Five years ago, any discussion of the environmental services industry and the government would have been characterized by complaints about burdensome regulations. Over the past five years, however, there have been favorable changes in how the government relates to environmental services firms and their customers. This means more opportunities for the environmental services industry.

Federal and State Legislative Activity

Superfund. Clearly, Superfund hasn’t worked and reform focused on efficient spending and less litigation appears to be the solution. With no reform in 1998, the environmental services market will be looking to the states for opportunities.

Voluntary Cleanup Laws. Increasingly, the US Environmental Protection Agency is shifting authority for the cleanup of contaminated sites to the states. Voluntary cleanup programs directly address the problems of contaminated industrial sites by eliminating many of the procedural and economic stumbling blocks that otherwise might exist. These programs provide clear cleanup procedures and standards, state agency oversight, review and sign-off for parties that voluntarily cleanup contaminated sites and protection from unknown future liabilities. Many state programs also include tax abatement or other financing incentives to mitigate the cost of cleanup. In addition, states have also established grant or loan programs that will pay for environmental assessments of sites, or in some cases, the cleanup project itself.

Potential Opportunities For Environmental Service Firms

A viable government-based market for the next 15 to 20 years is the redevelopment of former military bases. Currently, these are 200 bases either closed or closing, and another 50-100 planned for closure. A recent statutory amendment is likely to be an incentive to get cleanups started and keep them moving along. The amendment was passed as Section 334 of the National Defense Authorization Act for Fiscal Year 1997, and it allows redevelopment authorities to take title to their sites before the property’s contamination is cleaned up. This is a departure from past policy which only allowed Local Redevelopment Authorities (LRAs) to arrange long-term leases for the property, but did not allow them to actually sell the property until the cleanup was complete. Now an LRA can take title to the site and clean it up, which creates opportunities for the environmental services market.

In the private sector, the development of limited liability corporations also presents business opportunities for the environmental services market. These corporations buy contaminated sites from companies seeking to rid themselves of environmental liabilities. This new breed of limited liability corporations acquire contaminated properties, and all of the cleanup, long-term environmental care liabilities and remediation management that come with them.

Changing legislation and overall risk management strategies are opening the doors of opportunity for the redevelopment of contaminated sites, including military bases and corporate property -- and for the environmental services firms that will help turn redevelopment visions into realities.