Dioxin Developments

May 24, 2017 | Commercial Litigation | General Liability

EPA Resuming Remediation at American Creosote Site

The U.S. Environmental Protection Agency (“EPA”) is resuming its work to remediate the American Creosote Works, Inc., in Pensacola, Florida.

Background

The 18-acre American Creosote Works site is at 1800 West Gimble Street in Pensacola. Several businesses are located north of the site and residential areas, included in the site, also surround the site to the west, south, and east. The site is located in a commercial and residential district directly south of the intersection of Barrancas Avenue and West Main Street, about 600 yards north of Pensacola Bay and Bayou Chico.

The site is the location of a former wood-treating facility that operated from 1902 to 1981, when American Creosote Works filed for bankruptcy. The EPA has said that, prior to 1950, the company used creosote exclusively to treat poles. According to the EPA, use of pentachlorophenol (“PCP”) started in 1950 and steadily increased in later years of the facility’s operation. The EPA has said that dioxins at the site resulted from the use of PCP as a wood-treating chemical; dioxins are a common impurity in commercial-grade PCP, the EPA has noted.

As the EPA has explained, operators sent process wastewaters to four holding ponds located in the western portion of the site. The ponds overflowed after heavy rains. Prior to 1970, wastewater in these ponds overflowed through a spillway into local streets and storm drains and Bayou Chico and Pensacola Bay. In later years, the company collected and spread liquid wastes on the ground in designated “spillage areas” on site.

In 1983, the EPA placed the site on the Superfund program’s National Priorities List (“NPL”) because of what it said was contaminated soil and groundwater resulting from facility operations.

The EPA and the Florida Department of Environmental Protection (“FDEP”) have investigated site conditions and have taken some steps to clean up the site. According to the EPA, site contamination “does not currently threaten people living and working near the site.” Residents and businesses use the public water system for drinking water; private wells are for irrigation purposes only.

New Developments

Now, the EPA is resuming its remediation of the site.

An EPA project manager recently told reporters that the site was “one of the more complicated sites that I’ve worked on in my days.” However, he continued, “we’re getting to the stage where, I think we’ll be able to implement a remedy and put it into re-use.”

The EPA has asked for public comment on a cleanup plan. Once the comment period closes, it will issue a “record of decision,” followed by a budget proposal. If approved, remediation would proceed.

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Is the Passaic River Affecting U.S.-Argentina Relations?

In late April, President Donald Trump hosted President Mauricio Macri of Argentina to discuss ways to deepen the partnership between the United States and Argentina. Some have wondered, however, whether the countries’ relationship might be in jeopardy because of a river in New Jersey.

The April Meeting

At their April meeting, President Trump welcomed Argentina’s “growing leadership role on the world stage” and the “political and economic reforms recently implemented” by the Argentine government.

President Trump also offered his support to President Macri as Argentina prepares to host the World Trade Organization Ministerial and assume the G-20 presidency.

The Passaic River

Underlying the countries’ relationship, however, is the status of the Argentinian state-owned oil company: YPF S.A.

In 1995, YPF acquired Maxus Energy Corporation (formerly the Diamond Alkali Company). In June 2016, YPF placed Maxus into bankruptcy following the announcement by the U.S. Environmental Protection Agency (“EPA”) of its record of decision in March 2016 to remediate contaminated sediments found in the lower 8.3 miles of New Jersey’s Passaic River, a part of the Diamond Alkali site, at a cost of $1.38 billion.

The bankruptcy proceeding evidently is an effort to discharge the company’s Superfund obligations. New Jersey legislators have urged federal and state authorities to investigate YPF’s actions.

A Wrench into Macri’s Plans?

An article in the Chicago Tribune observed that the YPF bankruptcy was not at the “top of the agenda” when President Trump met President Macri and that it may not even have been on the agenda at all.

Nevertheless, the article suggested, it “could dog the relationship in the future.” The author of the article noted that New Jersey legislators want Congress to “hold Argentina’s feet to the fire,” and he concluded that that “could throw a wrench into Macri’s plans to pitch a new Argentina to America.”

For further information, please contact Paul V. Majkowski, Lawrence S. Han, or your regular Rivkin Radler attorney.

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