Hydraulic Fracturing – Outlook for the Next Four Years

Remarks by Marianne Horinko, President, THG
WWEMA 40th Annual Washington Forum | Washington, DC| April 24, 2013

Building on THG’s landmark 2012 report, Hydraulic Fracturing: Guidebook on the Current and Future Environmental, Regulatory, and Legal Challenges, Marianne Horinko recently presented at the Water & Wastewater Equipment Manufactures Association’s 40th Annual Washington Forum to discuss the environmental challenges hydraulic fracturing presents, the state of regulation and litigation governing its practice, and opportunities for technology providers in finding safe solutions for reducing its environmental impact.

Since the formation of The Horinko Group in 2008, my team has been closely tracking many energy sectors and considering their economic viability, energy security, and environmental impact.  Before I delve too far into hydraulic fracturing and the related environmental, regulatory and legal challenges, I believe it is important to describe the energy landscape as a whole, while sharing some key facts and insights that I’ve gained along the way.

Renewable energy is undoubtedly an important sector and one which we would, of course, like to see succeed.  In 2012, wind, solar, geothermal, and hydropower accounted for almost 15% of energy production in the United States.  Each suffers from intermittency and location issues, as well as extensive capital requirements.  Mixed public-private investment might ameliorate these roadblocks.

Biofuel production has been on the rise since the establishment of the first renewable fuel standard (RFS) in the Energy Policy Act of 2005.  The RFS program has since been expanded, and at the same time, biofuels have become the subject of the “food versus fuel” debate.  Biofuels are still necessitated by the RFS program and Clean Air Act regulations that require the use of reformulated gasoline, so their development continues.

Nuclear energy production has also been on the rise since 2005.  Concerns associated with waste disposal and safety, especially following the Fukushima disaster, has brought into question the future of its growth.

Petroleum continues to be central to our country’s energy resources.  Despite challenges, domestic crude oil production has risen steadily since 2009 and this Administration has committed to safe and responsible expansion of crude oil production.  New fuel economy standards, coupled with new production technologies, have resulted in a rise in domestic oil reserves.  The course of offshore oil production was altered and its future became more uncertain following the BP oil spill.

Shale and tight oil, two additional forms of domestic hydrocarbons, are accessed using the same technologies used in natural gas extraction.  Tight oil development has contributed to the reversal of more than two decades of declining U.S. oil reserves.  Both shale and tight oil represent a growing role for domestically produced hydrocarbons in meeting our nation’s energy demands.

This brings us to the primary focus of today’s discussion – natural gas.  Natural gas production, especially shale gas, has seen a significant rise in recent years with the improvement of directional drilling and hydraulic fracturing technologies.  The Energy Information Administration has estimated that U.S. natural gas reserve volumes are equivalent to a 93-year supply at current consumption rates.

Increased shale gas production and the extraordinarily low prices of natural gas that this production has brought about have had enormous economic impacts – job growth, decreased reliance on costly liquefied natural gas imports, and enabling LNG exports.  Industries and homeowners stand to gain from the lowered cost and increased price stability.

Given the growth and expected future impacts of natural gas, The Horinko Group conducted a study this past fall to look at the current environmental, regulatory, and legal issues tied to hydraulic fracturing.

Environmental impacts and health issues associated with shale gas are still being investigated.  There are unintended consequences in every step of the process to the air, water, and climate.  With regards to water, potential groundwater contamination has received the most public attention, but wastewater management, and water withdrawal volumes may be more notable concerns.

Turning the focus to the regulatory landscape, it is clear that rapid growth in the natural gas industry (estimates suggest that 11,400 new wells are being drilled each year) makes pragmatic regulation, permitting, and enforcement difficult.  The U.S. is gradually working to resolve this.

Natural gas development activities fall under a host of federal state and local regulations, but are for the most part regulated at the state level.  This framework opens the door for inconsistencies in the level of environmental protection across different states.  This is true of water withdrawal limits, recycled water usage standards, and wastewater management requirements.  Each of these components of the gas extraction process is regulated at the state level.  Therefore, operations in different states vary in their degree of protectiveness of the surrounding water resources.

There has been some federal activity to address these discrepancies.  In October 2011, EPA initiated a rulemaking process to address wastewater concerns from shale gas development when water is disposed of via treatment facilities.  New standards are expected to be published for comment in 2014.  EPA has also been investigating the impact of hydraulic fracturing on drinking water sources in a multi-year study.  These results are also due out in 2014.

With regard to the legal landscape, litigation has escalated concerning aquifer contamination, disposal of wastewater, and property rights.  Many of these cases allege a causal connection between hydraulic fracturing and water contamination.  Thus far, the majority of these cases has reached settlement agreements or has been dismissed.  Emerging scientific evidence is informing decision-making where specific regulations are absent, and the legal precedent is certainly still developing.

Our study concludes that the economic potential that the development of U.S. natural gas supply holds is undeniable.  Unconventional reserves have led to job creation, decreased energy costs, reduced dependence on foreign resources, and if exported, could come to bear on the balance of trade and improve our nation’s international negotiating position.  It is also generally agreed upon that natural gas for electricity generation is a cleaner burning fuel, with fewer air pollutants and greenhouse gas emissions, than coal power.

The risks of these practices, however, are yet to be fully known.  The lack of concrete information has led to public distrust, restrictive regulation, litigation, and, in some cases, outright bans.  For these results to be avoided, and for protective practices to become widespread, industry must be proactive in self-regulation and sensitive to concerns.

In particular, focus must be placed on finding and implementing innovative methods or technologies for minimizing impact on water resources and reusing wastewater generated.  Advanced water treatment technologies have emerged and recycling of drilling water is taking place on some sites.However, not much has changed, as it is often more cost effective for drillers to continue using traditional wastewater disposal methods or employ the least expensive treatment methods.  There exists an opportunity for technology manufacturers to innovate around these issues, partner with industry players, conduct pilot projects, and develop solutions that can be scaled across this rapidly growing industry.

Given the promise of hydraulic fracturing and horizontal drilling and their proven contributions to our nation’s energy supply, these technologies must be explored with a renewed commitment to safe, environmentally sound development.

Addressing the Middle East Water Crisis — One Rain Drop at a Time

By: Brendan McGinnis, President, Water Resources Action Project

Global Understanding Convention | Monmouth University | April 9, 2013


My name is Brendan McGinnis, in addition to helping found The Horinko Group, an environmental consulting firm based in Washington, DC, I’m President of the Water Resources Action Project, or WRAP as we have come to know it, which I will be discussing today.  Before I get started, I would like to personally extend my warm thanks to Dr. Saliba Sarsar, who continues to graciously share his time and insights to WRAP, serving on the group’s Board.  I would also like to express my gratitude to him for the invitation to present today — it is truly an honor and an opportunity that I don’t overlook.

Middle East — Water Conflict

Before I provide a brief history of the group and it’s efforts, let’s start with a snapshot of what the water conflict looks like in the Middle East.  More specifically, I’m going to focus on the bordering regions of Israel, Palestine, and Jordan — the initial focus of WRAP’s efforts.  This region is one of growing population that is already dealing with dire water shortage problems.  All three of these bordering countries rely on a shrinking and polluted Jordan River, and adding to this problem, the number of rainy days continues to decrease each year.  So, as you can imagine, freshwater is a precious resource for this region and its people.

Some are looking to desalination to provide the additional water that these people will need, removing salt from the waters of the Mediterranean and Dead Sea, so it can be used for drinking, agriculture, toilet flushing, washing, showering — all things we often take for granted.  Desal will certainly play a role, but it’s an expensive, energy intensive process that has a host of near-term challenges and limitations.

Lack of Water — The Impact

Where does this leave us?  Well, the issues I just touched on continue to intensify and the resulting impacts worsen —

Drinking water is scarce, whatever remains, if anything, is used for toilet flushing and hand washing.  Whether an office building, home, or school — each is permitted only so much water each day for drinking and other uses.  If they run out, they run out — the tap doesn’t continue to flow.

These people are left with two options, wait until the next delivery of water or simply use less.  Best case scenario — a tanker trunk actually shows up in a reasonable timeframe.  And, even if it does, you are left purchasing drinking water at an exorbitant rate.

This kind of scenario regularly plays out in the remote, rural areas of East Jerusalem bordering the Palestinian territories, as well as much of the West Bank.

During my last visit to the region in November of last year, this was certainly the case at a number of schools we visited.  We have seen that school populations are impacted the most.  Why?  Because you have a large population of young students, centralized on a small site.  And, even though some will have an appreciation of how scarce this resource really is, conservation will always be an issue when dealing with children.

As you can imagine, it can be difficult to focus on learning when you’re thirsty, when the restrooms are temporarily closed, when they are dirty because there is only enough water to clean them twice a year.  Yes, twice a year, at the beginning and end of the school year.  Factor in that you will likely not have enough water to wash your hands, and you have a serious hygiene problem.

This all leads to a greater dependency on municipal water that in this area is quite limited, often unreliable, and can constitute a very significant portion of a school, or household’s, overall budget.

All of these pressures, and the countless ones that I haven’t touched on – no water for agriculture, gardening, washing dishes, washing clothes, the list goes on and on – all result in growing tension between these bordering countries, with a people from a variety of backgrounds and beliefs, all competing for the same, dwindling resource.

Where Do We Go From Here — WRAP

Where do we go from here?  A question without a definitive answer that initially brought our group together in early 2009, a handful of concerned environmental and legal professionals from diverse political, ethnic, and religious backgrounds, all wanting to make a difference in this region of the world, not later — now.

That same year, we form a 501(c)(3), volunteer,non-profit called the Water Resources Action Project.  I stress the word, volunteer.  No one is paid, no one.  Not knowing early on exactly where and how our group would be able to make the greatest difference, we kept our mission and vision flexible enough to let us figure it out along the way.

Our mission – to improve the quality of life for underserved communities in the Middle East through greater water stewardship, and, I will stress – while operating with strict political and religious neutrality.

Our hope – that by easing the growing water conflict and educating individuals and institutions at the grassroots level on the value and interconnectedness of water, we can foster a greater awareness and appreciation for human health and the environment.

What Difference Can We Make — Now

After a few visits to the region, ongoing dialogue with these struggling people, and canvassing the organizations currently working in this area, we identified a number of immediate opportunities –

The most precious resource of this arid region will forever be water — not oil, but water.  And, during an ever-shrinking timeframe of the year, typically November through April, freshwater falls from the sky, much of it soaks into the dry land, where it eventually finds its way into the Mediterranean and Dead Sea.

A rather simple technology, at a relatively low cost, that we have found is effective in capturing, storing, and using this rainwater, are two primary types of collection systems — rain barrels and cisterns.

With respect to the rain barrel system, it’s pretty straight-forward — there is a collection unit that is placed on the roof of a house or building, the unit collects the rainwater as it falls, the rainwater runs through a gutter system, by way of gravity, to the ground level, where it is then stored in a number of large, plastic barrels.  This water does not meet drinking water standards, but it can be used for a range of other needs, typically toilet flushing and hand washing.  A small pump transfers the water from the storage barrels through a set of plastic tubing to selected toilets and faucets.

A cistern system is a bit more complicated and costly, due to the excavation and concrete required.  This system is placed in the ground and a concrete storage tank is poured that can hold a great deal more water than a rain barrel system.  A similar type of pump is then used to pump the water from the cistern to its intended use.  A cistern is typically used in the West Bank.  Due to the very infrequent rainfall in this particular area, you want to capture and store as much as possible, which the cistern permits.

Following a number of visits to schools in the area, we found that 85% of a school’s total water usage is from flushing toilets.  We also determined that these rain collection systems could supply 70% of a school’s total water needs during its nine months of operation.

Taking these scattered pieces of information collected from our visits, discussions, research, and relationships, the path forward became clearer.  Emphasizing a “results–only” approach, we would begin actively sponsoring and constructing rainwater collection systems within underprivileged schools of neglected areas that lack reliable, safe water.

In order to do so, we would need local, trusted partners, working on the ground with a proven track record of “getting things done.”  And, thankfully, we found the right fit.  In January 2011, WRAP entered into a memorandum of understanding with Friends of the Earth Middle East (FoEME).  FoEME continues to be an invaluable resource for WRAP, assisting to identify candidate schools, licensed engineers for constructing the systems, and in-school partners.

With all the necessary pieces now in place, we were able to complete the installation stage of our pilot project in a matter of weeks.

WRAP’s Progress — Pilot Project

The Sur Baher Girls School in East Jerusalem was selected as WRAP’s pilot school based on a number of criteria, the most critical being — it’s located in an underprivileged area, in an outlying region of Israel bordering Palestine; serves 800 Arab girls (grades 1–12); the school’s municipal source of water is costly and unreliable; the principal, teachers, maintenance workers were all enthusiastic to have this rain barrel collection system installed, and each were committed to working with the children to understand the purpose of the system, the value of water, and the impact that each student’s individual actions have on the surrounding environment and their neighbors.

The rain barrel collection system was completed in February 2011, servicing one of the school’s two restrooms.  Contributions that each WRAP member pledged to donate on an annual basis funded it.  We made certain that any project we implemented budgeted for no less than three years of routine maintenance and a part-time Project Educator, working in-school with the children five hours per week.

I was fortunate to attend the dedication of the system on May 19, 2011 with the school’s leadership and students.  Also participating was Naomi Sur, Deputy Mayor of Jerusalem.

Monthly reporting following the 2011 and 2012 rainy seasons shows that WRAP’s havesting system at Sur Baher has collected over 130,000 Liters, accounting for nearly half of the water used by the school during this timeframe.

As a result, we have reduced the school’s dependence on the municipal system, the amount of limited resources allocated to its water bills, and improved the children’s understanding of water’s importance and conserving it — knowledge the we found was carried home with the students and transferred to parents, siblings, and neighbors.

Before describing our second project, it’s worth noting (actually, it’s a key differentiating factor) that we don’t simply move onto the next school.  We are committed to staying connected to each school that we establish a relationship with.  We stay fully committed to each school, its leadership, and its children.  We visit these schools during our annual trips to the region, and remain closely connected to each.

WRAP’s Progress — Second Project

Our second project was also completed in February of this year — a rain barrel collection system at the Afaq School for the Learning Disabled, also located in East Jerusalem.

The system services 300 Arab boys with special needs.  The project, which includes three years of maintenance and education, was funded by WRAP’s annual membership dues, as well as a $4,000 commitment by Only Green Environmental Center.

Monthly reporting following the 2012 rainy season shows that WRAP’s havesting system at Al Afaq has collected nearly 50,000 Liters, used for the school’s toilet flushing and community garden.

WRAP’s Progress — Next Project

WRAP is close to breaking ground on its third project, a cistern system at the Battir Girls High School, located near Bethlehem in Battir, a Palestinian village.  Visited and vetted through WRAP, this school has 120 female students in three grades.  We intend to work closely with the school’s leadership to provide the environmental education program and routine maintenance for no less than three years.

Water delivery is unreliable and costly.  The bathrooms are cleaned twice during the school year.  The principal that we met with is a very dedicated individual that is fostering a positive environment for his students.

This project consists of a cistern collection system, a $25,000 budget that includes three years education and maintenance.  Immediate benefits include continued usage of cleanrestrooms throughout the entire school year, with water available for hand washing, ability to have summer camp, and a community garden.

Once this project is fully funded and complete, a number of additional schools with similar needs have already been identified.  Considering WRAP’s next trip to the region is in the coming weeks, I can ensure you that this list will continue to grow.

Lessons Learned — Carrying It Forward

What have we learned thus far?  For a young organization, a number of lessons have been learned along our brief journey —

  • Fully committed leaders from the school, community, and local partners are critical.  If there is not a shared vision of what is trying to be accomplished, real progress will not take hold.
  • Strong, parallel educational component is a must.  The installation of a rain harvesting system will result in its own direct benefits to the school and its students, but a full understanding of the interconnected, and often unperceived, impacts of collecting and conserving water to the surrounding community and environment cannotbe overlooked.
  • Detailed, transparent criteria and process for screening and selecting projects is important to continue the validity and neutrality of our efforts, particularly in a region with sensitivities between bordering nations.
  • Proven contractors, routine system maintenance, and protective measures from vandalism are all critical elements to ensure the ongoing performance and longevity of any project.
  • Continued follow-up on projects, data collection, and reporting can never be underestimated — each validates the importance and impact of the project, not only to the school and its surrounding community, but also to our membership, donors, and ability to raise funds.
  • It’s important to identify the end game and create a roadmap to get there — absent this, it’s very easy to lose focus and succumb to distractions.



Most non–profits have paid staff with benefits, expenses, and travel costs covered.

Most non-profits have marketing programs that spend donor funds on coffee mugs, pretty calendars, mass mailings, member services, etc.  Many start small, but over time become their own bureaucracies.

What’s makes WRAP different?

WRAP directs all contributions towards its projects — every penny of every dollar.

No overheard, no pass through, no bureaucracy, no executive salaries, no nonsense.

All WRAP leadership, members and staff are volunteers, devoting their time and resources toward putting real results on the ground.  When we show up at a project site overseas, it’s on our dime, not the donor, and not some grant.

We have trusted, grassroots partners in place prepared to leverage their knowledge and resources towards these efforts.

We have licensed engineers standing by to install these systems.

We have a parallel curriculum established and a project educator lined up to administer the educational program.

If You’re Wondering — How Can I Help?

Let me first say, my primary objective of today’s presentation was simply to make you aware of how little it takes to make a very big difference.  This effort has been one of the most rewarding, worthwhile, and satisfying experiences that I’ve had working with a non-profit organization.

You can spread the good word.  Become more aware of these issues, educate others, seek out your own solutions, and of course, let others know about WRAP.

We welcome your feedback, and I’m not just saying this.  I want to hear from you.  Let me know how I can improve this message, further leverage resources, and connect with others making a difference in this region.

And finally, our volunteers make a difference by being the difference.  If you believe this is the right time for you to get involved, then join us in our effort to bring clean water to people routinely deprived of it — not later, now.

We are in the midst of organizing student-led groups responsible for “owning a project.”  This means that you are in charge of working with WRAP to select the rain harvesting project in the Middle East, communicating with the contractor to design the construction plans and budget, help fundraise towards the effort, manage all aspects along the way from breaking ground to finished completion, coordinating the environmental curriculum, reporting, and maintenance, and most important, organizing a trip to the region to visit the completed project and witness first-hand the impact you have made on these children and the surrounding community.

If you’re interested, please don’t hesitate to contact me or at info@wrapdc.org and visit our website at www.wrapdc.org for additional info on our group.

Thank you and stay in touch!

Download a PDF copy of the presentation.

Profiles in Leadership Series

David Lloyd, Director, Office of Brownfields and Land Revitalization, U.S. Environmental Protection Agency

March 25, 2013

This series outlines the experience, ideas, and advice learned over considerable time devoted to environmental progress in our nation. Our third column features David Lloyd, Director, Office of Brownfields and Revitalization, U.S. Environmental Protection Agency.

The Road to EPA

David Lloyd began his career in private law practice in Nevada, where he grew up. He decided that he would return to Washington, DC where he attended law school and was able to obtain a position in EPA’s Office of General Counsel. Formerly a real estate attorney in private practice, he knew he would need grounding in environmental issues and was open-minded towards a public-sector practice of law.

David found that he really enjoyed working for EPA. At the time, the Agency was building new offices and laboratories in the Research Triangle Park, Northern Virginia, Denver, Colorado, and Michigan. The Office of General Counsel enjoyed a very strong relationship with its client as these new buildings were developed.

David counts the green building, LEED-certified offices at the EPA laboratories, regional office in December, and Potomac Yards as accomplishments, as well as collaborating with so many great people along the way.


David found that he underestimated the skill level and strong work ethic of EPA employees. He had wrongly assumed that they would be less motivated than private sector employees.

He also learned that the web of relationships between the federal government, states, communities, other executive branch agencies, and Congress was essential. You can’t be successful without these alliances. He had incorrectly thought that just becoming a subject matter expert was enough. These relationships are essential.

Finally, he learned how much of a positive impact the federal government can have when engaged in the right way. Its problem-solving attitude can accomplish almost any goal.

Issues Going Forward

The critical issue facing the Brownfields program at present is working to ensure our available funding is as available and effective as possible in light of constrained budgets and increasing demand. This sequester is causing a serious examination of how best to be problem-solvers at the state and local level, given these limitations.

Some programs are based strictly on the stated directive of a statute or regulation. However, programs like Brownfields must be creative, flexible and helpful in order to garner and maintain the public and Congress’ support.

The government also needs to continue to work at succession planning and workforce development. Finding nonmonetary things that employees would be attracted to, such as flexible schedules and commuting options, will help build and retain the workforce of the future.

State and Federal Relationships

The Brownfields program views the states and tribal governments as essential. Without the state and tribal response programs, there is no mechanism to supervise cleanups to ensure they are complete and protective of the environment and public health and, as such, they are the backbone of the Brownfields program. The federal program is critically important and has been very successful, but we need to continue to recognize the immense contributions of states and tribes to this success. The involvement of states, tribes, local governments, and nonprofit organizations working with the private sector under the Federal Brownfield statutory umbrella is the reason brownfields cleanup and redevelopment has expanded so widely and rapidly.

Advice to Stakeholders

David has three pieces of advice to stakeholders looking at a property for cleanup and redevelopment.

First, engage the affected people in the community to find out what they really need and want from the redeveloped property.

Second, reach out as early as possible to the Brownfields staff in the EPA regional office and with the state or tribal environmental programs. Let them work with you to avoid liability issues, assist with developers, and aid with financing.

Third, always keep the end goal in mind, of cleaning and redeveloping property for the benefit of the affected community.

Problems arise when developers don’t attract capital, have angry neighbors, and don’t involve the appropriate environmental programs.

Profiles in Leadership Series
Mark Giesfeldt, Bureau Director, Remediation and Redevelopment, Wisconsin Department of Natural Resources

This series outlines the experience, ideas, and advice learned over considerable time devoted to environmental progress in our nation. Our second column features Mark Giesfeldt, Director of the Bureau for Remediation and Redevelopment at Wisconsin Department of Natural Resources. After three decades in state government, Mark was recently awarded a Lifetime Achievement Medal by the Association of State and Territorial Solid Waste Management Officials in 2008.

A Career in Wisconsin

Mark began his career with a degree in Civil and Environmental Engineering from the University of Wisconsin in 1978. A college professor recommended that he try state government, and Mark started out working on remediation of former Uniroyal clean up sites in 1982. In 1984, Wisconsin founded its first official cleanup program, and Mark’s career trajectory has paralleled the growth of that program ever since.

Experience To Date

In Mark’s view, the hallmark of the program has been its emphasis on outreach. In the late 1980’s and early 1990’s, the program was subject to criticism by the petroleum marketers over state reimbursement of cleanup expenditures. As a result of this controversy, the state decided to undertake a broader cleanup rule effort, forming a fifty-plus person advisory group (which later, a smaller sub group of the rule advisory group became established by the Legislature as the Brownfields Study Group). In 1995, the state pioneered the “One Cleanup Program” concept, in which all of the state cleanup programs (underground tanks, Superfund, Resource Conservation and Recovery Act, and voluntary cleanups) were managed by a single bureau within the Wisconsin Department of Natural Resources (DNR). Mark became the Bureau Director of the program. As a result of that experience and transition, Mark was able to form longstanding relationships with the advisory board members and other regulators that became the basis of a successful outreach track record.

Mark views the excellent workplace rapport as critical to that success. By way of example, he cites the challenge of grappling with petroleum cleanups and EPA’s use of Risk-Based Corrective Action (RBCA) to make site specific aquifer determinations during the 1990s as historically controversial (viewing underground tank cleanups as something different and meriting risk-based cleanup). As a result of the lack of understanding by the Region of Wisconsin’s approach to cleanups, Mark successfully advocated for the federal agency to form the Senior Cleanup Council in 1998 to address some of these issues in a broader, cross-programmatic context. In Mark’s view, the ability to look across bureaucratic lines and focus on what would most benefit the community has allowed the state program to be nimble.

Top Issues

Going forward, Mark views the economy and bankruptcy as one of the top issues facing the Wisconsin DNR. The bureau has created a whole structure to work within that state at identifying possibly insolvent companies, extending a helping hand, and helping to streamline cleanup and reuse of the properties. When the economy was flourishing, there was plenty of opportunity for creativity in fostering brownfields innovation; with the slowing economy, the pace of reuse has become more challenging.

Vapor intrusion is another top issue for the state. Chlorinated organic chemicals, such as those from dry cleaners, are very persistent and raise questions with respect to future sources. The state has sent letters to consultants and active sites trying to get a handle on the issue, and is adding a section to the state regulations in February. The vastness of the problem is still being worked on. Should EPA formally direct that vapor intrusion become part of the Hazard Ranking System under Superfund, that will hopefully open up Preliminary Assessment/Site Investigation funding in order to use pre-remedial funds to better address the scope of the problem. The good news is notwithstanding the direct public health impact, a radon-type mitigation system has become a key solution in dealing with homes and businesses.

Evolution of the State-Federal Relationship

Looking back, Mark cites a number of key state, EPA, and external stakeholders with whom he has developed very personal and productive relationships over the years. He observes that some newer staff are more risk averse and not as open to a variety of options to solve issues. Mark notes that his program has a history of being a response program, not a strict or traditional regulatory program – focused more on cleanup results, not on process.

What to Expect in the Future

Looking forward, expect even more funding opportunities for cleanup and redevelopment as the economy improves and expertise levels grow, in Mark’s view. By challenging the status quo, the state was able to leverage other sources of funding, such as Great Lakes Legacy Act dollars, toward the larger revitalization and cleanup of Wisconsin sites with sediment issues. Mark advises newer staff to ask questions, keep trying to pursue redevelopment as part of any remedy, and understand how both EPA and the state work and try to improve relationships. Honest, candid discussions have resulted in demonstrable improvements to the state’s cleanup programs. In Mark’s view, this is the reason why the Brownfields Study Group has been instrumental in the program’s success.

Marianne Horinko
Authored by: Marianne Horinko, President, The Horinko Group

Marianne Horinko, THG President and Chair of the National Brownfields Association’s Advocacy Committee, kicks-off the 2013 Profile Leadership Series with a look ahead at the hottest issues Brownfield activists intend to tackle.

The crystallizing economic recovery coupled with a host of legal and social policy issues have created a hotbed of environmental questions and Brownfields redevelopment in 2013.

Bona Fide Prospective Purchaser Rules

Purchasers and developers of Brownfields property are anxiously awaiting the U.S. Court of Appeals for the Fourth Circuit’s decision in the Superfund case, Ashley II of Charleston, LLC v. PCS Nitrogen, Inc., No. 11-1662(L). The two key questions in this matter concern whether the property purchaser should have done or known more about the pre-existing contamination on the property at issue and also whether the purchaser had a prohibited relationship with the seller as evidenced by an agreement concerning cost recovery by the parties as well as efforts to prevent EPA from taking a cost recovery action at the property. The appeals court’s decision with respect to the first question will greatly affect the degree of care that purchasers exercise with respect to contamination they find as part of their due diligence. The court’s resolution of the second issue will be trickier should they choose to take it on. The presence of an indemnification agreement between the purchaser and seller may become one of the deciding factors. The extent to which any transaction appears to be conducted at arm’s-length distance will be guided by the court’s resolution, even if only in dicta, as the first question may ultimately be the dispositive one.

Licensed Site Professionals

Often the state legislatures are paragons of innovation, and Brownfields law is no exception. In recent sessions, a number of states have enacted laws authorizing the appointment of licensed site professionals or essentially certified auditors to augment the role of state or federal officials in determining whether cleanups are properly conducted. Massachusetts, Connecticut, and New Jersey are the leadership states in piloting this proposal. So far, the results are garnering mixed reviews. The additional capabilities in the field can enlarge and speed the process of finalizing a clean up. The licensed site professionals can on occasion be even more conservative than state employees given that their professional certifications are on the line.

State Liability Transfer Programs

Another state technique is the use of unusual liability transfer programs to speed closure of a site cleanup. In particular, the State of Wisconsin, often a leader in Brownfields innovation, has in recent years created a program that encourages property owners to obtain a state certification showing that a cleanup has been completed in accordance with the specific land-use. Subsequent purchasers are then liable for any change of land-use at the property and for ensuring that their stewardship of the property maintains the integrity of the previous owners cleanup.

Federal Tax Extender Legislation

In 2012, the federal provision allowing property developers to deduct the cost of any environmental cleanup for property they acquire under federal taxes expired . While data on the use of this tax provision are spotty, the City of New York alone reports hundreds of thousands of dollars in savings for Brownfields developers. There appears to be a consensus among federal legislative professionals that this popular tax extender will be revised in 2013. However, given the larger negotiations over the fiscal cliff and federal sequestration, the outcome of this provision remains unclear.

Brownfields Waterfront Legislation

In the waning days of the previous congressional session, Senator Kirsten Gillibrand (D-NY) introduced legislation that would provide incentives both financial and policy for the redevelopment of waterfront property . This legislation has important ramifications for Brownfields located in the fragile ecosystems and urban areas along the East Coast, Gulf, and Pacific Northwest. Subject to the outcome of the federal budget deliberations, this specific bill is likely to garner significant political support.

Green or Sustainable Remediation

The movement towards green or sustainable remediation has gained significant international momentum. Property owners and developers are finding that the principles of greener cleanups, layered atop existing legal requirements in their specific jurisdiction, can help engage communities and also create drivers for more acceptable, efficient, and low impact redevelopment. Grassroots efforts to share best practices and promote widely-accepted standards hold considerable promise, a hallmark of the Brownfields movement.

These issues are just a bellwether of the actions to come in 2013. As the economy and real estate market continue to improve, it is safe to project that Brownfields developments will continue to blossom and grow internationally for the coming year.

Marianne L. Horinko is President of The Horinko Group and serves as Chair of the National Brownfields Association’s Advocacy Committee.

1. 26 U.S.C. §198
2. S. 3549 (112th)

Cathryn Courtin
Authored by: Cathryn Courtin, Student Scholar, THG

While in attendance at the United Nations climate negotiations in Doha, Qatar, delegates dispute many aspects of international action on climate change, one question that underlies every conversation is: How will the proposed changes be funded? A piece of this funding question has to do with investment in renewable energy and how to scale-up the clean technologies that are needed to bolster emissions mitigations.

Panel discussions that went on in events parallel to the negotiations in Doha addressed this question and helped to break down the funding challenge while providing potential solutions.

Marcel Alers, Principal Technical Advisor at the United Nations Development Program (UNDP), outlined a UNDP program that uses public resources to leverage private investment in order to transform the market so that renewable energy becomes a lasting part of the power supply. The projects are focused in developing countries where many barriers to renewable energy investment and development differ from countries like the United States. The fundamental issue, however, is the same. The risk-reward profile of renewable energy does not attract enough private investment to be economically feasible. To remedy this, UNDP projects attempt to shift this profile and create an enabling environment for private sector investment to scale-up renewables in two ways: first, through policy derisking measures to remove underlying barriers that cause risk and second, through financial derisking measures to transfer risk away from private investors. Fifteen of these projects were analyzed and documented in UNDP’s Transforming On-Grid Renewable Energy Markets. Findings included the notion that every country needs a tailored approach to removing barriers and reducing investment risk.

Returning from Doha, it was refreshing to see that the Department of Energy (DOE) had just announced a national investment in Research and Development (R&D) for energy storage technologies that could contribute to changing the risk-reward profile for renewables in the United States. The investment consists of $120 million over five years to Argonne National Laboratory for its new role as the leader of the Joint Center for Energy Storage Research (JCESR). A true collaborative effort, JCESR incorporates the efforts and expertise of five DOE labs, five universities, and four private companies. The State of Illinois will also contribute $35 million to the project. The research laboratories and university researchers in the project plan to produce breakthrough basic research while simultaneously working closely with industry partners to convert this research into market-ready clean energy storage technologies. This aspect of the partnership is essential.

The goal of JCESR is ambitious. It aims to develop revolutionary technologies within five years, with five times the energy density of existing technologies, at one-fifth the cost. Advanced battery technology promises to be essential to the future of renewable energy. Intermittent energy sources like wind and solar would stand to gain a reliable means to store power cheaply when the sun is not shining and the wind is not blowing. The energy storage and battery technologies developed would also improve the reliability and efficiency of the electrical grid as well as the performance of electric and hybrid vehicles, leading to reduced reliance on foreign oil. According to JCESR’s Director George Crabtree, achieving this goal would “overcome manufacturing barriers and reduce the investment risk for American industry.”

The Argonne innovation hub serves as an example of smart public investment in renewable energy. U.S. Rep. Dan Lipinksi (D-IL), called it “the greatest opportunity that we have seen in a long time to bring federal funding that’s intended to promote the creation of new companies and jobs.” If successful, it would serve as an excellent model of using public resources to shift the risk-reward profile of clean energy to catalyze private sector investment.

The question of success leads back to another event in Doha, this one hosted by the Intergovernmental Panel on Climate Change (IPCC), the scientific body that informs the negotiations. It included presentations by two researchers who contributed to the most recent IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation. The study includes a comprehensive analysis of policies for research, development, and deployment of renewable energy. One of its “most robust” findings is that R&D investments, like the DOE energy storage research investment, are most effective at inducing innovation when coupled with other policy instruments that target deployment of renewables. Deployment policies include grants, rebates, tax credits (for production or investment), tax reductions, guarantees, loans, public procurements, etc.

This is a particularly relevant finding to the U.S. case because at the moment, a policy to enhance deployment of wind energy, the wind production tax credit (PTC), is currently being debated in Congress. Up for debate is whether or not the credit will expire this year or continue into next year. The PTC was part of the “tax extenders” package that already passed the Senate, but it is now held up in Congress as part of negotiations about the fiscal cliff and debt reduction. The wind PTC is thought to have adequate bipartisan support, but there is a stalemate at the moment over the broader fiscal cliff package.

The PTC could be regarded as an example of a deployment policy to accompany the R&D investment announced by DOE. Therefore, the IPCC findings provide further evidence of the merits of extending the credits. Unfortunately, the issue is now does not hinge on the merits of the policy but instead on more contentious political debates and decisions about debt reduction. The policy could help to bolster the success of R&D investments at Argonne, but proponents of wind development and renewable innovation can only wait and hope for the best.

More avenues to shift the risk-reward profiles of renewables and catalyze private investment must be explored. The U.S. has taken good steps toward doing so with the Argonne innovation hub. Policy that would enhance wind development is currently being debated, and the tax credit will hopefully be extended. Deployment policies for other renewables and clean electric vehicles might provide added support to the R&D funding and encourage the transformation of the energy market so that renewables become a lasting component.

Marianne Horinko
Authored by: Marianne Horinko, President, THG

America’s energy resurgence played an enormous role in the recent election cycle. Candidates all across the nation and on the national level sparred over the need for an energy policy that created independence, reliability and abundance for all Americans.

With typical ingenuity, American industry has responded by investing in a plethora of new energy sources. In addition to new renewable energy sources such as wind, solar and biomass, industry has explored new ways of extracting traditional fuels such as petroleum and natural gas by using innovative drilling techniques.

As these new energy sources become poised to enjoy explosive growth, it is worth noting that with this opportunity comes potentially great peril. It is incumbent upon both regulators and the regulated community alike to look at the lessons of the past in terms of dealing with emergencies and crises and plan ahead to avoid them in the future.

For example, the chemical industry was put on notice that their level of emergency planning and response needed to be drastically elevated with the 1986 explosion of the Union Carbide chemical plant in Bhopal, India. In response, the chemical industry put together CHEMTREC, a nationwide emergency planning preparedness and response capability that links a network of companies together in order to leverage their emergency response capabilities.

Congress also responded by enacting the 1986 Emergency Planning and Community Right-to-Know Act, which required some 50,000 facilities nationwide to create risk evaluation and analysis plans in order to prepare for and prevent emergencies. This law also created the Toxics Release Inventory, a reporting program that expanded community’s access to information about hazardous chemicals in their neighborhood.

In 1989, the Exxon Valdez oil spill off the shores of Alaska resulted in a catastrophic release of almost 20,000,000 gallons of petroleum into the ocean. Damages to natural resources totaled some $50 billion. In response, the petroleum industry and federal government responded by creating the National Response Center (NRC). Congress also enacted the Oil Pollution Act of 1990, which greatly expanded the governments’ capabilities in dealing with oil spills both on land and in domestic waters of the United States.

Today, our nation’s energy industries face a similar challenge. While utilizing innovative new drilling techniques and operating in locations often closer to our communities than ever before, the industry must also ensure that it has the necessary preparedness and communication skills to prevent an accidental release that will threaten human health and the environment as well as cause the enactment of stringent new legislation that will significantly increase the cost of production.

Actions should be taken at both the company and industry level.

Company level:

  • Risk evaluations
  • Response plans
  • Training
  • Exercising
  • Outreach

Industry level:

  • Leverage
  • Collaborations
  • Communications

As these nascent sectors of our nation’s energy economy grow, they would do well to develop their capabilities and prepare for dealing with any hazards that may be concomitant with production. In addition to preventing the harm to human life and the environment, these actions will also have the added benefit of enhancing interaction with the community, shoring up relationships with local and state law enforcement and enhancing collaborations with federal regulators.

All of these actions will allow our nation to develop its energy independence reliably and abundantly while at the same time ensuring public confidence in the environmental safety of our new sources of energy supply.

Authored by: Tim Richardson, Managing Member, Terra Nova, LLC

October 22, 2012

Political cycles present the obvious opportunity for prognostication.  Polling is happening daily. Rather than present another poll, let us take this opportunity to make a simple prediction.

There will be no pre-election BP Deepwater Horizon settlement despite an $18 billion deal being on the table last month and a rumored $21 billion settlement this past Friday, October 19.

Before speculating on why this settlement hasn’t happened and why those directly involved are hedging, let’s review what we know with certainty.

Revelation of the $18 billion version of a deal in the offing came in an October 1 Mobile Press Register story by George Talbot citing leaks from U.S. Department of Justice briefings to the five Gulf states.  The story vented Alabama officials’ objections to 1) proposed jurisdictional authority for spending funds; 2) geographic funding distribution pattern likely to result; and 3) allowable uses of the funds.  The objections were driven by the proposed blend of laws under which the BP fines would be paid, namely DOJ’s, and BP’s apparent accord over having more of the payment required under the natural resource damage provision of the Oil Pollution Act instead of the RESTORE Act’s implementation of Clean Water Act penalties.

A higher percentage of Natural Resource Damages (NRD) funds means more federal decision-making power compared to the broad state and local government powers under RESTORE, and it means more environmental focus to the expenditures compared with RESTORE’s ample allowances for economic uses.

BP prefers more of its penalties to come under NRD because they would be tax deductible, enough so that at $18 billion, or even at $21 billion, a high proportion of NRD levies would allow BP to come close to the real cost of $15 billion reported to have BP board approval, as long as that would mean it can close out all Deepwater Horizon state and federal lawsuits.

In contrast to NRD levies, RESTORE Act fines are not tax deductible, hence offer no discount from the real cost of $18 billion or $21 billion for example.

Alabama objections in the Press Register include this volley from U.S. Representative Jo Bonner, R-Mobile, “The idea that the Justice Department would attempt this, less than three months after the law (RESTORE) was passed, is absolutely unacceptable.  It is an arrogant slap to the people of the Gulf Coast and the members of Congress who passed it.”  Alabama attorney general Luther Strange vowed that Alabama’s case against BP would proceed January 14 despite a prospective  federal settlement, “We’re ready to go to trial.  They don’t want to see us in court.  Our motivation is simple: We want the biggest possible judgment or a settlement that makes Alabama whole.”

A follow-up Press Register editorial reinforced the objection to a higher NRD mix compared to RESTORE, “The RESTORE Act passed by Congress this past summer specifies that 80 percent of the penalties paid by BP under the Clean Water Act will be returned to the Gulf states to repair ecological AND ECONOMIC (sic) damage from the spill.  That means that the money can go for environmental as well as economic development.”

The Press Register coverage noted that greater federal power and environmental focus could favor Louisiana “because its coast incurred the greatest  environmental damage” and favor electoral swing state Florida with its extensive coast line, over Alabama, Mississippi and Texas, leading editorial writer Mike Marshall to ask, “Why the big rush?  Isn’t Justice more likely to be blind after November 6?”

But would strident opposition from Alabama, Mississippi and Texas officials be enough to deter Obama Administration Attorney General Eric Holder from striking a deal if BP agreed to $21 billion before the election?

Probably not.

However, the shift toward greater NRD fines from anticipated RESTORE Act proceeds is also opposed by Democratic U.S. Senators Mary Landrieu (LA) and Bill Nelson (FL) who were the principal authors of the RESTORE Act.  The eight Republican senators from the Gulf states co-signed the letter to President Obama thanking him for signing RESTORE and urging him to respect the bi-partisan support forged to pass the landmark legislation.  Despite the attraction of potentially more money for Louisiana and Florida, the loss of local control over NRD fines in favor of federal control doesn’t sit well with Landrieu and Nelson.  It is notable that Nelson is running for reelection this year, and doesn’t need a fire storm from local officials empowered by RESTORE and cut out of the action by a NRD-heavy settlement.  Landrieu’s next election would be 2014 and her understandably traumatized coastal communities have every expectation to be able to wield spending powers over part of the BP settlement.

Thirdly, the prospects for harshly negative media stories about the value of tax deductions offered to BP via a NRD-heavy settlement are daunting in an election atmosphere amid stories of new oil sheen showing up in the Gulf of Mexico traced to the Deepwater Horizon.  The public unease that large tax deductions for BP could arouse would be palpable during this election count down.  And this expected reaction is notwithstanding the impressive and ubiquitous television and print ads BP is sponsoring to tell their commitment to restore the Gulf.

While it is impossible for The Horinko Group’s readers not to have seen the BP advertisements many times, students and practitioners of the art of persuasion owe themselves a thorough look at BP’s messaging effort explaining all they are doing to restore the Gulf.  Discounting the initial atrocious handling of the spill disaster including the performance of former BP president Tony Hayworth, can you recall a more effective corporate media and public relations campaign than BP’s “” effort?

Finally, if Gulf state opposition, Democratic Senate RESTORE Act sponsors’ opposition and prospects for media backlash to tax breaks for BP are not troubling enough to the Obama Administration, the coup de grace against a pre-November election BP settlement in the range of $18 to $21 billion comes from the environmental sector, most pointedly from the National Wildlife Federation (NWF).

On October 10, NWF president and CEO Larry Schweiger wrote a letter to Attorney General Eric Holder opposing the rumored $18 billion settlement, because the fine is too low regardless of how heavily it is weighted to environmentally focused NRD fines.  The letter itemizes concerns over several points, including:

  • BP is proposing to settle for less than half of what it could face at trial under existing federal law;
  • The spill isn’t over as oil continues to coat wetlands and beaches in an extremely rich ecosystem;
  • Don’t go light on BP because Congress enacted laws aimed at compensating the public for harm caused by unreasonably risky shortcuts by industry;
  • If liability were to match the Exxon Valdez tanker accident, Exxon’s equivalent payment of $152 per gallon in 2012 dollars would equate to a BP fine of over $31 billion;
  • Criminal penalties should go on top of the compensatory natural resource fines;
  • Several other laws were violated besides the Oil Pollution Act and Clean Water Act including the Marine Mammal Protection Act, the Migratory Bird Treaty Act, the Endangered Species Act, and the Outer Continental Shelf Lands Act;
  • BP should be fined for the discharge of methane gas in addition to oil and dispersants; and,
  • Natural resource damages from Deepwater Horizon are almost certainly going to be long term and far-reaching.

In concluding the letter, Schweiger wrote, “Offshore drilling in deep waters continues, and is expected to move into deeper and more dangerous waters.  If BP is allowed to avoid the civil and criminal fines it is responsible for, the federal government will have failed to achieve justice for injured parties and will have failed to deter future recklessness that puts our environment at risk.

“In summary, any settlement of the Deepwater Horizon litigation must take into account both the letter and intent of our environmental laws; the extent of the recklessness of the defendants; and the extent of the damage they caused.  To accept anything less would shortchange the many communities that rely on a healthy Gulf ecosystem.”

A thorough legal review of BP’s environmental penalty exposure appeared in a last February by NWF’s Vice President for Conservation John Kostyack, and is still highly pertinent for those wanting an attorney’s overview of the BP case.

Future implications of the BP settlement loom large for the environment and how natural resources are treated and viewed by society.  Should BP and its partners receive what is perceived to be a minor penalty for a massive accident, wouldn’t a slippery slope of declining future penalties ensue?  Moreover, if U.S. standards for environmental disasters were viewed as shoddy by other nations, wouldn’t it have tragic global natural resource ramifications in a world undertaking more extreme measures in remote areas to exploit natural resources?  Simply put, the BP Deepwater Horizon stakes pose a “must win” perception event for the green movement given the certainty of future accidents and debates about pollution fines.

In conclusion, the four most compelling reasons why there will be no BP settlement before the election are:

  • Strident and organized opposition by Gulf states and local governments;
  • Opposition to shortchanging the RESTORE Act by bill sponsors Senators Landrieu and Nelson;
  • Risk of public outcry over large tax breaks to BP prior to the election; and,
  • The urgent necessity environmental groups feel about making the BP fine appropriate so as to both respond to the Deepwater Horizon impacts and to keep U.S. environmental penalty standards from eroding.

So, as anxious as many are on all sides for a settlement, this author is confident that the “when” part of the equation looks to be after November 6.  But hopefully, not too much after.


Lewis D. Solomon
Authored by: Lewis D. Solomon, Rinehart Professor Emeritus of Business Law at The George Washington University Law School

October 22, 2012

From a locality’s perspective, a successful water public-private partnership (P3) rests on the power of knowledge, information, and experience.

With respect to knowledge, a locality contemplating a P3 must ask: what’s the problem we’re trying to solve? Is it maintaining, upgrading, or expanding our water infrastructure? Are we trying to close a non-water related budgetary gap, for example, funding employees’ pensions? Or, is it a mix of water infrastructure and non-water related budgetary needs?

After identifying the problem, a community needs to gather information and expand its knowledge base. It must ask: what’s the best way to solve the problem? For instance, if its water system needs capital, can the locality raise the funds by borrowing, increasing rates, achieving economies by consolidating and/or regionalizing services across small neighboring communities, or tapping general funds? In view of the fiscal crisis facing many localities, general funds represent a highly unlikely capital source. The funds will not magically appear and another solution must be sought.

Although not a panacea, a long-term P3 arrangement may help provide a new funding source to meet the water infrastructure capital needs. A P3 may also offer other benefits, including increased efficiency, cost savings, improved compliance with environmental standards, and overcoming a lack of public sector managerial and technical expertise.

In going forward to implement a successful water P3, a locality needs experience and access to best practices. Although there’s no secret sauce, it can hire consultants and outside counsel. These experts build a community’s capacity for entering into a P3. They can advise on the bidding process, perform due diligence by investigating bidders, and help with contract negotiations and drafting. A carefully drafted, monitored, and enforced performance contract will meet possible objections, such as union agreements, rates, and service issues, but the community must bear the requisite transaction costs involved in implementation. Officials must also communicate to their constituents that the profits a private entity obtains from the P3 are not at the public’s expense.

Let’s take a specific example of a P3 currently being studied. Allentown, Pennsylvania faces the need to raise between $100 and some $250 million to meet its pension obligations, among other liabilities, and avoid cutting public services. Projections indicate that the municipality’s pension obligations will grow to $23 million annually by 2015, a four-fold increase since 2005. These obligations will engulf the city’s budget.

To solve its budgetary plight, among other options, Allentown is considering a long-term lease of its water and wastewater systems. Thus far, the city has retained a consultant to advise it on the P3 process, distributed a Request for Qualifications, and narrowed the list of potential bidders.

Building on their existing knowledge, gathering new information, and obtaining experience by hiring experts, communities throughout the United States can successfully implement water P3s. Private firms and potential investors should pay attention and see this as an opportunity to enter into win-win partnerships with localities.

Lewis D. Solomon, an emeritus professor at The George Washington University Law School, is the author of America’s Water and Wastewater Crisis: The Role of Private Enterprise (2011, paperback edition 2012). He is a Senior Advisor on Public-Private Partnerships, Infrastructure Finance & Development at The Horinko Group.

On the occasion of the 175th Anniversary of Alton, Illinois

Patrick S. McGinnis
As delivered by: Patrick S. McGinnis, Senior Advisor, Great Lakes and Mississippi River Systems

September 12, 2012

Thank you COL Hall for the invitation to join you and your Alton Guests aboard this always impressive vessel today.

I worked for the Corps for 32 years and retired 3 years ago. Since then I have been working with clients of a Washington, DC-based consulting firm, The Horinko Group, and serve on the board of the Meeting of the Rivers Foundation.

In this capacity, I am involved in an ongoing conversation with a variety of private and public institutions on how to reposition themselves strategically by embracing principles of sustainability to improve market performance.

I have a few remarks that I think are timely to the occasion and reflective of the long-standing collaborative spirit that exists between the Corps of Engineers and the City of Alton.

I’d like to begin with an interesting historical note…in 1837, the same year Alton was founded, Congress authorized the Corps to develop a plan for improving navigation on the Upper Mississippi River. This study was led by Robert E. Lee. Lt. Lee was an officer in the Corps and was stationed in St. Louis from 1837-1840. Some folks credit Lee with being at least symbolically the Corps’ first St. Louis District Engineer.

However, as a matter of record, The Corps’ St. Louis District Office wasn’t officially established until 1873, six years prior to establishment of the Mississippi River Commission. St. Louis’ first District Commander was I believe either COL William Reynolds who was in St. Louis from 1870-1873 or his successor COL James Simpson. In any event, the late 1830’s marked the beginning of an active Corps presence at St. Louis and the beginnings of a longstanding relationship with the newly founded City of Alton.

Now, lets fast-forward into the twentieth century. Many of us now associate the physical presence of the locks and dams on the upper river as the beginning of the Corps’ permanent presence in the upper river valley. I know I do, growing up in Pike County between the Mississippi and Illinois Rivers, and I know for my parents growing up through the Great Depression, the Corps was those locks and dams, and the Sny Levee District, and the CCC projects.

My parents would tell you the Corps put people back to work.

The 29-lock system that supports the Nine Foot Navigation Project stretches over 600 miles and was practically completed in one decade between 1930-1940. Old Lock and Dam 26, here in Alton, was completed in 1938 and named for IL Congressman Henry T. Rainey

In that first year of operation, Old 26 locked thru 1.4 Million Tons of commodities. In 1975, less than 40 years later, tonnage locked through Old 26 exceeded 55 million tons. That figure grew to exceed 75 Million tons at one point, an amount valued at $23 billion. About 60% of grain exported from the U.S. actually locks through here and Locks 27.

And, something else happened with the completion of the 29 locks…a system of slack water pools or lakes was created that became regionally crucial for recreational development and remain so today. Nature-based tourism on the upper river has become very big business and Alton is emerging as a gateway to millions of foreign and domestic leisure travelers wishing to experience and explore the Mississippi River first hand.

The navigation project drove the acquisition of thousands of acres of open space, which became immediately available for public use and enjoyment. Much of these lands are now included in the National Fish and Wildlife Refuge System. It is very likely that these lands would not have been acquired back in the thirties had it not been for the desire to open up the upper valley to shipping.

Lets fast-forward again to the 1980’s…the lock system has been in place 50 years and increased traffic and wear and tear are making the aging locks a bottleneck to efficiency and safety. Alton is now going to get a new locks and dam. At the time, it becomes the largest public works project in the U.S. and puts local contractors and the trades to work for over a decade.

In 1986, the Federal Water Resources Development Act also declares the Mississippi River a National Natural Treasure and a nationally important transportation corridor. The ’86 act also authorizes the funding of the auxiliary lock here at Mel Price, as well as the Upper Mississippi River System-Environmental Management Program, which over the next twenty-five years would improve the water management capacity and habitat value of thousands of acres of riparian public lands along the river.

In 1990, we witness a new wave of activity and interest happening along the river in this region, as communities like Alton begin to make efforts to reconnect with the river spruce up their waterfronts. Construction of the new locks and dam was well underway and would become operational in 1990.

The Corps would establish a new office here in 1989, which I was charged with developing. We named it the Riverlands Area Office. Within 12 months, we reclaimed 3,700 acres to a bottomland permanent prairie complex and completed the Riverlands Migratory Bird Sanctuary just across the river.

The magnificent new Clark Bridge here at Alton was also under construction. Alton’s waterfront gets a new floating gaming casino, the Argosy. The 1993 flood came and went. The Corps was in negotiations with Alton on the Riverfront Park redevelopment, which would include a state-of-the-art Marina concession operation based on the three party public-private partnership. The Vadalabene Bike Trail would be completed connecting St. Louis to Pere Marquette Park running right through the City of Alton. The Corps completes the new regional Visitor Center at Mel Price called the National Great Rivers Museum, using an innovative public-private partnership to push it through. Many Alton residents and business owners served on the Museum Citizens Advisory Committee.

The Lewis and Clark Historic site would get a new state of the art interpretive center just downstream at Hartford. Just upstream of Alton Raging Rivers Water Park opened. Later, we would land the National Great Rivers Research and Education Center and again community leaders stepped up to make this happen. The Meeting of the Rivers National Scenic Byway would be officially dedicated.

The Berm Highway portion of Route 143 in front of Mel Price Locks and Dam would get a new name, The River Heritage Parkway. The National Audubon Society would commence local programming at the recently completed Audubon Center at Riverlands, just across the river from Alton. Audubon’s Brand would instantly boost visitation to the site.

The Corps’ Museum at Mel Price and the Sanctuary across the river are now seeing 300,000 visitors each year. Tri-City Port would get a new name, America’s Central Port. The Corps would complete the Mississippi River Water Trail, which was recently recognized as only the 2nd National Water Trail by Interior Secretary Salazar. This trail supports the fastest growing outdoor sport, kayaking.

A focused effort to market the region for nature-based tourism and as a tourism destination is led by the Alton Convention and Visitors Bureau. These efforts begin building Alton’s and the Riverbend’s brand as a destination and Gateway to the Mississippi River.

There have been major highway and intermodal improvements along the way and more to come with high-speed rail and Alton’s proposed Intermodal Station. There is a major effort underway to address and update flood protection over the entire metro east region.

Many, many change drivers have brought us to where we stand here today. And where are we?

We are hopefully coming out of a prolonged and deep recession, we have a huge deficit and unemployment is high. All this creates a great deal of uncertainty for everyone.

Agencies in the federal government are going through major transformations to address the likelihood of no more earmarks. The Corps is trying to transform itself to better address the challenges of a modern society and how it can best serve in an era where federal resources will likely be heavily leveraged with private capital.

Regionalism is driving regional planning and an interest in identifying regional strengths referred to as clusters and regional centers of excellence. The need for resource leveraging and cooperation is driving regionalism and regional planning, but it is also driving what folks are calling P3s, public-private partnerships, to encourage private investment on many fronts that traditionally have been publicly funded.

All of this is driving a new era where top-down command and control models of governance are giving way to bottom-up grassroots approaches driven by greater transparency, broader civic engagement, and community-based problem solving.

In the midst of this uncertainty, I would argue that there is also opportunity for agencies like the Corps, for the State of Illinois, for Madison County, and for the City of Alton. And, while others may be resisting change and confounded by this rapid change, I believe those that think and act boldly may be able to seize the moment.

Alton and the Corps are in a very interesting place. More and more Americans are seeing issues involving water as matters of national security. This is also the case around the world and it will influence manufacturing, agricultural irrigation, ethanol production, hydropower, household uses of water, and a trend toward low impact development in places like Alton.

In October, representatives of our local National Great Rivers Research and Education Center will join members of the Corps and the State Department to travel to Southeast Asia to advise and cooperate with people of the Mekong River Valley and the Mekong River Commission on issues confronting them as they seek to sustain their Mekong River and the quality of life of millions of southeast Asians that depend on the Mekong.

More and more domestic and leisure travelers are seeking out water-based opportunities for recreation at what are being branded as nautical or maritime destinations. You may not have known this, but the Corps is the number one federal provider of water-based recreational experiences among all federal land managing agencies.

Panama Canal expansion has many looking at inland port expansion and improved intermodal logistics.

We now have a National Maritime Highway which Transportation Secretary LaHood is spearheading, and we are sitting on what is called the M-55 Segment of that system.

At the same time, this Administration is attempting to reconnect Americans to their Great Outdoors. Access to rivers and celebrating the heritage of our great rivers is a big part of that effort, as we sit here at the confluence of three of our nation’s most iconic rivers. It is for this reason, that President Obama sent his Assistant Secretary of Civil Works, Jo Ellen Darcy and Secretary of Interior Salazar to Alton this time two years ago to listen to community leaders about what could be done to better reconnect Americans to rivers like the Mississippi.

Locally, we have over 20,000 acres of public open space along the river, on Pool 26 alone. Every acre of it is within 45 minutes of downtown St. Louis.

In addition to the Corps land holdings, Fish & Wildlife Service has two major national refuges; the State of Illinois has one of its flagship parks at Pere Marquette. We now also have a Metro East Regional Park District.

EPA and USDA have launched a Healthy Watershed Initiative focused on the water quality of the Mississippi River to help ensure our common water future.

Many communities are struggling to overcome stormwater management challenges and combined sewer overflows.

Farmers are more actively managing nutrient loss from their fields that together with municipal waste is threatening the health of the Gulf. This drought has actually shrunk the dead zone in the gulf significantly due to reduced run-off and incidence of combined overflows.

HUD, DOT, and EPA have launched a regional sustainable community planning effort to build more livable communities. In fact, the St. Louis region just received a $4.7 M planning grant, which includes Alton and other Madison County communities.

Many NGOs are placing greater focus on the Mississippi. The National Audubon Society is attempting to call greater attention to the importance of the river for birds, people, and commerce, as is the Nature Conservancy and others. These groups understand the river possesses a wealth of natural capital. It is this natural capital that will grow tourism and help sustain riverside communities like Alton.

A group called the Northeast-Midwest Institute, in cooperation with the Walton Family Foundation, has launched what they are calling the Mississippi River Cities and Towns Initiative. In just a few months, 35 mayors of Riverfront communities have joined this effort including Mayor Slay of St. Louis and Alton’s Mayor Hoetsch. The Executive Committee for this group consists of one mayor leading each of the ten state delegations. Mayor Hoetsch is leading the Illinois group and was actively recruited to accept a seat on the Committee. This group will conduct its first planning meeting in St. Louis in a few weeks (September 12-14).

Another group will also convene in St. Louis in September. This initiative is referred to as America’s Great Watershed Initiative, and it involves an effort to call greater attention to the economic and environmental health and future of the Mississippi River Watershed and its people and communities.

There is a new emphasis and spotlight being placed on our nation’s water resources and the Mississippi River and its iconic stature is not lost on others.

For several years when asked what’s the next “big idea,” I have said repeatedly said, and several in the room today can attest to this, “it’s the water, it connects everything.”

But, it’s really the nexus of water, energy, and food security. These systems have to remain resilient. And, most urgently, how we approach all this must be about putting people to work in well paying jobs.

In May 2013, River Network will bring its national membership to St. Louis for the first time for its annual national River Rally to lend its voice to promoting the vitality of the Mississippi River. This rally will likely draw over 700 participants and they will be here for almost a week.

So, where does all this activity leave us?

How do we connect all these dots strategically and reposition ourselves boldly to take advantage of this opportunity to possibly rebrand our communities, and the Corps, at a time when many others are hunkered down trying to just weather the storm?

How do we muster a convergence of effort across organizations?

Can we? Can we take advantage of our unique connection to water?

At a time of great uncertainty, how can we use this opportunity to create some predictability about where we are going so that investors know this region is unique and open for business?

This is a time for great vision!

As we celebrate these last 175 years of progress and the cooperation between the Corps and the City of Alton and honor Alton on its 175th anniversary…

And, as we look ahead, one question looms…

How do we pull all this energy and good intention about water, rivers, commerce, livable communities and rural landscapes into some common strategic direction and shared goals to carve out Alton’s place for the future?

The Corps has a motto “essayons” which means, “let us try.” But here, at this time, in this place, rather than trying, perhaps our motto should become, “let us begin.”

Let’s come together and work with our Mayors and Councils, community leaders, our County Chairmen, our business community, our state and federal legislators, and our District Commanders, and let’s seize this moment.

Perhaps, in all this uncertainty, we can forge some certainty about who we are, reaffirm our sense of place, and reveal to others where we are headed.

That type of certainty is good for business.

Thank You.