Facilitating brownfields transactions using Triad and environmental insurance

Abstract

A significant hindrance to reuse of Brownfield properties is the risk associated with redevelopment, specifically the uncertainty associated with environmental cleanup. This paper explores an approach to managing environmental risk through a combination of risk quantification, environmental insurance and the Triad Approach to site sampling and data interpretation. Using the Marsh Peer Review SM risk quantification process that employs statistical techniques and highly experienced technical staff the expected costs of environmental liabilities are estimated. The outputs of the process indicate premiums and attachment points for insurance products, but they also point to "critical uncertainties" that drive the insurance premiums. Insurance premiums are often linked to site delineation deficiencies, such as the magnitude of impacted soil or the size of a groundwater plume. The Triad Approach is an integrated site characterization process developed by the Environmental Protection Agency that combines systematic planning, dynamic or adaptive field decision-making and field analytical methods (FAMs). The real time data produced by FAMs allow for in-field resolution of uncertainty about sample location, which in turn provides more representative delineation of contaminant distribution. The trade-off of using slightly less accurate but substantially lower cost FAMs, is an increase in sampling frequency or density thereby reducing the risk of incomplete detection or delineation while yielding a "data set" that is more powerful than fewer individual data points analyzed through traditional methods. Employing the Triad approach to analyze the "critical uncertainties" identified in the Peer Review Process can impact insurance premiums and allow for better terms of coverage. The combination of using the Triad Approach and environmental insurance products can lead to more predictable and profitable Brownfield transactions.

An Empirical Model for Estimating Remediation Costs at Contaminated Sites

“…The new federal SBLRBRA allows for a portion of grants to be used to purchase environmental insurance (Woll et al, 2003). With the better estimation of remediation costs, insurance costs could be possible be reduced, and this chain of events could help make brownfield redevelopment less risky and more profitable.…”

Using the Triad Approach to expedite the acquisition of an Abbott district school site

“…Under a Triad Approach program where increased sampling density is coupled with inthe-field knowledge, the resulting data set carries a higher potential of being more statistically representative of field conditions than prescribed one-size-fits-all approaches. Better sampling representativeness (data density) has been demonstrated to improve the level of confidence of site cleanup decisions by reducing uncertainty (Woll et al, 2003). When combined with fixed lab support for a subset of samples, both sampling and analytical error can be addressed.Two remaining components of the Triad Approach, systematic planning and dynamic work strategies, are needed to fully realize its potential (Crumbling et al, 2001;Robbat, 1997;USEPA, 2001).…”

Characterizing a Brownfields recreational reuse scenario using the Triad Approach–Assunpink Creek Greenways project

“…Because of the magnitude of the number of brownfields sites and the complexity of contaminated site redevelopment, alternative site characterization strategies that elevate reduction of sampling uncertainty are now undergoing field testing at NJIT.Through better sampling representativeness (data density) these approaches improve the level of confidence for site management and cleanup decisions with reduced uncertainty (Woll et al, 2003).When FAMs are used in conjunction with detailed systematic planning and dynamic work plans (DWPs), the full promise of the Triad Approach can be realized (Robbat, 1997;Crumbling et al, 2001;United States Environmental Protection Agency, 2001).…”