The Asbestos Business is Booming – But from the Wrong End

  I eat dinner somewhere between 8:30 p.m. and 9:30 p.m. most nights.

Burned out from starting my Blackberry at 6 a.m. and shutting it down at 12 a.m., as well as sitting in front of the computer all day, I do workout, important for everyone to do, and I do speak with my wife, also important, but I tend to watch brainless television while I eat, as well as keep my Blackberry turned on.

I switched channels hoping to see a good movie on HBO, which usually has the same old movies that run for months at a high price. I usually look for a movie to take my mind off my business. When I switched to the first HBO channel it was airing an HBO Documentary series Mann vs. Ford, Mann being Mr. Wayne Mann of the Ramapough American Native Tribe, and of course, Ford being the Ford Motor company.

This series is related to my business, the business of treating hazardous waste to a non-hazardous material. Being the workaholic and craver for more knowledge, I watched the documentary to see if I could learn anything new about hazardous waste.

The documentary’s premise: that Ford was liable for the short life span of the Ramapough people; that dumping of paint toxic sludge was the cause of a cancer cluster in the surrounding area; Ford dumped the toxic paint sludge in the abandon mines and mountains of Ringwood, New Jersey where the Ramapough live.
The documentary goes on to show the history of the dumping, the suffering, poverty and constant fight of the Ramapough to rid the area of the toxic paint sludge.

When Ford closed its facility in Mahwah, NJ, Ford graciously donated the land for low-income housing to be built for the Ramapough.

With this donation, the taxpayer gave Ford a huge tax deduction.

When the Ringwood site became a Superfund site, again, the taxpayer, paid for the clean-up, in this case not once, but twice with long-term costs for monitoring the site, which means the taxpayer paid twice for the clean-up and continues to pay for the monitoring.

The lead paint’s attorney in the documentary is Ms.Vicki Gilliam.

Ms. Gilliam takes us to site of the cancer cluster to personally meet the residents and to point out the poverty and pain of the Ramapough.

Then, somewhere in the middle of the documentary we get the pain and suffering of Ms. Gilliam, how she was poor growing up on a farm, got married at a young age and had a child while still a teenager. Then her husband left her, she had to live in a trailer, but she was determined to become a lawyer. I am not sure what this portion of the documentary had to do with the Ramapough, because Ms. Gilliam didn’t know them while growing up or while becoming a lawyer.

Lawyers who take on the lucrative environmental cancer and illness cases know that the fees will be high and that they will be there when they finish, no matter how much they win for their clients.  Ms. Gilliam stated that legal fees would cost more than a million, possibly two million before the case was over.

My favorite scene, while showing the devastation of the Ramapough in this cancer cluster, takes place in an upscale restaurant at a meal with the lawyers, a consulting doctor and an environmental consultant drinking red wine and bottled sparkling water while discussing the Ramapough case. Of course the meal was tax deductible, charged to the Ramapough account, and partially paid for by the taxpayer.

Then we cut to the court and the Judge all paid for by the taxpayer.

The judge was adamant about not making this a long and drawn out trial.

In the end it was settled, Ford claimed no wrong doing and said that it was legal to dump at the time that it used the site as a landfill.

The total dollar settlement was $11,000,000. 00, less than carry-around pocket change for Ford. The monies paid to the plaintiffs ranged from the lowest $700.00 to the highest $34,000,000.00, a very small amount to pay for good health, something no amount of money can buy.

The lawyers, I would guess, got closer to the million to two million dollar mark and some good meals.
Now take the above law suit and times it by millions of cases with much larger settlements around the world, specifically asbestos cancer cases.

According to the Buffalo News, Ford paid a chemist with mesothelioma who worked for Durez Plastics with a machine manufactured by Ford that filed and ground brake shoes. Mr. Ginter won a $2.5 million settlement of which Ford paid 15%, or $375,000.00.

When asbestos containing materials are removed from our built environment we send it to another built environment, a landfill.

Today it is legal to dump asbestos containing material in a landfill, with two caveats: by law the asbestos containing materials sent to a landfill must have the original owner of the asbestos containing material’s name on the bag it is put in when removed and on manifest this way the lawyers will know who to sue, because there is a sign posted on the landfill that warns of the dangers of asbestos, which indicates that asbestos, although dumped in a legal landfill, can still cause health problems.

We all see the lawyers on television advertising: “if you have been exposed to asbestos, call us.”

We are in the awareness stage of recycling and the scarcity of landfill space.

We are in the awareness stage of toxic material dumping and the consequences of families suffering with illness and loss of loved ones.

We need to start permanently ridding our built environment of toxic materials, like asbestos, and at the same time reduce landfill storage.

There is no price big enough to pay for good health, no matter how good your lawyer is.

And so it goes with hazardous waste, especially asbestos.

The Asbestos Debacle

Society and industry are diligently working to find better solutions through waste

reduction, recycling and reuse, but what is the plan for hazardous materials, such as

asbestos, in buildings and property?

Known as the miracle mineral, asbestos was used for its resiliency against chemical

attack and its excellent tensile strength and superior fire-proofing characteristics. The

material was used in 3,000 to 5,000 products from the early 1800s through the 1970s.

Recognizing the effects of asbestos on human health, the U.S. Public Health Service

recommended guidelines on asbestos exposure as early as 1938.

The start of World War II accelerated the expansion of existing military bases, building

new bases and government facilities, and amplified shipbuilding, all of which used

asbestos. The government also bought and stored raw asbestos in silos around the country, in case it became unavailable.

Obviously, Public Health Service recommendations were ignored then and many years

into the future.

Ubiquitous, asbestos containing materials (ACM) were installed in American factories,

electric utilities and generating plants, schools, homes, and process industry during the

20th century, causing about than 4,000 deaths a year in the United States, making asbestos exposure the deadliest industrial tragedy in American history.

The U.S. EPA says an estimated 27 million people were exposed to asbestos in the

workplace between the years of 1940 though the 1970s. As long as asbestos is in the built

environment, the exposure will continue.

Asbestos remains one of the costliest environmental challenges facing the United States. Because it was so widely used and permeates our environment, asbestos continues to cost

millions of dollars a year for remediation, millions in medical and legal expenses

resulting from asbestosis and Mesothelioma, and multi-millions of dollars to American

industry and government related to regulatory enforcement and compliance. The tiny

fibers also have resulted in a record number of corporate bankruptcies. All these costs

have been borne by the taxpayers, who have had no relief.

A worker removing asbestos from buildings must protect against inhaling the cancer causing fibers.

Negative externality (the theory that those who make a decision do not have to pay the

negative cost and effect of that decision) is the best way to describe the asbestos debacle. Companies that were aware of the dangers of asbestos early on continued to profit. Their

legacy includes:

• Superfund site cleanups as well as brownfield site grants,
• U.S. courts flooded with asbestos-related litigation, and
• Medical and financial costs paid by taxpayers.

Society can abate negative externality in several ways. The producer or owner must pay

the costs of these hazardous material releases and inevitable cleanups or the producer

must pay environmental taxes, both of which negatively affect the bottom line. The best

approach for business is to eliminate the release before it occurs.

Under the Comprehensive Environmental Response, Compensation, and Liability Act

(CERCLA), the law designates the owner of the site from which ACM is removed as a

Potentially Responsible Party that is subject to strict, joint and several perpetual liability

that could lead to incalculable-unmitigated cleanup costs, even if the material or waste

was deposited before the measure was enacted.

Environmental groups have sued and won against the U.S. Environmental Protection

Agency, requiring it to enforce Section 108(b) of CERCLA. In that section, companies

must prove financial assurance requirements for hazardous releases by acceptable

financial vehicle, such as guarantee, surety bond, stand by letter of credit, insurance, self

or insurance company generated, all with terms and language incorporated and approved

by EPA and carried out by National Enforcement Initiatives. In short, you will protect

your bottom line if you prove to EPA that you can pay for the cleanup of hazardous and

regulated waste releases years in the future. You also should be aware that EPA supports

the reinstatement of the environmental tax.

By enforcing these regulations, EPA is making it cheaper to treat hazardous and regulated

waste onsite to end liability than to landfill, which carries perpetual-incalculable liability.

Besides CERCLA, asbestos is regulated as a solid waste under the Resource

Conservation and Recovery Act, as a building material under the Toxic Substance

Control Act, and as an airborne contaminant under the National Emission Standards for

Hazardous Air Pollutants program in accordance with the Clean Air Act. The agency also

limits effluent discharges for asbestos fibers in water under the Clean Water Act.

The immediate costs of the regulations to a company's bottom line should drive a

practical and astute CEO to require his or her environmental department heads to find

EPA-approved environmental technologies that can eliminate hazardous and regulated

wastes releases once and for all. The success of this action would help alleviate the

regulatory burden, increase the bottom line, solidify stockholder position and steady

stock worth.

Solve CERCLA and SEC Asbestos Liability

 

The regulatory whirlpool keeps turning the U.S. power industry every which way but loose.

At the same time forward-looking industry CEOs and CFOs are challenged by the uncertainties posed by the rising tide of state and federal environmental regulatory requirements, many utilities are engaged in rear guard actions, fighting the regulatory ghosts of industry practices discontinued decades ago.

Until the latter part of the 20th century, the marriage of asbestos and the power industry seemed a match made in heaven. Because of its superior insulating properties, asbestos seemed an ideal fit for coal fired, oil fired and nuclear power plants.

Asbestos containing material (ACM) was used liberally in underground electrical feeds and power plants, to the point where distributors and generators became one of the most ACM-pervasive environments in all of American industry.

But now, asbestos haunts power distributors and generators who once embraced it. ACM's ubiquitous presence in the utility industry has forced shut-downs and work stoppages, increased costs, regulatory scrutiny, employee asbestos related illness, and thousands of law suits, vexing an industry already bedeviled by the lack of public consensus about what's environmentally acceptable.

Asbestos may be a utility owner's worst nightmare, but in its heyday, asbestos was a miracle product of American industry. Plentiful and pliable, asbestos provided tensile strength and withstood high heat, and enjoyed nearly 5,000 industrial applications, across the board.

Boilers, turbines, generators and underground cables were assembled and insulated with ACM. In a typical power plant, asbestos not only lined miles of pipes, boilers and electrical wiring, but also was used as fire-proof roofing and flooring, and installed in walls. Since insulation and gaskets were often fitted to specific areas, asbestos dust and particles were released during repairs and renovations, especially when working with friable ACM.

Asbestos fell from favor during the 1970s on news it was carcinogenic. Congress soon moved to give ACM abatement efforts the force of law, enacting legislation governing the handling and disposal of ACM which in turn gave birth to the asbestos abatement industry.

In 1980, Congress passed The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), and in 1986 revised it as the Superfund Amendment and Reauthorization Act (SARA).

Under this legislation, owners of sites containing ACM that was removed and shipped to a landfill for storage became a "potentially responsible party" (PRP), subject to "strict, joint and several" liability that potentially result in incalculable future cleanup costs.

CERCLA and SARA further mandate that liability can be imposed on PRPs regardless of whether such parties were negligent, environmentally compliant, or participated in or benefitted from handling ACM. Additionally, CERCLA calls for treatment of hazardous substances, to reduce volume, mobility and toxicity.

Even as demand for power continues to rise, the industry is weighted down by asbestos-related factors that are costly and disruptive.

Despite all the steps generators take to comply with their regulatory burden, the issue of present and retroactive liability lives on to haunt them, providing a living for lawyers.

Utilities and others who used ACM as insulation are now unable to insure themselves against exposure claims and CERCLA responsibilities.

The Securities and Exchange Commission's (SEC) required environmental accounting principles further add to the bottom line concerns of the utility industry.

In March 2005, a Financial Accounting Standards Board (FASB) and Financial Accounting Standards (FAS) clarification raised the bar for hazardous and regulated waste generators and others by requiring the industry to account more fully for its environmental liabilities -- i.e., asbestos abatement costs -- associated with the future retirement of fixed assets and asbestos storage in a landfill.

Rather than waiting until the asset is sold or retired to estimate and recognize the costs of addressing embedded environmental liabilities, FASB financial interpretation No. 47 takes a sooner, not later, approach.

Under FIN 47, the cost of abatement generally cannot be deferred indefinitely, nor avoided by selling the asset.

FIN 47 didn't just narrow the range of industry accounting practices -- it has emerged as a diligence issue in financial transactions that can affect closure. Compliance demonstrates the extent to which companies have good environmental-accounting systems in place, and proves a company is proactively dealing with and accounting for embedded environmental liabilities, which spins off good public relations and adds value.

FASB 143 applies to "legal obligations" associated with retirement of tangible long-lived assets. FAS 5 and Statement of Position (SOP) 96-1 address hazardous contamination, whether in a facility or landfill. All hazardous waste liabilities require CERCLA enforcement and must be reported on the balance sheet of a public company.

Asbestos is extremely resilient, defies most attempts to destroy it, and takes many decades to degrade naturally. Today, as in years past, the asbestos abatement industry's prevailing modus operandi is to warehouse ACM in landfills. ACM is double bagged in 6 mil plastic, then loaded and enclosed for transport, and finally deposited into a landfill for storage, where it is covered with a six-inch layer of non-asbestos material.

Further liability problems can occur when bags break and asbestos fibers become airborne or migrate into the water table, or the landfill becomes a Superfund site.

Consolidated Edison of New York (Con Ed) ran afoul of regulators during the 1980s when company employee's informed authorities that ACM was mishandled on numerous occasions during removal and transport operations. Adding to Con Ed's woes was a steam pipe explosion in Gramercy Park, N.Y. that killed two workers and contaminated apartment units, setting in motion a far-ranging federal investigation that concluded when Con Ed became the first utility to be placed on federal probation.

It has become increasingly important for the CEO and CFO to insure environmental and financial sustainability to their stockholders, employees, and customers.

Under CERCLA, for instance, generators responsible for small percentages of site waste may be held liable for the entire costs of site remediation, a burden which frequently falls on the PRP with the deepest pockets, such as utilities.

The ideal solution is to meet SEC and CERCLA requirements by treating asbestos and other hazardous waste on site, preventing further contamination and stopping future liability.

On-site treatment eliminates protests and community concerns about the transport of asbestos and hazardous waste through neighborhoods.

Cost effective on-site technology development for hazardous and regulated wastes treatment must become our way of life. Landfills are already over burdened and expanding them is increasingly difficult. What little land is left must be preserved.

The sustainability movement is here to stay. Companies that proactively deal with their environmental problems are the winners.

Industry-Government-Pollution-EPA-Money

Industry and Government have been hazardous polluters for decades. Negative Externality (the theory that those who make a decision do not have to pay the negative cost and effect of that decision) is a theory that could well apply to the consequence of previous hazardous pollution in the past. 

An example of this is the answer I received after a presentation I gave on a non-thermal, EPA approved process that destroys asbestos. At the end of the presentation I asked the environmental manager if the company was worried about the cradle-to-grave consequences of landfilling asbestos or, for that fact, any hazardous waste.

The answer: Our Chief Executive is not worried about that, he’ll be long retired before there are any consequences of our landfilling of hazardous material.

In other words, he is going to CYA it until it is time to collect his pension 

Yes that may be true, but what about his grandchildren?!

This brings us to the EPA and money.

EPA budgets have become limited by financial constraints, as well as the fact that EPA enforcement has become prevalent since the EPA has been sued by environmental groups to enforce Section 108(b), which requires financial responsibility and a secured guarantee for environmental pollution clean-up that a company may cause long into the future.

The enforcement of 108(b) will eventually lessen the Congressional appropriations for the clean-up of polluted sites in the future, therefore easing tax payer liability and creating an efficient EPA that can be the oversight manager of our environment instead of the responsible clean-up contractor.

How does industry constructively deal with 108(b)?

The financial requirement of 108(b) goes directly to a company’s bottom line as a negative liability and future cash requirement.

Industry, through its CEOs and CFOs should instruct their research and development and environmental departments to actively seek out solutions to our hazardous waste problems.

Let’s take a look at the advantages to industry of finding and utilizing solutions that permanently rid our environment of hazardous waste:

1.      Elimination of a liability;

2.      Elimination of further pollution;

3.      Elimination of health risks to humans

4.      Good social responsibility;

5.      It is the green thing to do;

6.      It does not cost them anything, because it is tax deductible, either as a deductible expense or as a deductible capital expense

In this scenario, the company will be financially stronger, good for the stock holders and the CEO and CFO, good for the environment, socially responsible and most importantly, good for our grandchildren.

EPA Budget Cuts Spell Stricter Enforcement Technology the Answer

How does the Federal Environmental Protection Agency (EPA) receive funding? The simple answer - the taxpayer -from the taxpayer to Congress from Congress to the EPA, the taxpayer being the catalyst.

The economy is in deep trouble; our government is looking at options not to default on our debt, trim budgets and reduce unemployment.

One disturbing factor is that Congress wants to take billions from the EPA budget by weakening part of the Clean Air Act.

The EPA’s job is to enforce environmental regulations passed by Congress to keep us and our country in a healthy and pollutant-free environment by monitoring a myriad of industries, conducting walk-in inspections, audits and investigating record keeping fraud.

In order to effectively do their job, the EPA needs money besides Congressional appropriations. The EPA creates funds by issuing permits, overseeing environmental cleanup projects, criminal punishment and fines, and issuing fines from violation enforcement.

If Congress cuts the EPA budget by billions, the EPA will have to find the money to fund operations. One way would be through dogged-tougher industrial enforcement.

Industry is lobbying Congress to trim down the Clean Air Act, because of the price of compliance. If this happens, what will be the cost to the environment and ultimately humans?

Cost and price are two different things, price is something you pay immediately, but cost is what you pay in the long term. That leads to the question: What does human sickness cost, and even worse, what is the cost of losing a human life?

The question is how industry complies with the EPA, keeping itself intact and financially viable, creating jobs and paying taxes, as well as becoming good corporate citizens, who are socially responsible, and who practice sustainability in their quest for a cleaner and healthier environment.

Instead of paying high-priced lobbyists to lobby Congress to limit environmental regulations, and pay for research and development to create technologies that will prevent environmental releases, have your environmental departments explore existing technologies that can be implemented; fund research and development projects that will create solutions to the environmental problems of your industry:

• For stack releases invest in research to create a viable technology that will arrest toxic releases. 
• Instead of sending toxic wastes, such as Chromium VI soil, heavy metals, asbestos, etc to a landfill, diligently invest in research for new technologies or search for and use existing environmentally safe technology that will stop landfilling of all toxic wastes.

We have become so conscious of environmental issues and green initiatives that we live in a world of corporate and individual social responsibility and sustainability; Not In My Backyard (NIMBY) with landfills and incinerators; landfill mining, which is becoming a trend (digging up landfills and removing the recyclables to make more space) or removing the waste from a truck at the tipping gate to cull the recyclables, and the constant reminder to recycle, reduce and reuse.

Treatment of toxic substances may originally have a higher price to create and to use, and existing technology may be a slightly higher price to implement, but the long-term cost will be a lot less, environmental cleanups will start to diminish, air will start to become cleaner, and people will have a good chance for good health.

Clean Energy Technologies Will Create Waste

The birth of mitigating our dependency on oil and coal is here. We are rapidly developing energy saving and renewable-energy solutions that are about to transform our lives for the better, bringing a new era of limiting our dependency on fossil fuel, and creating less wastes when generating electricity. But inevitably through this period we will create other wastes, some hazardous.

These changes and growth in renewable-alternative energies will deliver a new era of efficient power generation and a new sector of jobs. Infrastructure building and renovations will have to take place, i.e. transmission lines and sub-stations will require modifications and upgrades and generating stations will be abandoned as retired assets, dismantled and the environmental hazards removed.  

It is obvious that the cross over to clean energy will inevitably breed countless environmental clean-up projects. Utilities are notably plagued with many hazardous-waste products such as asbestos, Polychlorinated Biphenyls (PCBs), heavy metals, lead, cadmium, and chromium that will haunt them and us for generations to come if they are not permanently removed from our built environment (meaning buildings, facilities and landfills).

The companies that generate and release these hazardous wastes are being monitored by the Federal Environmental Protection Agency (EPA) who has become stricter in its enforcement of polluters, requiring a guarantee of financial assurance under Section 108 (b) of the Comprehensive, Response, Compensation, and Liability Act (CERCLA). In this section of CERCLA, companies must prove financial stability, long into the future, by acceptable financial vehicles with terms and language incorporated and approved by the EPA and enforced by the National Enforcement Initiatives for the clean-up of environmental hazardous. Therefore it is in their favor to seek out technologies that permanently remove these hazardous wastes from our built environment, which will lesson the financial burden.

The major problems that will develop from this era lay in the fact that landfill space is at a premium and landfill mining (digging up landfills to recycle the buried recyclables) is becoming a way to create landfill expansion. Also, the development of new landfills is becoming almost impossible, due to the ever present: Not In My Back Yard (NIMBY).
Hazardous waste destruction technologies are the future of the waste industry, just as clean energy technologies are the future of the utility industry.

Clean energy and zero waste, non-hazardous and hazardous, must be a vigilant effort. Our goal has to be the development, refinement and implementation of technologies that can support these efforts. This is the best socially responsible sustainable environmental approach.
 
What will our children do to eliminate waste in their life?

It is up to our generation to set the ground work and emphatically pursue cleaner energy and zero waste technologies, educating the consequences of not continually finding better solutions for our environment, and most importantly, for the health of generations to come.