Institute of Water Research

The true economic, ecological, and social costs of relying on land use restrictions to address groundwater and soil contamination instead of active clean up are likely significantly higher than generally estimated. That is a conclusion of a new report submitted to the Michigan Department of Environment, Great Lakes, and Energy (EGLE). 

Institutional Controls for Groundwater Management: Long-Term Costs and Policy Impacts, authored by the Institute for Water Research (IWR) at Michigan State University and by FLOW, an environmental law and policy center in Traverse City, Michigan, analyzes the effects of such measures. Institutional controls (ICs), often in the form of deed restrictions or local ordinances that prohibit the use of contaminated groundwater, have been put in place at over 2,000 sites across Michigan, affecting a cumulative area more than twice the size of the City of Grand Rapids. 

The project originated with a request for proposals from EGLE to assess the long-term economic cost of using ICs and other restrictive actions to manage risks associated with groundwater contamination compared with the cost of other potential management actions. 

The IWR/FLOW team conducted extensive background research at seven case study sites, reconstructing timelines and gathering relevant cost data. That research informed the subsequent economic analysis that sought to isolate costs related to IC implementation and extrapolate them into the future. The team found that when responsible parties or their consultants estimated the cost of an IC-only response as part of a remedial action plan, those estimates fell short, often significantly, of the actual costs incurred. The differences were mainly attributable to failures to anticipate contaminant migration (necessitating additional monitoring and the extension of municipal water sources) or the adoption of stricter criteria for acceptable contamination levels based on emerging science. 

Despite the tendency to underestimate their true long-term costs, the analysis found that IC-driven approaches were still cheaper in the near term than active remediation efforts to restore contaminated aquifers, such as pumping and treating or soil vapor extraction. It is often more affordable for responsible parties to fall back on approaches that do not actively clean up contaminated aquifers. But choosing to let groundwater contaminants attenuate for decades (centuries in some cases) allows them to continue to migrate with the flow of groundwater, effectively writing off a public resource, resulting in orphan sites and contaminating public and private drinking water across the state of Michigan. 

Though the analysis focused on more readily quantifiable costs, such as the extension of municipal water lines, monitoring well installations, and staffing, the team acknowledged the broader social and ecological impacts of not actively remediating groundwater contamination sites. These include the erosion of public trust, threats to environmental justice, the stigmatization of cities and regions, and degraded ecological function. The team developed a decision framework tool, organized as a spreadsheet, to help evaluate the potential costs of an IC-only approach, potentially as part of the development of a remedial action plan. While the tool’s cost estimates are limited to those that the project team was able to quantify in its analysis, it also informs users of the harder to quantify societal and ecological impacts of not actively removing contaminants from the ground and encourages their consideration as part of remediation planning. 

From the report: “This project highlights the need for a market-based correction that imposes much more of the impacts associated with groundwater contamination to be captured in the cost of doing business by the contaminating entities.”  

In addition to the cost analyses and development of the decision framework tool, the report provides recommendations on how groundwater management policy, specifically regarding the management of ICs, could be improved. These include: 

• Prioritization of Sites: Prioritize the investigation and identification of all source areas and removal or prevention of those source areas from continuing to contaminate and migrate. 

• Natural Resources Damage Assessment: Consider a natural resource damage assessment payment to the state for any responsible party that utilizes an IC on groundwater as a part of its remedy. This fee could be a function of the extent to which the responsible party implements remedial actions to remove source materials, reduce concentrations of the contamination in the aquifer, and restrict expansion of the plume. 

• Sellers Disclosure Act: More strongly enforce the Sellers Disclosure Act, Act 92 of 1993. Require landowners with knowledge of existing contamination, institutional controls, or restrictive covenants to notify EGLE, local government, and prospective new purchasers/lessees of the contamination/RCs/ICs. Include such information in title searches for mortgages.  

• Future Hazardous Conditions: During remedy selection processes, EGLE should consider the possible future generation of hazardous conditions, such as explosive vapors (e.g., methane) from the biodegradation of organic materials (wood, charcoal, landfill content) in groundwater. Potentially affected properties should be eligible for free groundwater and soil vapor testing.  

• One-call System: Develop a one-call system like Michigan’s 811 program (MISS Dig) to include all sites with use restrictions due to soil or groundwater contamination.  

“Institutional Controls are an important part of the environmental remediation toolkit. They help protect the public from exposure to dangerous chemicals. But if they are the only tool used in response to a contamination, then it creates long-term economic, social, and environmental risks to be borne by current and future generations. We have to find ways to prioritize the removal of contaminants from the environment, not just shielding ourselves from them.” – Glenn O’Neil (Environmental Scientist, IWR) 

“This report underscores the need for a greater emphasis on active cleanup of groundwater contamination sites. The fact that groundwater is out of sight does not mean it is worthless. It supplies drinking water to 45% of Michigan’s population. This report documents both quantitative and qualitative costs from the use of institutional controls, which generally let groundwater contamination persist.” - Liz Kirkwood (Executive Director of FLOW) 

Read the full report here.

Download the IC cost calculator tool here (must enable macros)