DuPont &Tainted Water Allegations In Wilmington

The reports of the tainted water supply from a chemical plant in Wilmington, North Carolina are both alarming and shocking in nature. The Cape Fear water supply is infected with large levels of a chemical agent called GenX.

This chemical has been linked to numerous health conditions which have been exhibited in residents living in that area which utilize the Cape Fear water supply. The incidents have been staggering, and the report from CBS News states that evidence exists that could indicate that the chemical has been present in the water supply for decades.

The chemical plant is operated by Chemours, which is a spinoff company of the agricultural chemical giant, DuPont. The company formed and split off Chemours as part of the steps taken for regulatory approval of DuPont to merge with another goliath in the industry, Dow Chemical.

This particular chemical, GenX, is a replacement component used in the process of making Teflon. It is has been linked to potential cancer causing effects and is present in the drinking water supply of Cape Fear River which serves tens of thousands of people. The substance has been in the water supply for 37 years because there is no standard for measuring or testing for that chemical.

GenX is a processing aide and replaced a substance called P.F.O.A. which had a long history of safety issues itself. The process of making Teflon received largely unnoticed media coverage as the company moved forward with production utilizing GenX in the formulation.

DuPont insisted to the public that the substitute was safe, yet had issued over fifteen documents behind closed doors that cited concerns over health and safety of the chemical. The “to make matters worse” segment of this article is that Chemours, according to local news reports, will not commit to stopping the release of further GenX into the river.

The municipal government response is almost tragic in that they will not state that GenX is safe to consume but they will not state that it is unsafe either. The recent fallout legally from the horrendous water crisis in Flint should give these local officials pause when dealing with these issues. The official response from the municipal level is that they are deferring to the county for further direction.

The local area residents, most of them at least, are understandably very upset. The fact that toxic material has been in the water for decades and undisclosed is yet another example of corporate distrust in the American public perception. The reports I saw referenced some other area residents with the opinion that the river is contaminated from all sorts of chemicals and that should be common knowledge for a local person.

The news will have little to no impact on the proposed merger between Dow and DuPont because Chemours was spun off and is technically a separate entity at this point from DuPont. The DuPont merger with Dow would initially create one huge company that then will be split in legal terms into five smaller companies, or units.

It may not damage the chances for the merger to be approved, but this situation in North Carolina still connects DuPont to a tainted water supply, which is damaging in the court of public opinion. That can be a force that should not be underestimated.

The recent developments out of Flint, Michigan which were referred to earlier in this piece also could play a role in the way that the situation in North Carolina gets handled from both a government and a media coverage standpoint. The disaster in Flint has gripped the nation and the consensus opinion drawn from that tragedy of contaminated water and government cover-ups is: this can never happen again. The situation with Chemours and the Cape Fear River can get some significant backlash because of the timing of the whole situation.

The direction of the situation could evolve into a similar one to Flint, where an investigation into who knew about the effects of GenX and when did they know become significant findings. It could also become a scenario that proves difficult to build a case because so many people can claim ignorance on the effects of the chemical.

This tragic situation is evolving and will continue to do so in the coming weeks and months ahead. In the meantime, there will be more questions raised than there are answers available. The lives of residents and the quality of life of families from all backgrounds and demographics will hang in the balance. This will all come together around another American corporation trying to defend itself from what it knew a long time ago: that putting these chemicals into the river would have consequences.

It is inconceivable that we could have another situation like Flint in our future, but it appears that at the very least this Cape Fear River debacle is on the surface a very significant public health threat, and what lies beneath that surface is what we are all bracing for in the near future.

European Union Votes To Ban GMO Crops

The majority of countries in the European Union voted to ban crops made with two different types of genetically modified maize on Monday. However, the measure failed passage because the countries that voted against the measure did not represent 65% of the population of the EU, a requirement to defeat this proposal from moving further in the legal process.

The crops in question as part of this measure were the Pioneer brand and another from Syngenta. The EU has been consistent in their resistance to genetically modified food and to crops utilizing genetically engineered seeds for both human and agriculture use such as to feed livestock.

The rules regarding these particular proposals seem to work against the union itself from a political and policy point of view because even if a majority of the countries vote against a specific policy, in this case being GMO seeds/crops, the motion can still carry if the more populated member countries vote in favor of it.

It would stand to reason that the citizens of the smaller or less populated countries would certainly have some frustration or anger over that voting mechanism within the structure of the E.U. at this point. The European mindset toward rejecting genetically engineered or modified food ingredients has been consistent over the course of the past several years, and they have been far more successful than the anti-GMO lobbying efforts have been in the United States.

Moreover, that is not meant to be an indictment on the anti-GMO movement in the U.S., because in my view, they have been tireless in their efforts toward further transparency in food product labeling and ingredient disclosure. The movement has even gained some victories in the past 18 months or so, in the declarations on the labels for food products from major manufacturers of nationally distributed brands.

The anti-GMO movement has been successful on the state level in gaining new legislative action regarding the use of genetically engineered products in a variety of applications from food production to agricultural use. The growth of new brands that are organic and non-GMO and their subsequent success in the marketplace is evidence of a growing trend in America away from processed and modified food to more natural and healthier food choices.

However, despite the policy victories and despite the change in the consciousness of the general American consumer, the new Administration in Washington threatens to rescind some of those legislative changes regarding the ingredients in food products. This includes the policy enacted by the previous Presidential Administration requiring food companies to disclose if the product contains any genetically engineered ingredients.

In my prior article about Campbell Soup Company and their decision to disclose those ingredients prior to the change which would make that disclosure mandatory, the stock market and shareholders alike had some trepidation on how it would affect sales at the company. The disclosure has resonated with the consumer especially in the case of their soup products, where there was some shock value to the presence of genetically engineered ingredients.

In the current context of GMOs in the food industry, there are some factions that feel that a rollback of the disclosure policy would damage the overall movement for the non-GMO interests. Then, there are others who maintain that the consumer now knows which companies and products contain GM ingredients, and will likely avoid them in their future purchase patterns. The other fact remains that once a purchase pattern is changed, most consumers do not revert back to a prior pattern for product selection.
In the context of the current situation in Europe, all of this comes within the backdrop of some major shifting and consolidation activity within the agricultural seed and crop protection industries. The largest players in those industry segments: Monsanto, Dow, DuPont, and Syngenta are all the subject of merger and acquisition activity at this point.

Monsanto is in the process of being potentially purchased by German corporate titan, Bayer. Dow and DuPont are in the process of merging together to form one goliath sized company and that merger just went before some E.U. regulators and is in regulatory review in the United States as well. DuPont is in the process of selling off some business units to FMC at this time to meet regulatory approval.

Syngenta is in the review process of being acquired by a Chinese corporation, which has left some within the Western economies feeling uneasy for a variety of reasons. The potential for the Chinese to gain access to specific technologies and processes that could impact the “playing field” in that industry segment is one issue. The concerns over quality control and product assurance/ product safety when it comes to the reputation of Chinese companies for bending the rules on certain protocols is an anxious proposition when it comes to the products used to grow food.

The European Union as a governing body must be facing pressure from an economic standpoint to start utilizing more genetically modified products from a cost efficiency point of view as well as a crop protection standpoint. The lobby from the corporations involved must be significant as well or else these types of proposals would not even be under consideration.

The EU currently uses GMO products but only certain types of products are approved for each type of main staple crop. The food produced from those crops is subject to very strict testing and regulations. The political movement by the union in recent years is to provide the member states with more latitude to determine how they will regulate GMO crops.

This current vote on EU crops represents the first new GMO crop products to be considered in almost twenty years. The measure, when or if it is passed, will only affect nine countries and some regions in Belgium and England. The other 19 members of the EU have banned GMO crops from being grown within their borders.

The future of genetically modified crops in the EU is going to be interesting especially given the backdrop of the major consolidation activity within the seed and agricultural/crop protection industries currently. Those companies will get even larger and more influential, and the resistance from the citizens and governments in the members states of the EU will have to ramp up their defenses to continue to resist the policies from being altered.

Follow Up: Dow – DuPont Merger Outlook Upgraded

The latest news on the now 12 month saga that is the Dow – DuPont merger proposal is that both stocks have been upgraded from “Hold” to “Buy”. The upgraded status from Jefferies is being reported by CNBC and Barron’s among other financial news outlets, and it is due to the outlook for the merger looking more promising.

The ratings staff at Jefferies places the new odds at “90%” that the year-long quest for the mega-merger of these two chemical giants will gain approval. The rationale behind this upgrade, according to their ratings report which was quoted by CNBC is that the increased stock market activity and economic growth has created conditions where the EPS (Earnings Per Share) for chemical companies will not be tied to just traditional metrics.

The changes in the economy also have combined to create favorable industry conditions in the chemical space. The regulatory bodies involved apparently maintain that this merger will not inhibit growth and competition in their specific industry segments.

This is the backdrop for the next round of regulatory proceedings, and if this merger is ultimately approved, it amounts to a whole new slate of issues for the farmer, the consumer, and the protection of our environmental resources

The detractors to this merger are still the farmers, some agricultural groups, and environmental groups. These factions all have legitimate claims to skepticism when it comes to an over $120 billion dollar merger that will further consolidate the seed industry for crops into fewer hands.

This merger, if approved, strikes fear into the environmental advocacy groups because of the prevalence of pesticides, herbicides, and other chemical agents that the combined Dow-DuPont will market more aggressively and more cost effectively to the farming and agricultural products areas.

The combined Dow-DuPont along with chemical giant Monsanto would control the majority of the seed industry used for crops for food and other staple crops such as corn, used for alternative energy sources. The stakes for the farming industry, which is dwindling because it is harder to maintain profitability, and is still dominated by family owned farms, are enormous. These two companies could set pricing and put enormous cost pressures on farms.

The proposed merger of these two chemical titans has been tied up in the European Union by their regulators, and at one point the outlook was bleak that it would move forward. The EU regulators were told by Dow-DuPont that they would sell some of their assets to clear up the concerns over anti-trust issues that the oversight board had regarding the merger.

In February, Dow-DuPont discussed with the EU board a plan to sell off some assets in DuPont’s crop protection brand portfolio and Dow’s acid copolymers and ionomers business holdings, this is from CBS Market Watch. In earlier work I have done on this specific merger, I had mentioned the selling off of business assets or brands as the best pathway to work with anti-trust, anti-monopoly concerns held by regulators in both the EU and the United States.

The US regulators, provided that the assets are sold, seem apparently through this upgrade and the reports today to be willing to move ahead with approving this merger. The changes potentially on the horizon in Congress with regard to business regulations and the strength of the overall business climate seem to have opened the opportunity for Dow-DuPont to get this done.

The concerns of the farmer, the consumer, and the environmental advocates have definite merit because any merger this large is going to have an impact on all of those areas: the food supply, costs of food and other products, increased pesticide/ GMO use, as well as potentially huge negative environmental consequences.

Follow Up: Dow – DuPont Merger Update

The gigantic potential merger of Dow Chemical and DuPont, both with market caps at around $60 billion each, is being fiercely opposed in the European Union by regulatory authorities. The biggest concern is that the combined company would spend less on crop protection which the regulators maintain will lower overall global food supply production.

This comes amid news that the global population is growing and food supply chain issues will become increasingly more important. The financial markets have also responded amid these reports with the indicator known as short interest falling 88% regarding Dow Chemical. That is a hint that Wall Street thinks this deal could be headed for a complete halt.

This deal is also under scrutiny from several directions from a variety of interested parties: the farming and agricultural sector, the environmental activist groups, the GMO food supply activist groups, and from within the chemical industry segment. These groups each have different issues with the proposed consummation of these two industrial titans.

The farming and agricultural sector has concerns with this deal as it pertains to eliminating competition for certain components necessary for crop production. The decrease in competition could likely lead to higher prices for these items which will impact the profits for farms of all types, the majority of which are family owned.

The environmental activist segment has concerns about the increased production of several chemical products if these two conglomerates merge and begin synergizing their product lines. The increased production of products such as weed killing sprays as well as other pesticides or herbicides are at the forefront of their opposition to this deal. They also share the concerns of the E.U. regulatory boards regarding the effects that cost cutting combined with increased amounts of product being manufactured will have on the plants and factories being utilized.

Furthermore, these groups have increasing concerns over the potential for air and water pollution from the manufacturing practices used in the operation of these production factories for these types of chemical items. The emission of carbon is at the center of the climate change debate which is a very serious situation in Europe at this point within their discourse.

The GMO and food supply activism groups have issues with this proposed deal because of the potential for increased amounts of GMO seeds and the increased amounts of pesticides, weed killers, and other agro-chemical products that it will push into the marketplace. These groups also share similar concerns to the European regulators regarding the cost cutting strategies surrounding crop protection and the direct impact that will have on the food supply.

Finally, there are concerns from within the chemical industry segment regarding this deal as well. It should be understood though that most of the issues that this segment has with the proposed formation of Dow-DuPont is regarding the role it could play in decreasing competition. It will become even more difficult for smaller chemical manufacturers to compete in the business environment with a combined Dow-DuPont, the possibility of a combined Bayer-Monsanto, and the Chinese chemical conglomerate with their proposed bid for Syngenta.

The trend toward consolidation is invariably a concern for the other companies within the chemical industry segment as it will also be an area of scrutiny for the regulatory bodies involved in both the E.U. and the United States.

The implications are enormous for the future mergers and consolidations of the companies mentioned earlier: Bayer – Monsanto, and the potential for a Chinese company to obtain a key specialty chemical maker such as Syngenta. Those proposed mergers also impact the Dow-DuPont deal. In the event that the regulatory powers involved determine that either Dow or DuPont, or for that matter both entities, have to sell off pieces of their respective companies to make the merger more palatable; the other major players in the industry will be out of the mix to buy those business units.

Syngenta, Monsanto, and Bayer will be very reluctant to make any purchases at all while their proposed merger deals are also under regulatory scrutiny. This inability to find potential willing buyers for the business units at Dow-DuPont could also cause the merger process to go completely off the tracks.

The process will continue to play out in Europe, and the decision rendered there will have an impact on the manner in which the U.S. federal regulators view this potential acquisition. The stakes are high for farmers, for the environment, for the food supply, and for our natural resources. The stakes are high for us all if this merger moves forward and two giant companies have that much influence over the most important aspects of our global community.

Follow Up: Dow – DuPont Merger Hits Snag

The proposed merger between two global industrial chemical giants, Dow and DuPont, has reportedly hit a snag with the top European regulatory board. In a follow up to my prior article on this topic, this proposed merger had some issues from the outset, which is to be expected whenever two companies of that size are in the mix.

The European regulatory board has some significant concerns regarding the agricultural product lines particularly the seed products for crops involved in this proposal. The combined Dow-DuPont would be a major rival to the market leader, Monsanto, and if the deal was approved it would consolidate a huge majority of the seed industry into the hands of two companies.

I had mentioned this area in my prior work on this merger as being an area that should be of huge interest to the majority of the general public regarding this deal because it would place a monopoly on the seeds used to grow the global food supply. This will inevitably cause some very dangerous potential ramifications regarding the cost to grow and manufacture food and agricultural products.

The European regulators were correct in raising this concern at this point and to investigating this situation further. They also raised concerns about certain petrochemical products and the overall impact that this merger could have on innovation. The regulators explained to the media that the farmers have a reliance on the capability of being able to obtain seeds at a competitive price in order to maintain their livelihood. The statement essentially indicates that this proposed merger could leave the farmers in a situation where that cost competiveness is gone, forcing them to buy the seeds at whatever price the two top companies on the supply side dictate that price to be.

The anti-trust laws were established both in the U.S., in Europe, and in other parts of the world to provide safeguards against the very type of situations that this proposed merger presents in the context of competitive balance. The control of any commodity into the hands of the few is a problematic situation given the predisposition toward greed displayed by the large majority of publicly traded corporations.

The likely defense from Dow-DuPont is, as they alluded to when the CEOs made the rounds on the financial news networks back at the start of this circus, that they plan to split the company into three separate companies. In the reports I have read regarding the European regulatory decision today, it appears that will not be enough to satisfy their concerns because that accounting split into three companies does not change the controlling market share in seeds or petrochemicals that Dow-DuPont would maintain.

It remains to be seen what the investigation will yield, it could result in the European board “recommendation” that the proposed merged entity must divest their holdings in the seed industry segment and potential other industry segments. This would deal strictly with the European divisions of the proposed new Dow-DuPont and would be required of them to clear the hurdles to that M&A proposal in Europe.

The impact of that recommendation or the finding of this investigation could have an impact on the regulatory process in the United States. However, there is a chance that the regulators here view this as a European issue and they may have other concerns about this gigantic merger proposal.

The agricultural lobbies, both those who have interests in lobbying for farmers in the US and those who lobby for the petrochemical and agricultural supply companies, will certainly be active in the run up to the regulatory review process here in America.
This new emphasis on “clean” eating and healthy food will have interest groups from the GMO free side of the food industry certainly weighing in on this proposal as well. The renewed focus on GMO seed that companies such as Monsanto, Dow, and DuPont push for all the main staple crops in America is something that all of us should be concerned about, and the implications for the consolidation of that seed industry could deal a crushing blow to the GMO free lobby.

This investigation by European regulators could set the bar for American regulators to follow suit, which could very well lead to the breakup of the existing brand lines controlled by Dow- DuPont and lead to some significant changes to the agricultural industrial marketplace and the petrochemical marketplace globally. This matter is far from over, in fact, it looks like the process has finally started to feel like it has actually begun.

Creating A Duopoly: The Dow – DuPont Merger

The $130 billion mega-merger announced late last week between Dow and DuPont is just the latest agreement in what has become an environment of increasing consolidation across all industrial and commercial markets. This deal is unique because once the merger takes effect then the companies plan to split into three separate publicly traded companies.

 

The rationale behind the three-way split is for tax efficiency purposes and will take nearly 24 months to complete just one phase of this complex transaction, which some on Wall Street believe will invite further regulatory scrutiny. In fact, regulators have been hitting the pause button on several merger deals in recent weeks. The most high profile being the Staples merger with Office Depot which is being blocked currently by the FTC (Federal Trade Commission) creating a saga where most recently the Staples-Office Depot legal team has filed a countersuit which is expected to be heard in federal court in March 2016.

 

Those who track and analyze M&A activity are bracing for another contentious scenario with the proposed merger between Dow and DuPont, two of the oldest and largest American companies in the chemical and agricultural products industries. The obvious prevailing theory being that if the FTC is giving Staples a huge amount of pushback over their proposed merger in the office supply industry, just imagine the type of scrutiny they could enact on the largest merger deal ever in the chemical space.

 

The Importance of EBITDA

 

The CEOs of both companies, Dow and DuPont respectively, were on all the financial cable network shows last week trying to get their corporate PR version of why the merger should move ahead in an attempt to set the narrative before the FTC and other regulators provide the public with their version.

 

In particular they were pressed by the financial media as to the rationale behind the merger followed by the split into three companies. The concerns are due to the regulatory process involved in that type of complicated transaction as well as the sheer amount of time required to complete the entire transition into three distinct and publicly traded companies.

 

Both CEOs explained that the most tax efficient method was to complete the transaction in this manner. In their view this protocol could actually reduce overall regulatory scrutiny and anti-trust concerns because the mega conglomeration would essentially be split into three parts.

 

The concerns from the side of the average stock holder, big investor, or the Wall Street firms analyzing this deal hinge on what this type of transaction will mean for earnings growth. This measurement of performance is always paramount, but takes on added significance if this deal gets cold water thrown on it by the FTC or other ant-trust regulatory bodies.

 

In order to address some of that potential reticence the two CEOs from both of these iconic American corporations discussed the importance of EBITDA to this overall transaction. I interpreted this emphasis to be driven by the strong value of the US Dollar which has stripped away the revenues for giant companies such as Dow and DuPont, so shifting the focus to EBITDA is being done to demonstrate the cash flow overall for the combined entity prior to the 3 way split.
In my own view, I would caution investors on that rationale because EBITDA can be manipulated in a variety of ways to present an unrepresentative picture of the financial health of any given business. I am in no way insinuating that this is the case with Dow-DuPont, no evidence of that exists at this point, but as a general rule of thumb I would tread lightly and not use that one measurement to determine the overall viability of a company.

 

Moreover, the bigger issue for this proposed Dow – DuPont entity is twofold:

  1. The flattening curve in the commodities pricing market
  2. The potential creation of a “duopoly” in the seed industry

 

The decreasing demand for agricultural products is also an issue here but the commodities markets that both companies have large stakes within have been beset by falling prices.

 

The creation of a “duopoly” has been mentioned in other media reports regarding this mega-merger. The eventual 3 way split into three companies would result in an agricultural products entity that would combine Dow and DuPont’s seed and crop protection product lines.

 

The major anti-trust “red flag” would result because in that scenario Dow-DuPont and Monsanto, just two companies would control a huge portion of that industry segment. They would be able to set pricing and enact inventory controls that could have enormous consequences to farming and access to commodity products and the food supply. That could be the cause of significant regulatory concern especially if the public is informed and expresses those concerns to their elected representatives in Washington.

 

Three Way Split

 

The three way split of the company, provided the merger is approved by the summer of 2016, should take place according to the reports anywhere from 18 to 24 months from that point. The three companies proposed in this merger announcement are:

  1. Agriculture Company – see above explanation
  2. Material Science – combines product lines from material sciences and performance plastics divisions and performance materials/chemicals
  3. Specialty Products Company – nutrition, health, industrial bioscience, safety, and communications product lines merged for this company to form

 

This merger is seen as necessary for the ultimate survival of both companies between the commodity market issues I raised earlier to the strengthening of the US Dollar, the unpredictability of agricultural product sales, and falling crop prices; Dow and DuPont were individually facing some difficult hurdles to their future growth.

 

DuPont was rumored to have been mulling a variety of staff reduction plans in order to slash costs due to the negative impact of market conditions on their business units. Meanwhile, Dow was said to be reviewing the repositioning of some of their product lines in the marketplace as well as exploring other options in the event that the proposal to merge with DuPont was met with resistance.

 

Final Analysis

 

In my view, as one who has reported on mergers and acquisitions across many industry types and for a few large news organizations, this particular transaction will face some significant regulatory hurdles on the path to approval. The rationale behind that reality exists on a multitude of levels, from the obvious (the sheer size of the two conglomerates involved) to the subtle (the impact on the commodities markets for certain agricultural products).

 

The most pressing issue involved is the potential for a duopoly in the seed business with the potential merged Dow-DuPont and Monsanto. The consolidation of market share of any single industry into the hands of two corporations is usually, but in no way an absolute, death knell for M&A activity on this scale.

 

In recent history some exceptions to this rule have been made but the seed business is a different scenario and it will be viewed in that regard during the regulatory process. It may not necessarily scuttle the deal, but a revision to how that proposed merged business unit will operate will likely be the resolution. The sale of current Dow or DuPont brands or business units to other competitors is also a likely outcome in order to usher the merger through the regulatory approval process.

 

In addition, it is important to note that this merger, if approved, will not completely insulate the current staff head count. The financial news media has reported that job cuts from various divisions of both companies will come in order to position “the books” from an accounting perspective and enhance the profitability of this acquisition.

 

It is also my opinion that the merger into a one company followed by the 3 way split into multiple publicly traded entities could likely derail this merger from the way it was intended. The complexities involved in the transaction coupled with the longer period of regulatory review needed for this deal to process successfully are factors in forming my opinion in this regard. That is not to say that will not eventually happen (with this much money involved that seems unlikely) but the manner in which the companies are split may change, and the market conditions will dictate how that will all eventually come to fruition.

 

In the end analysis, this announcement of the proposed merger of Dow and DuPont, two enormous and iconic American corporations, is just the beginning of a lengthy process toward a potential merger. In the interim, we will read and see reports detailing tax efficiency, earnings, commodity pricing, market conditions and a myriad of other terms detailing the road either to consummation or perdition for this merger. It is a sad, stark reminder that even the big fish are not immune to the rough waters of a constantly changing global economy.

 

 

Superfund: Cleaning America – Part 3

The Superfund has tackled the most difficult pollution and provided solutions to very complex remediation projects throughout the United States. The first two installments of this series traced the history of this program, the types of contamination, the enforcement protocols, and the spill response mandate from Congress.

 

 

This portion of the series will be dedicated entirely to my home state, New Jersey, which has the highest number of Superfund sites in the United States. The complexities of some of the politics involved in the placement of sites on the Superfund list will also be examined.

 

New Jersey

 

The State of New Jersey has the most sites listed on the Superfund system for cleanup. This number can be attributed to the abundance of manufacturing, chemical engineering, pharmaceutical, and biotech companies located in New Jersey based on its central location between New York City and Philadelphia.

 

 

The other troubling statistic for New Jersey is that it is the most densely populated state in the country. Therefore, a spill or a hazardous pollution site has the potential to impact many more lives than in other, more remote areas of the United States.

 

In the N.P.L. section of the EPA website you can search the sites and filter them by state. Using that website feature, I was able to determine that New Jersey has 144 sites listed on the N.P.L. which is a staggering statistic (www.epa.gov).

 

In a recent report made available through the Freedom of Information Act (F.O.I.A.) the State of New Jersey could have 27 more sites which are toxic that could have qualified for the Superfund program and are not on the list.

 

 

The most notorious site which remains missing from the list in New Jersey for Superfund cleanup is the former DuPont site in Pompton Lakes. The EPA has confirmed that the company’s practices have contaminated the ground water, soil, sediment, and surface water at the site (www.nj.com).

 

 

The pollution present at the former DuPont site threatens an area containing approximately 400 homes, where reports of illness from families breathing in toxic vapors from the contaminated groundwater seeping into their basement have become increasingly problematic.

 

Governor Christie has maintained that the state Department of Environmental Protection (D.E.P.) will continue to work on the cleanup efforts at the site. The Governor has stated that many sites on the Superfund list sit for years without being adequately addressed (www.nj.com).

 

However, the head of the Sierra Club in New Jersey, Jeff Tittel, counters the Governor’s assessment by stating that the state program has been in charge of the site for years and nothing has been done to address the major issues there, that it is a prime candidate for Superfund remediation.

 

The EPA statement to the media when the inquiry was made about the Pompton Lakes site being overlooked for Superfund status intimated that the site was too small for inclusion in the program. The site is estimated to be anywhere from 540 to 570 acres in size; which has the environmental groups and residential groups in that area in an uproar (www.nj.com).

 

In the meantime, New Jersey has been awarded $160 million in federal funding via the stimulus package directed toward 8 Superfund sites in the state (www.njspotlight.com). This proves that the federal government is aware and concerned about the pace of the cleanup efforts of the numerous polluted sites in New Jersey.

 

In addition, New Jersey has two other sites being proposed for inclusion on the N.P.L. at this point: Route 561 Dump Site in Gibbsboro and the Mansfield Trail Dump in Byram.

 

These overlooked toxic sites have been a source of great concern for residents in New Jersey. The debate continues on whether or not the sites should require EPA assistance in order to remediate properly versus the ramifications of having the environmental program run by the state government be responsible for those areas.

 

 

According to the website, NJ Spotlight.com, there are concerns from the environmental groups that the state program is concerned more about the redevelopment of the land than the complete remediation of the pollution at these sites. The Sierra Club and other environmental groups cite the more strict standards of cleanup required by the Superfund as the rationale for why the DuPont site should be under the EPA jurisdiction.

 

In fact, New Jersey has privatized its hazardous waste cleanup program which allows for more cost conscious remediation work and less public scrutiny of the program (www.njspotlight.com). The New Jersey D.E.P. has also introduced a program called the Licensed Site Remediation Program which would use private contractors hired by the polluters or P.R.Ps to clean up the waste sites. This program has also met with strong opposition from the environmental groups in the state.

 

The prevailing question from the environmental groups in regard to this program is: how can the public be assured that the cleanup process is done correctly and thoroughly with limited government oversight?

 

The other issue I see in this approach by New Jersey is it does not address how the cleanup of a site would be achieved in the event that the corporation or entity involved in the pollution on the site is now bankrupt or no longer exists. In that case, who would be responsible for hiring the private contractors to clean up the site?

 

The new order of the day from the Christie Administration is to limit state government expenditures and maintain balanced budgets, so in that scenario, the state government would not cover the costs of the expenses to remediate the site. I would have to assume that the site would end up on the Superfund list anyway for the federal government to clean up the hazardous material.

 

The other point worth mentioning here is that other states have gone to a similar model to the one used in New Jersey to deal with the cleanup of contaminated sites. The net result of this shift could be a changing role in the future for the EPA with regard to environmental contamination cleanup, but that remains to be seen.

 

One of the most polluted sites in New Jersey at one point was the Imperial Oil site in Morganville. It first became listed on the Superfund in 1983, which is a strong indication of the level of contamination at that location at one point in time.

 

The EPA, through Superfund, has removed 25,000 gallons of contaminated oil from the 15 acre site (www.epa.gov). The project also provided for the cleanup of four other properties which are residential and located adjacent to the Imperial Oil site.

 

According to the U.S. government, there are 406,326 people living within 10 miles of the site (www.census.gov). That potential for potential public health risk to a huge number of people is a driving force behind the importance of cleaning this site properly and thoroughly.

 

The Imperial Oil cleanup project received $33.4 million in Recovery Act funds to treat the contaminated soil on the site which is threat to the groundwater supply located beneath the site (www.epa.gov). The soil will then be tested over a very long period of time to measure the effectiveness of the remediation work done there.

 

The safe cleanup of the Imperial Oil site is a case study in the success that the Superfund protocols can achieve when the process is allowed to move from start to finish. That location featured some complex environmental remediation problems, and the EPA was able to find solutions to those issues and move the project forward to the final stages of soil sediment cleaning.

The next installment of this series will explore the criticisms of Superfund which have manifested over the years. It will also take an in-depth view of one of the worst pollution areas the program has ever faced, the Gowanus Canal site in Brooklyn.