| Authority looks into pollution insurance |
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| Tuesday, 03 February 2009 20:54 |
By Norma EngelbergEven though the plume of benzene contamination found under western edge of the Woodland Station development site is considered as a low to moderate risk, the Woodland Park Downtown Development Authority should consider buying pollution legal liability insurance. That was the suggestion of Tammy Essmeier, an environmental law consultant from Matrix Design Group, to the authority board on Jan. 13.The plume was found during a groundwater study last year after workers smelled a gasoline-like odor while digging a trench in 2007. Matrix Design Group created a Voluntary Cleanup Program that was sent to the Colorado Department of Health and Environment and the Colorado Division of Oil and Public Safety for approval, which was granted late last year. The plan doesn’t require any actual cleanup. Instead the benzene will be left underground and kept from becoming an air-quality problem during construction and once the buildings are in place. Remedies are mostly of the materials-management variety and can include installing vapor barriers and ventilation systems similar to but simpler than those used to vent radon from basements. The city also has to make sure no one on the site drinks the ground water, which shouldn’t be a problem since developers will tap into the city water system, said Matrix engineer Eric Smith. While the procedures for controlling benzene emissions at the low levels found under Woodland Station are pretty straightforward, that doesn’t mean the city shouldn’t look into insurance, Essmeier said. The biggest risk to the city will be during construction, she said. “You have to make sure you aren’t creating further exposure and there is always a chance something could go wrong,” she said. She added that some of the risk can be transferred to the individual developers, depending on what they are willing to take on and their long-term stability. The city also can make sure each developer follows the clean-up protocols. “We can make sure any trenches on the site are water tight so that the benzene doesn’t spread,” Smith said. “We have to mitigate during construction, not after,” Coker added. There are at least two good reasons the authority might want to get pollution legal liability, Essmeier said. First, it pays third-party claims. These could be claims from neighboring properties — parties that are neither the developers or the authority. Second, insurance provides clean-up costs for conditions currently unknown. For example, some kind of contamination could be found on another part of the site. “You don’t know if you’ll run into other problems in the future,” she said. “Clean-up costs are not based on the total value of the building but instead on the actual cost of cleanup.” She listed four factors that determine the cost of this insurance — 1: Site risk, this site is considered hardly to moderately risky; 2: terms of the policy, the longer the period covered the more expensive the insurance; 3: monetary limits, how high does the coverage go; and 4: the size of the deductible. “You have to weigh the benefits against the costs,” she said. “Conduct risk analysis — What have we already done? What are the risks? What have we done to mitigate or transfer risks to other entities?” Coker and Smith promised to send environmental risk management language to the board that can be inserted into any contracts it makes with developers. If the authority buys insurance, it should be in place when land is transferred to the developer. “As long as the source is gone the plume is going to go away,” Coker said. “In 20 years it might be gone naturally. It might make sense to install some test wells in about five years to confirm our suspicion that the source is gone. If it isn’t gone it will take longer for the benzene to flush out.” The state has already agreed that the benzene plume was not caused by the city and entered the property from an outside source. It will be up to the Division of Oil and Public Safety to find the source and make sure it is no longer there, Coker said. If the plume is traced to the site of an old gas station, it might be wise to make sure the gasoline tanks are no longer buried underground, Coker said. “We’ll keep reminding the state to keep looking for the source,” he said. “If the company that caused the leak is no longer in business and a buried tank is found, the state has a clean-up fund that all gas stations contribute to. Clean-up costs can come out of that.” |