OECEIVEn
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2012
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February 20, 2012
St"~ "' l H~m' lton
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JJ ""'(ou ry
Dear Mr. Sarro:
Pat (rowley J"nSpocl.tr" ~kl-J~
408 E Michigan Ave
Kalamd~oo Mich; I~"
~9007
269·978·~60b
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Step.hell K. Hamilton. PhD
PresIdent, Kalamazoo River Viatershed Council
Position Statement
regarding a settlement proposal from Georgia Pacific
Kalamazoo River Watershed Council
6 February 2012
Synopsis
Georgia Pacific LLC, a Responsible Party under Superfund for cleanup of PCB­
contaminated sediments in and along the Kalamazoo River, has proposed a settlement
that would be considered by the US EPA and Department of Justice. The settlement
would absolve Georgia Pacific of all future environmenlalliability associated with the
Kalamazoo River Superfund Site. The proposed amount would cover a considerable
fraction of the costs for removal and remediation of two decommissioned hydroelectric
dams that retain contaminated sediments-Otsego City and Otsego Township dams.
This would not cover the costs for removal and remediation oflhe larger and more
costly Trowbriqge Dam (also decommissioned), nor would it address any cleanup above
the Allegan City Dam or in Lake Allegan where PCB contamination is extensive. The
Kalamazoo River Watershed Council has evaluated this proposal in light of estimated
costs of cleanup actions and concluded that the proposed settlement falls far short of
what is needed to perform the most important cleanup actions.
Background
Members of the Board of Directors of the Kalamazoo River Watershed Council (KRWC)
met with a representative of Georgia Pacific LLC (GP) and its consultant engineer
ARCADIS on December 15 at the offices of the Council in Kalamazoo. The primary
topic of the meeting was a proposal by GP for their contribution of $150 million toward
cleanup of contaminated sediments at two former impoundments on the Kalamazoo
River as well as removal of the failing dams associated with these impoundments. The
two former impoundments are in Superfund Area 2, from the site ofthe former Plainwell
Dam to and including Otsego City Dam, and Area 3, from the Otsego City Dam to and
including the Otsego Township Dam. GP estimated that "Plainwell type cleanups"
similar to the Time Critical Removal Action (TCRA) undertaken by GP and the former
Responsible Party, Millennium Holdings, including dam removals, could be
accomplished al a tolal cost of in the neighborhood of $80-90 million. This would leave
at least $50 million additional funding for other projects on the river. No specifics were
provided·to support the proposal and GP declined to provide documentation.
For maps of the Superfund Site including area boundaries and maps of the
impoundments, see this web site from a recent EPA presentation:
http://www .epa.gov!region5lcleanuplkalprojectlpdfslkalprojecl_slides_2011 0427_ ou5. pdf
The KRWC notes that TCRA cleanups, while most welcome, are intended to be
emergency cleanups that would be followed by more thorough assessment to determine
the need for any additional required cleanup actions in Ihe future. Whether subsequent
cleanup to a higher standard would ever happen in the case of the Kalamazoo River is
not clear. It is important to remember that a TCRA does not necessarily constitute an
end point in the cleanup, and does not necessarily alleviate all of the risks posed by
contaminants.
GP brought the proposal forward to the KRWC seeking its support for the proposal in
negotiations with the United States Environmental Protection Agency (EPA) and the
United States Department of Justice (DOJ). DOJ is involved as GP is subject to an
Administrative Order of Consent entered into in 2007 as a result of a "negotiated
settlement" completed with no public oversight or input. GP advised that negotiations
with EPA and DOJ concerning the current proposal would be ongoing and that the
support of local govemment officials, Michigan state legislators, and United States
Representatives and Senators was being sought, as was the support of citizens' groups
such as KRWC. In return for the $150 million contribution, GP expects to be absolved of
all further liability under any and all environmental laws, state and federal.
A settlement offers advantages over the Superfund process because 1) funds become
available immediately, whereas the Superfund process can be very protracted; and 2)
use of the funds is more flexible, and in this case could cover removal of the dams
themselves and not just the contaminated sediments above them. A settlement could
"jump-start" the cleanup process and encourage leveraging of other funding sources.
The KRWC is open to considering the settlement option, but because it ends all future
environmenialliabilities, caution must be exercised.
For reasons documented below, the KRWC has concluded that the GP proposal is
inadequate to accomplish even the minimal "Plainwell type cleanups" at tl1ree critical
sites, Areas 2, 3 and 4 (from Otsego Township Dam to and including Trowbridge Dam).
The GP proposal gives no consideration to Area 5 (from Trowbridge Dam to and
including Allegan City Dam), Area 6 (from Allegan City Dam to and including Calkins
Bridge Dam, which forms the reservoir known as Lake Allegan), and Area 7 (the river,
marshes and fens downstream from Calkins Bridge Dam to Lake Michigan). In reaching
this conclusion about the inadequacy of the proposed settlement amount, the KRWC
examined available evidence for the volume of contaminated sediment in place at the
three critical sites, actual costs incurred for the Plainwell Dam TCRA, the total amount
of contaminated sediment remaining in the entire river system, and the estimated costs
for various remediation alternatives.
Source Documentation
USGS sediment studies
At the request of Michigan Department of Natural Resources (MDNR), in 2000 the
United States Geological Survey (USGS) prepared an estimate of the total amount of
sediments in place behind the three decrepit dams-Plainwell, Otsego TownShip, and
Trowbridge-which had been transferred to MDNR ownership. The estimates were
limited to the volume of sediment in the present-day river channel; there is much more
on land within the former reservoir boundaries. The estimates were:
Plainwell
77,600 yd 3
Otsego Township
268,000 yd 3
Trowbridge
1,192,600 yd J
The proportions of these sediment volumes estimated to be contaminated with PCBs
were not estimated
Plainwefl Time Critical Removal Action (TCRA) Construction Completion Report 2010
The Former Plainwell Impoundment TCRA removed 126,700 yd 3 of sediment from
within and along the chaonel at a cost of $28 million during 2008-09. This included the
cost for removal of the former power house portion of the dam, but not the concrete
spillway structure which remains today.
Kalamazoo River Study Group Remedial Investigation / Feasibility Study 2000
The Feasibility Study (FS) published with the sediment volumes shown in the table
below proposed five remediation alternatives, ranging from the baseline "no action"
alternative to a complete dredging alternative. The selected alternative was bank
stabilization, primarily aimed at stopping erosion of contaminated sediments from banks
in the three MDNR-owned former impoundments (Plainwell, Otsego TownShip,
Trowbridge). Inexplicably, the FS is moot concerning the more extensive Otsego City
impoundment. The dam is no longer operable, the impoundment is drawn down, and exposed former impoundment sediments contaminated with PCBs are present above the impoundment, a situation that is similar to those of the MDNR-owned dams. Table 1. Volumes of total sediments and PCB-contaminated sediments, and total PCB
masses in each reach. Source: Blasland, Bouck & Lee Allied Paper, Inc.lPortage
Creek/Kalamazoo River Superfund Site RI/FS, October 2000. (Blasland, Bouck &
Lee became a wholly owned subsidiary of ARCADIS NV, the name under which
the consultancy currently operates.)
PCBReach
Total sed'ments I conta.m'nated
""MIiin SI. Plainwell to
Plainwell Dam
Plainwellimpoundmellt
Tolal MainSt.Plainwell
Plainwell Dam to
Otseqo City Dam
alsegoCity
Impoundment
g:~~ ~~W~:~Dt~Dam
Otsego Township
1m oundment
Totat otsego City
Dam-Otsego Twp Dam
Otsego (Township) Dam
to Trowbrid eDam
Trowbridge
1m oundment
Tolat otsegoTwp
Dam-TroWbridge
Trowbridge Dam to
Aile an Citv Dam
Altegan City Dam to
Lake Allegan (Calkins
Slid eDam
Lake Allegan
(ydl)
se~~~~nts
99,000
53,000
360,000
459,000
Total PCB
mass (kg)
241
3,200
3,441
415,000
224,000
290,000
191,000
540,000
695
306
3,200
830,000
3,506
542,000
263,000
1,900,000
719
15,400
2,442,000
16,119
1,198,000
675,000
3038
10,163,100
5,143,000
20,363
See report 1
_"_ _ _. - - L - Capital and Operations & Maintenance cost estimates for remediation of the entire
Kalamazoo River Superfund Site ranged from $0 for the "no action" alternative, through
$73,186,000 ($40,679,000 NPV) for bank stabilization, to $2,618,445,000
($839,747,000 NPV) for complete dredging. I\IPV is net present value, which is a
method to calculate the current or present value of all spending over an extended period
of time using a specffic interest, or discount, rate. At even moderate discount rates
expenditures in periods beyond 10 years are neariy immaterial. The dredging alternative
was estimated for a 25-year period, while no time period was given for the bank
stabilization alternative.
Otsego City Dam, Dam Removal and Channel Restoration, Engineering Design Report,
Final October 2011
The Michigan Department of Natural Resources (MDNR) received a grant through the
Great Lakes Restoration Initiative (GLRI) to conduct engineering design work for
removal of the Otsego City Dam and the Otsego Township Dam, including remediation
of sediments affected by the dam removals. The KRWC has been a partner on that
work. The Otsego City Dam removal study identified three alternatives for sediment
remediation which are dependent on the amount of future channel migration allowed
across the floodplain. The most natural channel (Altemative 1) requires that more
contaminated sediment be removed on either side of the channel to prevent future
contaminated sediment resuspension from erosion of the banks. The least natural,
controlled channel (Altemative 3) requires the least amount of sediment to be removed
either side of a narrower channel path that is heavily armored to prevent lateral
migration. The cost estimates for these the alternatives are shown in the table below.
Table 2. Cost estimates for Otsego City and Otsego Township dam removal and sediment cleanup under the three alternatives considered in the 2011 MDNR engineering study. Dam removal and non·
Altematlva
h
~""ml,".d
..dlmoo'
management
(Smllllon)
2
3
11.85
11.51
11.88
Contaminated
I
Contaminated
"dlm';':=+~~r''''
(yd')
--_._­
1,464,367
1,022,151
753,170
managemant
(Smillion)
98.0
71.36
56.17
!
I
Total
(Smillion)
109.85
82.87
68.05
KRWC's Analysis
The $150 million settlement proposed by GP pales in comparison to the total cost
estimate for a thorough remediation of the entire Superfund Site, which ranges up to a
cost of $2.6 billion over a 25·year period according to the 2000 RifFS. More recent
estimates suggest that an acceptable cleanup of the most contaminated sediments
might be attainable at a total cost in the vicinity of $1 billion. The evidence in all studies,
including the RifFS funded by GP as part of the Kalamazoo River Study Group, is that
only by ignoring massive amounts of contaminated sediments downstream from the
former Plainwell Dam can $150 million be considered anything more than start on the
cleanup that is required
Considering only the next dam to be removed (otsego City Dam), an engineering study
for the dam and its impoundment presents a range of costs between $68 million and
$110 million. The more expensive alternative is also the most attractive from the
environmental pOint of view, as it eliminates the greatest volume of PCB-contaminated
sediments from the riverine environment and allows the river greater flexibility in finding
its natural course. The KRWC accepts that the $11-12 million for dam removal is not the
responsibility of the Responsible Party, and that other funding sources must be found.
The KRWC also supports the idea of finding other funding sources to make up the
difference between the channelized river design and the free flowing design.
The KRWC believes such funding might be developed from US EPA Legacy Act and
GLRI programs, even though such publicly funded programs are not linked to
Superfund cleanups. This leaves approximately $56 million for the minimum cost of the
cleanup of contaminated sediments associated with the Otsego City Dam, a cost which
should be borne by the Responsible Party(ies).
The next downstream dam-Otsego Township Dam-is physically much like Plainwell,
with a well defined channel and separated power house and spillway channels. If the
cost efficiency and volume of former-impoundment contaminated sediment left in place
resemble the case of the Plainwell Dam removal, the cost of this project might be
expected to be in the range of $35 million. The ARCADIS report for Plainwell did not
provide separate estimates of the dam removal cost portion. Since only the power
house channel was remediated and the water control structure was smaller than that
proposed for the otsego City Dam, the KRWC estimates that the dam removal portion
of the project would cost approximately $7 million, which results in a share for
Responsible Party(ies) of $28 million.
The next project downstream is Trowbridge Dam. This project presents a case where
the choice of remediation goals (i.e., free flowing vs, channelized and armored river)
results in large cost differences (as was the case at Otsego City Dam), but with a total
sediment volume and thus cost that is likely to be 4-15 times greater. The divergence in
sediment volume estimates and the quality of the remediation, as well as the
significantly larger dam structure, make an estimate difficult. On the basis of an
estimated sediment volume at 15 times greater than at the Plainwell Dam, as estimated
by USGS, and a sediment-only removal cost of $23 million, the sediment portion of
Trowbridge Dam cleanup would be $345 million. Again, allowing for a difference
between a channel allowed to meander and a highly regulated channel, it is apparent
that the Responsible Party(ies) should cover about $200 million of the total cost.
We note that a large fraction of the total PCB contamination resides in sediments
downstream from the aforementioned dams. Downstream of Trowbridge is the Allegan
City Dam, behind which the estimated contaminated sediment volume is 675,000 yd 3
containing 3038 kg of PCBs, and Lake Allegan with 5,143,000 yd 3 containing 20,363 kg
of PCBs, according to the RI. GP has asserted that the PCB-contaminated sediment in
Lake Allegan is being buried by cleaner sediment, a process that is reducing exposure
of fishes to PCBs, thereby diminishing the threat of PCBs to human health through fish
consumption in that reservoir. Nonetheless, it is entirely possible that at least the delta
will require dredging to remove PCB contamination in sediments that are inherently
unstable and thus subject to remobilizalion.
The total liability for Responsible Party{ies) for acceptable remediation of the PC8­
contaminated sediments associated just with the three former hydroelectric dams is
therefore estimated at a minimum of $284 million. This is nearly twice the amount of
the proposed settlement
If a settlement that only covers the three former hydroelectric dams were to be
accepted, the entire volume of contaminated sediment and its PCB load in Lake Allegan
and above the Allegan City Dam must be deemed acceptable to remain in the
environment. This is a difficult choice, as all dams have finite lifetimes, and river
systems are dynamic and prone to unforeseeable floods and consequent geomorphic
destabilization (e.g., sudden channel migrations or sediment resuspension). Also,
unforeseeable events such as the 2010 Enbridge pipeline oil release may necessitate
dredging and sediment disturbance
Conclusion
KRWC applauds the progress that has been made in recent cleanup actions on the river
system. including the removal of the Plainwell Dam, and appreciates the contributions of
GP. KRWC sympathizes with GP in the loss of Millennium Holdings from the
Kalamazoo River Study Group as a result of its bankruptcy, but cannot agree that GP's
''fair share" should be judged in light of that bankruptcy. Under Superfund law
(CERCLA), GP continues to be legally liable for the entire cost of remediation, though
other potential Responsible Parties can also be identified to contribute to the funding
The identification of additional potentially Responsible Parties cannot be allowed to
diminish GP's responsibility unless and until they are legally bound to contribute. If and
when any additional Responsible Parties are designated, GP would be able to litigate to
recover its costs incurred up that point. Thus GP's expenditures in any settlement now
are likely to eventually be compensated in proportion to the liability that is assigned to
other Responsible Parties. should they be designated.
EPA and the Department of Justice should consider GP's offer as a beginning point for
remediation of the two specified impoundments and explore whether a comprehensive
senlement for the entire Superfund site is atlainable. Such a seniement would need to
be approximately three times greater than the proposed $150 million to accomplish the
high-priority cleanup of the most contaminated sediments (including ''former
impoundment sediments" that are now above the normal river water level because the
impoundments have been partially removed). Perhaps a detailed set of goals could
accompany the senlement, and should they be met at a lower cost, GP would be
entitled to the retum of unspent funds.