeply and beneficially into communities could prove timely and a new expression of extension that could better inform how we relate to natural systems.

Along the length of the Mississippi Valley, nine community colleges are working with land grants and the American Association of Community Colleges to scope out how they may better address challenges like workforce training, green technology, deployment of STEM initiatives, and advancing jobs initiatives.  In this particular instance, the river is revealed as an organizing principle for regional economic recovery and guiding sustainable development.

In too many places, regional and local development still suffers a lack of a planned-for approach.  Many small and mid-sized communities are not equipped or resourced to do effective planning.  In many places, planning staffs are being eliminated.  This same lack of planning capacity confounds stewardship of our natural resources and communities.  We still respond too often in a knee-jerk fashion to new development that promises jobs and local tax revenue, without thoughtfully considering the externalized costs.

8) Staying with the empowerment theme, I want to mention the power of an incremental approach as a learning tool and its link to adaptive management.  Too often, when I chat with colleagues regarding adaptive management, the discussion goes directly to the design and delivery of new projects instead of beginning with more effective management or stewardship of the existing condition and footprint.

In most of our freshwater ecosystems, we are dealing with a built-out environment.  The path ahead needs to be informed by our best science.  Adaptive management can make a place at the table for scientists in day-to-day operations, while also fostering relationships between research scientists, resource managers, and program managers.

An incremental approach also allows the swelling number of well-intentioned local and regional stakeholders to build capacity and learn how to do things beyond agreeing or disagreeing.  Learning to “do” is empowering.  Public involvement that engages, but does not inform, tends to see initiatives lose steam.  Well-intentioned will never replace well informed.  An incremental approach that applies adaptive management principles and processes allows all participants and those affected to learn along the way.

One area I believe we could demonstrate adaptive management early, and within existing authority on the Upper Mississippi River, is on federally managed public lands within the riparian corridor.

Recently, the Corps, in cooperation with other federal, state, and NGO partners, developed a Systemic Forest Stewardship Plan for the Upper Mississippi River that I believe presents a model for an inter-jurisdictional, inter-organizational approach to regional resource master planning to demonstrate, communicate, and guide stewardship of riparian lands in a planned-for incremental fashion.  This effort to integrate management on federal lands could then be integrated with conservation practices on adjacent private lands guided by compatible resource objectives arrived at by shared reach planning.

9) There is also the matter of low impact development, urban storm water management and nutrient management across rural landscapes.  No matter how much habitat we reclaim or improve, without water quality and water availability or supply squarely addressed as a priority driver, we may be reclaiming a house of cards.

The Chesapeake Bay experience in moving toward BMPs, TMDL allocations, and buffer management can offer many lessons learned to those of us here in the Midwest.

10) Lastly, I want to mention environmental education and what the next generation of environmental curricula might look like.  Giving students a systems context and appreciation of natural systems needs to become a part of our formal educational experience.  I believe students understanding the role, not simply the chemistry of biogeochemical cycles (carbon, nitrogen, oxygen, hydrogen), can be an important foundation to their understanding of open and closed systems, and how resiliency is governed by process and replenishment.  As we embrace and promote STEM, hopefully we can utilize our natural systems as living classrooms to foster an in-context experience and connection to our natural resources.

Before I conclude, I want to quickly mention a few initiatives that are now underway in the Mississippi River Basin, that I believe hold great promise and are worth your attention.

  • Northeast-Midwest Institute administers the Mississippi River Cities and Towns Initiative (MRCTI), which is bringing the Mayors of waterside communities, large and small, together along the length of the river to create an informed voice for the river. Currently 57 mayors are participating.  This effort is spot on in my view.
  • The Mississippi River Community College Consortium is launching a nine-school consortium to reposition community colleges along the Mississippi River corridor to more strategically address basin issues by revealing the linkage between the ecology and economy of the corridor in a more socially relevant and actionable way.
  • The Illinois Green Economy Network (IGEN) is a statewide effort here in Illinois involving over 40 community colleges that have committed themselves to advancing green careers, green campuses, green curriculum, and green communities in their service areas.
  • The National Great Rivers Research and Education Center (NGREC), established in 2001, is a freshwater research collaborative involving the University of Illinois, Illinois Natural History Survey, and Lewis & Clark Community College.  The program is studying the ecology of great rivers, while also attempting to call attention to water resource challenges.  Through aggressive outreach and technology transfer, NGRREC is better informing our water resource narrative with a fact-based dialogue.  Two years ago, the partners dedicated a 32,000 square foot, LEED Platinum Field Station, adjacent to the Mississippi River between the confluences of the Illinois and Missouri Rivers.  This institution is repositioning the State of Illinois to play a greater role as an emerging water research and technology hub.  In two weeks, NGRREC will enter into an MOU with the Mississippi River Commission to further advance collaboration with the Corps on several fronts.  One initiative that NGRREC and University of Illinois are involved in is called GREON and consists of a network of lightweight pontoon platform supported real time water quality and meteorological sampling and recording units being deployed at locations on the Mississippi and Illinois Rivers.
  • The Mississippi River Xchange (MRX) is another NGRREC initiative that involves a multi-state educational endeavor to give high school students a greater comprehension of their relationship to water, their local river reach, and a larger system context.  The immediate objective of the program is to deliver a comprehensive STEM-based river education program to high school students along the Mississippi River corridor.
  • As a cost-saving measure to reduce treatment costs and contain water rates, a number of private water companies and utilities are stepping up to bring more awareness to source protection and source control.  Some of these same companies are involved in buffer management and watershed management districts in other watersheds.   The Systemic Forest Management Plan for the Upper Mississippi River that I previously mentioned could have a complementary impact guiding an adaptive management approach to steward riparian buffers along the Upper Mississippi River.

Anyway, these are just a few efforts I see gaining traction.

To close, it seems to me that we have actually been on an incremental, but disconnected journey.  We need a course correction, an actionable foothold, and a better narrative to make real headway.  We need to become much more strategic in our thinking, our communications, and linking results to outcomes.  We need to push ourselves at a time when many are hunkering down due to budget constraints, an uncertain economy, and uncertain regulatory environment.

I think we have a lot of the right dots.  Perhaps, we simply need to strategically connect and communicate those dots, pursuing them incrementally.

Most of all, we need to begin today.

Excerpt from: Contaminated Sediments – How Do We Strike the Proper Balance?

By: Richard Fox, Vice President/Principal Scientist, Natural Resource Technology, Inc.

August 2013

Contaminated sediment projects represent some of our country’s largest environmental sites in terms of size, complexity, and cost due to several factors including:

  • Transport of contaminants during and after discharge to the water body;
  • Persistence of hydrophobic contaminants (i.e., those that do not dissolve in water);
  • Transfer of contaminants through the food chain; and,
  • A high degree of uncertainty as to how contaminants move through the food chain.

USEPA and state environmental agencies (Agencies) are increasingly focused on reducing potential risk through remediating contaminated sediment sites around the country.  Large programs such as USEPA Great Lakes National Program Office’s (GLNPO) Great Lakes Legacy Act (GLLA) are dedicated to addressing contaminated sediments.  Although the GLLA is focused on specific sites in the Great Lakes, the issue of contaminated sediments is nationwide.

Many larger sites have been remediated or are currently being remediated (e.g., Lower Fox River (WI), Hudson River (NY), Duwamish River (WA)).  For others a Record of Decision (ROD) prescribing the site remedy has been or will soon be issued through USEPA’s Superfund Program (e.g., Passaic River (NJ), Lower Willamette (OR), Gowanus Canal (NY)).

Many large sediment projects become mired in opposition while resources are unnecessarily expended.  An article titled “Accelerating Progress at Contaminated Sediment Sites: Moving from Guidance to Practice” (Bridges et al., 2011) does an excellent job of framing the key issues.  The paper lists the following five steps to accelerate the process:

Action 1: Development of a detailed and explicit project vision and accompanying objective, achievable short-term goals and long-term goals, and metrics of remedy success at the outset of a project, with refinement occurring as needed throughout the duration of the project;

Action 2: Strategically engage stakeholders in a more direct and meaningful process;

Action 3: Optimize risk reduction, risk management processes, and remedy selection addressing two important elements: a) the deliberate use of early action remedies, where appropriate, to accelerate risk reductions, and b) the systematic and sequential development of a suite of actions applicable to the ultimate remedy, starting with monitored natural recovery (MNR) and adding engineering actions as needed to satisfy the project’s objectives;

Action 4: An incentive process that encourages and rewards risk reduction; and,

Action 5: Pursuit of sediment remediation projects as a public-private collaborative enterprise.

All five actions are important and if implemented will very likely realize accelerated sediment cleanups.  Though all of these actions can accelerate site cleanups, Actions 3-5 will likely not occur without Actions 1 and 2.  This article focuses on the first two of the five recommended actions.

Why do we get stuck?  The Agencies are trying to reduce risk – risk to human health and the environment.  However, Agencies often select remedies that may not be the best remedy to reduce risk.  Industries or responsible parties (RPs) are usually forced to remediate their site and seek to do it at the least cost.  At most contaminated sediment sites, Agencies prefer dredging to remove contaminants, while RPs prefer monitored natural recovery (MNR), adding amendments to reduce bioavailability, or capping.  They are typically at odds.

The GLLA Program has not experienced the delays that typically plague other sediment remediation sites.  GLLA has completed remediation at 14 sediment sites and has many others at various stages moving toward remediation.  However, the GLLA is limited to specific areas in the Great Lakes and is not available across the country.

The GLLA Program is a cooperative endeavor where the Federal Government actually contributes significant funding to the project.  It is much easier for RPs and Agencies to come to agreement when both parties are aligned (they both have an interest in creating a win-win remediation scenario), particularly with a funding cap and a clear understanding of how much both are paying.  The success of this program in aligning interests of Agencies and RPs forces us to ask:

  • How do we accomplish sediment remediation in a timely manner for sites not in the GLLA?
  • Is GLLA a model for future sediment remediation projects?

Many practitioners believe the GLLA model should be applied at locations outside the Great Lakes.  However, in the current political climate it is unlikely a broader cost-sharing program will be created.  Clearly, we have learned from the GLLA Program that projects move to remediation faster and achieve better results when interests are aligned.

Typically, sites are remediated using dredging or removal, capping, adding amendments to in situ sediments to reduce bioavailability (more recently), MNR, or a combination of these.  There are advantages and limitations to each of these technologies.  The table below provides a high-level comparison of the advantages and limitations to these technologies.




Dredging Removes contamination; permanent; precise Most expensive; disrupts habitat; leaves residuals
Capping Less expensive than dredging; provides immediate barrier to contaminants; less destructive to habitat and can enhance natural habitat Contaminants remain and must be monitored for a long time; caps have failed; decreases navigation depth
Adding amendments such as activated carbon Less expensive than capping; reduces bioavailability; less disruption Contaminants remain in place; must monitor long term to ensure contaminants not available
Monitored Natural Recovery (MNR) Least expensive; no disruption to habitat No action to accelerate risk reduction; it may not work



In 2011, Bridges et al. stated, “The primary objective of an optimized risk management process is to focus the project, from the very beginning, on developing and implementing solutions for managing risks posed by the site.”  How do we strike this balance?  USEPA has coined a term “smart from the start” to describe how a holistic consideration of a site vision can lead to better sampling of the site.  Here the term “smart from the start” broadens this concept to mean a holistic approach to understand, compromise, and communicate a site vision to find alignment and create a win-win remediation scenario.  The “smart from the start” steps include:

  • Creating the vision for your site
  • Aligning the site vision with the Agencies
  • Building the relationship to align vision and goals
  • Creating win-win

Based on this, implementing Actions 1 and 2 (i.e., site vision along with clear, meaningful communication with stakeholders; Bridges et al., 2011) are important first steps to create alignment between Agencies and RPS.  These actions are more effective if done early in the process before risk-based remedy decisions are made and dollars are spent.

Regardless of whether a site has been studied extensively or is “new” with a paucity of data, it is important to create a conceptual site model (CSM) that shows the current site information.  The CSM can be an illustration or table showing contaminant transport and exposure pathways for important receptors (e.g., humans, birds, fish).  The CSM is important from a technical perspective because risk determination is very complex and fraught with uncertainty.  Small changes in basic assumptions can lead to significant increases in sediment volumes requiring remediation that increase the costs.  The CSM is also the first step to determine the vision for the site and helps keep focus on risk management.  Below is an example CSM courtesy of the Interstate Technology & Regulatory Council (ITRC):

Feature Column Image

Action 1 offered by Bridges et al. (2011) recommends, “development of a detailed and explicit project vision and accompanying objective, achievable short-term goals and long-term goals, and metrics of remedy success at the outset of a project, with refinement occurring as needed throughout the duration of the project,” as the first of five actions for accelerating cleanups at contaminated sediment sites.  Site vision can be viewed as taking the current CSM to the future CSM.

The vision for a site is a mental picture that takes the current site into a better future.  Considerations for creating a site vision include:

  • Potential future use for the site and nearby
  • Planned activities for the waterbody
  • Navigation concerns (both current and future)
  • Ability to redevelop, sell, or donate the site after remediation
  • Opportunities to create land from a waterbody

Developing a vision upfront is critical because different remedial technologies for contaminated sediments can enhance or limit future site use.  An RP that has started along the process of performing the remedial investigation (RI), feasibility study (FS), remedial design, and remedial action without a vision usually only asks, “How can we minimize the cost of the remedy?”  A much better question is, “How can we use ‘smart from the start’ to create a win for us and a win for the Agencies?”  If the site vision is aligned early in the process, a win-win situation is more attainable.

Being “smart from the start” (where we consider the end game, understand the Agencies’ and RP’s perspectives, and find alignment) is the opportunity to balance risk reduction achieved and cost (i.e., risk management).  This is only achieved when there is a common understanding, respect between parties, and a true effort to attain shared goals.  “Smart from the start” is as much psychological as technical.

Part of the site vision is the need for a high-level understanding of potential remedy costs relative to risk reduction.  This is done by estimating the areas and volumes of contaminated sediments to a variety of potential cleanup concentrations or levels (CULs).  These estimated volumes can help establish general cost ranges along with the potential risk reduction to provide an overall perspective of sensitivities to changes in the program.  It is also important to understand the feasibility of remedial technologies at a site.  Dredging is difficult under certain conditions (e.g., if contaminated sediments overlie a rocky substrate).  Capping is difficult under other conditions (e.g., if there are navigation concerns or the potential for ice scour of the cap).  Experienced personnel are best to assist with these analyses, especially if there are significant data gaps in understanding the breadth of contamination and potential risk.


It is critical to engage Agency personnel and demonstrate a willingness to work with them.  The goal is to create mutual trust which thereby, allows for more open and meaningful dialog.  Trust allows for discussion of ideas that might otherwise be thrown out without due consideration.

It is ideal to engage Agency personnel around a vision for the site.  Site vision is becoming increasingly more important and will likely be more of a driver for compelling Agencies to take action on sites.  Further, consideration of site vision will become increasingly more important and represents a prime opportunity to engage the Agency personnel to build relationships.  Attaining agreement on the site vision may be the most significant impediment to executing a contaminated sediment project that meets the goals of both the Agencies and RPs.

Site vision discussions should include potential for leveraging activities in the area that are being conducted or are planned to be conducted.  This is a time to establish a cooperative relationship, and hopefully a partnership.  It is important to keep early discussions at a high level to avoid forcing one’s agenda.  There is a tendency in early negotiations and discussions to try to push for less expensive remedial technologies.  This should be resisted.  There is much more to be gained when an RP makes every attempt to understand, agree to, and then blend the vision of the Agencies into a remedial approach.

The Great Lake Commission has recognized the value of developing a site vision and recently held a workshop titled “Creating Vibrant Coastal Communities: Techniques, Tools, and Resources to Advanced Placemaking in Waterfront Areas” was recently held in Muskegon, Michigan.  This workshop focused on an integrated approach to waterfront redevelopment that includes sediment remediation.


Why are relationships so important?  When perspectives are exchanged in a trust-filled environment, there is more consideration of ideas before taking positions on issues.  This is because in a trusting environment motives are rarely questioned.  Conversely, (and unfortunately, typically) motives behind ideas are questioned when there is distrust.  Relationship building provides the opportunity to change the basis of understanding.  While there is rarely agreement on all issues, merely modifying ones views to consider the perspective of the others will help bridge that gap.

Action 2 offered by Bridges et al. (2011) recommends, “Strategically engage stakeholders in a more direct and meaningful process.”  This is because engagement builds trust, provides perspective, and offers opportunities to adapt ideas and thoughts.  Agencies are the most important stakeholders to engage first, but other stakeholders can be engaged to offer opportunities to create win-win remediation scenarios.  Example opportunities that can be leveraged to create win-win remediation scenarios include:

  • Shoreline access for the public
  • Public amenities (e.g., parks, boat launches)
  • Redevelopment for residential or commercial purposes


Environmental negotiations, in particular those specifically related to contaminated sediment sites, are locked in on the “mythical fixed pie” (Bazeman, 2003).  The negotiation paradigm of the “mythical fixed pie” is that the “pie” is finite and in order for one party to gain more, the other party must give something up.  Recall that at most contaminated sediment sites the Agencies prefer dredging to remove contaminants, while RPs prefer MNR, adding amendments, or capping.  The mythical fixed pie is capping (or MNR or adding amendments) versus dredging; remove contaminants at a high cost or leave them in place at a lower cost.  If Agency personnel allow MNR, adding amendments, or capping they are losing some of the pie.  If the RPs are not allowed MNR, adding amendments, or capping they are losing pie.

Such negotiations are based on win-lose rather than win-win.  There are opportunities to expand the pie and create win-win scenarios.  As mentioned above, trust between Agencies and RPs is the first step to expanding the pie and for achieving the win-win.

The second step is to agree to or at least understand the Agencies’ site vision.  Remedial options can then be discussed based on the site visions rather than on cost alone.  When there is trust and a site vision, the pie is not fixed and win-win can be attained.

As an example, proposing to install caps versus dredging will be better received by Agency personnel if both trust and a site vision (e.g., where shallowing or enhancement to natural habitat is desired) are present.  Conversely, when capping is proposed without a site vision that supports the benefits of capping, Agency personnel usually feel that the RPs are merely trying to propose a less expensive remedy that leaves contamination in place.

Another way to gain trust is to propose remedy components that are desired by the other party.  When dredging is proposed by RPs, Agency personnel are more likely to trust that RPs are not just seeking the lowest cost remedy.  Dredging can strategically be used to target areas of highest contamination or to remove sediments that inhibit navigation.


The overall goal of risk management is to reduce risk to acceptable levels at the least cost.  Of course the goal is to also limit the overall liability.  Liability includes the cost of the assessment, remediation, monitoring the effectiveness of the remedy, and potentially maintaining the remedy if contamination is left behind untreated (i.e., tailing liability). It is critical to understand that many contaminated sediment remedies have tailing liability that lasts beyond completion of the project remedy.  Under Superfund, one could argue all remedies have tailing liability because of the need to monitor the effectiveness of the remedy.  However, if sediments are capped in place, amended with organic carbon to reduce bioavailability, or subject to MNR, tailing liability can be far more significant.

The conundrum is that less expensive remedies typically come with more tailing liability.  It is classic “pay me now or pay me later.”  Further, the larger the site the more difficult and expensive it is to remove or treat all contamination, as river dynamics tend to redistribute contamination over larger areas.

With consideration to overall liability, combination remedies (i.e., use of multiple technologies) often afford the greatest opportunity to expand the pie and create “win-win” scenarios.  Combination remedies, by their nature, balance the tensions between parties because they allow both parties to attain wins.

An example combination remedy is being constructed on the Lower Fox River in Wisconsin.  The remedial action level is 1 ppm.  There are approximately 7.25 million cubic yards of sediments that must be remediated.  Approximately 70% of the mass of PCBs will be removed from the river using hydraulic dredging.  The rest of the sediments (approximately 3.25 million cubic yards) will be capped or covered with sand.  This remedy strikes a balance between the Agencies’ preferences for removal of PCBs with the RPs preferences for lower cost.  The combination remedy was arrived at through many meetings between the RPs and the Agencies and their Oversight Team.  The meetings focused on the site vision and risk reduction.  These meetings were conducted while there was a ROD in place that called for dredging all sediments but allowed for a “contingent remedy” of capping if capping could be shown to be as effective as and less expensive than dredging.  The combination remedy required an Amended ROD.  The fact that the Agencies were willing to amend the ROD shows the success of the processes of visioning the site and creating trust through meaningful and open dialog between the parties.  This truly was a win-win.

Finally, there have been a few projects recently where the RPs have opted for dredging all contaminated sediment out in order to create a situation with no tailing liability.  These projects have been conducted under a removal action and later receive a “No Action” decision in the ROD.  These types of projects are easier to come up with a win-win but the greatest opportunities exist when the project is conceived of from the beginning.  A balance must be struck to ensure that the remedy is complete enough for the Agency to agree to a situation where the remediation is complete.  This requires openness and trust.

The final piece to all of this is to align the site vision, remedy selection, and tailing liability with overall risk reduction.  If communication has led to trust, it is possible to agree to a win-win remedy where both parties are satisfied.


Bridges, T.S., S.C. Nadeau, and M.C. McCulloch. 2011. “Accelerating Progress at Contaminated Sediment Sites: Moving from Guidance to Practice”. Integrated Environmental Assessment and Management; Volume 8, Number 2: pp. 331-338.

Bazeman, M.X. “Mythical Fixed Pie”. Harvard Business Publishing Newsletters; 3 pages. November 1, 2003. Prod. #: N0311A-PDF-ENG.

Excerpt from: Fostering Dialogue at the WEC Roundtable on Sustainable Engineering


The World Environment Center held a roundtable event from June 10-11 in Washington, DC, entitled Preparing the Next Generation of Engineering Students to Implement Sustainable Development: A Dialogue with Engineering School Thought Leaders and Business Executives.

THG’s President Marianne Horinko moderated a panel discussion during the event focused around the question: What skills do global companies want their new hires to possess?  The panel featured executives from The Dow Chemical Company, Royal Dutch Shell, and CH2M Hill sharing experiences on the qualities that their companies seek in new employees and the training they undergo as related to sustainability.

Panelists emphasized the importance of teamwork and the ability to collaborate across disciplines and areas of expertise.  They expressed that while new hires must possess the standard capabilities of numerical analysis and quantitative thinking, individuals who are creative, expressive, and strong communicators stand out and contribute most to the company’s ability to incorporate sustainable values into everyday work.

Sustainability for many companies entails a certain way of thinking about problems and solutions.  This requires a systems approach, taking a circular, non-linear, view of a product lifecycle or engineering project, considering uncertainty and imagining unintended consequences.  It requires that employees ask the right questions—often different and innovative questions.  The panel discussed how these skills might be cultivated before employees are brought in, either through university programs emphasizing interdisciplinary teaching and relying on sustainability-based case studies, through co-ops and internship experiences, or otherwise.

The discussion thoroughly covered many facets of the central question, and the session fostered a rich and thought–provoking dialogue between the audience, the moderator, and the panelists.

Insider Account of the 2013 Brownfields Conference Panel —

ASTM Greener Cleanup and Other Tools: Who Can Use Them and How


At this year’s Brownfields Conference, held from May 15-17 in Atlanta, GA, one panel discussion entitled, ASTM Greener Cleanup and Other Tools : Who Can Use Them and How, featured panelist Marianne Horinko, President of The Horinko Group, representing the Sustainable Remediation Forum (SURF).  The panel explored the new cleanup standard that aims to provide a systematic process for reducing the environmental footprint of contaminated site cleanups.  The session, moderated by Deborah Goldblum of U.S. EPA Region 3, featured speakers with various experiences creating, implementing, or advocating for the standard.

Mathy Stanislaus, EPA’s Assistant Administrator for the Office of Solid Waste and Emergency Response, gave a special introduction to lead off the session.  He gave a bit of background on the new principles and emphasized two keys aspects: first, that the principles were designed to be implemented in conjunction with existing regulatory frameworks, and second, they are designed to reduce environmental footprint while moving the cleanup process forward.  Stanislaus’ support for these principles, which provide a systematic evaluation tool for greening cleanups rigorously, was echoed throughout the discussion.

John Simon of Gnarus Advisors followed with a comprehensive overview of the standards.  He emphasized that the standards are intended to provide a process and technical direction for reducing the footprint of cleanups while maintaining flexibility for different cleanup stages and sites.  Their development, which began in 2009, followed the rigorous ASTM process and involved a broad array of stakeholders.  The standards uphold a transparent and documented process and are intended to serve as an incentive for greener cleanups.  The backbone of the standard is a robust list of over 180 Best Management Practices (BMPs) for cleanups.  The four-part process includes an opportunity assessment of feasible BMPs, prioritization of BMPs that will have the greatest impact on footprint reduction, selection and implementation of BMPs, and finally, the reporting on the cleanup and the sustainable approach to it.  Quantitative evaluation of this process is possible and encouraged for analyzing footprint and measuring performance of the BMPs applied.  As of now, the standards are used on a voluntary basis, but Simon notes that the hope is that regulatory enticement and policy will develop around the standards.

Stephanie Fiorenza, representing BP North America, Inc., a current voluntary user of the standard, spoke next.  Fiorenza remarked that BP ran a pilot test of the standards on a service station site using the qualitative BMP list.  After assessment, prioritization and selection phases, they implemented 15 BMPs.  Fiorenza recommended that the guide be used during remedy design to minimize the footprint and emphasized its usefulness across regulatory programs.  BP plans to use the quantitative approach on a larger test site in the next phase as well as complete the reporting components.  This experience with the standards in practice was favorable.

Speaking from the state perspective, Heather Nifong, Illinois EPA, likewise touted the advantages of the new standards.  She highlighted a few key reasons why these standards serve to mitigate the resource intensiveness of state cleanup programs: uniform process works across regulatory programs, carefully vetted BMPs, reporting and transparency encourage self-implementation, and therefore do not require state regulatory review.  Though states have the option of not adopting the standards, Nifong predicted that states will embrace them and offered various ways to incentivize their use including expedited review, discounts or rebates on fees, or recognition programs for standard users.  This panelist noted that though the BMPs individually may be minor changes, in aggregate, the standards could have a major impact.

The next panelist, Carlos Pachon of U.S. EPA Headquarters, highlighted the momentum from industry, consultants, engineers and other parties to create these principles.  The development and long evolution of the standards involved extensive work with many related regulatory programs and various regions, resulting in a strong base of support throughout the Agency.  Pachon too emphasized the importance of transparency and publicly available documentation that the standards require.  At this phase, he noted, continuing to spread information about the standards and their availability is essential.  With widespread use, the standards have the potential to facilitate a common language for sustainable cleanups.

The final panelist, Marianne Horinko, focused on the growing support for sustainable cleanups, as well as the need to widely advocate for and apply these greener cleanup standards.  She has witnessed green remediation principles being embraced by a global audience as nascent cleanup programs are developed in other countries.  The new cleanup standards and others like them focus on efficiency in cost, minimizing cleanup time, and reducing environmental footprint, and therefore are a fundamental tool for serving communities in need.

Furthermore, the standards are rigorous and do not allow for “greenwashing,” but still emphasize quick and sustainable cleanups.  They provide value to constituents that can be demonstrated through metrics and transparent reporting, and they allow industry and consultants and all those involved with cleanups to do more with less and accomplish cleanup goals in a more sustainable manner.  SURF will certainly play a role in amplifying these efforts and spreading these principles with the hope that they become a second nature part of the cleanup process.

The session concluded with an informative round of questions and discussion.  This notably touched on the best way to demonstrate the usefulness of the principles and information sharing regarding case studies and pilot tests.  There is an abundance of information available on the web via EPA’s site for green remediation (which will publish the list of BMPs later this summer), SURF website, and ITRC’s website.  Case studies will become more readily available as the standards are implemented and reports published.  Equally, if not more convincing than such case studies, is the common sense implicit in the standards themselves.  The standards provide guidance for users to consistently approach cleanups that are quicker, cheaper, and greener.