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The contamination problem that no one talks about and that seems to defy solution

15 Aug 2018

A chemical threat to Michigan’s drinking water that regulators were unaware of and don’t know what to do about.  Sound familiar? Thinking Flint and lead in the water?  Well, you’d be wrong and it’s not just a Michigan problem.

The chemicals are per- and polyfluoroalkyl substances (PFAS), and they are now a national health concern as they are beginning to show up in all sorts of places including dumps, groundwater, lakes, and drinking water.  Michigan has been called “ground zero,” but it is by no means alone.

PFAS chemicals have been used to make cookware, clothes, shoes, furniture, and even food packaging!  They are also used in fire-fighting foams.  PFAS includes a family of chemicals but currently the focus has been on two of the PFAS chemicals, as we learn more, those concerns may expand.  Unlike many other chemicals, there has been little study on the safety of these chemicals.  What is known is that, like PCBs,  PFAS chemicals are stable (they don’t degrade), they bio accumulate (the higher up the food chain you are, the more you likely have) and they pose remediation challenges because of their stability.  Unlike PCBs, they are water soluble which makes them much harder to control.  As a result, they are widely found in the environment and are already present in the blood of virtually everyone in the developed world.

Some studies indicate that PFAS chemicals may:

  • affect growth, learning, and behavior of infants and older children
  • lower a woman’s chance of getting pregnant
  • interfere with the body’s natural hormones
  • increase cholesterol levels
  • affect the immune system
  • increase the risk of certain types of cancer

They are a human health and environmental concern but there is little consensus on what levels of these chemicals are safe in your system.

According to the Michigan Department of Environmental Quality (MDEQ), there are more than a dozen communities where PFAS has been detected.  Some Michigan communities have been discovered to be using PFAS-impacted groundwater for their drinking-water supply.

In November 2017, Governor Snyder issued executive order (EO) No 2017-4 creating a multi-agency “Michigan PFAS Action Response Team” to, among other things, “make inquiries, conduct studies, consult with federal agencies, and receive public comments.”  The State reportedly will test 1380 water systems and 460 schools for PFAS.

In December 2017, the legislature passed PA 201 which, inter alia,  included $23.2 million for state PFAS remediation.  It passed 109 to 1 in the House and 33-4 in the Senate but that may be a drop in the bucket as more sites are discovered.  This spring, MDEQ asked regulated wastewater treatment plants (WWTP) to conduct a screening of their industrial users to identify PFAS sources including landfills that treat their leachate through the WWTP; develop and implement a monitoring plan to evaluate the possible sources; reduce or eliminate PFAS sources; evaluate impacts and submit reports.

The EPA set a lifetime health advisory (LHA) level for two PFAS in drinking water, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS). The LHA level is 70 parts per trillion (ppt, equal to 70 ng/L) for PFOA and PFOS combined, or individually if only one is present. The EPA has not set health advisory levels for other PFAS chemicals. The State of Michigan is using 70 ppt for decision making purposes.

In the absence of federally-enforceable limits, some states are developing their own guidance and enforcement limits. The limits set by the states range from 400 times higher to 5 times less than the current EPA advisory levels.

Litigation over this contaminant has already begun in New York, Minnesota, Michigan and many other states.

For a State that dealt with PBB contamination  in the 1970’s, a whole host of contamination issues from the 1970’s until now and then the Flint lead crisis, Michigan seems to have learned its lesson and is jumping on the PFAS problem with both feet but the ubiquity and complexity of PFAS appears to make this the biggest, most difficult and most expensive environmental issue Michigan may have ever faced.

Reduce, Reuse and Recycle Homes in Detroit

4 Jan 2017

table1“Would you cut down an old growth forest just to put the lumber in a landfill? That’s what typical demolition of a neighborhood does.” This was our introduction from Kevin at Workshop  – a Detroit-based furniture manufacturer that uses lumber reclaimed from Detroit’s vacant and abandoned building stock.  Detroit has been trying to save homes that can be saved but is moving quickly to demolish homes which are beyond repair to stabilize the remaining neighborhoods as the City continues to reinvent itself.

Detroit has reportedly demolished 10,700 homes since 2014 and has another 2,436 in the pipeline.  The bulk of these homes are demolished the way you’d expect – wrecking ball, dumpster, landfill.  However, some houses are being “deconstructed” rather than demolished. Reclaim Detroit is working to fight blight, create jobs for Detroiters, and prevent resources from being landfilled by using deconstruction and reuse techniques.  Their crews dismantle parts of buildings that would otherwise be destroyed, saving antique doors to old growth lumber, while training workers in the green construction and demolition industry. I’ve been told that the average Detroit house has some 10,000 board feet of reusable lumber which would normally go to waste.  Some sources I’ve read indicate that would equal some 20 tons, or roughly  1-3 acres, of trees.

My family and I have been trying to live our espoused values and, while separating our recyclables, trying to be more energy efficient and composting is a start, when we decided to get a new kitchen table (don’t worry, the old one has a new home), we explored options and found Workshop.  The table is old made new again and even is stamped with the address that was the source of the wood.   We’re looking forward to using it for many years to come.

What will 2017 Bring? Dramatic Change?

20 Dec 2016

edit_calendar_ssk_47433454In prior years, we knew that regulatory and environmental change was coming but we expected it to be slow and incremental.  With an unknown quantity like President Elect Trump, one thing is clear – no one really knows what may happen.  Here are a few possibilities:

1.  Coal/Cleaner Energy Generation – revitalizing the coal industry was part of Mr. Trump’s midwest stump speeches.  Will Mr. Trump be able to reverse Barack Obama’s Clean Power Plan? What about the Paris Climate Accord?  Certainly, his team is looking at both of those right now. The dispute in Michigan v. EPA, decided in June 2015, continues to rage.  In 2015, the US Supreme Court ruled that the EPA didn’t properly justify its rule governing mercury and toxic pollution (MATS) from power plants because it did not specifically address costs at the initial stage of the rulemaking process. In April, the EPA announced it was standing by its MATS rule and concluded that the benefits far outweighed the costs.  Petitioners continue to litigate whether the EPA properly evaluated costs.  Here in Michigan, new legislation has been passed (and is awaiting the Governor’s signature) intended to encourage additional investment in energy generation and transmission while balancing consumer choice and a greater percentage of renewable energy generation.  Will it work? At a reasonable cost?

2. Power Generation Subsidies/Oil/Gas Generation – Mr. Trump’s attacks on “crony capitalism” would seem to mean that he will stop financial incentives for solar and wind generation.  Will he also attack oil and natural gas supports in the tax code?  Will he open up ANWAR to oil/gas exploration?  Will he scale back attempts to regulate fracking?  This will be difficult in light of the December EPA Report  which concluded that fracking posed problems such as:  fracking water withdrawals compete with other water needs; spills of hydraulic fracturing fluids and chemicals or produced water may impair groundwater resources; injection of hydraulic fracturing fluids into wells may allow gases or liquids to move to groundwater resources; discharge of inadequately treated hydraulic fracturing wastewater to surface water resources; and contamination of groundwater due to disposal or storage of fracturing wastewater.

3. Pipelines – will Mr. Trump reverse the Obama administration’s dim view of oil and gas pipelines such as the Keystone XL and Dakota Access Pipelines?  How will this affect Michigan where public awareness of two 60+ year-old pipelines under the Mackinac Straits has galvanized both sides of the political spectrum into action.  In 2014, Michigan convened a pipeline task force which issued a report in 2015.  In September, 2015, the State entered into a written agreement with Enbridge to prevent the transport of heavy crude oil through the Straits Pipelines.  The task force also recommended that the pipelines be independently evaluated and that additional financial assurance be provided.  The State solicited Requests for Information and Proposals (RFPs) and Enbridge agreed to pay $3.6 Million for the evaluation of the Straits Pipelines.  An independent evaluation of alternatives to the Line 5 pipelines is also underway.  When those will be completed is not known.

4. Infrastructure – Mr. Trump campaigned on infrastructure (although to hear him tell it, that only encompasses airport quality), and Governor Snyder appointed a 21st Century Infrastructure Task Force which concluded that the State needed to be investing $4 Billion more than it was in infrastructure to address roads, bridges, internet, water, sewer and other infrastructure needs.  Given the recent nationally publicized Flint Water debacle, will Michigan find the intestinal fortitude to fully invest in infrastructure or will we continue to patch and delay?  Given the State’s recent fight against a federal judge’s order to deliver clean water, and Michigan legislators “default anti-tax setting,” the future does not bode well.

5. Brownfields – as previously reported, Michigan adopted legislation streamlining its brownfield funding laws and deferred action on Dan Gilbert’s “transformational” brownfield funding legislation.  Will that resurface in early 2017?  I expect it will.

6. Other issues – there are a number of other issues on the horizon including cleanup standards, the maturing of the Great Lakes Water Authority and its ability to deliver clean water and septic services at a reasonable price, Michigan’s effort to reimagine its solid waste program, water withdrawals and protection of the Great Lakes from invasive species and nutrients leading to algal blooms.

Gilbert Transformational Brownfield Legislation Stalls

12 Dec 2016

MOnroeblock9Dan Gilbert’s team drafted legislation based on the current Brownfield law.  This legislation was  moving rapidly through the Michigan Legislature until the Michigan Speaker of the House announced that the House would wait until next year to move the bills forward.  While this seems to have killed the bills for now, some are still lobbying for them to become law before 2017.

Articles had appeared in the local papers describing two proposed towers for the Monroe block of downtown Detroit (pictured), These articles include statements that the buildings won’t be built without this legislation being enacted (and presumably implemented in their favor).

The legislation is based on an existing approach – when a project increases property value, the taxes on that increased value can be captured and used to pay for  “eligible expenses.” Typically, these TIF (tax increment financing) programs put the risk of failure on the developer (where it belongs) while they increase the potential return by reimbursing the developer for expenses it would otherwise absorb.  The current brownfield law allows communities to issue bonds and pledge their full faith and credit, but in the brownfield “universe” that almost never happens.

The brownfield TIF law allows reimbursements for cleaning up contamination and taking protective measures and, in more urban communities, for costs of site preparation and infrastructure improvements.   This State, like many others, has decided that these incentives are necessary to entice developers to take desired risks. This is not a tax credit, nor, do the taxpayers of the State front any money to the developer.  If the development does not result in the increase in taxes expected, the developer loses. Without a bond, if there is no tax increment, the community/state owes the developer nothing.  Further, the community is held harmless because the predevelopment property taxes continue to go to the government as they did before project development. In short, this is a kind of “deferred gratification” for the taxing authorities as they must wait until the developer is repaid to get taxes on the increased property values (certain taxes are exempted from the TIF program and so there is some immediate benefit to the community).

So what’s the fuss about the Gilbert legislation?  These bills take the Brownfield TIF and put it on a massive dose of steroids. In addition to capturing real property taxes,  the Gilbert team proposes to capture both income taxes and sales taxes generated on a property following its redevelopment, if the project is “transformational.” This legislation vastly broadens the eligible expenses which can be reimbursed.  Instead of covering only environmental cleanups, environmental due care and communal benefits like infrastructure, the Gilbert legislation would allow a developer to be reimbursed for all of its construction costs. This is bold and would almost certainly lead to new, riskier developments. A developer could wind up with a significant competitive advantage because his costs are could be fully reimbursed. This could allow such a developer to undercut the market or amass significant profits.  The potential for market distortion appears to have been overlooked by the few commentators who have spoken on the subject.

The legislation includes a cap on the number of such transformational projects per year and per community and with a maximum of $50 Million in the first year’s capture for new projects. It is tiered so what is transformational (based on a dollar amount) varies based on the size of the community. This was a sop to smaller communities to get their support for this legislation as was a provision putting funds into the State’s Brownfield revolving fund. There are also some exemptions from the spending requirements including one that seems directed right at Flint.

“Transformational” can mean many different things  but the legislation’s focus is whether a project will transform local economic development, community revitalization, growth in population, commercial activity and employment.

The legislation received little notice until recently. Interestingly, it has been criticized by those on the left and on the right. A Free Press column calling this legalized “serfdom” for employees seems over-the-top. Yes, taxes will be collected and ultimately reimbursed to the developer.  I don’t see that equaling employee slavery. The Mackinac Center piece is a bit closer to the mark. They complain of “crony capitalism.”  The fact that only a few developers can get these projects approved per year and one per community per year does seem like the sort of favoritism inherent in crony capitalism. Further, the fact that the projects are limited to extremely expensive ones (on a range between $15 Million and $500 Million depending on county population), again, seems to mean that only the elite get benefits that are not available to the ordinary developer. In that regard, as the Mackinac Center points out, this is no different than any TIF financing model (and there are many of them in use throughout Michigan and the US).  This is the world we live in as evidenced by President-Elect Trump’s efforts to keep a Carrier plant in Indiana.

The capture of sales and income taxes would be new to Michigan and would put Michigan in the minority of states that allow such capture.

What has not been commented on is the need for a mechanism to ensure that the taxpayers of the State of Michigan are held harmless – so that the income and sales taxes to be captured are truly new to the State and not the result of a business moving its operations from one place to another.  This mechanism (and others needed) are to be developed later.  This is a practical consideration with large implications.  The State’s review of this legislation thus far includes an admission that the Legislature has no idea how much this might actually cost the State in revenue if it passes as is.

Will this package of bills pass?  I expect it will.  If not this month, then early next year.  If the Legislature doesn’t address some of the concerns expressed above, we may find ourselves with some major projects and some unintended consequences not too far down the road.

What will be the top stories of 2015?

23 Jan 2015

edit_calendar_ssk_47433454Happy new year!  I know it’s almost February but as this is my first blog post of the year, I thought (particularly after hearing the State of the Union and the State of the State speeches)  I’d predict the big stories of 2015 in no particular order:

  • Wetland Rules – the EPA and the Army Corps of Engineers finally proposed rules in 2014  to address the fallout of the Rapanos case.  The proposal was met with a firestorm of disapproval, particularly from the farming world.  Will they ever finalize them?
  • Brownfield TIF Legislation – after all that work last year, will the Legislature take up streamlining this program and expanding it to allow Michigan to be even more competitive in redeveloping brownfields?
  • EPA Greenhouse Gas Rules vs. Congress – in September, 2013, EPA issued a proposal for carbon pollution from new power plants; in June  2014, EPA issued a proposal to cut carbon pollution from existing power plants – the GOP and coal and oil interests in Congress have fought this for some time.  Will the rules be adopted and enforced?  Will there be enough time for electricity generators to get alternative plans in place before being forced to shutter their oldest, least efficient and most polluting plants?
  • Keystone Pipeline – President Obama and Congress have been locked in a politically charged dispute over the Keystone XL pipeline for almost 3 years now – he seemed to indicate in the State of the Union that he’d veto legislation – will he?
  • Energy Policy – Governor Snyder has pushed for an energy policy, legislation is expected this year and the Governor recently mentioned an intention to develop a new energy agency that would make Michigan more competitive for business.  What that will entail in light of the likely changes due to federal regulations will be interesting to see – will Michigan upgrade or discard its renewable portfolio standard? Can Michigan reduce electrical cost while improving both reliability and environmental performance?
  • Water Policy – the Governor’s long-awaited great lakes policy is expected this year.
  • Pipelines – in addition to the Keystone pipeline, there has been a lot of interest in pipelines in, under and around the Great Lakes – could there be federal and state changes there?
  • Detroit’s Water Authority – it is supposed to morph into a regional authority – as I said previously, the easy part was getting to the agreement last year – will the hard work succeed or will it fail, causing major shockwaves for roughly half of the State’s population?

Gas taxes, electrics and hybrids – is Michigan paying attention?

17 Dec 2014

Tesla

A sharp, environmentally friendly car, but also a “free rider”?

Everyone agrees that Michigan’s roads are in awful shape.  Everyone seems to agree on the amount of money to get them into good shape and keep them there (an additional $1.2 Billion a year – although MDOT argues that it may be closer to $2 Billion/year).  What no one seems to be able to agree on is how to pay for that.  With a week left to go this year (and I wonder why they aren’t working through the 31st on this), the House has passed two bills and the Senate has passed another.

Michigan, desperate to fund much-needed road repairs, appears unwilling to take on this issue

The first House bill would amend the General Sales Tax Act to eliminate, over 6 years, the sales tax on motor fuels. The proposed exemption would first reduce the portion of the sales tax that existed before the approval of Proposal A on March 15, 1994. After January 1, 2021, eligible fuel would be exempt from the sales tax. The Legislature’s own financial analysis shows reductions in State and local revenue by approximately $1.1 billion by fiscal year 2021-2022.  The second bill would amend the Motor Fuel Tax Act to replace the current excise taxes on gasoline and diesel fuel with a single excise tax that would be adjusted annually.  The current gasoline fuel tax is 19 cents per gallon and under the bill, the tax rate could go up every year but could not exceed 32.5 cents.

the number of miles driven is a good proxy for wear and tear on the roads but I wonder if there should be some weighting based on, well, vehicle weight

(more…)

Electric Shaming – Part 2 – “I told you so”

15 Dec 2014

1368974_10201396380089655_297288408_nA year ago, I raised the question “has electricity shaming come to Detroit?”  This was after I started receiving the monthly “letter of shame” that DTE generates, comparing my family to our more and less efficient neighbors.  It appears I’m not alone in wondering about this.

Saturday’s Detroit Free Press asked the same question.  The answer appears to be about the same as mine was – most people wonder who are these “more efficient” neighbors and what are they doing that I am not?   Interestingly, the Free Press article says DTE and Consumers can document a decrease in electricity usage after these letters (and emails) start going out – albeit a relatively small decrease – 1%.  In the meantime. I’d appreciate better information on how to save energy rather than just the generic platitudes about switching lightbulbs (I’m working on it), vacuuming out my refrigerator (I do that)  and ditching the old refrigerator in my basement (not going to happen).