Superfund: EPA's Costs to Remediate Existing and Future Sites Will Likely Exceed Current Funding Levels
Released: 2010-06-22T00:00:00

Letter

Considerable Work Remains at Most Nonfederal NPL Sites with Unacceptable or Unknown Human Exposure, and Some Site Cleanups Have Not Been Funded at the Most Efficient Level

As detailed in our report, over 60 percent of the 75 nonfederal NPL sites with unacceptable human exposure have all or more than half of the work remaining to complete remedial construction. According to EPA regional officials’ responses to our survey, EPA has plans to control human exposure at all of the 75 sites with unacceptable human exposure; however, our survey results also show that EPA regional officials expect 41 of the sites to continue to have unacceptable exposure until fiscal year 2015 or later. Similarly, over 60 percent of the 164 nonfederal NPL sites with unknown human exposure have all or more than half of the work remaining to complete remedial construction, according to EPA regional officials’ responses to our survey. The majority of the sites with unknown human exposure that have all of the work remaining to complete construction are in the remedial investigation phase, which is when EPA usually determines a site’s human exposure status, according to EPA guidance. EPA may also designate a site as having unknown human exposure during the construction phase of work, or after a site has met the construction complete milestone, if new information suggests that there may be risk at the site, or if an investigation is under way to assess a potential exposure pathway not previously analyzed.

Since CERCLA was passed in 1980 through the end of fiscal year 2009, EPA expended a total of $3 billion in constant 2009 dollars on the 75 sites with unacceptable exposure and $1.2 billion in constant 2009 dollars on the 164 sites where exposure is unknown, based on EPA data. However, despite the relatively high level of expenditures at sites with unacceptable human exposure, EPA regional and headquarters officials told us that construction has not been conducted in the most timely and cost-efficient manner at some of these sites because EPA had to balance limited annual resources among various program activities. At the Eureka Mills site in Utah, people who are in contact with soil and dust contaminated with lead from mining activities face human health risks. From 2003 to 2008, the site received $6.6 million to $10 million a year for construction, even though regional officials said that an additional $3 to $5 million per year would have allowed them to complete construction at the site 3 to 4 years earlier at a reduced overall cost. However, with the addition of $26.5 million for the Eureka Mills site in fiscal year 2009 from Recovery Act funding, officials said that they will be able to complete construction at least 1 year earlier than planned and control human exposure at the site. In response to our survey, EPA regional officials noted that they are using Recovery Act funding to partially or completely control the unacceptable human exposure at 20 NPL sites. However, despite EPA’s use of Recovery Act funds to control human exposure at these sites, EPA officials noted that EPA’s constrained funding has caused delays in the control of human exposure at some sites.

EPA’s Costs for Conducting Remedial Construction at Nonfederal NPL Sites Will Likely Exceed Recent Funding Levels for These Activities

As we noted in our report, EPA’s annual costs to conduct remedial construction in the most efficient manner at nonfederal NPL sites for fiscal years 2010 through 2014 may range from $335 million to $681 million, according to EPA regional officials’ estimates (see table 1). These estimates include EPA’s costs to conduct remedial actions at 142 of the 416 nonfederal sites that are not construction complete. For the remaining 274 sites, EPA regional officials were unable to provide cost estimates for 57 sites, expect responsible parties to fully fund remedial actions at 206 sites, and do not expect to incur additional costs to complete construction at 11 sites because these sites are already fully funded.

These annual cost estimates for remedial construction at these sites exceed past annual funding allocations for such actions. For example, EPA regional officials’ cost estimates for remedial construction for the next 2 years—fiscal years 2011 and 2012—are $253 million to $414 million greater than the $267 million in annual funding that EPA allocated for remedial actions in fiscal year 2009. From fiscal years 2000 through 2009, EPA allocated $220 million to $267 million in annual funding for remedial actions. According to EPA headquarters officials, however, funds from additional sources—such as prior year funds, settlements with responsible parties, and state cost share agreements—may also be available to fund remedial construction from year to year. While the amount of funding available through these sources may vary substantially from year to year, according to EPA headquarters officials, approximately $123 to $199 million was available from additional sources for remedial actions in fiscal years 2007 through 2009. Our analysis indicates that, even if this level of funding were available in future years, it would not supplement EPA’s annual funding allocation enough to cover the estimated costs for conducting remedial construction in fiscal years 2011 and 2012. Therefore, despite funding from additional sources, EPA’s estimated costs to conduct remedial construction will exceed available funds if funding for remedial construction remains constant.

Furthermore, these annual cost estimates are likely understated. These officials were not able to provide annual construction cost estimates for 57 of the 416 nonfederal sites that are not yet construction complete because they are in the early stages of the remedial process, and EPA does not yet know the extent of the contamination and/or has not chosen a cleanup remedy for them. For some additional sites, EPA regional officials were unable to provide cost estimates for construction at some of the operable units at the site. In addition, EPA regional officials’ estimates did not include costs for conducting long-term response actions—such as operating groundwater treatment facilities—which are considered part of the remedial action, or for performing 5-year site reviews, both of which EPA funds from its remedial action allocation and would, therefore, increase the cost estimate for remedial actions.

EPA’s estimates also did not include construction costs for sites that currently have a potentially responsible party that may be unable to fund the cleanup. EPA officials told us that EPA has identified one or more potentially responsible parties at 206 of the 416 nonfederal NPL sites that are not yet construction complete. However, officials also said that they were slightly or not at all confident that a responsible party would fund future remedial actions at 27 of these sites.

EPA headquarters and regional officials also told us that EPA’s actual costs for construction are typically higher than its cost estimates because of a number of uncertainties. Most importantly, according to EPA officials, the extent of contamination at a site is often greater than EPA expected when it developed the cost estimate, which can expand the scope of work and remedies needed and increase overall construction costs. For example, we recently reported that at the Federal Creosote Superfund site in New Jersey, the greater-than-expected quantities of contaminated material contributed to a $111 million increase in construction costs over EPA’s estimates. Another factor that can increase construction costs is a change in acceptable contaminant levels. In addition, according to EPA, the actual costs of goods and services—such as energy, construction materials, and labor—may increase above estimated prices, causing an increase in the actual construction cost. EPA officials noted that there may be some instances when construction costs are overestimated because, for example, there is less contamination at a site than previously thought or the prices of goods and services decrease; however, the officials commented that this is rare. The frequent occurrence of additional unexpected costs enhances the likelihood that EPA’s costs for remedial actions over the next several years will exceed recent funding levels for these activities, and EPA may be forced to choose between funding construction at some sites in the most efficient manner or funding construction at more sites less efficiently.

EPA Allocates Remedial Program Funding Separately for Preconstruction Activities and Remedial Actions, and Limited Funding Has Caused Delays at Some Sites

As explained in our report, EPA allocates funds separately for pre- construction activities—such as remedial investigation and remedial design—and remedial actions. EPA headquarters allocates funds for pre- construction activities to the regions for them to distribute among sites. EPA headquarters determines the amount of resources that the Superfund program will allocate to the regions by using a model that distributes available funding based on a combination of historical allocations and a work-based scoring system that scores each region based on projects planned for the upcoming year. According to EPA’s Superfund Program Implementation Manual, at the initiation of the planning process, headquarters provides general projections of funding for preconstruction activities that will be available to the regions. On the basis of these projections, each region then develops a plan for allocating these funds to sites. Before finalizing this plan, each region holds planning discussions with headquarters to discuss actions that can be accomplished during the year and alters its plans, as needed, based on refined projections of available funding from headquarters.

To allocate funding for remedial actions, EPA headquarters works in consultation with the regions to allocate funds on a site-by-site basis. EPA’s Superfund Program Implementation Manual states that sites with ongoing construction receive priority for funding over new construction work. Headquarters develops the initial plan for ongoing construction based on regional funding requests, projections of available funding, and discussions with regional officials. According to EPA, the agency’s goal in allocating funds is to ensure that all sites with ongoing construction continue to progress toward construction completion while also funding some new construction projects.

According to EPA headquarters and regional officials, the funds for both preconstruction activities and remedial actions have not been sufficient to clean up some sites in the most timely and cost-efficient manner. EPA officials from several regions told us that their regions currently receive about half or less than half of the funding they could use for preconstruction activities. As a result, according to our survey, which collected data on fiscal years 2000 through 2009, most regions have sites that have experienced delays in the preconstruction phase because of insufficient funding. Similarly, sites with ongoing construction have experienced delays caused by limited funding, according to EPA officials. Since fiscal year 2000, most regions have experienced delays because of insufficient funding at one or more sites with ongoing construction, according to responses to our survey. According to several EPA regional officials, delays in funding for sites with ongoing construction increase the length of time it takes to clean up a site; the total cost of cleanup; and, in some cases, the length of time populations are exposed to contaminants. In addition, funding limitations have caused delays at sites that were ready to begin new construction. According to EPA Superfund Accomplishment Reports, between fiscal years 2004 and 2008, 54 sites, or over one-third of all sites ready for new construction funding, were not funded in the year that they were ready to begin construction, and some sites were not funded for several years after they were construction-ready.

EPA officials told us that EPA prioritized sites to receive the $582 million in American Recovery and Reinvestment Act funds allocated to remediation in a manner similar to the way EPA prioritizes sites for remedial actions. According to EPA headquarters officials, 25 sites needing new construction funding in fiscal year 2009 would most likely not have received funding had Recovery Act funding not been available.

Most EPA Regional and Selected State Officials Expect an Increase in the Number of Sites Added to the NPL over the Next 5 Years but Cannot Estimate the Cleanup Costs

Our report also notes that most of the EPA regional officials and state officials we interviewed told us they expect the number of sites listed on the NPL over the next 5 years will be greater than the number listed in the past 5 years. EPA regional officials estimate that from 101 to 125 sites—an average of 20 to 25 sites per year—will be added to the NPL over the next 5 years. This is higher than the 79 sites—an average of about 16 sites per year—added from fiscal years 2005 through 2009. As table 2 shows, all EPA regions expect that the number of sites added to the NPL over the next 5 years from their region could increase. According to EPA headquarters officials, the number of sites proposed for listing over time has decreased as a result of the expanded use of other cleanup programs, including state programs. Most of the officials who expect an increase in listings noted that current economic conditions—which can limit states’ abilities to clean up sites under their own programs and responsible parties’ abilities to pay for cleanup—are a contributing factor to the expected increase in listed sites.

Most of the officials we spoke with in the 10 selected states also expect that the number of sites listed from their states over the next 5 years could increase above the number of sites listed over the past 5 years, as table 3 shows. For example, officials from the Michigan Department of Natural Resources and Environment said that they expect EPA to list five sites in Michigan to the NPL over the next 5 years, even though no sites have been listed from their state since 1996. These officials noted that the Superfund program has traditionally been a program of last resort, but declining resources in their state’s cleanup program have renewed Michigan’s interest in cleaning sites up through the federal program.

Neither EPA regional officials nor state officials we contacted were able to provide cost estimates for many of the sites they expect to be added to the NPL over the next 5 years. Furthermore, when these officials were able to provide cost estimates, most of them were imprecise figures based on limited knowledge and best professional judgment. Officials also explained that they could not provide cost estimates for some of the sites, because either the type and extent of contamination are not yet known, or officials have not yet identified the actual sites that may be listed. Therefore, it is impossible to accurately estimate what the cost may be to clean up these sites. However, we reported in July 2009 that the average amount EPA spent to clean up individual sites has increased in recent years. For example, EPA spent an average of approximately $7.5 million at sites that reached EPA’s construction complete milestone in fiscal year 1999. EPA’s expenditures increased to an average of about $10.2 million in total expenditures per site at sites reaching construction complete in fiscal year 2007. In that report, we noted that individual site costs may have increased because the sites on the NPL now are more complex than in the past, construction costs have been rising, and EPA has not been able to identify as many responsible parties to fund site cleanups as in the past, leaving a higher share for EPA to fund.

In addition to the number of sites that could be listed, the number of sites eligible for the NPL could increase if EPA begins to assess, as a part of its listing process, the risk of vapor intrusion caused by subsurface hazardous substances that have migrated via the air into homes and commercial properties. Although sites with vapor intrusion can pose considerable human health risks, EPA’s HRS—the mechanism used to identify sites that qualify for NPL listing—does not currently recognize these risks; therefore, unless a site with vapor intrusion is listed on some other basis— such as groundwater contamination—EPA cannot clean up the site using remedial program funding. Many EPA regional officials and state officials noted that vapor intrusion is a concern, and several of these officials told us that they believe additional sites would be eligible for listing if assessments of vapor intrusion were included as part of the listing process. According to an EPA headquarters official, based on recent discussions with regional officials, up to 37 sites could be eligible for NPL listing if EPA includes vapor intrusion assessments as part of the listing process. However, according to EPA headquarters officials, EPA must first determine whether or not it can consider the vapor intrusion pathway under its existing HRS regulations, and it has not yet made such a determination. While these sites are not currently eligible for NPL listing, the EPA headquarters official noted that EPA is addressing vapor intrusion at 13 of these sites through its Superfund removal program; however, this official also told us that, when conducting removal actions, EPA is limited in its ability to fully remediate the source of contamination. For example, according to an official from the Montana Department of Environmental Quality, preliminary data collected at the Billings PCE site—which the official noted is not eligible for NPL listing—indicated vapor intrusion in buildings, and EPA conducted a removal action at this site. However, according to this official, it is unclear whether the removal action was effective in mitigating the vapor intrusion contamination, and people may continue to be exposed.

In conclusion, we found that limited funding for the Superfund program has caused delays in cleaning up some sites in recent years. This limited funding, coupled with increasing costs of cleanup, has forced EPA to choose between cleaning up a greater number of sites more slowly at higher cost and cleaning up fewer sites more quickly at lower cost. Compounding these challenges, EPA does not currently assess the relative risk posed by vapor intrusion when deciding which sites to include on the NPL, and assessing this risk could lead to an increase in the number of sites listed on the NPL. However, if these sites are not assessed and, if needed, listed on the NPL, some seriously contaminated hazardous waste sites with unacceptable human exposure may not be cleaned up. In our report being released today, we are recommending that the Administrator of EPA determine the extent to which EPA will consider vapor intrusion as part of the NPL listing process and how this will affect the number of sites listed in the future. EPA agreed with our recommendation.

Mr. Chairman, this concludes my prepared statement. I would be pleased to respond to any questions that you or Members of the Subcommittee may have at this time.

GAO Contact and Staff Acknowledgments

For questions about this statement, please contact John Stephenson at (202) 512-3841 or stephensonj@gao.gov. Individuals making key contributions to this testimony include Barbara Patterson and Vincent P. Price, Assistant Directors; Deanna Laufer; and Kyerion Printup. Elizabeth Beardsley, Pamela Davidson, and Mehrzad Nadji also made important contributions.

This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.