Natural Resource Damage Assessment: Methods and Cases

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A. New Jersey The Department of Environmental Protection (DEP) is the designated trustee for New Jersey’s natural resources. At the time of our survey, the Office of Natural Resource Damages (ONRD) was responsible for implementing the NRDA program to address and ensure that PRPs compensate the public for injuries to natural resources; that office is now named the Office of Natural Resource Restoration (ONRR). The New Jersey Legislature has declared groundwater to be one of the resources most vulnerable to contamination by hazardous discharges. Groundwater is an important natural resource for New Jersey. It is a major source of water for drinking and irrigation, and provides non-consumptive ecological services such as prevention of salt water intrusion, maintenance of freshwater wetlands, and base flow to surface waters. In addition to the Federal statutes previously discussed (notably OPA and CERCLA), there are multiple state statutes establishing the DEP’s authority to require the investigation and restoration of natural resource injuries. These include the Water Pollution Control Act, the Spill Compensation and Control Act, the Industrial Site Recovery Act and the Brownfield and Contaminated Site Remediation Act in addition to the Public Trust Doctrine under which the State is responsible as the trustee of the State’s natural resources to manage these resources. These statutes specify that PRPs should compensate the public for the loss associated with injuries to natural resources by paying monetary damages the State, committing to restore the injured resources to their former state, or engaging in restoration projects elsewhere in the watershed that achieve similar restoration benefits. The federal court has stated that “while it is not irrational to look to market price as one factor in determining the use value of a resource, it is unreasonable to view market price as the exclusive factor or even the predominant one… natural resources have values that are not fully captured by the market system” (NJDEP, 1999). The New Jersey Legislature also recognizes that the public value of a resource is distinct and could exceed the private value. At a minimum, NRDs include restoration costs and the cost of assessing the damages. Restoration costs are the costs of actions that return natural resource services to their baseline condition sooner than natural recovery. Assessment costs are the “reasonable” costs of performing the damage assessment; those expenditures must be commensurate with the estimated amount of damages. NRDs could also include interim losses. NRDs do not include punitive damages; thus, they do not depend on the conduct of the PRP. The DEP promulgated a document titled Technical Regulations for Site Remediation (New Jersey, 1999) which provides a mechanism for assessing the natural resource injuries required as part of the site remediation process. This chapter summarizes the 1999 policy and regulations, though some amendments to these regulations have been made recently. The assessment process involves a baseline ecological evaluation and an ecological risk assessment. The baseline assessment involves identifying if there is a contaminant of ecological concern at the site, if there are environmentally sensitive natural resources at or near the site and if there is a pathway that would link the contaminant with an environmentally sensitive natural resource. If these three criteria are met then an ecological risk assessment is required to evaluate the likelihood that adverse ecological effects to natural resources have occurred or may occur as a result of the discharge. The ecological risk assessment is used to identify the impact of the 42
discharge on receptors studied in the ecological risk assessment. In the case of groundwater, however, an ecological risk assessment is not required. The Department developed a method for determining the injuries to groundwater that is inexpensive and less time consuming than the methods applied to other resources. This method is applied to all groundwater that is classified as Class II pursuant to the State’s Groundwater Quality Standards. The simplified method utilizes only information that is already available or that must be collected as part of the remediation process by following the technical regulations for site remediation. This chapter describes and analyzes the method as it existed at the time of our survey. Unlike the simplified methods used by Washington and Florida, New Jersey’s simplified NRDA method is not codified by state legislation and thus is subject to change. Several changes have been made to the method since then. Some of those changes will be mentioned in the following discussion; however, for an updated description of the simplified method used by New Jersey, see the website of the state’s ONRR (Currently http://www.nj.gov/dep/nrr/nri/nri_gw.htm.) The basic steps in New Jersey’s 1999 simplified assessment process are as follows; note that steps four and five have been dropped in recent modifications: (1) Characterize extent of groundwater contamination. (2) Identify remedial action for groundwater contamination. (3) Determine duration of natural resource injury. (4) Determine applicability of onsite exemption. (5) Determine applicability of de minimis exemptions. (6) Determine which water supply planning area the contaminant plume is located in and the projected status (e.g. surplus, deficit) of that area in the year 2040. (7) Determine annual groundwater recharge rate. (8) Determine dollar value of potable water. (9) Calculate surrogate value of the groundwater injury. The first three steps are based on information obtained as part of the remedial investigation of the groundwater for the site as required by the Technical Requirements for Site Remediation. The most typical nondepletive remedial actions used for contaminated groundwater are, pump and treat systems that reinject the treated groundwater either on-site or off-site, natural attenuation, and in situ treatment. The duration of injury is defined as time in years between when the remedial decision is made and when the water meets New Jersey groundwater quality standards or 30 years, whichever is smaller. There were a variety of limits on assessed damages under this approach which seem to have been eliminated by recent changes to the policy. The Department did not require restoration of natural resource injuries to groundwater if the contaminated plume has not traveled beyond the current boundaries of the property where the discharge occurred, the remedial action is a nondepletive action, and no other natural resources (such as wetlands or surface waters) are affected by the contaminated groundwater. Even if the contaminant plume has moved off-site, the department specified de minimis criteria on the size and duration of the plume for which it would not require restoration of natural resource injuries to groundwater. Additionally, it was specified 43
Page 1 and 2: WMRC Reports Waste Management and R
Page 3 and 4: RR-108 Natural Resource Damage Asse
Page 5 and 6: Acknowledgments Funding was provide
Page 7 and 8: Chapter 1: Tables and Figures Table
Page 9 and 10: staff of agencies that are just beg
Page 11 and 12: All: 64 Nevada Division of Environm
Page 13 and 14: Table 1.5 Number of Cases Settled b
Page 15 and 16: Table 1.9 Number of Potentially Res
Page 17 and 18: Table 1.14 Cost to Trustee of Perfo
Page 19 and 20: Mean Settlement (million $) 90 80 7
Page 21 and 22: V. Conclusions Trustees have had re
Page 23 and 24: Appendix: Materials in Information-
Page 25 and 26: NRD: Natural resource damages. Guid
Page 27 and 28: Survey of State Natural Resource Da
Page 29 and 30: 19) Has this case been settled? (Ch
Page 31 and 32: I. Introduction Chapter 2 Simplifie
Page 33 and 34: Number of Spills 1,000 800 600 400
Page 35 and 36: damages not quantifiable at reasona
Page 37 and 38: (b) Columbia River Estuary: Bird, f
Page 39 and 40: Example of the Washington method in
Page 41 and 42: % of All Cases 35 30 25 20 15 10 5
Page 43 and 44: preventing excessive expenditures o
Page 45 and 46: Example of the Florida formula in u
Page 47: damages to natural resources at con
Page 51 and 52: Information for this calculation is
Page 53 and 54: ased funding for the program was pr
Page 55 and 56: a spill occurs in a high income are
Page 57 and 58: References Cozine, M. H. 1999. “N
Page 59 and 60: Chapter 3: Tables and Figures Table
Page 61 and 62: This chapter will examine the exten
Page 63 and 64: Comprehensive Environmental Respons
Page 65 and 66: Output price P0 C D S0 is the suppl
Page 67 and 68: Travel-cost analysis can be used fo
Page 69 and 70: area B and computing willingness to
Page 71 and 72: Table 3.1: Summary of Studies Estim
Page 73 and 74: Schultz and Lindsay (1990) estimate
Page 75 and 76: Table 3.3: Using Benefits Transfer
Page 77 and 78: Number of Cases 30 25 20 15 10 5 0
Page 79 and 80: Table 3.4 Groundwater Case Studies
Page 81 and 82: and overall protection of the resou
Page 83 and 84: References Abdalla, C. W. 1991. “
Page 85 and 86: Nielson, E. G. and L.K. Lee. Octobe
Page 87 and 88: United States, adjoining shorelines
Page 89 and 90: Once there is a “release” of a
Page 91 and 92: 1997). Second, there can be no reco
Page 93 and 94: settlement of NRD claim prior to an
Page 95 and 96: egulations divide the assessment pr
Page 97 and 98: Damages: The trustees calculated th
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The State hired consultants (ARCADI
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C. Lake Barre/Texaco Site: The site
Page 103 and 104:
would be inefficient and unnecessar
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Damages: The U.S. Coast Guard requi
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Creek and the cultural importance o
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Natural Resource Damage Assessment: Methods and Cases

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