The aftermath of Hurricane Harvey is still being felt months after the storm made landfall, and lingering effects may continue to increase the cost associated with this natural disaster. Although progress has been made to clean up the debris scattered throughout the city, the United States Environmental Protection Agency (EPA) is currently working to prevent the spread of pollutants contained in Superfund sites throughout Harris County. The EPA defines a Superfund site as “any land in the United States that has been contaminated by a hazardous waste and been identified as a candidate for cleanup due to the risks posed to human health and/or the environment”. It is imperative that priority be placed on cleanup of the Houston Superfund sites, as the floodwater has potential to spread harmful contaminants across the city.
The San Jacinto River Waste Pits (SJRWP) is one of the highest priorities on the EPA’s Superfund cleanup agenda. The SJRWP was added to the National Priorities List (NPL) of hazardous waste sites in 2008, but has been around long before this time. In the Mid-1960’s, the SJRWP received waste contaminated with dioxin from a former paper mill. Dioxin is known to cause cancer and genetic birth defects, and can be transmitted through ingestion of contaminated seafood. This is particularly problematic, as the SJRWP has been exposed to the San Jacinto River for decades. Floodwater from Harvey submerged the SJRWP, and action must be taken in order to prevent further contamination of the water supply.
On October 11, 2017, The EPA approved a plan to clean up the SJRWP. The cleanup plan includes “installing engineering controls before excavating almost 212,000 cubic yards of dioxin contaminated material for disposal”. The estimated cleanup cost is $115 million, an amount the EPA considered reasonable given the potential health risks associated with the hazardous waste. The EPA will attempt to collect funds from the responsible party, however, any additional funding will come from the Superfund Trust Fund, which is made up of U.S. tax dollars.
In addition to the EPA, businesses throughout the community may incur costs related to flooding. If a loss due to a natural disaster is probable and reasonably estimable, a Company may recognize an environmental remediation liability. If the cost of the liability cannot be estimated, disclosure of possible loss may still be required. Environmental remediation liabilities may include cleanup costs, enforcement costs, government oversight costs, and natural resource damages. For more information on how to account for cleanup costs in the event of a natural disaster, please contact someone from Whitley Penn, LLP. http://www.whitleypenn.com
Whitley Penn continues to be one of the region’s most distinguished public accounting firms. With a strong base in Texas and a worldwide network affiliation via Nexia International, the firm is strategically positioned for continued growth both locally and internationally. Whitley Penn has been consistently recognized as “One of the Top 100 Firms in the U.S.” and “Best of the Best” by INSIDE Public Accounting. For more information on Whitley Penn, please visit whitleypenn.com.