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Hazardous waste

More than half of the hazardous waste facilities with state-ordered plans to clean up old spills in Louisiana haven't yet shown how they intend for pay for that work, even though, on average, their clean-up proposals are nearly 6½ years old, a new state audit says.

The estimated cleanup costs for incidents at the 14 hazardous waste facilities under clean-up orders range from $205,000 to $15 million as of midyear, the Louisiana Legislative Auditor's Office found.

Three solid waste landfills were in the same position with their own Louisiana Department of Environmental Quality-ordered cleanup plans, with an estimated cost of $5 million combined.

Meanwhile, cleanup for another batch of the state's 44 hazardous facilities that have released pollution — 11 in all — hasn't even progressed to the point where the owners would be required to explain payment options because final plans haven't even been submitted yet, the auditors said. Those spills, on average, happened more than 11 years ago.

These and other findings in the state audit exposed a number of administrative, staffing and legal shortcomings in how DEQ tracks cleanup from spills at hazardous waste facilities and landfills, as well as plans to one day close the state's waste operations entirely. The audit was released Monday; its calculations are through the period ending June 30.

Besides cleanup, the long-term expense for the closure and post-closure monitoring of Louisiana's 44 hazardous waste operations and 178 permitted solid waste landfills has been estimated at $1.15 billion and also drew auditors' concern.

Auditors found that while 204 privately operated solid waste landfills and hazardous waste facilities have provided the initial financial documents for closure and post-closure monitoring, nearly 14% of them, or 28, had not provided required updates to account for annual inflation or a change in closure plans.

Under state rules, the companies operating the facilities have to establish trust funds to hold the money that would be used to cover the closure costs, or offer a surety bond, letter of credit or insurance policy. 

Municipalities run 18 solid waste landfills and face a test of their ability to issue debt, but state auditors found those local governments don't have to submit annual audits or other documents to show they can pay for landfill closure.

The audit noted that Louisiana taxpayers are put at risk because DEQ isn't ensuring private or municipal operations establish their ability to pay for cleanup or closure — something called "financial assurance."

"Ensuring that owners have adequate financial capacity is important to protect human health, the environment and taxpayers from assuming the financial burden of environmental cleanup," the state audit says. "If owners cannot demonstrate sufficient financial assurance, the state may be responsible for part or all of the cost of completing cleanup activities."

The hazardous facilities handle some of the most harmful and toxic waste generated in the state. Despite the slow pace of cleanup, state auditors found these old spills or other releases had been contained so they didn't pose an immediate risk to the public.

The audit doesn't identify any of the facilities or describe what kinds of incidents were prompting cleanups.

But solid waste landfills, where residential and other kinds of waste are dumped and stored in perpetuity, can face problems with contaminants from the waste pile leaching into the surface and groundwater, especially older landfills that lack newer containment designs. The sites often are ringed with monitoring wells to track the movement of those contaminants.

The audit noted DEQ lacks the dedicated staff with financial expertise to review the necessary documents and that a database set up to track the costs "was often incomplete and inaccurate."

DEQ also hasn't created procedures to assign staff to handle the financial review of cleanup efforts and closure plans. Just one person had that task, in addition to other work responsibilities, auditors found.

The auditors noted that other states, such as Texas and Arkansas, employ teams of people with banking and financial backgrounds.

In a written response, DEQ Secretary Chuck Carr Brown agreed with many of the auditors' findings and promised to take corrective actions, including tracking down facilities that haven't submitted plans or financial information and looking at changes to standard procedures.

His response also agreed with auditors' staffing recommendations, airing a desire to have the teams other states use. 

"LDEQ has previously recognized the need for, and requested, a dedicated position for the review and management of financial assurance," the audit responses says. "LDEQ will continue to work towards this goal."

One regulatory shortcoming auditors pointed to is that DEQ hasn't established time frames when hazardous waste facilities and landfills with pending spills must submit evidence of their ability to pay for cleanup. 

In part of the response to that criticism, DEQ officials told auditors that the agency has a practice of not requiring that financial showing until the final fix has been picked.

Auditors suggested that this process creates a disadvantage for the state. Money isn't set aside until late in the cleanup review process.

The U.S. Environmental Protection Agency, auditors noted, says that because the cleanup selection process often does take years to complete, "there is a risk that a facility owner's financial situation could deteriorate" and leave the cleanup cost with taxpayers.

The auditors suggested DEQ may want to consider having landfill and hazardous waste facilities provide financial documents based on an early estimate of cleanup but allow the owners to shift that financial assurance once costs are clearer.

"The benefit of this option is that the facility is forced to set aside funds for corrective action at an earlier stage; however, the EPA admits that it may be difficult for regulators to determine a reasonable amount for some facilities," the auditors wrote.

In Brown's response for DEQ, he wrote the agency would look at the regulatory change, but it would be tougher than federal rules and "would like generate considerable comment" in addition to creating the shortfalls that the EPA has pointed out. 

The agency may also look at other policy changes to address that finding, Brown wrote.

Email David J. Mitchell at dmitchell@theadvocate.com

Follow David J. Mitchell on Twitter, @NewsieDave.