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aflatoxin content than specified by the guideline and would
therefore have to be thrown away or rejected.  These costs (or
values) were then distributed over the remaining quantity of
acceptable product and expressed as the additional costs (per
unit) of producing acceptable product.  Table A-5 lists per
unit and total costs of five different guideline levels as
calculated by ADL.

                           TABLE A-5

            PER UNIT AND TOTAL COSTS TO PEANUT BUTTER
         INDUSTRY OP VARIOUS AFLATOXIN GUIDELINE LEVELS
                     (AS CALCULATED BY ADL)1
                    Per Unit Costs of
Guideline          Acceptable Product2           Total Cost2
  (ppb)                  (*f/lb)                    (10
   20                      0.6                       3.7
   15                      3.0                      17.6
   10                      9.1                      52.6
    5                     33.9                     196.5
    2                     60.3                     348.5
1.   Source:  Arthur D. Little/ Inc., Assessment of the
     Effects of Possible Aflatoxin Guideline Changes for the
     Peanut Industry/ Draft Report to the National Peanut
     Council, January 1974.

2.   ADL estimated expected values and upper limit values.
     The figures reported here represent the expected costs.


     To calculate the cost estimates provided in Table A-5,
ADL required information on the percent of total peanut butter
rejected at each guideline level and the cost of producing a
pound of peanut butter.  The former information was obtained
through a survey of 12 manufacturers of peanut butter repre-
senting slightly more than 70% of the peanut butter manufac-
tured in the United States.  The manufacturers were asked to
estimate the cumulative percentage of their January-June 1973
peanut butter production containing levels of aflatoxin from 0
to 20 ppb.

     Based on the survey information, ADL constructed a proba-
bility density function of peanut butter production which


                              109

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would exceed the proposed guideline.  Based on the distribu-
tional characteristics of the function, the expected level of
product rejection could be calculated for any guideline
level.-  For example, ADL's calculation showed that if peanut
butter3'manufacturers tested peanuts for 7 ppb aflatoxin con-
tent  (that which would be required to meet a.15 ppta guideline)
approximately 5.1 Ib out of every 100 Ib would have to be re-
jected. 28  m addition, ADL calculated the average aflatoxin
in the acceptable product at any given inspection level.  In
the case of a 7 ppb inspection level, the (most likely) afla-
toxin level would be an average of 2.0 ppb, but ranging from
1.45-2.41 ppb.

     To compute the costs of having to reject a specified
percent of peanut butter produced, ADL calculated the average
direct costs associated with producing a pound of peanut
butter.  The basis for this cost element was a per unit pro-
duction cost estimate of 37.4£/lb.29  This base number was
adjusted by several factors to arrive at the final figure used
by ADL.  First, the cost of peanut's portion of the base was
escalated by 22% to account for cost increases between 1972
and 1974 (no justification was given for the use of this
number).  Second, 11.2 cents was added to the adjusted base
figure  (44.9 cents) to account for the increased cost of in-
spection and disposal of rejected peanuts (based on industry
estimates).  While ADL suggested that other indirect cost ele-
ments (such as loss of sales) should be included, they stated
these costs could not be quantified for this study.  The final
direct and indirect unit cost of rejecting peanut butter used
by ADL was 56.1^/lb.

     By combining the average unit cost of rejecting peanut
butter with the average percent of peanut butter rejected at
any given aflatoxin inspection level, ADL was able to calcu-
late the total cost to industry of a particular guideline
level.  The steps undertaken to make this estimate are out-
lined below.

     1)  Multiply the fraction of total peanut butter pro-
         duction rejected at a given operating level by total
         1972 peanut butter production.

     2)  Taking the total pounds of peanut butter rejected
         from 1 and multiplying by 56.1£ (the costs of reject-
         ing peanut butter) calculate total costs of rejected
         peanut butter.

     3)  Divide 2 by total acceptable peanut butter (assumes
         costs of rejected peanut butter will have to be
         spread remaining product) to yield costs of a par-
         ticular inspection level in terms of cents per pound
         of acceptable product.

                               110

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     4)  Translate inspection (or operating) level into FDA
         guideline level.  For example, the costs of setting a
         guideline of 15 ppb are given by the per unit costs
         of having to reject at an inspection level of 7 ppb.

     5)  Multiply costs in cents per pound of acceptable
         product at a given guideline level by total 1972
         production of peanut butter to total costs to peanut
         butter manufacturing industry of complying with a
         particular guideline level.

     ADL's cost data shows how per unit costs increase as the
guideline level is made more stringent.  While the movement
from 20 ppb to 15 ppb to 10 ppb guideline involves increas-
ingly higher costs, they rise at a slower rate.  A dramatic
increase in costs occurs at guideline levels below 10 ppb.
The cost elements were also shown as a function of reduced
average aflatoxin level in acceptable peanut butter at each
possible guideline level.  This information, for several
guideline levels, is reproduced in Table A-6.

                            TABLE  A-6

             AVERAGE  AFLATOXIN LEVEL  (PPB)  PER  POUND
                        OF  PEANUT  BUTTER1
Guideline          Average Expected Aflatoxin    % Incremental
   (ppb)                    ppb Level2              Reduction
   20                          2.28
   15                          2.00                   12.3
   10                          1.57                   21.5
    5                           .78                   50.3
    2                           .42                   46.1
1.   Source:  ADL

2.   Throughout the study ADL reported expected values as well
     as value ranges.  This Table reports only the expected
     value.

     Based on their analysis, ADL recommended against any
change in the current FDA guidelines, suggesting instead a
stronger quality control program.
                              Ill

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Analysis of Cost Estimates—
     A careful review of the cost estimates provided by ADL
highlights several concerns that suggest that costs of reduc-
ing the aflatoxin guideline may be lower than expected by
FDA.  First, since all the cost increase was based on the 1972
production level of 578 million pounds, the decrease in
quantity demanded due to a higher price is totally ignored.
This leads to an immediate overestimation of the increased
production costs of the regulation.  This is demonstrated in
Figure I where the net effect of a more stringent FDA guide-
line is assumed to result in a shift in supply of acceptable
peanut butter from 81-82 and the vertical distance DB is
the per unit increase in price of producing acceptable peanut
butter of the new regulation.

     In essence, ADL estimated the area P]_DBP" and referred
to this area as the increased costs of producing acceptable
peanut butter.  In fact, the actual production cost increase
would be represented by the much smaller area ?2ACP'.  The
net social costs of the regulation as discussed are another
matter and, following Figure A-l, are shown to be the area
ABG.  Producers lose surpluses, in the short run, of P"BCP',
and consumers incur surplus losses of P2ABP".

Price of
Acceptable
Peanut
Butter    p, 	.	„
                                                   S,
   Figure A<-I:
                                                       Demand
                         Quantity of Acceptable
                           Peanut Butter
Illustration of the costs associated with a
more stringent FDA aflatoxin guideline.
                              112

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     Second, ADIi assumed  that  the  only option available to
peanut butter manufacturers  for  controlling the aflatoxin
levels in their products  was to  reject the unacceptable peanut
butter after incurring  the production costs of processing.
ADL did not allow for the possibility that manufacturers
facing a more stringent guideline  would require raw peanut
shipments with lower average aflatoxin levels than those now
received.  This assumption was based  on a comparison of afla-
toxin levels in finished  peanuts which showed an extremely low
(.003) coefficient of determination between the two.  This
evidence led AOL to the conclusion that even if shellers pro-
duced raw peanuts with  lower aflatoxin levels, there would be
no effect on the costs  imposed on  peanut butter manufacturers.

     While sufficient information  does not exist on the com-
parison by AOli to allow for  a  critical appraisal, a review of
the report suggests a radically  different conclusion.  (Even
in their-study,',ADL admitted that  logic would argue for a sig-
nificant positive relationship between raw peanut aflatoxin
levels and peanut butter  aflatoxin levels.)  If a positive
correlation between the two  did  exist, it is likely that a
method of complying with  new guidelines that involved at least
a combination of using  cleaner peanuts and rejecting unac-
ceptable peanut butter  would yield lower per unit increases in
production costs.  There  is  some evidence that FDA may have
been aware of this possibility.  According to one FDA offi-
cial, the agency had assumed all along that if they lower
their guideline, manufacturers would  demand a lower guideline
from the USDA for shellers and processors recognizing that
lower costs would be incurred  than if their only recourse was
to reject the final product.

     Third, ADti assumed that the costs of meeting the guide-
line would be incurred  each  year,  and that no technological
advances would be made  to reduce this cost.  Based on the
peanut industry's demonstrated ability to develop techniques
that reduce aflatoxin levels,  an ability shown since the afla-
toxin problem was discovered in  the 1960s, a more reasonable
conclusion is that more technological advances are possible.

Summary—
     The estimation of  the true  social costs of reducing afla-
toxin levels in peanuts and  peanut products requires several
assumptions.  First, one  has to  calculate how a stricter
guideline affects the supply curve of the peanut industry.  To
do this, one must raate  assumptions about which stage of the
process  is burdened with  the cost. Assuming the cost to be
placed on the shellers, one  then needs to determine how much
of the increase is passed through  to  consumers.  Second, an
estimate must be made of  how long  before technological ad-
vances reduce the supply.  Third,  one needs to determine how
strongly consumers react  to  a  price increase in peanuts demand.

                             113

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     The ADL study clearly overestimates the cost of stricter
guidelines.  It neglected to. consider that consumers demand
fewer-.i.peanut products in response to higher prices and make up
part of the loss by substituting other products.  Available
technology enables shellers ,£o.,reduce levels far more cheaply
than by disposing finished products, as assumed by ADL.
Finally, ADL did not make allowances for cost reductions made
possible by technological advances.

    .- Supporting the argument that the costs are much lower
than ADL's estimates is that the National Peanut Council has
subsequently taken a neutral stand toward the 15 ppb guide-
line.  In addition, a FDA official claims that several of the
large peanut butter manufacturers have already voluntarily met
the 15 ppb even though the regulation is still in the proposed
stage.

Footnotes

 1.  Allcroft, Ruth, In "Aflatoxin-Scientific Background, Con-
     trol and Implications."  In Aflatoxin.  L.A. Goldblatt,
     ed., New York:  Academic Press, 1969.

 2.  Miller, James S., "Role of the United States Department
     of Agriculture."  Aflatoxin Quality Control Seminar,
     National Peanut Council, April 11, 1979.

 3.  39 Fed. Reg. 42748, December 6, 1974.

 4.  Rodricks, Joseph V., Hazards from Nature-Aflatoxins."
     FDA Consumer, May, 1978.

 5.  39 Fed. Reg. 42728, December 6, 1974.

 6.  U.S. Department of Health, Education, and Welfare, Food
     and Drug Administration, Bureau of Foods, Assessment of
     Estimated Risk Resulting from Aflatoxins In Consumer
     Peanut Products and Other Food Commodities.  January 19,
     1978.!

 7.  43 Fed. Reg. 8808, March 3, 1978.

 8.  Stoloff, Leonard.  "Aflatoxins - An Overview."  In
     Mycotoxins In Human and Animal Health.  Joseph V.
     Rodericks, e_t al., eds., Parke Forest South, Illinois:
     Pathotox Publishers, 1977.

 9.  Stoloff, Leonard.  "Incidence, Distribution and Disposi-
     tion of Products Containing Aflatoxins."  Proceedings of
     the American Phytopatholoqical Society, Vol.. 3, 1976.
                              114

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10.  Rodericks, Joseph V,  and Leonard Stoloff,  "Pood-Producing
     Animals."  In Mycotoxins in Human and Animal Health,
     Joseph V. Rodricks,  el: al., eds., Parke Forest South,
     Illinois:  Pathotox  PublTshers,  1977.

11.  Stoloff, Leonard.  "Mycotoxin Residues in  Edible Animal
     Tissues."  In Interactions of Mycotoxins in Animal Pro-
     duction, National Academy of Sciences, 1978.

12.  42 Fed. Reg. 61630,  December 6,  1977.

13.  Stoloff, Leonard. U.S. Department of Health, Education,
     and Welfare, Food and Drug Administration,  Bureau of
     Foods, Personal Communication, November, 1979.

14.  Campbell, T. Colin,  and Leonard Stoloff.  "Implication of
     Mycotoxins for Human Health."  J. Agr. Food & Chem.,
     Vol. 22, No. 6, 1974.

15.  Ibid.

16.  Shank, R.C., et al.,  "Aflatoxins in Autopsy Specimens
     from Thai ChiTdren with an Acute Disease of Unknown
     Aetiology."  Fd. Cosmet. Toxicol., Vol. 9,  pp. 501-507,
     1971.

17.  Rodricks, supra, note 4.

18.  Wogan, G.N.  "Aflatoxin Carcinogenesis."  In Methods  in
     Cancer Research, Vol. VII, H. Busch, eel.,  Academic Press,
     New York, N.Y., 1973.

19.  Ibid.

20.  Hsieh, D.P.H., e_t al., "Comparative Metabolism of Afla-
     toxin."  In Mycotoxins In Human and Animal Health, Joseph
     V. Rodricks, et al.,  eds., Parke Forest South, Illinois:
     Pathotox PublTshers,  1977.

21.  Van Rensburg, J. "Role of Epidemiology In the Elucidation
     of Mycotoxin Health  Risks."  In Mycotoxins In Human and
     Animal Health, Joseph V. Rodricks, et al.,  eds., Parke
     Forest South, Illinois:  Pathotox Publishers, 1977.

22.  Campbell and Stoloff, supra, note 11.

23.  Ibid.

24.  Stoloff, supra, note 10.
                              115

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25.  Peers, F,G., and C.A. Linsell.  "Dietary Aflatoxins and
     Human Primary Liver Cancer," Ann.  Nutr.  Alim.;  1977,  31,
     1005-1018.

26.  39 Fed. Reg. 42750, December 6, 1974.

27.  Arthur D. Little, Inc., Assessment of  the Effects of
     Possible Aflatoxin Guideline Changes for the Peanut
     Industry.  Report to National Peanut Council,  January 25,
     1974.

28.  Aflatoxin can be unevenly distributed  throughout peanut
     butter leading to large sampling errors  in the inspection
     results.  In order to ensure the safety  of their
     products, peanut butter manufacturers  normally discard
     any products with an aflatoxin level higher than 50% of
     the FDA guideline.

29.  This estimate was obtained by ADL from:   Peanut
     Processing Opportunities, University of  Georgia, June
     1972.
                             116

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SACCHARIN CASE STUDY

Introduction

     On April 15, 1977 the Pood and Drug Administration (FDA)
proposed rules in the Federal Register restricting the use of
saccharin, the only remaining artificial sweetener permitted
for consumption.!  Citing laboratory experiments demonstrat-
ing that saccharin caused bladder cancer in rats, FDA argued
that present consumption levels were hazardous and acted to
prohibit uses of saccharin that led to human exposure.  The
FDA proposed to prohibit the use of saccharin in all foods and
beverages, drugs (unless the company could demonstrate an
overriding health benefit), cosmetics that might be ingested
(such as toothpastes, mouthwashes, and lipsticks), and animal
foods and drugs.  Even animals not intended for human consump-
tion could not be fed saccharin, since the FDA Commissioner
found they derived no therapeutic benefit from it.  Under the
proposed rules, saccharin in the tablet, powder, and liquid
forms known as "table-top sweeteners" would be classed as a
drug.  FDA was undecided as to whether a prescription would be
needed to buy saccharin.

     The FDA action to ban saccharin as a food additive, or
more precisely to revoke the interim regulations allowing the
use of saccharin in food products, was taken under the general
safety provisions of the Food Additives Amendment of 1958 and
the Delaney Clause of the Federal Food, Drug, and Cosmetic
Act.2  The general safety requirements direct the Secretary
to detail the uses for and conditions under which a food ad-
ditive can be safely used.  Furthermore, the Delaney Clause
categorically states,

         "... that no additive shall be deemed safe if
         it is found to induce cancer when ingested by..
         man or animal."3

Under the Delaney Clause, once FDA concluded that saccharin
was a carcinogen, it had a clear responsibility to ban the
substance.  Although the inflexible nature of the Delaney
Clause has prompted considerable academic and public debate,
FDA has denied that the Delaney Clause was the exclusive basis
for the action.  Stating that the accumulated evidence demon-
strated that saccharin was not safe for human consumption, FDA
held that the general safety requirements for food additives
of the Food, Drug & Cosmetic Act* would have prompted FDA
action in the absence of the Delaney Clause; the Delaney
Clause only reinforced the conclusion.5

     To restrict the use of saccharin in drugs and cosmetics,
FDA followed different sections of the Act and a different
rationale; it argued that for these uses, the benefit of

                              117

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saccharin must be weighed against  the  risks.   In the case of
cosmetics, the Commissioner  held that  saccharin use should
cease because the benefits were not  great  enough to outweigh
the risks, even though these risks might well  be quite
small.6

     Consideration of the use of saccharin in  drugs presented
a more complicated problem since the benefits  were plausible
but difficult to evaluate.   While  FDA  recognized that special
formulas containing saccharin'may  be required  for diabetics.
and that in certain drugs saccharin  provided substantial
health benefits that could not otherwise be obtained in the
absence of feasible substitutes, it  felt the benefits of
saccharin generally did not  outweigh the risks.   Hence, unless
overriding health benefits could be  demonstrated, its use in
drugs was prohibited.

     The Commissioner proposed to  consider table-top sweet-
eners as drugs so that consumers could continue to obtain
saccharin.  Although saccharin's carcinogenicity prevented its
use as a food additive,  it did not prevent its use as a drug.
The Act's provisions governing the approval of human drugs
contain no Delaney Clause equivalent specifically preventing
the use of carcinogens in human drug products.   FDA would have
greater control over table-top sweeteners  as drugs than as
foods, since each variety would need FDA approval.   The law
gave FDA leeway to determine whether saccharin should be
available over-the-counter or whether  a doctor's prescription
would be required.  The Commissioner had not chosen which
option to pursue but was inclined  to permit saccharin to be
sold over-the-counter.

     The determination that  saccharin  would be prohibited as
an ingredient in animal foods and  drugs was based on a legis-
lative requirement forbidding such use of  any  substance found
to cause cancer in nan or animal unless tests  provided that no
residue of the substance could be  detected in  any food derived
from animals.^  Since no assays had  been submitted to FDA
(or were known to exist by FDA) that showed the lack residue,
it banned the use of saccharin in  animal foods and drugs.

     The FDA finding that saccharin  was a  carcinogen was based
on several scientific and medical  studies  involving animals
and humans.  The most persuasive results and those most often
referred to by FDA in the proposed regulations were derived
from chronic toxicity feeding experiments  on rats.   Two
studies of this sort, completed in 1973, one by FDA and
another by the Wisconsin Alumni Research Foundation, showed a
statistically significant increase in  the  incidence of bladder
cancer in male rats fed saccharin.3  The results of these
studies, however, were of questionable merit and could not be


                             118

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taken as conclusive because the saccharin contained impuri-
ties.  A third study, sponsored by the Canadian government,
corrected the errors in the earlier studies and led to the
conclusion that ingestion of saccharin by rats caused an in-
creased incidence of malignant bladder tumors.9  Extrapolat-
ing these results to humans prompted FDA to conclude that
saccharin posed "a significant risk of cancer for humans."10

     By FDA's calculation, the benefit from banning saccharin
was a maximum of 4 fewer cases of bladder cancer in the life-
time of 10,000 persons, compared with a lifetime risk of
bladder cancer in the United States of 150 cases per 10,000
persons.  It has been argued that for this reduction in cancer
incidence, the proposed regulations would impose several costs
on consumers.  In the absence of any non-nutritive sweetener
replacement, it was argued, diabetics would have more diffi-
culty obtaining sweet foods and more difficulty adhering to
their diets; people would gain weight, becoming prone to other
serious health problems such as heart disease and diabetes;
and, people would have increased tooth decay.  The cost of
these effects is hard to evaluate because none have been
scientifically proven.

     Subsequent events suggested that Congress and FDA had
either overestimated the value society places on reducing the
risk of cancer or underestimated the value of saccharin's
benefits.  The public and industry voiced strong opposition to
the ban, sending nearly 70,000 letters to the White House,
Congress and FDA.  After listening to testimony from the
American Diabetes Association, the Calorie Council and the
Pharmaceutical Manufacturers Association, among others,
Congress placed a moratorium on saccharin regulations until
May 23, 1979.  On July 4, 1979 the House voted to amend the
Act by extending the moratorium until June 30, 1981.  The
moratorium now awaits Senate approval.  In the interim, the
use of saccharin continues.  FDA continues to support removing
saccharin from the food supply, except as a table-top sweet-
ener, but is not acting until Congress decides whether, and if
so, under what conditions, unsafe food additives perceived to
have benefits should be available to consumers.

     During the moratorium, the merits of saccharin and the
proposed ban have been much debated.  More scientific studies
have been completed, studies of the scientific studies have
been done, as well as studies on many of the political, legal
and economic dimensions of the problem.  The prevailing opin-
ion is that some intermediate position between unrestricted
use and the controls proposed by FDA in 1977 is appropriate.
The final solution will probably not be known for some time.
                              119

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The Benefit of Removing Saccharin from Consumer Products

     The health risks of saccharin consumption have been a
matter of contention since shortly after saccharin's discovery
in 1879.  Serious evidence of health hazard, though, did not
appear until 1951 when the first of many animal chronic
toxicity studies was conducted.  Whereas, this study found
abnormalities in the abdomen of the rats, the results were not
statistically significant, and therefore inconclusive.  Since
that time, dozens of investigations have taken place.  Al-
though scientists are now in general agreement that saccharin
is a potentially weak carcinogen in humans,  questions remain
concerning the medical and scientific evidence.

     There are three general types of studies that are used to
identify potential carcinogens:  epidemiological studies,
animal studies and short-term tests.  Epidemiological studies
involve the comparison of statistics on the incidence and
mortality rates of a disease within a human population in an
attempt to determine causality.  Animal studies expose animals
to a single substance over a long period and then examine them
for tumors.  Short-term tests have been recently developed
which are much faster and cheaper than animal or epidemiologi-
cal studies.  They expose bacteria or mammalian cells to the
questionable substance to determine if genetic alterations or
neoplastic transformation occur.  Although a positive result
is not conclusive evidence of a substance's carcinogenicity,
it indicates that animal and epidemiological studies should be
undertaken.H  Each type of study has been conducted on
saccharin.  The differing reports reflect the strengths and
weaknesses of their respective methodologies.  The results of
these tests and the uncertainties associated with their re-
sults are discussed in more detail below.

Animal Studies—
     The 1977 FDA case that saccharin be considered a carcino-
gen was largely built on the results of three animal studies.
The general procedures for these studies, as specified in the
National Cancer Institute guidelines, is to administer the
maximum tolerated dose of saccharin and one-half or one-
quarter of this amount to separate groups of animals.  The
guidelines specify that the two test groups be composed of
fifty males and fifty females each, and 100 animals be in the
control group.  At the end of the expected lifetime the
animals are killed and autopsied, and the results between the
experimental and control groups are compared.  In addition,
the three animal studies which found saccharin to be car-
cinogenic continued the test for two generations; the second
generation was thus exposed from the time of inception.

     In 1973, the results of two two-generation studies, one
by the FDA and the other by the Wisconsin Alumni Research

                              120

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Foundation (WARP), were released.  Both studies found a
statistically significant increase in bladder tumors among
second-generation male rats fed the highest levels of sac-
charin - 7.5% and 5.0% of the diet respectively.  However the
saccharin used in both experiments contained numerous impuri-
ties/ making it unclear whether saccharin or an impurity was
the cancer-causing substance.12  This confusion was ad-
dressed by a Canadian government two-generation study which
investigated the carcinogenicity of the principal impurity in
saccharin, orthotoluenesulfonamide (OTS).  One group of rats
was fed a 5% dose level of saccharin without OTS, other groups
were fed various levels of OTS.  The rats exposed to saccharin
developed bladder tumors, while those fed OTS exhibited no
adverse health effects.13  None of the eleven one-generation
animal studies that have been conducted on saccharin have
revealed harmful effects.*4

     Several areas of uncertainty exist in interpreting the
results of animal studies.  One is how to interpret results
obtained by purposely administering extremely high doses of a
substance to test for its carcinogenicity.  While many
non-scientists have criticized this method of testing, it is
held to be appropriate among scientists.  Without using exag-
gerated doses animal tests would not be sensitive to mild car-
cinogens; for example, a 300-animal test would only be able to
detect a carcinogen expected to affect 1% of the population,
or 2 million persons, in the United States.  But if the doses
are several magnitudes higher than realistic doses, effects
can be extrapolated for approximately 0.001% of a population,
or two thousand people in the United States.  At the same
time, the dose must not be so high as to cause acute, non-
cancerous toxic effects.  While some reviewers felt that the
5% and 7.5% dose levels in the saccharin studies could have
been toxic, the National Academy of Sciences panel concluded
they were not.

     Concluding that the use of high dose levels in animal
studies is justified does not remove the uncertainty asso-
ciated with their use; the appropriate method of extrapolating
effects from high to low doses is not clear.  Estimates of
response at low doses differ radically depending on which
model is used.  Of the two major models, the single-hit or
straight line model predicts response to be much greater in
the low-dose range than the log-normal model.  When the dose
level is one thousandth of a dose at which 50% of the popula-
tion develops cancer, the single-hit model predicts response
to be 200 times greater than the log>~normal model. ^5
(Table A-7) .  FDA used the single-hit model in estimating the
risk of saccharin.16
                               121

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                            TABLE A-7

          EXPECTED RESPONSE  RATES AS A FUNCTION OF DOSE
               FOR DIFFERENT DOSE-RESPONSE MODELS3

Relative
Dose
16
8
4
2
1
.50
.25
.125
.063
0.01
0.001
0.0001

Log Normal, %
98
93
84
69
50
31
16
7
2
.05
.00035
.0000001

Log Logistic, %
96
92
84
70
50
30
16
8
4
.4
.026
.0016

Single Hit, %
99 +
99
94
75
50
29
16
8
4
.7
.07
.007
Source:  National Academy of Sciences, Saccharin:  Technical
         Assessment of Risks and Benefits, Washington, D.C.,
         1978.

     A second uncertainty involves extrapolating health ef-
fects from animals to humans.  Several critical factors may
differ among species that would cause some to be hypersensi-
tive to a substance and others to be resistant.  These factors
include metabolic pathways, rates of biotransformation, rates
of repair and routes of excretion.17  Some substances will
cause cancer in different organs in different species.  Never-
theless, the NAS panel of scientists concluded that "since the
metabolic pattern of organs or tissues and their responses to
acute injury are often very similar among different species,
it is not surprising that chemicals that are shown to be car-
cinogenic in one species often show the same type of response
in other species."18  Supporting this statement is the find-
ing that 81 of the 82 known human carcinogens have been shown
to induce cancer in animals.19  In defending its saccharin
decision, FDA acknowledged the uncertainty in using results
from animal tests to identify human carcinogens.  It then
accepted the principle, after citing similar positions taken
by numerous experts and government health agencies.
                               122

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     Beyond the inherent uncertainties of all animal studies,
the results of the saccharin two-generation studies generate
additional policy questions.  First,  almost without exception,
the cancers noted in these studies developed only in rats
which were exposed to saccharin in the womb and throughout
their early development.  Several factors make the fetus
radically moe sensitive to cancer-causing agents than adults.
These factors include suggestions that transplacental transfer
results in higher doses to the fetus  than to the mother, the
unknown strength of the fetus' immunities, the possibility of
greater susceptibility during rapid development, different
fetal metabolic capacities than adults, and factors relating
to fetal pharmacology.20  The importance of second genera-
tional health effects is not in question since pregnant women
may expose their children to saccharin.  Rather, the question
is how these results should be used to predict health effects
on adults.

     Second, only male rats exposed to saccharin showed sta-
tistically significant increases in the incidence of bladder
cancer.  This calls to question the appropriateness of apply-
ing the risk predictions to human females since the prediction
cannot even be applied to female rats of the same strain..21..

     A final uncertainty is whether saccharin acts in concert
with other substances to increase the probability of cancer.
Mondal et al. (1979) found it may be  a weak promoter in a
study whTch obtained significant in vitro transformations of
cells exposed to saccharin in the presence of nontransforming
doses of the carcinogen and an in, vitro transforming agent,
3-methylcholanthrene.22

Epidemiological Studies—
     The usefulness of the epidemiological studies on sac-
charin as a guide to policy making is extremely limited by
methodological difficulties.  The first study to suggest that
saccharin presents a health hazard was completed soon after
the FDA proposal.23  This was a case-control study in which
the differences in artificial sweetener consumption between
people with bladder cancer and healthy people were compared,
controlling for age and residential neighborhood.  The study
found an increased risk of bladder cancer for men who consume
artificial sweeteners but not for women consumers.  As it did
not differentiate between artificial  sweeteners, the study
could not attribute the risk to saccharin alone.  A similar
case-control study did not find a risk associated with the use
of saccharin.24  ^he NAS panel concluded that methodological
difficulties prevented them from judging the "seemingly con-
tradictory results" of these two studies.  In addition, four
other case-control studies failed to  show a correlation be-
tween saccharin consumption and bladder cancer, but they were
found by the panel to contain such significant methodological


                              123

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problems that conclusions could not be made from the re-
sults. 25

     Two other types of epidamiological studies have been
conducted on saccharin.  One is time-trend analysis in which
trends in exposure to a substance are compared to trends in
the incidence of a disease.  The two studies of this type
failed to detect any correlation between saccharin use and the
incidence of bladder cancer, although like the case studies
described above, shortcomings suggest caution in relying on
these results.  A study of bladder cancer rates in Britain,
where saccharin consumption became extensive during World
War II, found that saccharin's contribution to the increased
rates could not be statistically separated from that of
cigarette smoking.26  The second study, in the United States
from 1950 to 1967 where a dramatic increase in the consumption
of saccharin occurred in 1962, noted that the study may have
taken place too soon to detect the effects of the increase in
consumption because carcinogens are thought to have a latency
period of 18 to 45 years.27

     The third type of epidemiological study on saccharin com-
pared the incidence of bladder cancer among diabetics with
that of the general population.  Diabetics tend to consume
large quantities of saccharin as a substitute for sugar.  None
of these studies have found significant differences in bladder
cancer rates among the test groups.28  However, diabetics
differ from the general population in several key ways that
might effect the validity of the test results such as metabo-
lism, genetics, diet, abnormal bladder function, and a ten-
dency to smoke less.29  Given these differences, diabetics
cannot be assumed to be equivalent to nondiabetics in all
things except saccharin consumption.

     The above discussion suggests several methodological
limitations to epidemiological studies that must be taken into
account when applying the results of these studies to regula-
tory policy.  First, they are most useful at detecting ex-
tremely potent carcinogens.  Increasing their sensitivity can
only be done by expanding the sample size which generally
requires large expenditures.  Second, it is difficult to
control for the health effects of other carcinogens and other
social and environmental variables, restricting the ability of
the rests to isolate the risk of one carcinogen from other
factors.  Third, the long latency period for most carcinogens
may render impractical the dependence on epidemiological tests
for evaluating suspected carcinogens unless they have been
part of the environment for many years.

Summary—
     FDA relied heavily on the results of the two-generation
animal studies in determining saccharin to be carcinogenic.

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There is little doubt that these tests support their conclu-
sion:  that saccharin acting alone is a weak carcinogen.
However, the risk is apparently very small; they estimated
that, between zero and 4 out of 100,000 people would develop
cancer from saccharin in their lifetimes.  Alternatively
stated, between zero and 1,200 people in the United States
would develop bladder cancer each year should everyone consume
one diet soda a day.30  These estimates rank saccharin as
the weakest carcinogen yet discovered.  More serious than the
health effects of saccharin on adult humans are the health
risks to human fetuses, children, the mutagenic risks to the
gene pool and its potential promotional or   carcinogenic
effects.

The Cost of Regulation

     The economic definition of the cost of regulation is the
value of foregone alternatives.  In the case of a ban on sac-
charin, the costs are represented by the lost sales resulting
from price increases for dietetic foods and beverages, and the
transition costs of switching labor and capital from the pro-
duction of products containing saccharin to other products.

     FDA considered two costs:  the increased price of
sugarless products, and the value of lost sales of saccharin
and products containing saccharin.  It found the total cost of
the proposed regulation to range from $715.0 - $2,079.6
million.31

     Of this total, FDA estimated the lost sales to industry
to be between $607.2 - $1,969.3 million including the diet
food, diet beverage and table-top sweetener industries, and to
the sole domestic producer of saccharin, Sherwin Williams.
The lower figure assumes some reduction in lost sales through
the offering of alternative products formulated with small
amounts of nutritive sweeteners.  These would be consumed only
by overweight people, not diabetics.  The higher figure repre-
sents a complete loss in which no diet foods, diet beverages
or table-top sweeteners are purchased, either because no al-
ternative sweeteners are found or consumers do not buy any
that are marketed.

     The costs of prohibiting the use of saccharin in drugs,
where saccharin is an inactive ingredient, were estimated
separately by the Bureau of Drugs.32  jhe  implied conclusion
was that no major costs would be imposed on the drug indus-
try.  The FDA finding was based on several assumptions.   (1)
Many drugs are formulated with other sweetening agents besides
saccharin, which suggests that these sweeteners could be used
in drug products containing saccharin.   (2) FDA felt that
other "substitute sweeteners will almost certainly be
found."33   (3) in addition, FDA reasoned that the dosage

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 form of drugs would not have to be altered,  a costly aspect
 argued by industry, since a film coating could be applied to
 drugs to make them more palatable.  FDA did  admit that some
 increased packaging costs would be incurred  by the drug in-
 dustry because of larger tablet sizes.
        i.T  ' '
      On, a graph, the value of the lost  sales to the industries
 are repreesented by the area OPORQO;  the price times the
 quantity sold (See Figure A-2).
    Price
                                           Supply
                                           Demand
                               fir
Quantity
     Figure A-2:  Market equilibrium for saccharin products.

.The value of lost sales,  though,  is not an accurate  estimate
 of the cost of the regulation since the resources previously
 used in the production of products containing saccharin are
 transferred to other productive uses and therefore generate
 other sales.   In the short-run some resources such as plant
 facilities are fixed and  will lie idle;  the production lost by
 the idle capacity is a -short-run cost,  as  are the costs in-
 curred in transforming resources into new  productive uses.   In
 the long-rrun, resources will be fully employed in the second
 most valuable use.   The long-run cost is the difference be-
 tween the value of products containing saccharin and the value
 of the second best use of the inputs.   This cost will be much
 lower than those represented by lost sales.

      FDA estimated the cost to consumers to range from
 $107,8 - $110.3 million.   These figures were derived by.
 assuming diet foods and beverages would be reformulated using
 nutritive sweeteners and  would be purchased only by  overweight
 people.  Furthermore, the increased price  of products con-
 taining alternative sweeteners was assumed to approximate the
 price of substituting sugar for - saccharin.

      While FDA's method is the beginning of an assessment of
 the cost to consumers, it falls several steps short  of a •
                              126

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theoretically appropriate estimate.   In order to estimate the
true social costs of the regulation, the lost consumer sur-
plus, one must have estimates of the supply and demand func-
tions for dietetic products.   The increased costs to industry
that FDA estimated will actually be  translated into a new
price for sugarless dietetic  products through the workings of
the market.  Once a new price is estimated, the lost consumer
surplus can be calculated, with the  knowledge of how much
lower demand for a product is when its price increases.  In
Figure A-3, the lost consumer surplus is represented by the
trapezoid P0P]_TR.

      Price
            -  0
  Figure  A-3.
          Q!          QQ          Quantity
Effect of price increases for dietetic products.
     The Council on Wage and Price Stability (CWPS) estimated
that, based on the concept of lost consumers' surplus, the
regulation would cost $144 to $182 million.  This assumes that
all the surplus presently enjoyed by consumers would be lost
and that the demand for saccharin was relatively inelastic.
Neither of these assumptions seems likely to be true in the
face of subsequent evidence.  First, not all of consumers'
surplus would be lost since several alternative products could
replace saccharin in consumers' market basket:  new alterna-
tive sweeteners could be approved for use, consumption of
existing alternative sweeteners could be increased, or diet
foods and beverages could be reformulated without any sweet-
eners to which consumers would add saccharin they would buy as
a table- top sweetener.  Second, the demand for saccharin is
not likely to be as inelastic as assumed by CWPS since the
demand is not for saccharin as such, but for qualities pro-
vided by saccharin.  Since other products provide these quali-
ties, the appropriate definition of the demand curve is demand
for low-calorie, sugarless sweeteners.  Thus, with a ban on
saccharin, consumers will lose only a part of the surplus as-
sociated with consumption of low-calorie sugarless products,
and the actual dollar amount will be smaller than that esti-
mated by CWPS.

     The actual costs imposed on consumers, as implied by the
above discussion, depends on the value consumers impute to the
benefits of consuming products containing saccharin, whether
actual or perceived, and whether alternative sweeteners are
•seen as close substitutes.  The vigorous protest following the
proposal to regulate the consumption of saccharin that came
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from members of the public, the medical profession and indus-
try suggests that these benefits may be quite large and that
alternatives were not perceived as being as effective.  Be-
cause of the important role played by consumers'  perceptions
of the benefits of saccharin, and their validity, to accurate
cost estimates, a review of the evidence on the existence of
these benefits is presented below.

Saccharin in Foods and Beverages—
     One of the greatest areas of concern to the  public was
the elimination of saccharin from foods and beverages.
Studies have shown that the preference for sweet  foods exists
from the time of birth.34  Furthermore, the quantity of
sweets consumed appears to be culturally determined, and in
the United States sweet foods are an increasing proportion of
the diet.  Sugar adds what are commonly cited as  "empty"
calories to food and beverage products.  These calories are
quickly converted to fatty tissue when calorie consumption
exceed the body's needs, thus promoting weight gain.

     Saccharin is most frequently cited as facilitating weight
loss and helping diabetics avoid sugar reactions.  For those
wishing to control their weight, saccharin provides the sweet
taste of sugar without the calories.  Diabetics react both
acutely and chronically to nutritive sweeteners such as
sugar.  Saccharin, a non-nutritive sweetener, as  in foods and
beverages provides these individuals an opportunity and to
indulge a taste for sweetness and to participate  more fully in
social situations.  Furthermore, people who develop diabetes
in adulthood are typically overweight.  For them  saccharin
plays an additional role, in so far as it is thought to aid in
weight reduction, an important component of their treatment.
As an assessment of saccharin's contribution in controlling
weight, some predicted that in its absence the American popu-
lation as a whole would gain 632 million pounds of fat in one
year.  To the extent that people would gain weight, such
health problems associated with obesity as heart  disease,
diabetes and ironically cancer, would also increase.35

Saccharin in Drugs—
     Saccharin is used as an ingredient in many types of drugs
to sweeten and mask the taste of medicine.  For example, sac-
charin is frequently added to liquids and chewable tablets for
users, particularly children, who have difficulty swallowing
pills.  The underlying intent of formulating prescription and
over-the-counter drugs with saccharin is to encourage people
to comply with directions involving their use. Failure to
follow the recommended dosages, is recognized as  "one of the
key problems in attaining desired therapeutic results" of
drugs.36
                              128

-------
     In many drugs, sugar is not a viable substitute for sac-
charin.  If sugar is chemically active with other ingredients
in a drug to which it is added, it can destroy the therapeutic
value of the drug.  Because sugar is chemically unstable, it
can also reduce the life of the product.  Moreover, the quan-
tity of sugar necessary to mask the bitter taste of some drugs
may be so large as to make the size of pills unmanageable were
sugar used to replace saccharin.  Finally, using sugar as an
ingredient in drugs represents a potential hazard to diabetics.

Saccharin in Cosmetics—
     In toothpaste and mouthwashes, the major perceived advan-
tage of saccharin is that it encourages proper dental care*  A
sweetener is useful in toothpastes because of the bitterness
of fluoride and the chalkiness of phosphates.37  Adding-
sugar would contravene the purpose of using toothpastes as
well as present the same sort of technical problems arising
from its use in drugs.

Scientific Evidence of Benefits--
     Few studies have attempted to measure the extent to .which
the benefits discussed above are in fact realized.  A panel of
scientists at the National Academy of Sciences reviewed
several studies and concluded that:

     1.  Research has yet to be conducted to determine-.the-
effectiveness of saccharin in controlling weight, making it
impossible to evaluate this perceived benefit;

     2.  Few studies have investigated saccharin's role in
weight reduction, and those that exist have been unable to
document that it contributes significantly to weight loss.
Two studies that found saccharin to contribute to weight loss
had such limitations that no confidence could be placed in
their findings.38  TWO other studies found no correlation
between weight loss and the use of non-nutritive sweet-
eners. 39

     3.  No evidence indicates saccharin to be necessary in
the diabetic diet.  Current theories stress control of. ..
calories rather than sugars, and suggest that carbohydrates
represent 40% to 60% of the diet.  Diet, combined with regular
eating schedules, moderate quantities of food and regular
exercise is the recommended lifestyle for diabetics.  The use
of saccharin does not seem to encourage better adherence to
the dietetic regime.^0  However, saccnarin may provide sub-
stantial benefits by adding variety, assuaging a sweet tooth,
and offering a psychological crutch.

     4.  Although adequate studies have not been conducted,,
saccharin does appear to play an indirect role in preventing
tooth decay.

                              129

-------
     5.  And there are possible benefits in including sac-
charin in drugs and cosmetics.

     Although no other non-nutritive sweeteners are currently
permitted for general consumption by FDA, there are several
substances that, in the absence of saccharin, might become
available as substitutes.  In addition,, several nutritive
sweeteners, such as xylitol and sorbitol, may also be de-
veloped as substitutes for saccharin.  These substances do not
run the same risks to diabetics as ordinary sugars.  It should
be noted that none of the known possible alternatives to sac-
charin are without some questions of health risk and many are,
at this point, commercially inferior to saccharin as a food
additive.

Summary—
     The estimation of the true social costs of the proposed
saccharin ban is frustrated by several critical factors which
are not easily defined or quantified.  First, one has to iden-
tify the appropriate market in which changes in equilibrium
prices and quantities should be measured.  Is this market the
one for saccharin, or is it one of a group of substances shar-
ing similar characteristics such as sweetening without adding
calories, or causing tooth decay or affecting blood sugar
levels.  Second, given the definition of the relevant market
how inelastic is the demand for products with the attributes
of saccharin?  Should the demand curve reflect the lack of
scientific evidence of benefits attributed to saccharin con-
sumption, or should it reflect the perception of benefits?
Third, one has to calculate how a ban on saccharin affects the
supply curve in this market.  What are the short-run costs
incurred when capital is committed to the production of
products containing saccharin?  How much will it cost to
transfer the resources used to make saccharin products into
making the second best alternative?  What is the long-run loss
in producer's surplus measured by the difference between the
economic profits from saccharin products and the second-best
alternative?  How much more costly will alternative sweeteners
be to produce?  Fourth, since at the time of the proposed ban
no perfect substitutes for saccharin existed, the question
becomes important of how long before substitutes are ready to
market; that is developed, tested, approved, formulated into
products and capital readied for production?  Need substitutes
be developed, or can existing substances such as xylitol and
sorbitol readily replace saccharin's role?  How much will the
consumption of saccharin as a table-top sweetener increase as
a result of the proposed regulation?

     In light of difficulties imposed by the above considera-
tions, it is not surprising that FDA and CWPS made simplifying
assumptions that would bias their estimated cost of the pro--
posed regulation.  FDA erroneously included the total cost of

                              130

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lost sales to industry  and  miscalculated the loss to con-
sumers.  CWPS correctly identified  lost consumer surplus as
the appropriate cost to measure,  but  made the unreasonable
assumption that no alternatives  to  saccharin would become
available.  While any estimate is inherently uncertain given
the number of assumptions that need to be made,  an estimate
based on more flexible  and  appropriate assumptions would al-
most certainly reveal the cost to be  lower than either group
predicted.

Chronology

1970     NAS-NRC reviewed all available toxicity data on sac-
         charin for FDA for its  GRAS  review.  Inconclusive.
         Recommended establishment  of 15 mg/kg body weight/day
         limit, and new studies  of  chronic effects.

1971     June 25--FDA proposed removal of saccharin from the
         GRAS list and  the  establishment of an interim food
         additive regulation.

1972     February 1—FDA removed saccharin from GRAS.

1973     May 25—Extensions of interim food additive regula-
         tion.

1974     December 10—NAS-NRC report  concluded that existing
         evidence does  not  support  a  conclusion that saccharin
         is carcinogenic.

1977     January 7—FDA extended interim food additive regula-
         tions until results of  Canadian studies available.

         April 15--FDA  proposed  to  prohibit the use of sac-
         charin in diet foods, soft drinks, cosmetics, animal
         foods, animal  drugs, and to  permit its use in drugs
         when the benefits  outweigh the risks.

         November 23—Congress passed the Saccharin Study and
         Labeling Act placing an 18 month moratorium on regu-
         lations affecting  saccharin.

1979     May 23—Expiration of moratorium.

         July 24—House passes amendment to Saccharin Study
         and Labeling Act extending the moratorium until
         June 30, 1981.
                              131

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Footnotes

 1.  42 Fed. Reg. 19996,  1977.

 2.  42 Fed. Reg. 20002,  1977.

 3.  21 USC §348(c)(3)(A)  1977.

 4.  21 OSC §348(c).

 5.  42 Fed. Reg. 20002,  1977.

 6.  42 Fed. Reg. 20005,  1977.

 7.  21 USC §306b(d)(1)(H),  1972.

 8.  U.S. Department of Health,  Education,  and  Welfare,  Public
     Health Service,  Food and Drug Administration.   Histo-
     pathologic Evaluation of Tissues  from  Rats Following
     Continuous Dietary Intake of  Sodium Saccharin  and Calcium
     Cyclamate for a Maximum Period of Two  Years, 1973;  U.S.
     Department of Health,  Education,  and Welfare,  Public
     Health Service,  Food and Drug Administration,  Division of
     Pathology.  Subacute and Chronic  Toxicity  and  Carcino-
     genicity of Various  Dose Levels of Sodium  Saccharin,
     1973; and Wisconsin  Alumnae Research Foundation.  Long
     Term Saccharin Feeding in Rats.  Madison,  Wisconsin:
     WARF, 1973.

 9.  Canada, Ottawa,  National Health and Welfare Ministry,
     Health Protection Branch.   Toxicity and  Carcinogenicity
     Study of Orthotoluenesulfanomide  and Saccharin, 1977.

10.  42 Fed. Reg. 19996,  1977.

11.  44 Fed. Reg. 39859,  July 6, 1979.  "Scientific Basis  for
     Identification of Potential Carcinogens  and Estimation of
     Risks"; U.S. Environmental Protection  Agency,  Short-term
     Tests for Carcinogens,  Mutagens and Other  Genotoxic
     Agents, July, 1979;  and, Maugh, Thomas H., "Chemical
     Carcinogens:  The Scientific  Basis for Regulation."
     Science, 201 (1978), 1200-1205.

12.  See note 8.

13.  Canada, Ottawa,  supra,  note 9.

14.  Althoff, J., A.  Gardes, P.  Pour,  and P.  Shubik. "A
     Chronic Study of Artificial Sweeteners in  Syrian Golden
     Hamsters."  Cancer Lett.  1:21-24; BioResearch Con-
     sultants, Inc.,  Report to the National Cancer  Institute
     on Studies on Saccharin and Cyclamates.  Cambridge,

                             132

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     Mass.:  National Institutes  of Health,  1973  (unpub-
     lished) ; Coulston,  F., E.W.  McChesney,  and L. Golderg.
     "Long-term Administration  of Artificial Sweeteners  to  the
     Rhesus Monkey."   Food Cosmet, Toxicol.  13:297-302;
     Hicks, R.M.,  C.L. Walters, I. Elsebai,  A.B.E. Aaser, M.
     Merzabani, and T.A. Gough.   "Demonstration of Nitro-
     samines in Human Urine:  Preliminary Observations on a
     Possible Etiology for Bladder Cancer in Association with
     Chronic Urinary  Tract Infections."  Proc. R. Soc. Med.
     70:413-417; Lessel, B., A  Two-year Trial on  Saccharin  for
     Carcinogenic  Activity.  Report No. 1014, Biol. Div. Boots
     Pure Drug Co., 1959 (unpublished); Litton Bionetics,
     Inc., Carcinogenicity of Chemicals Present in Man's
     Environment Final Report to  the National Cancer
     Institute, National Institue of Health, 1973; Munro,
     I .C., C.A. Moodie,  and H.C.  Grice, An Evaluation of the
     Carcinogenicity  of  Commercial Saccharin, Ottawa, Canada:
     National Health  and Welfare  Ministry, 1973;  Munro, I.C.,
     C.A. Moodie,  D.  Krewski, and H.C. Grice, "A  Carcino-
    ; genieity Study of Commercial Saccharin  in the Rat."
     Toxicol. Appl. Pharmacol.  32:513-526;  National Institute
     of Hygienic Sciences,  "Long-term Toxicity Study of  Sodium
     Cyclaraate and Saccharin Sodium in Rats." Jpn. J.
     P:har.ntacol. 25 (Suppl.) :55-56; Schmahl,  D. "Fehlen Einer
,  \ .  Kaiizerogenen  Wirkung von Cyclamat, Cyclohexylamin and
     Saccharin bei Ratten." Arzneim.-Forsch. 23;1466-1470,
     1973; Simon,  D., £t al., "Coffee Drinking and Cancer of
     the Lower Urinary Tract."  J. Nat. Cancer Inst.
     54:587-591.

15.  National Research Council/National Academy of Sciences.
     Saccharin; Technical Assessment of Risks and Benefits,
     Washington, D.C.:  National  Academy of  Sciences, 1978.

16,  42 Fed. Reg.  20001, 1977.

17.  National Research Council, supra, note  15.

18.  Ibid,

19.  Maugh/ supra, note  11.

20.  National Research Council, National Academy  of  Sciences,
     Safety of Saccharin and Sodium Saccharin  in  the Human
     Diet, Washington, D.C.:  National Academy of Sciences,
     T9~7T.

21.  Hav«?nder, William R.,  "Ruminations on a Rat: Saccharin
     and fluman Risk." Regulation, March/April, 1979.

22.  National Research Council, supra, note  15.


                              133

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23.  Howe, et al.,  "Artificial Sweeteners  and  Human  Bladder
     Cancer"?1"  Lancet, 2 (1977),  578-581.

24,  Cojilston, F.,  E.W. McChesney,  and  L.  Goldberg,  supra,
     no£e 14.                      ....„•

25.  Kessler, I.I.  "Non-nutritive Sweeteners and  Human  Bladder
     Cancer:  Preliminary Findings."  J. Jrol.  115:143-146;
     Morgan R.W., and M.G. Jain,  "Bladder  Cancer:  Smoking,
     .Beverages and Artificial Sweeteners." Canada Med.  Assoc.
     J^, .3:1067-1970; Simon,  D.,  supra,  note 14;  Wynder,  E.L.,
     and R.'Goldsmith, "The Epidemiology of Bladder  Cancer;   A
     Second Look."   Cancer, 40:1246-1268.

26.  Armstrong, B., and R. Doll.   "Bladder Cancer Mortality  in
     England and Wales in Relation to Cigarette Smoking  and
     Saccharin Consumption."   Br. J.  Prev. Soc. Med.,
     28:233-240.

27.  Burbank, F., and J.F. Fraumeni,  Jr.   "Synthetic Sweetener
     Consumption and Bladder  Cancer Trends in  the United
     States."  Nature, 227:296-297.

28.  Armstrong, B., and R. Doll.   "Bladder Cancer Mortality  in
     Diabetics in Relation to Saccharin Consumption  and  Smok-
     ing Habits."  Br. J. Prey. Med., 29:73-81; Armstrong, B.,
     et al. "Cancer Mortality and Saccharin Consumption  in
     Diabetics."  Br. J. Prev. Soc. Med.,  30:151-157; and
     Kessler/ 1.1., "Cancer Mortality Among Diabetics."   J^
     Nat. Cancer Inst., 44:673-686.

29.  National Research Council, supra,  note 15.

30.  42 Fed. Reg. 20001, 1977.

31.  Office of Planning and Evaluation  - Office of the Commis-
     sioner, Inflation Impact Statement of Proposed  Rulemak-
     ing;  Saccharin and Its  Salts in Foods, Drugs,  Animal
     Feeds, Animal Drugs, Cosmetics,  and as a  Food Additive;
     Prohibition of Uses.  Washington,  D.C.:   FDA, April 1977.

32.  Ibid.

33.  Ibid.

34.  Lippsitt, L.P., "Taste in Human  Neonates:  Its  Effects  on
     Sucking and Heart Rate."  Taste  and Development:   The
     Genesis of Sweet Preference.  J. Weiffenbach, ed.
     'National Institute of Health,  Publ. No. 77-1068, 1977.
                              134

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35.  National Research Council,  supra,  note  15.

36.  American Pharmaceutical Association, Comments  on  the
     Proposed Rulemaking Concerning Saccharin  and Its  Salts,
     Hearing Clerk Document CA 41183, June 9,  1977.

37.  Proprietary Association, Comments  on the  Proposed Rule-
     making Concerning Saccharin and Its Salts, Hearing Clerk
     Document CH 43465, June 14,  1977.

38.  Breslow, I.H., Summary of Report on Sucaryl Weight-loss,
     Chicago:  Records of Abbott Laboratories.  326403, 1964;
     and Glenn, M.D.,  "Education and Motivation in  the Treat-
     ment of Obesity." Amer. Coll. Health assoc. J.,
     13:521-531.                        '

39.  Alexander, M.M.  "Have Formula Diets Helped?"  J. Am.
     Diet. Assoc., 40:538; and McCann,  M.B., and M.F.  Trulson,
     and S.C. Stulb, "Non-caloric Sweetners  and Weight Reduc-
     tion."  J. Amer.  Diet. Assoc., 3.2 ;1067-1070.

40.  Farkas, C.C. and  C.E. Forbes.  "Do Non-caloric Sweeteners
     Aid Patients With Diabetes  To Adhere to Their  Diets?"  J_.
     Am. Diet. Assoc., 46:482-434.
                              135

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RADIATION CASE STUDY

Radiation Regulation

     Protection of human populations and the environment from
excessive radiation exposure is an area of federal regulation
that is characterized by several agencies administering
statutes that have been adopted in a piecemeal fashion.  No
single agency has  the authority to coordinate the various
radiation protection  procedures or to establish the broad
principles under which the costs and benefits of alternative
levels of radiation protection could be evaluated.  Conse-
quently, the agencies responsible for radiation protection
have worked largely independently as they weigh the merits of
varying degrees of control.   The purpose of this study is to
review from a cost-benefit perspective some of the practical
problems encountered  by the agencies as they seek to protect
individuals from radiation and to indicate briefly some of the
agency responses to these problems.

     The radiation of interest to the regulatory agencies is
termed ionizing radiation, because as it passes through sub-
stances, chemical  bonds are broken and electrons are lost.  In
biological material the damage can kill cells, induce cancer,
and produce genetic effects.  Ionizing radiation consists of
alpha, beta, and neutron particles and gamma and X rays.   Man-
kind is exposed to ionizing radiation from several sources:
cosmic radiation,  terrestrial radiation, medical diagnostic
procedures, and internal radioactive isotopes contributing the
most to dosage rates.  Table A-8 summarizes the average doses
for the U.S. population.

Ionizing Radiation;  Scientific Aspects

     The several types of ionizing radiation have quite dif-
ferent effects in  biological matter  and, hence, have different
implications for public policy.  Alpha particles are posi-
tively charged helium particles which are not appreciably
absorbed by biologic  matter.  Thus,  alpha particles emanating
from the environment  are stopped by  the outer dead layer of
human skin.  Beta  particles are negatively charged and may
penetrate to a few centimeters in biological matter.  As alpha
and beta radiations do not easily penetrate tissue, an adverse
effect by these radiations would most likely occur only when
the radionuclides  are inhaled or ingested by an organism and
the radiations are emitted inside the organism.  Alpha and
beta particles are termed internal emitters.  Neutrons are
uncharged particles that may penetrate deeply into biological
tissues before causing ionization.  Gamma and x radiations are
similar to the radiations of the visible spectrum, expect that
they have much shorter wavelengths.   These radiations easily
penetrate tissues, to the extent that they may go right

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                           TABLE A-8

        1970 ESTIMATED WHOLE BODY DOSE RATES IN THE U.S.



     Source of radiation       Average dose in millireras/year
     Natural
       Cosmic                               45
       Terrestial                           60
       Internal Isotopes                    25

     Manmade
       Global fallout                        4
       Nuclear power                         0.003
       Medical diagnostic                   72
       Radiopharmaceuticals                  1
       Occupational                          0.8
       Miscellaneous                         2
Source:  Nuclear Poser Issues and Choices, p. 163.

through an exposed organism.   Gamma and x radiations and
neutrons are termed external  emitters, as they may evoke an
adverse effect without being  inhaled or ingested by the or-
ganism.1                                      .

     Alpha and beta radiations are said to be "directly ioniz-
ing" as they carry a charge and directly interact with atoms
in biologic tissues to cause  ionizations.  Conversely,
neutron, gamma, and x radiations are said to be "indirectly
ionizing" in that, although they are uncharged, their energy
is released to produce charged particles which, in turn, in-
teract with atoms in biologic-tissues and cause ionizations.
For example, collisions between neutrons and atoms in biologic
tissues may cause the formation of positively charged par-
ticles, termed protons.  These protons, so formed, may pass
through the exposed tissue causing ionizations.2

     The damage to biologic matter by ionizing radiation de-
pends on the amount of energy lost by the radiation.  The more
energy lost, the more ionization and hence, damage.  The
phrase, linear energy transfer (LET), is the amount of energy
lost by the ionizing radiation per unit distance transversed.
The LET value, usually expressed in kiloelectron volts
(keV)/micrometer (urn), of a particular type of ionizing radia-
tion increases as the energy decreases.3 7  For example, an
alpha particle with an energy of 100 keV will have a lower

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tissue penetration distance but a higher LET value than an
alpha particle with an energy content of 200 keV.  Beta par-
ticles and gamma and x rays are low-LET radiations and are
responsible for most of the absorbed doses received by the
general population and by radiation workers.4  Neutron, radi-.
ation and alpha particles are high-LET radiations.

     To better understand the biologic effects of ionizing
radiation, a brief discussion of the units of measurement is
warranted.  Basically, one can measure either the amount of
radionuclide or the radiation dose.  The quantity of radio-
active substance can be determined by the number of radio-
active disintegrations per second for a given amount of
radionuclide.  The basic unit of quantity of radionuclides is
the curie (Ci), which is the amount of material in which 3.7
X IQlO atoms disintegrate per second.  The actual weight of
radioisotope comprising a curie varies.5  For radium-226,
the naturally occurring radioisotope of radium 3.6 x 10^-"
disintegrates/second are emitted from 1 gram of material.  The
curie indicates the number of radiations being emitted, but
does not indicate a biological effect.**

     The radiation does is measured in roentgens, rads, or
rems.  The oldest unit of measurement, the roentgen (R) is
applicable only to gamma and x radiations.  The more current
terminologies are the rad and the rem.  The rad, or radiation
absorbed dose, is the amount of radiation which leads to the
absorption of 100 ergs of energy/gram of absorbing material.
However, a rad of exposure to alpha particles has a greater
biological effect than a rad of x radiation.  To account for
differences in the biological effectiveness of different kinds
of ionizing radiation, the rem (for r_oentgen equivalent man)
is used as a unit of "relative biological effectiveness"
(RBE).  One rem = (1 rad)  (RBE), where RBE is used as a cor-
rection factor to convert rads to rems, which is a measure of
exposure independent of the type of radiation.  Typical RBE
valuers are 1 for gamma and beta radiations with energies above
50 key, 2 to 5 for lower energy gamma and beta radiations, 10
for fast neutrols and natural alpha particles, and 20 for fis-
sion particles.7

     Lastly, the man-rem (or, person-rem)  is used to measure
the exposure of a population to ionizing radiation.  It is
defined as the added doses, i.e., those above background
levels, to which the population is exposed.  For example, 200
people exposed to 2 rems each of ionizing radiation would be
measured as 400 raan-rems.8

     Ionizing radiations naturally occur in the biosphere and
constitute the background radiation to which the biota is,
presumably, adapted. "This background radiation is derived


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from nuclides located in the external environment or in the
organism itself.

     Cosmic radiation consists of charged particles, primarily
protons and some heavier particles.   However, upon entering
the earth's atmosphere, these charged particles collide with
atmospheric gases to produce a variety of products, including
neutrons, gamma rays, mesons (positively or negatively charged
particles of intermediate mass between that of protons and
electrons), and electrons.9  The dosage of cosmic radiation
received by an individual is dependent on the altitude.  For
example, at sea level the radiation dosage is about 40 milli-
rems (mrems)/year, but at Leadville, Colorado, at an altitude
of 3 kilometers (km), the dosage increases to 160 mrems/year.
At an altitude of 10 km the dosage is 3,500 mrems/year.  Al-
titude becomes a significant factor for aircraft crew and pas-
sengers.  It has been estimated that a transcontinental jet
flight at a height of 10 km would result in an extra whole-
body radiation dose of 1 mrem.10  For the U.S. population as
a whole, aircraft transportation results in a cumulative does
of 105,350 person-rems/year.11

     Radionuclides in soil and in building materials are ad-
ditional sources of ionizing radiation, with concentrations
varying according to soil types.  Thus, the rate at which a
person receives ionizing radiation from terrestrial sources is
dependent on the soil type of the specific geographic loca-
tion.  Individuals living in the Atlantic and gulf coastal
plain states receive terrestial radiation at levels from 15 to
35 mrem/year; those in the northeastern, central and far-
western states received from 35 to 75 mrem/year; and those in
the Colorado plateau region received from 75 to 140 mrems/year
(Figure A-4)12  Braziliansoils rich in thorium and uranium
emit quantities of radiation causing whole body exposures up
to 2,000 mrem/year.13

     Natural radionuclides may be ingested or inhaled by or-
ganisms and, thereby, are present in the body tissues them-
selves.  The level of "internal" radionuclides is depenent o
geographical location, the type of water supply, etc.

     Artifical  (i.e., anthropogenic) sources of ionizing radi-
ation include those from medical/dental treatments, radioac-
tive fallout, occupational exposure, and a variety of minor
sources.  X rays, used either for medical/dental diagnoses or
for therapy, constitute the largest anthropogenic course of
exposure of the U.S. population.  It was estimated that in
1970, 65% of the U.S. population was exposed to x rays for
medical/dental purposes.14  Another medical source of ioniz-
ing radiation occurs in patients administered radiopharma-
ceuticals.
                              139
on

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     Beginning in the 1950s, another source of ionizing radia-
tion arose, that from the radioactive fallout resulting from
the testing of nuclear weapons,  when a nuclear weapon is
tested in the atmosphere, extensive local fallout of radio-
active materials occurs for 1 day over the immediate area.
However, worldwide trophospheric fallout is evident for about
1 month and worldwide stratespheric fallout occurs for many
years thereafter.15

     Occupational exposure to ionizing radiation occurs during
the operation of x ray equipment in medicine and dentistry.
Operators of medical x ray equipment are exposed to an addi-
tional 125 mrem/year.  Medical radionuclide and radium workers
are exposed to an additional 350 and 540 mrem/year, respec-
tively.  Personnel associated with commercial nuclear power
plants and supporting activities, such as the mining and
milling of uranium, are also exposed to additional ionizing
radiations.  Research activities utilizing high voltage x ray
machines, particle accelerators, x ray diffraction units,
neutron generators, and electron microscopes are other poten-
tial sources of exposure to ionizing radiation.16

     Minor sources of ionizing radiation include various con-
sumer products (e.g., luminous wristwatches and clocks, smoke
detectors, television sets) and activities (e.g., smoking,
combustion of natural gas during cooking, combustion of fossil
fuels for home heating)  and industrial products (e.g., build-
ing materials, airport luggage x ray inspection systems).
These sources yield a combined whole-body dosage exposure for
the U.S. population of 4 to 5 mrems/year.17

     Traditionally, the adverse biologic effects of ionizing
radiation have been classified as (1)  genetic and (2)
somatic.  A genetic effect is an adverse effect occurring in
the germ cells, i.e., the sperm and the egg.   Such an adverse
effect, involving some gene mutation or chromosomal aberra-
tion, may be transmitted to (i.e., inherited by)  the off-
spring.  This type of damage poses a threat to the descendents
of the exposed individual.  Somatic cells are all the body
cells, except the germ cells, comprising an individual.  An
adverse effect on a somatic cell poses a threat to the exposed
individual.  Chromosomes with their genes control not only the
hereditary aspects but also the everyday metabolic activities
of the cell.  Thus, an adverse effect on somatic cells may
also (as with the germ cells) be due to the induction of gene
mutations or chromosomal aberrations.18

     The biological damage caused by ionizing radiation res-
ults from the disruption of molecules, such as DNA, which are
essential to the normal functioning of cells.  Densely ioniz-
ing, high-LET radiations are most effective at damaging cells,
possibly because they have a high probability of emitting

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large amounts of energies into small volumes.   Radiations
having low-LET spread their energy out more  or less uniformly
in the cells, so that no portion of the  target cell receives
large quantities of energy.*9

     Ionizing radiations may interact in a variety of modes
with cells:   (1)  The radiation may pass  through the cell with-
out causing  intracellular damage.  (2) The ionizing radiation
may cause sublethal damage to the cell,  which  can eventually
repair and recover  fron the injury.   (3)  The radiation may
damage the cell to  the extent that the cell  cannot repair the
injury or it reproduces itself in an altered physiological
state.20

     Although much  research has demonstrated the genetic ef-
fect of ionizing radiation on microorganisms,  plants, insects
(primarily,  the fr.ui.tfly) , laboratory animals  (with emphasis
on the mouse) , and  cells in tissue culture,21  there is an
almost complete absence of information on radiation-induced
mutations in human  beings.  The problems of  recognizing and of
estimating the effects of ionizing radiation on genetic ef-
fects has been stated by the National Research Council:^2
"Some results of genetic change are conspicuous, others are
invisible; some are tragic, others so mild as  to be trivial;
some occur in the first generation following the gene or
chromosome change,  others are postponed  tens or hundreds of
generations  into the future.  Furthermore, most of the effects
that are produced by mutation are mimicked by  others, of
nongenetic origin.   For all these reasons, radiations (or some
other environmental agent) could be having an  important effect
on human well-being, yet this could go unnoticed.  Even if the
increase in mutation rate is large, the  consequences are
likely to be" so heterogeneous in their nature, so diluted by
space and time, and so obscured by similar conditions from
other causes as to  make it impossible to associate with their
cause."

     The somatic effects caused in ionizing  radiation include
impairment of early human growth and development, impairment
of fertility,- fbtstation -of cataracts, promotion of the aging
process, and induction of cancer.  The development individual,
i.e., the embryonic, fetal and infant stages,  is especially
sensitive to the damaging effects of  ionizing  radiation.
Knowledge of the effects of ionizing  radiation on human de-
velopment is derived from 4 sources:   (1) patients irradiated
for medical reasons, (2) the survivors of the  atomic bombs
dropped on Hiroshima and Nagasaki, (3) the individuals of the
Marshall islands who were exposed in  1954 to radioactive fall-
out,23 and (4) studies of population  exposed to high levels
of background radiation.  A high incidence of  microcephaly
(i.e., a head size  of reduced circumference),  with or without
accompanying, mental retardation, was  noted in  subjects exposed

        """"  '    ....'"...'..,: "' '  '  141     ' "  -                 .

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in utero at Hiroshima and Nagasaki.  Elevated rates of chromo-
somal abnormalities were noted among survivors and their off-
spring who were exposed in utero but not in the children cpn-
ceived'after the detonation of the atomic bomb.24  A high
incid*ftce of fetal and neonatal mortality was also noted.  At
Nagasaki, the rate of fetal deaths was 23.4% and that of neo-
natal or infant deaths was 26% in those situated 2,000 meters
from the point of detonation.25

     The most definitive studies on the hypersensitivity of
children to ionizing radiation were of young children exposed
at Hiroshima and examined into adolescence.  Decreased growth
rates and body measurements characterized those children ex-
posed to 100 rads or more.  People of the Marshall Islands who
were exposed to radioactive fallout in early childhood de-
veloped atrophy of the thyroid gland, with impaired body
growth and sluggish mental functions.26

     The induction of cataracts, the promotion of premature
aging, and the impairment of fertility as somatic effects of
ionizing radiation have been noted primarily in studies with
experimental animals.  There are little data on humans and
some of the data is contradictory.  For example, mortality
studies of radiologists have demonstrated increased mortality
rates from cardiovascular-renal diseases as compared to other
medical technologists, strengthening the notion of radiation-
accelerated aging.  However, accelerated aging has not been
noted in studies of the survivors of Hiroshima and
Nagasaki.27

     Lastly, but perhaps of greater concern, are the effects
of ionizing radiation on cancer induction.  Although the
mechanism of carcinogenesis is not fully kndwn, there are
several hypotheses concerning the mode of induction of malig-
nant tumors by ionizing radiations.  Ionizing radiations may
(a) cause gene mutations in somatic cells, (b)  cause chromo-
somal aberrations which are a dominant feature in malignant
cells, (c) activate latent intracellular oncogenic viruses,
(d) cause a precancerous lesion in which tissue regeneration
leads to cancer, and (e)  damage an endocrine aland, such as
the pituitary, so that a hormonal imbalance i& created that
causes a cancer at another site, such as the ovary.28

     Different biologic tissues have different sensitivities
to ionizing radiation, with progenitive tissue being the most
sensitive.  (Table A-9)   Progenitive tissues include the
bloodforming components,  the alimentary tract mucosa, the skin
and associated structures, and the lens of the eye.

     Many studies have demonstrated a positive relationship
between ionizing radiation and cancer induction in humans.  An
increased incidence of all forms of leukemia (except'for

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                           TABLE A-9
Tissues are listed here in the order of their decreasing
radiosensitivity (Grosch and Hopwood, 1979):

 1.  Lymph tissue, especially lymphocytes

 2.  White blood cells and immature red blood cells of the
     bone marrow

 3.  Cells lining the gastrointestinal tract.

 4.  Gonadic cells

 5.  Skin, especially the proliferating layer

 6.  Blood vessels and the body cavity lining       '

 7.  Tissues of glands and the liver

 8.  Connective tissues

 9.  Muscle

10.  Nerves
chronic lymphocytic leukemia) was noted in atomic bomb sur-
vivors of Hiroshima and Nagasaki and in British patients
treated with intensive spinal irradiation for ankylosing
spondylitis29.  Overall, the risk for leukemia in the sur-
vivors of the atomic bombs was about 20 cases/million people/
rad/year.  Increases in other types of cancer were also noted
among the survivors; the risk, in cases/million people/rad/
year, was 1.2 for thyroid cancer, 2.1 for breast cancer, -arid
2.0 for lung cancer.30  An increase in the incidence of bone
tumors was noted in the 1920's in painters of luminous dial
watches and clocks.  The workers, unknowledgeable of the ad-
verse effects of radiation, often dipped their brushes into
the luminous compound which contained radium, and then tipped
their brushes on their tongues.  Radium miners, who often are
exposed to and inhale radioactive dusts and gases, have a high
incidence of lung cancer.31

The Regulatory Problem

     The problem facing regulatory agencies is to develop'
sensible policies regarding exposure to relatively low doses
of radiation.  Tabe A-8 indicated that doses from roanmade
sources are below background levels of radiation for most o'f

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the U.S. population.  Given that the human population has
probably adapted for the most part to background levels, it is
not surprising that difficulties are encountered in measuring
the effects of small increases and natural background levels.
Perhaps the most-attention has been given to long term studies
of the survivors of the Nagasaki and Hiroshima A-bombings.
The data on radiation exposures are unique in having a wide
range of exposures and a large sample size.  Although the
sample size at low levels of exposure is not sufficient to
determine with any precision the impacts of low doses, the
effects at higher doses can be extrapolated.  Figure A-4 below
indicates a range of possible extrapolations, based upon
linear, quadratic, and other functional forms of the dose
response function.  All functional forms are consistent with
the prevailing scientific opinion that no threshhold exists,
that some cancer risk is present for even very small eleva-
tions in background radiation levels.  Even so, the estimated
dose-response relationship at low doses depends heavily on
which functional form is chosen.
 Source:   Science,  September  12,  1980, p.  1200.

    Figure A-4.  Dose-response analysis of leukemia incidence
                 among  Nagasaki A-bomb survivors.

      A  recent Chinese  study  provides supporting  evidence  on
 the  effects of low doses  of  radiation.3^   since  1972,  the

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Chinese team has monitored the health status of approximately
73,000 people who live in parts of Yangjiang County? Guangdong
Province, where background radiation levels are about three
times those in neighboring areas, and the health status of
about 77,000 people in two control regions a few kilometers
away.  Population exposures averaged approximately 25
millirems/month in the high-background area and 9.3
millirems/month in the control areas.  Comparison of blood
samples for chromosomal aberrations, the spontaneous abortion
rate, heredity diseases and congenital abnormalities, and the
growth and development of children showed no significant dif-
ference between the two regions.  Likewise, the mortality rate
from malignancies did not show a significant difference be-
tween the two regions for the period 1970 through 1974.  The
Chinese concluded that to detect the effects of relatively low
doses (such as the approximately 200 millirem difference in
background radiation doses in the study), a much larger sample
must be used.

     Other studies of the effects of low level radiation in-
clude the studies by Thomas Mancuso and associates of workers
at Hanford, observation by Najarian and Colton of workers at
the Portsmouth Naval Shipyard where nuclear submarines ar«
maintained and refueled, and the work of Irwin Bross on diag-
nostic x-rays.  All of these studies claim that there is an
elevation of cancer incidence even at low levels of radiation
exposure.  But just how great is the elevation in risk remains
uncertain.  Two difficulties are always encountered.  First,
precise direct estimation of risks at small doses requires
impractically large samples.  Second, to estimate low-dose
risks from high dose data, must depend heavily on parameters
in the dose-response curve, e.g., whether it is linear,
quadratic, concave, or convex in the region of low doses.

     The currently accepted approximation, developed by the
International Commission for Radiological Protection (ICRP),
is that a whole-body dose of 1 rem leads to a death risk of
one in ten thousand.  A less reliable but quantitatively simi-
lar estimate holds for the risk of a serious genetic effect.
The dose-response function is assumed by the ICRP to be
linear.  That is, the ICRP assumes that 10 rem exposures of
1,000 individuals and .01 rem exposure of one million people
will both have a death risk of one person.

     In this context, the Chinese study of 70,000 people, each
of whom is exposed to approximately 0.2 rems of excess back-
ground radiation relative to the control group, should find
about 1-1/2 excess deaths per year in the study group.  Such a
small effect would likely go undetected in samples this size.

     Using the ICRP data, one can make a rough estimate of the
number of cancers per year caused by all manmade sources of

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radiation in the U.S. (1,800).   Of  this  number,  nuclear power
contributes 0.1, global  fallout  22, occupational sources 4,
and medical diagnostic cases  over 1,700.
      . *>              •
     Several dimensions  of  the federal regulatory problem
should be .apparent new.   First,-  there is probably no totally
safe level of exposure to radiation.  Thus,  statutes that
direct agencies to reduce risks  to  the maximum extent feasible
push agencies toward a zero increment to background levels.
Second, the dose-response relationship at  low  levels is highly
uncertain.  Actual fatalities from  a given dose  could vary by
more than one order of magnitude about the best  estimate
available.  Third, it may be  very costly to  control exposures
to radiation.  These costs  may be expressed  in terms of labor
and capital needed to shield  a reactor,  in terms of excess
risks to other workers to supply the necessary shielding
(which could more than offset the expected savings from radia-
tion protection), or in  terms of less precise  medical diag-
noses if medical exposures  are reduced.  The need for some
balancing of costs and benefits  should be  clear.

     Were this the full  extent of the radiation  regulatory
problem, this case study would look much like  saccharin, afla-
toxin, or coke oven emissions.   There is another dimension of
the radiation problem that  makes it considerably more in-
tractible, however.  This factor is the  long term activity of
many radioactive materials.   Relative long-run activity for
radioactive materials is measured in terms of  half life, the
time required for half of the radioactive  nuclei in a sub-
stance to decay.  Half lives  for some of the materials pro-
duced in nuclear power reactors  range up to  one  hundred
thousand years, indicating  a  considerable  risk to human popu-
lations should these substances  be  released  to the environ-
ment.  The dilemma facing regulators is  how  to evaluate these
future risks.  Should the risk of one cancer one hundred years
from now be treated the  same  as  the same risk  today?  Should
future risks be discounted?   Although the  issue  may seem
trivial, a risk of one fatality  per year for the next million
years, is valued quite differently when a zero  discount rate is
used (1 million fatalities) than when a more conventional rate
such as ten percent is used (only ten fatalities in present
value terms) .  The implications  for public policy are
enormous.  In the no-discount case  agencies  would be pressed
to limit all future releases  of  radioactive  substances, while
in the more conventional case they  can be  more cavalier about
future effects.

     The EPA environmental  impact statement  for  regulations on
the uranium fuel cycle clearly demonstrates  these issues.

     EPA was given toe authority to address  public health and
environmental concerns arising from radiation  exposure in the

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uranium fuel cycle in The President's Reorganization Act No. 3
of 1970.  The environmental aspects of the uranium fuel cycle
concern the long-term irreversible commitments of radioactive
pollutants into the earth, atmosphere, and water.  The uranium
fuel cycle consists of three phases:   fuel supply, electrical
power generation, and fuel reprocessing.33  Each phase has
the potantial of contributing radioactive effluents into the
environment,  The first phase, or fuel supply, consists of a
series of operations extending from mining through the fabri-
cation of enriched uranium into fuel.  The fuel supply phase
results in the introduction of naturally occurring radioactive
materials into the environment through mining, milling, and
fabricating uranium from ore.  The primary environmental
hazard concerns the immediate release of particulate radio-
active materials into the atmosphere and water.  The maximum
potential doses to the lung and bone from the fuel cycle occur
at mills and fuel fabrication facilities, due to the release
of dust containing natural or enriched uranium.  Radioactive
particsilates may also enter environmental pathways, such as
ingesticn through food chains, and result in a long-term
buildup of radionuclides in the environment.

     The second phase of the uranium fuel cycle concerns the
power reactor, where fuel is fissioned to produce elec-
tricity.  The environmental hazards surrounding this phase
concern operational releases of radioactive wastes into the
confines of the reactor, from which there is a potential for
pollution of the atmosphere.  The radioactive wastes originate
from the fission process which unlocks radioactive gases, such
as iodine-131, krypton-85, uranium-238, thorium and plu-
tonium.  Under certain conditions, inert dust contained in
cooling air may be discharged into the atmosphere.

     The final phase of the uranium fuel cycle comprises fuel
reprocessing, in which spent fuel elements are broken down in
order to isolate radioactive wastes.  At the present time no
reprocessing plants are operating and none will operate in the
future unless the political climate changes, but they do
represent the largest potential source of environmental con-
tamination.  During this phase, the fuel cladding is broken up
and all remaining fission products may potentially be released
into the atmosphere.  As an example, during the process of
separating unfissioned uranium 238 and plutonium 239 from
radioactive waste products, two radionuclides, krypton 85 and
tritium, are released.  Krypton 85 accumulates in the at-
mosphere causing increased particulate radiation.  Tritium,
the radionuclide of hydrogen, is present in water vapor.  Be-
cause of the difficulty of removing tritium from liquid dis-
charges froi?, reprocessing plants, tritium enters the water and
may concentrate  in fish in increasing amounts  in the food
chain.  Iodine, which accumulates in the thyroid, also may be
released into the atmosphere from the reprocessing cycle.

                               147

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     It should be noted that standards for waste disposal are
being developed separately by NRG and the EPA.   The large
potential environmental harm from leaking storage and disposal
facilities has helped to delay the promulgation of these stan-
dards until better scientific data can be developed.

     In developing its standards for the uranium fuel cycle,
the agency was careful to attempt to balance costs and ef-
fects, and in effect argued that expenditures up to a range of
$500,000 to $1,000,000 to save a statistical life were reason-
able.  The agency adopted a curious position with respect to
the present value of future effects, however, when it used a
zero discount rate to compute the present value of effects up
to.the year 2000 (the next 23 years when the EIS was  prepared)
and chose not to count any effects beyond that date (in effect
a 100% discount rate).  Why this arbitrary position was taken
was not explained or defended.

     Cohen investigated the implicit cost per life saved in
the context of other radiation protective regulations.  A
summary is included in Table A-10.  That the costs per life
saved are so large relative to the recommendations of Martin
Baily and others suggests greater attention to costs  and bene-
fits should be given in federal regulatory actions to regulate
radiation exposures.

                           TABLE A-10
                     COST  PER  FATALITY SAVED
     Regulation/Action            Dollars per Fatality Averted


     Radium in drinking water          $     2,500,000

     OMB guidelines                          7,000,000

     Defense high level waste              200,000,000

     Civilian high level waste

         No discounting                     18,000,000
         Discounting 1% per year         1,000,000,000


Source:  Health Physics, 38, p. 36.

     Examination of other federal regulatory actions to limit
radiation exposures reveals similar anomalies.  The geographi-
cal area in which effects are counted may matter as much as
                               148

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discounting.  In its attempt to assess the impacts of long-
term storage options for defense wastes, the Department of
Energy cited a 50-mile limit to the validity of its dispersion
models and limited the calculation of adverse health effects
to those occurring within a 50-mile radius of the proposed
disposal sites.  In effect, this sharply reduced the apparent
risk because most repositories are in relatively isolated
areas.  If DOD was able to project exposures world-wide from
leaks in long-term storage facilities, the need for better
containment would probably appear quite urgent.  Likewise, by
arbitrarily cutting off from consideration any effects beyond
the year 2050, DOD removed from its shoulders much of the
problem with the integrity of its containment and the
long-term risks from plutonium and other long-lived alpha
emitters.

Footnotes

 1.  Giese, A.C., Cell Physiology, 4th edition, Saunders Co.,
     Philadelphia, PA, 1973.  ~_. ..

 2.  National Academy of Sciences, The Effects on Populations
     of Exposure to Low Levels of Ionizing Radiation, National
     Academy Press, Washington, D.C.,1980.~~

 3.  Hodges, L., 1977 Environmental ;,gx)llution,2nd edition,
     Holt, Rinehart, and Winston, N.Y., 1977.

 4.  NAS, supra, note 2.

 5.  Hodges, supra, note 3.

 6.  Odom, E.P., Fundamentals :of Ecology, 3rd edition.,
     Saunders Co., Philadelphia, PA, 1971.

 7.  Hodges, supra, note 3.

 8.  Anon., "How Dangerous is .kow-leVel Radiation?"  American
     Biologist, September, 1980.

 9.  Giese, supra, note 11.    -

10.  Hodges, supra, note 3.

11.  NAS, supra, note 2.

12.  Ibid.

13.  Hodges, supra, note 3.

14.  NAS, supra, note 2.
                              149

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15.  Hodges, supra, note 3.

16,  NAS, supra, note 2.

17.  Itfid.'

18.  Hodges, supra, note 3.

19.  Pizzarello, D.J., and R.L.  Witcofski,  Basic  Radiation
     Biology, 2nd edition, Lea and Febiger, Philadelphia, PA,
     1975.

20.  Ibid.                         . .

21.  Grosch, A.C. and L.E. Hopwood, Biological Effects  of
     Radiation, 2nd edition, Academic  Press,  N.Y.,  1979.

22.  National Research Council,  The Effects on Populations  of
     Exposure to Low Levels of Ionizing  Radiation,.  Report of
     the Advisory Committee on the Biological Effects of
     Ionizing Radiations, National Academy  of Sciences,
     Washington, D.C., 1972.

23.'  Ibid.

24.  Hodges, supra, note 3.

25.  Pizzarello, supra, note 19.

26.  NRC, supra, note 22.

27.  NAS, supra, note 2.

28.  Grosch and Hopwood, supra,  note 21.

29.  NRC, supra, note 22.

30.  Grosch and Hopwood, supra,  note 21.

31.  Pizzarello, supra, note 19.

32.  High Background Radiation Research  Group, "Health  Survey
     in High Background Areas of China,"  Science, August 22,
     1980, pp. 877-880.

33.  United States Nuclear Regulatory  Commission, Radiation
     Standards Fact Sheet, 1980.
                              150

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                           APPENDIX B

            CASE STUDIES OF HAZARDOUS WASTE DISPOSAL
INTRODUCTION

     Up to this point,  this report has discussed hazardous
waste issues on a conceptual level.  As much as this was
necessary for our analyses, the value of the study lies in the
applicability of the study results to existing situations*
One way to assess this  applicability is to examine actual,.
incidences of improper  disposal of hazardous waste and see how
the cases support the analyses of the study.  The five case
studies included in this section have already been used in the
previous sections to support various parts of the analyses.
This section will present them in their entirety and discuss
some of their common elements.

     We will examine five cases involving hazardous waste dis-
posal:  two incidents,  in New Jersey and North Carolina, of
illegal dumping of hazardous wastes; two incidents, in
Kentucky and Pennsylvania, of abandoned hazardous waste sites,
and one incident, in Illinois, involving siting of a hazardous
waste disposal facility.  The North Carolina case study also
deals with the siting issue.

SELECTION AND METHODOLOGY

     We selected candidate incidents from a variety of
sources.  Foremost was  the list of 138 incidents of toxic
substances-related pollution incidents in connection with
another study.  This study, Six Case Studies of Compensation
for Toxic Substances Pollution;  Alabama, California,      "
Michigan, Missouri, New Jersey, and Texas, was completed by
the Environmental Law Institute and published under the Same
title by the Senate Committee on Environment and Public Works
in June of 1980  (96th Congress, 2nd Session, Serial
No. 96-13).  Other sources included newspapers and other
periodicals, and the EPA preliminary damage assessments.  In
choosing the case study incidents from the candidate list.,, we
looked for incidents that:

     1.  Illustrate the issues involved in illegal disposal,
abandoned sites, or siting of disposal facilities;


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     2.  Had caused substantial harm to people, property, and
the environment;  and

     3.  Had been well documented and on which information was
readily available (recent incidents, because less information
is available on them, thus tended not to be selected).

     In researching the five cases, we relied on a number of
sources, including newspaper and periodical accounts,  govern-
ment documents, court pleadings, and interviews with principal
actors.

ORGANIZATION OF CASE STUDIES

     After an introduction, the case studies are divided into
two main sections:  one dealing with background information on
the cases and the other with the costs, both private and
social, imposed by hazardous waste disposal.

     For the four cases dealing with illegal waste disposal
and abandoned waste sites, the Background Information section
is divided into the following subsections:

Location

     This gives pertinent geographic and geologic information
on the waste disposal site.

Waste Disposal

     This discusses the specifics of the waste disposal and is
further subdivided as dictated by the logic of the individual
cases.

Response

     Here is detailed the reaction by local, state, and
federal authorities and private parties to the waste dis-
posal.  It includes investigation of the extent of pollution,
action to protect public health, administrative enforcement
action, and criminal and civil suits.

     The Background Information section for the case dealing
with the siting of a hazardous waste facility in Wilsonville,
Illinois is subdivided in a different manner to reflect the
different subject matter.

     The section on costs first analyzes the private costs
incurred as a result of illegal waste disposal, an abandoned
dump, or the siting of a disposal facility, according to the
case under consideration.  For cases involving illegal dis-


                              152

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posal of hazardous waste,  this section compares the actual
cost of illegal disposal with what it would have cost to
properly dispose of the wastes.

     The costs section next assesses the social costs incurred
as a result of the waste disposal.  For illegal disposal and
abandoned sites, these include injury to natural resources,
property, and health, enforcement and litigation costs, and
clean-up costs.  For the siting cases, social costs are
divided into the social cost of having the site, which in-
cludes injury to natural resources, property, and health, and
the social cost of not having the site, which is the cost
borne by society as a result of losing a hazardous waste dis-
posal facility.

STUDY RESULTS

     We found that there is generally a long delay between
discovery of a threat to public health or the environment
posed by improper waste disposal and removal of the threat.
In fact, in three of the four cases considered here, the
hazardous waste situation has not been remedied and continues
to threaten the environment.

     In two of the cases this delay partially stemmed from
slowness on the part of government officials in enforcing ap-
plicable laws.  People living near the Wade site complained
for two years to Chester City officials about pollution from
the site, but no action was taken, possibly because the city
is not responsible for enforcing the environmental laws.

     Kentucky state officials knew of problems at the Valley
of the Drums as long ago as 1967, but did not begin adminis-
trative proceedings against the operator of the site until
April 1976, after much complaining by adjoining landowners.
Nothing resulted from these proceedings until August 197-8,
over two years later, because of an oversight on the part of
the hearing officer.

     In these same two cases, lack of resources has prevented
cleanup of the disposal site.  In both cases the parties
responsible for the dumping do not have the means to pay for
cleanup.  In the Chester,  Pennsylvania case both the hauler
and the dumper are bankrupt; in the Kentucky case, the
hauler/dumper is dead and his estate would almost certainly
declare bankruptcy if a judgment were entered against it.
Litigation has not been able to hasten cleanup in either.
case.  EPA has sued to force the parties responsible in the
Chester case to clean up the site, but the suit has not yet
been scheduled for trial, over a year after it was filed.
Moreover, the suit was not filed until almost two years after


                              153

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the problems at the site were discovered.  In Kentucky, the
state filed an administrative complaint against the widow of
the site operator a year-and-a-half ago, but the state has not
pursue^ the complaint because it feels that to do so would be
fruitless.

     Government has been able to spend only limited funds to
help speed cleanup in these cases.  In Chester, the state
government is paying for a partial cleanup that began nearly
three years after discovery of problems at the site.  In
Kentucky, the federal government provided emergency response
funds to contain the immediate hazards posed by the site, but
neither federal nor state government has funds to pay for a
complete cleanup of the site.

     Because of these factors, only partial cleanup  efforts
are underway at these two sites.  Cleanup is still outstanding
over three years after discovery of the Chester site, and four
years after the first administrative proceedings in the
Kentucky case.

     Lack of resources is not the reason for delay in cleaning
up the PCB contamination in North Carolina.  The state is
willing and able to pay to remove the PCB contamination from
the roadways and dispose of it in a specially constructed
landfill, but public opposition in the county where the land-
fill would be located has blocked the state's path.  Two years
after the dumping, the contaminated soil still has not been
removed*

     The pollution in the Dover Township, New Jersey case wai
quickly cleaned up.  Cleanup was instigated not by government
but by the owner of the land on which the wastes had been
dumped, who sued to have the hauler and the generator  of the
wastes remove them.  The court ordered the responsible parties
to do so the day the suit was filed, and the site was cleaned
up within three months of its discovery.  The reason for the
quick cleanup in Dover Township may be that only one company
had generated the waste.  The company was easily identifiable
and did not contest the court's order to remove the waste.  In
contrast, several companies generated the wastes in the
Chester, Pennsylvania and Kentucky cases, and the companies
for the most part cannot be linked with the wastes they
generated.

     In the cases we studied, the costs of improper hazardous
waste disposal generally were not borne by the persons respon-
sible for the disposal.  Instead, government generallly had to
pay for cleanup and private parties—neighboring landowners
and residents—have suffered uncompensated injuries.
                              154

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      In Pennsylvania,  the state  government is paying for a
partial cleanup of the Chester site; the federal government has
paid  to contain pollution from the Kentucky site;  the New
Jersey state  government paid for emergency drinking water sup-
plies and testing of groundwater in the  Dover Township  case;
and the North Carolina state government  plans to pay to clean-
up the dumped PCSs.  So far, these governments  have not re-
covered their expenditures from  the parties responsible for the
dumping.

      In all these cases, private parties have suffered  injuries
including lowered property values, loss  of drinking water, loss
of gardens and crops,  acute health effects, and possible latent
health effects.  In all but the  New Jersey case, private parties
have  not received compensation for these injuries.

      It seeais unlikely that government or private parties will be able to
obtain compensation from the persons responsible for the dumping.   The
responsible parties in the Chester case are bankrupt;  in the Kentucky cage,
the hauler/dumper is dead  and his estate is poor; in North. Carolina,  the
hauler has limited resources, although the generator of the wastes might
be able to pay for damages.

      In two of the cases, some of the costs of improper dumping have been
assumed by the responsible parties.  In Kentucky, waste generators are paying
to remove some of their wastes from the dumpsite.  Jfowever, their  efforts
will cost less than $100,000 or 4% of  the $2.5 million estimated cost of a
complete cleanup.  The most extensive  compensation was received in the
Dover  Township, New Jersey case.  The  generator of the waste paid  households
in the contaminated area $1,000 each, as compensation for injuries  suffered.
Whether this is sufficient to cover all injuries that may result from the
contamination, including possible future health effects, is uncertain.  The
generator is also compensating the state government for up to $6Q,QQQ of
costs  incurred over a  five-year period starting three years after  the
incident first came to light ~  The generator is not reimbursing the state
for the substantial costs  it incurred  before that period nor is it com-
pensating the township or  the federal  government for their expenditures.

      These case studies were conducted in 1980. ;Jn October 1981, the
Institute reviewed and updated the case studies, incorporating any charges
in the status of federal and state court cases.   In addition, we have
noted, where possible, the effect that passage of the Comprehensive
Environmental Response, Compensation,  and Liability Act of 1980 has had
on prospects for remedial  action.
                                  155

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PETROCHEMICAL CONTAMINATION OF COHANSEY  AQUIFER,  DOVER
TOWNSHIP, NEW JERSEY

Introduction

     Between March and December 1971  Nicholas  Fernicola, a
scavenger trucker under contract to the  Union  Carbide Corpora-
tion disposed of between 5,000 and 6,000 barrels  of chemical
wastes from Union Carbide's Bound Brook, New Jersey plant on a
former chicken farm in Dover Township, New Jersey and in the
township landfill.  The wastes included  aromatic  hydrocarbons,
benzene, toluene, styrene,  xylene, ketones,  alcohols, and
phenolic resins.

     In early 1972, the township and  the owner of the chicken
farm obtained a court order directing Union Carbide to remove
the wastes from the township.

     Groundwater contamination in the township was first dis-
covered in early 1974, when residents complained  that their
well water had a disagreeable taste and  odor.   Numerous tests
found high levels of organic chemicals in the  well water.  For
the most part, the tests did not permit  a precise charac-
terization of the contaminants.  However,  phenol, styrene, and
toluene were found in the well water.

     In September 1974 residents were provided with an interim
water supply.  The Township Board of  Health ordered the 148
wells in the area with contaminated groundwater sealed at the
owners' expense.  Shortly thereafter  a nearby  municipal water
system was extended into Pleasant Plains.

     In 1976, thirteen additional wells  near the  affected area
were found to be contaminated and were condemned.  The munici-
pal water system was subsequently extended to  the area.

     Both area residents and the State of New  Jersey, in
separate actons, sued Union Carbide for  compensation.  Both
cases were settled.  Affected well owners or users received
$1,000 each for the loss of their wells, and the  state will
receive up to $60,000 as compensation for  costs incurred as a
result of the contamination.

Background Information

The Location—
     Dover Township, population 64,000,  is located in Ocean
County in the center of the New Jersey coast.   Pleasant
                              156

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Plains, the site of the illegal dumping and subsequent ground-
water pollution, is a residential community in the northwest
corner of the township.

     Several aquifers underlie the township.  The most im-
portant of these is the Cohansey Formation, estimated to be
between 50 to over 100 feet thick in the portion below the
Township.1  This aquifer is the prime source of drinking
water for the residents of the township and surrounding
areas.  Beneath the Cohansey lies another important aquifer,
the Kirkwood Formation.  Groundwater in the portion of the
Cohansey Formation underlying Dover Township moves in a
southerly to southwesterly direction.2                '

     Union Carbide is a multinational manufacturer of indus-
trial chemicals, plastics and consumer goods.  In 1971 Tjnion
Carbide had sales of $3,037,529,000 and total assets of
$3,554,668,000, and employed 99,181 persons, 52,9O6 of them in
the United states.3  Exact information on Fernicola's wa.ste
hauling business is not available, but it was reported to be
very small, consisting of just Fernicola and a'few em-
ployees.4                                    .

Waste Disposal--                            •      .
     In April 1971, the Union Carbide Corporation contracted
with Nicholas Fernicola, a local scavenger trucker, to remove
and dispose of drummed chemical wastes from its Bound Brook,
New Jersey plant at a rate of $3.50 per drunr.  The wastes
consisted of solvents and residues from the manufacture of
organic chemicals, plastics, and resins,6 and may have
included aromatic hydrocarbons, benzene, toluene, styrene,
xylene, ketone, alcohols, trichloroetbylene, acrylonitrile and
phenolic resins."7  Since many of these wastes are solvents
that were used to wash equipment, they might also have con-
tained other unknown substances.°  Many of the chemicals
identified in the wastes that Fermicola hauled from the Union
Carbide plant qualify as hazardous under the hazard criteria
that the National Academy of Sciences has developed for^the
Coast Guard for the evaluation of the hazards of bulk water
transportation of chemicals.  The chemicals in the waste are
hazardous on account of their ignitability, irrifeativeness,
toxicity to humans or aquatic life, or reactivity to other
chemicals.9

     Fernicola hauled approximately 6,00ft drums of waste from
the Bound Brook plant during the period April 1971 through
December 1971..^  According to Union Carbide, Fernicola
claimed that he was dumping these wastes in the Dover Township
landfill, situated approximately 45 miles south of the Bound
Brook plant and 1-1/2 miles to the northeast of Pleasant
Plains (see Figure B-2) .H  The township landfill does not
charge for the use of its facilities.  Fernicola is believed

                              157       ...:.  .,-••-  . •••• ••'..v",V;"; ".

-------
                                          *    DOV-0
                                              TOwNSniP

                                             (See figure 2)


                                            TOMS RIVER
Figure  B-l.  Locations of Ocean County, Dover  Township,
              and Toms  River  in the State  of New Jersey

                           158

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                                 ^'VH^^^
                                 =^ A / m
                               iw-j  *~T~',^.'t-J —'""•?";..- »••  !I
                               T'Toms'!j: ".r-4*-~ "^*,^!*j^*»«-***
Figure B-2.   Location of Reich Farm,  Dover Township
                        159
                               Reproduced from
                               best available copy.

-------
to have dumped around 2,000 drums of waste in the landfill,
even though it has a policy against accepting drums or chemi-
cal wastes, and in other neighboring landfills.12  Fernicola
disposed of the majority of the wastes—approximately 4,500
drums—on a portion of a chicken farm in Pleasant Plains which
he had leased from Samuel and Berta Reich, the farm's
owners.13  The Reichs leased Fernicola the property for $40
per month with the understanding that he would use it to tem-
porarily store empty drums.  No mention was made of disposing
chemical wastes.1^

     Much of the waste was disposed of simply by scattering
the drums around the Reich farm; a portion of it, however, was
poured directly onto the ground, into trenches dug especially
for that purpose.15  Approximately ten percent of the drums
found on the Reich farm were partially or completely empty;
presumably, their contents had been discharged to the
ground.16

Response—

     Discovery of waste disposal; cleanup—The Reichs dis-
covered that Fernicola was dumping waste on their property in
December 1971 after noticing unusual odors emanating from the
site.  The Reichs asked Fernicola to remove the wastes.  When
Fernicola failed to do so despite repeated assurances, the
Reichs, on January 31, 1972, filed a complaint against
Fernicola and Union Carbide demanding that further disposal
stop, the drums be removed, and that other relief be pro-
vided.  Dover Township also filed a complaint against
Fernicola and Union Carbide that day, charging that the situa-
tion on the Reich farm constituted a public nuisance.17  The
same day the suits were filed, the court ordered the two de-
fendants to stop the dumping and to remove the wastes from the
Reich's farm.I8

     By April 1972, Union Carbide had apparently removed all
the drums from the Reich farm, transporting them to incinera-
tors in New Jersey and Ohio and approved chemical waste land-
fills.  Once this cleanup had been effected, the complaints
against the defendants were dismissed with prejudice.19  In
addition, the Reichs were reported to have received from Union
Carbide $10,000 in an out-of-court settlement for damage to
their property, and compensation for the costs of digging a
new well.20

     Enforcement action in response to dumping—The state did
not take action against Fernicola or Union Carbide to enforce
the waste disposal laws while the dumping was taking place or
even once the dumping was discovered, but waited until the
groundwater contamination discussed below was discovered
                              160

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 several years after the dumping.  The state might  have pro-
 ceeded against Fernicola and Union Carbide under several regu-
 lations, however.   At  the time of the dumping,  the Department
 of Environmental Protection (DEP) and the Board of Public
 Utility Commissioners  regulated waste disposal.

      Beginning in 1970, DEP required haulers of solid  waste to
 register themselves with the Department.21  Registration
 involved only answering a few simple questions; no registra-
 tion fee was charged," nor did DEP require haulers to meet
 any minimum standards.23  Qgp also regulated landfills, re-
 quiring that they be registered and their designs  approved.24

      The Board of Public utility Commissioners  (PUC) started
 .regulating waste haulers as common carriers in  1971.25  PUC
 regulations required waste haulers and disposers to hold a
^certificate of public  convenience and necessity from PUC; to
 obtain this certificate, a hauler or disposer had  to furnish a
 statement of his experience, training or education in  solid
 waste disposal and proof of financial responsibility.2**
 Meeting these requirements would have cost a hauler an esti-
 mated several hundred  dollars in 1971, including a $50 filing
 fee and the services of an accountant and a lawyer,27

      Fernicola had not registered as a waste hauler with
'•either DEP or PUC, Baking his activities illegal.   The Reich
 farm was an illegal disposal site, never having been regis-
 tered with or approved by DEP for such purposes.

      Union Carbide apparently did not investigate  whether
 Fernicola had met the  registration requirements when it en-
 tered into its contract with him.  As part of the  contract,
 however. Union Carbide did require Fernicola to guarantee that
 the wastes would be taken to an authorized landfill...?.?-"

      Neither DEP's not PUC's regulations regarding waste dis-
 posal were well enforced at the time the dumping in Dover.
 Township took place.  DEP's regulation on waste disposal took
 effect July 1, 1970.  In 1971, the time the dumping took
 place, DEP had a staff of five to enforce the regulations for
 the entire state, and  was just beginning to develop enforce-
 ment strategies.29

      PUC's regulations took effect July 8, 1971, after the
 Dover Township dumping had gotten underway.  During 1971, PUC
 was trying simply to identify waste haulers and get them to
 register.  Enforcement staff was just beginning to be  hired,
 and very little effort was made to catch persons not complying
 with the regulations.^^

      The likelihood that a person violating DEP's  and  PUC's
 -regulations would be caught must therefore be assessed as

                              161

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slight.  The maximum penalty for violating DEP's regulations
was $2,500 per day. 31  The penalty for a first violation of
the PUC regulation was $500 and up to $1,000 for subsequent
violations.32                                       '
    . T,-*>
     Discovery of grbundwater contamination--Groundwater con~
tamination in Dover Township was first discovered in early
1974,  when three Pleasant Plains families in the vicinity of
the Reich farm noticed that their well water had a foul taste
and odor. 3 3  Tests revealed traces of toluene in the well
water from one property and phenol in the water from the other
two. 34  The property owners whose wells were contaminated
with phenol dug new wells and found uncontaminated water. 35
The owner of the property with the toluene-contaminated well
apparently did not want to dig a new well and instead evicted
his five tenants since he could not provide them with pure
water, 36

     Shortly thereafter the Board of Health received a report
of contaminated water in other sites several miles from the
properties where the pollution was first reported, but only a
few hundred feet from the Dover Township landfill.  Tests con-
firmed that water in three wells near the landfill was con-
taminated with phenols. 37

     From March to August, 1974, local, state, and federal
agencies tested samples of well water from Pleasant Plains
using several test procedures.  Most of the test methods were
capable only of detecting organic chemical contamination and
could not distinguish specific contaminants.  These tests
found up to 68 parts per million (ppm) of organic contaminants
in the Pleasant Plains water.  One test which could charac-
terize specific contaminants found 12 parts per billion (ppb)
of toluene and 30 ppb of styrene in one well. 38

     At the time of the tests the only state or federal stan-
dard regarding organic chemicals in drinking water was a
federal standard on organics removed by the carbon chloroform
extract {CCE) method.  This standard recommended that water
with more than 0.7 milligrams of organic chemicals per liter
extracted by the CCE method (equivalent to 0.7 ppm)  be re-
placed with purer water if possible. 39  Only one of the
wells tested by the CCE method exceeded this standard; it had
a reading of 1.2 ppm extractable organics.  Other wells
sampled ranged from 0.1 ppm to 0.4
     Protection of public health — State and local health
authorities took action as the test results came in.

     To provide Pleasant Plains residents with an interim
water supply the New Jersey National Guard and the Ocean
County Defense stationed seven tanker trucks throughout the

                              162

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community in June 1974, and the Toms River Water Company put
spigots on three of its fire hydrants in the area so that
residents could obtain water from them.   In addition, many
residents of the area purchased bottled  water for drinking and
cooking purposes.41

     In June, Township officials recieved an anonymous tip
that some drums of waste might still be  buried on the Reich
farm.  A search turned up 51 drums and a quantity of chemical
wastes.  Union Carbide removed the drums and approximately
1,000 cubic yards of soil and disposed of them in a secure
landfill.  In addition, another 37 drums were discovered
stored on two trucks belonging to Fernicola that were parked
about four miles from the Reich farm. Union Carbide removed
and disposed of these drums as well.42

     On July 8, 1974, the New Jersey Department of Environ-
mental Protection (DEP) recommended chat water from a munici-
pal water system be made available to Pleasant Plains resi-
dents as soon as possible, and that until such a system was
available, that residents filter their well water through
activated carbon.43

     Finally, on July 30, the DEL3 determined that it was "un-
equivocally apparent that the gcoundwater [in Pleasant Plains]
is contaiminated with organic chemicals" and directed the
Township government to prohibit the use  of water for drinking
purposes from wells along specified streets in Dover Town-
ship.44  DEP ordered this ban not because any specific
standard regarding purity of drinking water had been violated,
but because the well water had a strong  chemical taste and
odor, because tests indicated that the water was contaminated
with uncharacterized organic chemicals,  and because it was
known that hazardous chemical wastes had been dumped on the
Reich farm, which is within the contaminated area.  The find-
ing that triggered DEP's action was apparently the discovery
in late July of toluene and styrene in one of the Pleasant
Plains wells.  At the time it ordered the ban, DEP also wrote
to the New Jersey Board of Public Utility Commissioners,
recommending that the Board order the nearest piped water sys-
tem, the Toms River Water Company, to extend its lines into
the contaminated area.4^

     In response to the DEP directive of July 30, the Township
Board of Health on September 16, 1974 ordered residents in the
contaminated area to seal their wells at their own expense,
prohibited the use of water from those wells for any purpose,
and prohibited the construction of new wells.4^  The
Ordinance affected wells along the streets specified in the
DEP directive, and, in addition wells along three other
streets.4^  Altogether, 148 wells were ordered sealed.48
Many residents simply  ignored the order and failed to seal

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their wells until the Township began a serious effort to en-
force the Order in early 1976.49  By late Spring 1377, all
148 affected wells had been sealed.50

     To provide residents of Pleasant Plains with a permanent
supply of potable water, the Township petitioned the State
Board of Public Utility Commissioners (PUC)  to order the Toms
River Water Company to extend its lines to the Pleasant Plains
area at its own expense.  The Board ordered the company to do
so on September 12, 1974.  Residents, however, were required
to pay for the cost of hooking up to the water mains once they
were extended into the area,51 estimated to cost $100 per
household.52

     On December 31, 1974, DEP issued its final report on the
underground pollution in Dover Township.53  in this report,
DEP designated a portion of the Township approximately one
square mile in area Zone I, and concluded that this zone had
contaminated groundwater.  Zone I, which corresponds to the
area in which wells were ordered to be sealed by the Board of
Health, has at its center the Reich farm, the likely source of
the groundwater contamination (see Figure B-2) .  In accordance
with the Board of Health's order, no new wells were allowed to
be constructed in Zone I.  DEP designated a second portion of
the township comprising approximately three square miles as
Zone II.  It concluded that groundwater quality in this zone
was questionable, and recommended that testing for contamina-
tion continue in this area.  In addition, DEP recommended that
new wells in Zone II be drilled deeper, down to the relatively
uncontaminated Kirkwood Aquifer.  The rest of the Pleasant
Plains area was designated Zone III; DEP concluded that the
groundwater in this zone was not contaminated, and was not
likely to become contaminated in the future.

     The report considered two possible sources of the ground-
water contamination in addition to the Reich farm:  the Dover
Township landfill and the Toms River Chemical Company, located
in Zones II and III respectively.  DEP determined that the
groundwater contamination could not be traced to either of
these sources.

     Discovery of further groundwater contamination;
response—In March 1976, several residents along two streets
in the southeast corner of the Zone II section of Dover Town-
ship complained to the Township Board of Health that their
well water had a bad taste and odor, and petitioned the Board
to make arrangements to have the municipal water system's
mains extended to their area at no cost.5'*  The Board of
Health took samples from the residents' wells on March 10,
1976; tests revealed that the water was contaminated with
phenol.55  $n March 15, 1976, the Township Board of Health
and the county Health Department advised residents in the

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affected section of Zone II not to drink or cook with their
well water.56

     Testing of well water from the area continued.  On
August 11, 1976, DEP announced that carbon tetrachloride had
been found in four of ten samples taken, in levels ranging
from 0.2 to 11.0 ppb.^7  Noting that carbon tetrachloride
was a suspected carcinogen, DEP directed that thirteen private
wells along the two streets affected be condemned and sealed,
and recommended that piped water be provided to the affected
area.58

     On November 10, 1976, the Board of Public Utility Commis-
sioners ordered the Toms River Water Company to extend their
lines to the two affected streets.  The thirteen households
along the streets were required to pay $400 each, or $5,200
total, toward the cost of the extension, and in addition,
approximately $100 each for hookup.  Dover Township absorbed
the $20,000 cost of resurfacing the streets once the lines herd
been laid.  The Toms River Water Company bore the remaining  •
cost of approximately $17,000.  Altogether, the extension of
the lines to the affected area in Zone II cost roughly
$43,500.59

     Enforcement action and private suits in response to
groundwater contamination—                            .
     Pleasant Plains residents against Union Carbide--In
October 1974 seven Pleasant Plains residents, subsequently
joined by 52 additional residents in May 1976, filed a class
action suit against Union Carbide,60 alleging that the
company was responsible for the contaminated groundwater, and
seeking compensation for the loss of their wells.  In December
1977, the case was settled in a consent order.61  Union
Carbide, without admitting that it was responsible for any of.
the groundwater contamination, established a fund of.':$101,000
to compensate the residents.  Under the settlement, each-per-
son who owned property within the area subject to the Board of
Health's first condemnation order (Zone I) or any person who
was required to seal his well as a result of that ordinance.,
would receive $1,000 from the fund in exchange for releasing
Union Carbide from any additional claims in connection with
the groundwater contamination.62  of the 152 persons eli-
gible, 140 have signed releases and received compensation
under this settlement thus far.63

     State of New Jersey against Union Carbide and
Fernicola--0n December 18, 1975, the Attorney General of Uetf
Jersey filed suit against the Union Carbide Corporation and
Nicholas Fernicola.  In its complaint, the state charged Union
Carbide with creating a public nuisance and charged both the
company and Fernicola with violating state water pollution
laws.6*  The state requested the court to direct Union

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Carbide to abate the contamination of groundwater, and pay
compensatory and punitive damages, and to impose penalties on
the company and Fernicola for violating the water pollution
law.

     A consent order was agreed to on April 21, 1977, under
which Union Carbide agreed to pay the state up to $60,000 to
defray any costs it might incur after that date for investi-
gating, sampling, or purifying the groundwater in Dover Town-
ship. "'  AS the state incurs costs for these purposes, it
bills Union Carbide for reimbursement.  So far the state has
received $6,341.50 under the terms of the settlement.65  If
by 1982 the state has billed Union Carbide for less than
$30,000, Union Carbide will pay the state a lump sum of
$30,000, ending its obligations under the settlement.  If
Union Carbide has been billed for more than $30,000, it will
pay the state the difference between what it has been billed
for and $60,000.  In exchange for these payments, the state
released Union Carbide from all further claims in connection
with the groundwater contamination.

     The state settled its suit against Fernicola on June 1,
1977 in return for a payment of $100.67

Costs

Private Costs of Waste Disposal—

     Actual cost of illegal disposal—Union Carbide paid
Fernicola $3.50 per drum to haul away and dispose of approxi-
mately 6,000 drums of waste, or roughtly $21,000 altogether.
The Dover Township landfill, where Fernicola apparently dis-
posed of some of the waste, does not charge for the use of its
facilities.  Fernicola paid the Reichs $40 per month for the
use of the portion of their farm where he dumped most of the
wastes; however, the Reichs did not know that Fernicola
planned to dispose of waste on their property when they agreed
to lease part of their farm to him.68

    • Comparative cost of proper disposal—Proper disposal of
the wastes would have cost somewhat more than Fernicola
charged.  Fernicola himself said in a 1974 interview that the
price he charged was "at least a quarter to a half a dollar
less" than what other haulers of chemical waste were
charging.6^

     Alternative means of disposal available to Union Carbide
in 1971 included an incinerator and at least one approved
landfill.  The incinerator, operated by Rollins Environmental
Services in Logan Township, New Jersey, would have charged
$3.85 to $5.50 per drum for incineration and another $1 to $2
for transportation to the incinerator.70  Perhaps the most

                             166

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logical alternative available to Union Carbide in 1971 for
proper disposal of chemical wastes was the Kin-Buc landfill in
Scotch Plains,  New Jersey.   Although problems later surfaced
at Kin-Buc, at  the time it  was considered to be the state of •
the art, and Union Carbide's Bound Brook plant used it
regularly.71

Social Costs of Illegal Disposal—

     Natural resource damage—As a result of the improper
dumping of chemical wastes, the Cohansey aquifer and the upper
portion of the  Kirkwood aquifer have become contaminated with
organic chemicals.  The state of New Jersey has determined
that the aquifers cannot be purified.72

     Property damage—The Township Board of Health ordered 148
domestic wellsin Zone I and another 13 wells in Zone II
sealed at their owners' expense; this was estimated to cost
$300 per well,73 or $45,300 altogether.  Eventually resi-
dents with contaminated wells were able to connect up to the
municipal water supply, for which they had to pay an average
connection fee  of $100'4 each or $15,100 in total.  In the
interim, they had to pay for bottled water or bear the incon-
venience of going to tank trucks or spigots stationed through-
out the affected area to pick up water.

     Extending  the municipal water system to Pleasant Plains
cost the Toms River Water Company roughtly $180,000.75
Since the Company is a regulated public utility, it can be
assumed that most if not all of this cost was passed on to its
ratepayers.  Dover Township paid approximately $92,000 to
resurface the roads that had been torn up to lay the water
mains.76  jn addition, the  thirteen households in Zone II
had to pay $400 each or $5,200 in total, for the extension of
the water system to their area.77

     New wells  in Zone II had to be drilled deeper to the
Kirkwood Aquifer, increasing the cost of constructing a well.
As of 1976, approximately 20 households in Zone II had drilled
deeper wells at an estimated cost of $2,300 per well.78
Buying water from the municipal system costs Pleasant Plains
residents approximately $30 per year more than it does to
operate a private well; the cost differential is higher for
houses with swimming pools  or large lawns and gardens.79
For some, relying on water  from the municipal system imposes
an unquantifiable aesthetic cost as well:  many residents in
the affected area find that the piped water has a funny taste
compared to well water.80

     Residence-related damage was suffered by the five tenants
evicted by their landlord in early 1974 when it was discovered
that water from the property's well was contaminated.

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     Property values in Pleasant Plains declined when the
groundwater contamination became known; one estimate puts the
decline at 20 to 25%.81

     Acute and Latent Health Effects—In June 1974,  the
Disease Control Section of the Ocean County Health Department
conducted an "illness survey" in Pleasant Plains to investi-
gate any possible health effects due to the contaminated
groundwater.  Twenty-three families comprising forty-eight
persons altogether were interviewed.  Tests had indicated that
wells for ten of these families were contaminated and that
another four were uncontaminated.  No test results were avail-
able for nine of the wells.  Fifteen of the twenty families
reported illnesses of some sort involving kidneys, stomach,
liver, or gall bladder, and eight reported no illness.   Ill-
ness was reported both by families with contaminated and un-
contaminated wells, as well as those with wells for  which no
test data were available.  As a result, the surveys  made no
correlation between the use of contaminated well water  and
illness.82  it should be noted that this survey appears to
have been a rather casual investigation and not a rigorous
epidemiological survey.

     Children of one family were reported to have body  rashes
that disappeared after they stopped using well water.83
Stomach problems were also reported.84  Neither of these
reports have been medically documented.

     The full range of possible latent health effects due to
the groundwater contamination in Dover Township cannot  be de-
termined because not all the chemicals present in the ground-
water were characterized, and the duration of exposure  to
contaminated groundwater is unknown.  Most of the testing
simply detected organic chemical pollution without specifying
what substances were present.

     Some contaminants were identified, however.  Styrene,
phenol, carbon tetrachloride, and toluene were detected in
various wells.  Phenol is mutagenic, promotes tumor  growth,
and produces reproductive effects.85  Carbon tetrachloride
is carcinogenic, is suspected of being mutagenic, and is toxic
to the liver and kidneys.  The National Academy of Science's
report, Drinking Water and Health, found no data available on
the mutagenicity, carcinogenicity, or teratogenicity of
styrene or toluene.86

     Enforcement and litigation costs--No estimate has  been
made of what the Dover Township waste dumping and groundwater
pollution has cost the government.  A 1976 report prepared for
EPA estimated that as of May 1975, the incident had cost
local, state and federal government $33,600 for supervising
the waste cleanup, obtaining and testing water samples, and

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deafting the ord«r closing down the Pleasant Plains
wells.8/  However* this estimate does not cover all the
costs to government over this period.  For instance, the only
costs to the state covered by the estimate are for testing
water; general administrative expenses borne by the Department
of Environmental Protection and the Board of Public Utility
Commissioners are ignored.  In addition, the estimate does not
cover costs incurred after May 1975, which would include well
monitoring and the costs of the action that the state brought
against Union Carbide and Fernicola.

     Full information is not available on litigation costs.
The plaintiffs* attorneys in the class action suit against
Union Carbide received $50,000 in fees under the settlement
reached in that case.88  There is no information on the
amount Union Carbide or the Reichs spent on legal services.

     Clean-up costs--Dover Township spent an estimated $10,000
to inspect and supervise the removal of the waste dumped at
the Reich farm.89  union Carbide bore the Reich farm
clean-up costs.  The company refuses to disclose how much it
spent on the cleanup.  Ghassemi estimates that Union Carbide
spent $15,750 to remove 4,500 drums from the Reich farm in
1972,*^ but he probably has underestimated the cost sub-
stantially.  Ghassemi derived his estimate by assuming that
the cost-of removing and disposing of the drums from the site
was $3.50 per barrel, the same amount that union Carbide
originally paid Fernicola to haul the wastes from its plant.
The cleanup must have cost far more than $3.50 per drum, how-
ever since the scattered barrels had to be collected and their
contents identified.  Furthermore, Union Carbide shipped ap-
proximately 2,500 drums of waste to its plant in Marietta,
Ohio, which would have made the disposal more expensive.

     A roughly similar clean-up operation at the Valley of the
Drums in Kentucky will cost an estimated $50 per drum in
1980.^1  Since waste disposal and the price level in general
were lower in 197.1, .this figure cannot be applied to the Dover
Township cleanup, but it does provide a reference point
against which to judge 1971 costs.               v

Cost Redistribution—
     The Reichs are reported to have received from Union
Carbide $10,000 and reimbursement for the cost of drilling a
new well as compensation for damages done to their property as
a result of the dumping of the waste.  One hundred forty of
the 152 eligible Pleasant Plains residents have received from
Union Carbide $1,000, or $140,000 in total, as compensation
for the..loss of their wells.  The State of New Jersey will
receive from Union Carbide up to $60,000 to compensate it for
costs connected with the groundwater contamination that it
incurs after April 21, 1977.

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Footnotes

 1.  Richard Dalton, Senior Geologist,  Bureau  of Geology  and
     Tojpography, Department of Environmental Protection,
     Memorandum to Steven H. Corwin (August 30, 1974).

 2.  Steven H. Corwin, New Jersey State Department  of Environ-
     mental Protection, Final Report--Delineation of Extent of
     Groundwater Contamination, Pleasant Plains Section of
     Dover Township, Ocean County,  New  Jersey  (December 31,
     1974), p. 4.

 3.  .Union Carbide Corporation, Annual  Report  for 1971.

 4.  Interview with Lawrence Stanley, Deputy Attorney General
     for the State of New Jersey (May 6, 1980).

 5.  Contract between Union Carbide Corporation and Nicholas
     Fernicola  (April 5, 1971).

 6.  M. Ghassemi, Analysis, of a land disposal  incident  involv-
     ing hazardous waste materials', Dover Township, New Jersey
     (EPA Contract No. 6F-01-2956,  Task Order  6F-01-3187, May
     1976) , p. 73.

 7..  New Jersey Department of Environmental Protection, In-
     terim Report—Investigation of Groundwater Contamination,
     Pleasant Plains Section of Dover Township, Ocean County,
     New Jersey (August 21, 1974),  p. 3.

 8.  Ibid,

 9.  Supra, note 6,,pp. 80-83.

10.  New Jersey v. Union Carbide et al., No. C-1597-75  (Sup.
     Ct. Ocean Cty.), Pretrial memorandum of Union  Carbide.

11. ' Ibid.

12.  Supra, note 6, pp. 9-12; interview with Mr. Thompson,
     Director of Public Works, Dover Township  (May  27,  1980).

13.  Supra, note 6, pp. 9, 12.

14.  Ibid., p. 12.

15.  Ibid.

16.  Ibid.

17.  Ibid., p. 16.


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18.  Ibid.

19.  Ibid.

20.  Ibid.

21.  New Jersey Administrative Code  7:26-1.1  et  seq.  (1970).

22.  Ibid., 7:26-2.2 (1970).

23.  Interview with Al Kaczoroski, Bureau of  Solid Waste
     Management, New Jersey Department  of Environmental
     Protection (May 9,  1980).

24.  New Jersey Administrative Code  7:26-2.4  (1970).

25.  Ibid., 14:3-10.1 et seq.

26.  Ibid., 14:3-10.5.

27.  interview with Al Lawrick,  New  Jersey Board of Public
     Utility Commissioners  (May  9, 1980).

28.  Supra, note 5.

29.  Supra, note 23.

30.  Supra, note 27.

31.  N.J.S.A. 26:2C-19.

32.  N.J.S.A. 48:13A-12.

33.  Supra, note 6, p. 19.

34.  Test results from Jersey Testing Laboratory, Newark, New
     Jersey (results on file at  Dover Township Board  of
     Health).

35.  Supra, note 6, p. 23.

36.  Ibid., "Polluted well  Results  in Eviction," [Toms River]
     Daily Observer (March  12, 1974).

37.  Supra, note 6, p. 23,  Test  results from Delare Associ-
     ates, Philadelphia, Pennsylvania  (results on file at
     Dover Township Board of Health).

38.  Supra, note 6, pp.  23-25.

39.  27 Fed. Reg. 2152  (March 6, 1962).
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40.  Supra, note 6, p.  25.

41.  Ibid., pp. 28-30.

42.  Ibid., pp. 18-19.

43.  Letter from Rocco D.  Ricci,  Assistant Commissioner,
     Bureau of Potable Water,  to  Raymond A. Hayser, Director
     of Law, Township of Dover (July 8, 1974).

44.  Letter from John C. Wilford, Chief, Bureau of Potable
     Water, DEP, to the Mayor  of  Dover Township  (July  30,
     1974).

45.  Supra, note 6, p.  35.

46.  Dover Township Board of Health,  Ordinance 8-74
     (September 16, 1974).

47.  Ibid.

48.  Supra, note 6, p.  26.

49.  Ocean County Health Department,  Pleasant Plains Water
     Survey (January 1976).

50.  Interview with Daniel J.  Carduccio, Special Counsel  to
     Dover Township Board of Health (April 22, 1980).

51.  Supra, note 6, p.  36.

52.  Ibid., p. 56.

53.  Supra, note 2.

54.  Petition, on file at Dover Township Board of Health.

55.  J.R. Henderson Labs,  test results on file at Dover
     Township Board of Health.

56.  Letter from Dover Township Board of Health and Ocean
     County Health Department  (March 15, 1976).

57.  Letter from John Wilford  to  Ocean County Health Depart-
     ment (August 11, 1976).

58.  Ibid.

59.  Interview with Edward Hughmanic, General Manager, Toms
     River Water Company (May  29, 1980).
                              172

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60.  Egloff v. Union Carbide, No.  L-6083-74  (Sup. Ct.  Ocean
     Cty., filed October  18,  1974),

61.  Ibid., Consent Order,  agreed  to  December  22, 1977.

62.  Ibid.

63.  Interview with Robert  Holdingshead, Attorney for  Union
     Carbide (May 29, 1980).

64.  New Jersey v. Union  Carbide Corp. No. C-1597-75  (Sup. Ct.
     Ocean Cty., filed December 18, 1975) State  complaint.

65.  Ibid., Consent Order,  agreed  to  April 21, 1979.

66.  Interview with Lawrence  Stanley, Deputy Attorney  General
     for the State of New Jersey  (May 29, 1980).

67.  Ibid.

68.  See text accompanying  notes 5-14.

69.  ntl did no wrong,1 declares Fernicola,"  [Toms  River]
     Daily Observer (August 4, 1974).

70.  Interview with Jack  Luvcott,  Rollins Environmental
     Services (May 23, 1980).

71.  Interview with Ronald  Burstein,  Environmental  Officer,
     Union Carbide Corporation  (May 6,  1980).

72.  Supra, note 1.

73.  Supra, note 6, p. 54.

74.  Ibid., p. 56.

75.  Ibid., supra, note 59.

76.  Ibid.

77.  Supra, note 59.

78.  Supra, note 6, p. 56.

79.  Ibid., p. 55.

80.  Ibid., p. 57.

81.  Ibid., p. 58.

82.  Supra, note 6, p. 51.

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83.  Ibid., p. 52.

84.  Ibid., p. 121.

85.  E. Hadorn and H. Niggli, Mutations in Drosophila  after
     chemical treatment of gonads in vitro,  Nature  (1946)
     157:162.  V.G. Heller and L. Pursell,  Phenol-contaminated
     waters and their physiological action,  J.  Pharmacol.  Exp.
     Ther. (1938)  63:99.

86.  National Academy of Sciences, Chloroform,  Carbon  Tetra-
     chloride, and Other Halomethanes;   An Environmental
     Assessment, Washington:  1978, pp. 274-275.

87.  Supra, note 6, p. 56.

88.  Supra, note 61.

89.  Supra, note 6, p. 54.

90.  Ibid.

91.  See case study above.
                             174

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LOCAL OPPOSITION CLOSES APPROVED HAZARDOUS WASTE MANAGEMENT
FACILITY IN WILSONVILLE, ILLINOIS

Introduction

      Local opposition forced SCA Services, Inc. to close its
hazardous waste disposal facility in Wilsonville, Illinois
after it had been in operation for less than a year, even though
the facility had been permitted by the Illinois Environmental
Protection Agency (IEPA) and approved by the Environmental
Protection Agency (EPA).  The Village of Wilsonville together
with Macoupin County, Illinois and the Illinois Attorney General
successfully argued that SCA's facility constituted a public
nuisance and that it posed a substantial threat of environmental
contamination in the future, winning an injunction that not only
shut down the facility, but ordered complete exhumation of the
wastes and site reclaimation.  SCA lost a 1980 appeal to the
Illinois Appellate Court, and on May 22, 1981 this decision was
affirmed by the Illinois Supreme Court.  SCA may seek certiori
by the U.S. Supreme Court.  SCA's experience illustrates the
power of local opposition in preventing the continued operation
Of a permitted hazardous waste facility.

Background Information

The Location—
      The hazardous waste management facility in Wilsonville,
Illinois came into being when a manager of lEPA's Division of
Land Pollution Control recognized the need for proper hazard-
ous waste disposal facilities.  He left IEPA and in 1974 char-
tered Earthline, Inc., a private engineering consulting firm,
to establish a hazardous waste landfill.-'-

      The Wilsonville facility was the first waste disposal site
developed by Earthline.  The Village of Wilsonville, population
700, is located in southwestern Illinois approximately fifty
miles northeast of the St. Louis metropolitan area.  It is a
largely rural community with an economy based on agriculture
and coal mining.  Many of the village's residents commute to
jobs in St. Louis due to a decline in coal mining in the
Wilsonville area.

      Earthline chose Wilsonville for its landfill because it is
close to a major industrial area  (St. Louis), has what it
believed to be favorable hydrogeological characteristics, and
is relatively undeveloped.

      The Wilsonville site is primarily a landfill, but also
has facilities for short-term storage of recyclable waste, and
for land-farming waste.  The waste disposal site encompasses
                              175

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approximately 130 acres, 90 of which are located within the
boundaries of Wilsonville, and was projected to have a
twenty-year land-fill capacity.2

     To the north the site borders on residential property; to
the south, east, and west it borders on agricultural or unde-
veloped land.  The existing waste burial trenches are located
one-quarter of a mile from the northern and most populated
border.  The entrance to the site is on the main street of
Wilsonville, so trucks carrying waste to the landfill had to
pass through the Village.

     The surface of the site consists of a ten-foot layer of
loess  (wind-blown silt and clay) and is underlain by 40 to
65 feet of dense glacial till.  Within the till is a thin
layer of sand with a thickness of from a few inches to two
feet, located 30 to 40 feet below the surface.   Disposal
trenches were dug into the loess and extended no more than one
to two feet into the till layer, so that there  would be at
least 10 feet of till between the bottom of the trenches and
the sand layer.3  The trenches apparently were  not lined
with any material that would have increased natural imperme-
ability of the soil.

     The landfill is situated above a deep shaft coal mine
abandoned in 1954.  The land was not reclaimed  after the mine
close, and piles of coal, shale, and clay mine  tailings cover
approximately forty acres of the site.  Groundwater near the
mine site has become highly acidic from oxidation of pyrites
in the tailings.4

     The Earthline landfill was designed to reclaim the mine
site in the course of its operation as a waste  disposal
facility.  Excess soil from the disposal trenches was to be
used to cover the surface of the tailings pile  with the goal
of retarding the flow of water into the tailings pile, thereby
reducing the acid mine draining.

Development and Operation of the Landfill—
     Around December 1975 Earthline leased the  property from
its owner, with the understanding that it would develop a
hazardous waste management facility there.5  On February 11,
1976, Earthline applied to IEPA for a permit to develop a
hazardous waste facility on the site.6  The Illinois En-
vironmental Protection Act gives IEPA authority to review and
permit hazardous waste landfill operations and  preempts any
local regulatory control over the siting of hazardous waste
facilities.^  The IEPA permit process for siting a hazardous
waste facility involves three steps:  1)  issuing a permit for
site development, 2) inspection of the completed facility by
IEPA personnel, and 3) issuing an operational permit.


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     While IEPA reviewed its application for a site develop-
ment permit, Earthline made an attempt to inform the citizens
of Wilsonville of the planned facility and secure their sup-
port for it.

     In February 1976 Earthline notified local officials and
neighboring landowners by letter that Earthline was planning
to build the facility.8  In its letter Earthline stated that
the facility would "assist in conserving our precious re-
sources and protecting our environment."  Earthline did not
explicitly state that its facility would dispose of hazardous
wastes but rather euphemistically termed "the recovery, treat-
ment, storage, and containment of industrial residues."9
Earthline also implicitly promised that the site would provide
jobs for Wilsonville residents and that the facility would
eventually reclaim the mine wastes on the site.

     According to the Village of Wilsonville, its attorney
responded to Earthline's letter on March 3, 1976.  He wrote
that the village supported establishing industry on the
property, but he was concerned that the operation Earthline
described in its letter might include a landfill, and added
"of course, the Village would object most strongly to
[this]."10

     IEPA granted Earthline a development permit in July 1976,
approving the site for the following processes for treatment
and storage of wastes:  1) hazardous waste landfilling,
2) acid-alkaline neutralization, 3) chemical fixation, and
4) short-term storage of recyclables.H

     Initial development of the Wilsonville site was completed
by September of 1976,12  After inspecting the facility, IEPA
granted Earthline an operational permit for the site on
September 23, 197.6.1.3. Disposal operations began on
November 15, "1976;14 on tfte same day Earthline held an open
house .at the facility to inform local residents about the
facility.  Earth'lihe also met with the Wilsonville Village
Board at this time.  The extent to which Earthline made clear
at these meetings that its facility would dispose of hazardous
waste is disputed.

     SCA Services, Inc. purchased Earthline in October 1976.
SCA, located in Boston, Massachusetts, is the third largest
waste service company in the United States with over
$180 million total corporate revenues for 1978.15

     The site accepted all types of hazardous and industrial
wastes with the exception of radioactive wastes, strong acids,
and explosives.  In April 1977 Earthline had IEPA permits for
the legal disposal of. 185 types of hazardous wastes, including
PCBS.16

-------
     Earthline1s primary market was the St. Louis metropolitan
area; however, it also received wastes from Indiana, New
Jersey, and Missouri.!'  The companies that contracted with
Eafthline for waste disposal include Velsicol, American
Cyanamidt Monstanto, Dupont, Ford, General Motors, McDonald
Douglas, Uniroyal and Western Electric.18

     Residents of Wilsonville voiced only minor complaints
about the facility during its first four months of operation.
There were some complaints of odors from the facility; that
the facility did not hire enough local residents; that trucks
carrying wastes to the site damaged local streets; and that a
few hazardous chemicals were spilled.  However, there was no
organized opposition to the site until April 1977.19

PCB Disposal Arouses Local Opposition—
     In early April 1977, the residents of Wilsonville learned
that EPA had chosen Wilsonville as the burial site for soil
contaminated with PCBs that had been illegally dumped along a
creek in Dittmer, Missouri.20  Wilsonville was the closest
landfill suitable for the disposal of PCBs.  IEPA issued an
emergency permit to Earthline to accept the wastes on approxi-
mately April 8, 1977.21  Op to this point, most Wilsonville
residents were apparently unaware that the facility accepted
hazardous waste.  The citizens of Wilsonville, alarmed by news
reports stressing the toxicity of PCBs, became violently op-
posed to the disposal and threatened to forcibly close the
site themselves if the courts would not do so.  On Friday,
April 15, 1977, Wilsonville1s state senator and the manager of
lEPA's hazardous waste subdivision held a meeting to reassure
residents of the safety of the operation.22  However, resi-
dents' fears intensified and by Sunday, April 17, 1977, resi-
dents had armed themselves and were ready to close down the
facility by force.

     In response to local sentiment, the Village of
Wilsonville on April 18, 1977 filed suit agains Earthline in
Macoupin County Circuit Court to enjoin it from accepting the
PCB-contaminated soil.23  The court that same day granted a
temporary restraining order enjoining Earthline from hauling
PCBs through Wilsonville and disposing of them on the
site.24  in April Earthline successfully petitioned the
Appellate Court to dissolve the restraining order25 and by
May 1, 1977 the disposal facility had reopened.26

     On April 29, 1977, Macoupin County, the county in which
the facility is located, joined forces with the Village of
Wilsonville and filed suit to prevent Earthline from accepting
the PCBs.27  The Macoupin County Farm Bureau was granted
leave to intervene in the case May 9, 1977 and shortly there-
after filed a complaint asking the court to enjoin Earthline
from accepting not only the PCB-contaminated soil but all

                              178

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other toxic wastes that had been deposited on the site up to
that point.28  The Village of Wilsonville and Macoupin
County amended their complaints in mid-May to similarly seek
an end to the disposal of all toxic wastes at the site, not
just PCBs, and to compel Earthline to remove wastes already
deposited there.

     Earthline petitioned the court to add the U.S. EPA as
necessary defendants in the suits, but it declined to do so.
EPA then obtained leave to enter the case as an amicus
curiae.29

     On May 26, 1977 the Illinois Attorney General filed a
complaint against Earthline, charging it with violating state
water pollution laws and asking that the site be closed and
the wastes deposited there be removed.30  up to this point,
the Attorney General had been representing IEPA in court in
the case.  IEPA had approved the site and was in favor of
Earthline's continued operation, so the Attorney General's
suit produced a split within the state government with respect
to the case.  These three complaints against Earthline were
consolidated for trial on June 2, 1977.31

     The Governor of Illinois became involved in the contro-
versy by instituting a 45-day moratorium on the issuance of.
new hazardous waste disposal permits on May 30, 1977.32
Under the Illinois Environmental Protection Act, the operator
of a hazardous waste landfill is required to obtain a separate
supplementary permit for each shipment of waste buried in the
landfill.  Since at the time of the moratorium Earthline held
over 150 permits that were still in effect, the moratorium had
no immediate impact on the facility's operations, beyond in-
tensifying the controversy.  The Mayor of Wilsonville, how-
ever, acting on the Governor's moratorium, stopped five trucks
from entering the site.33

Litigation:  Allegations and Defenses—
     The suits brought against Earthline by the Village o-f
Wilsonville, Macoupin County and the Illinois Attorney General
charged that Earthline was maintaining a present and future
public and private nuisance through operation of its facility
and that Earthline was violating the water, air and land pol-
lution laws of Illinois.

     Present nuisance--The plaintiffs alleged that operation
of the facility created a present nuisance because hazardous
wastes were hauled through the village and because the site
emitted dust and odors.  Local residents testified at the
trial that such hazardous waste as PCBs were transported to
the landfill in unsealed barrels on open trucks, and that
waste leaked as a result.  The problem was magnified by the
fact that the only access to the site was from the main street

                               179

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of Wilsonville.  Residents of Wilsonville also testified the
facility emitted unpleasant odors and that emissions from the
dump had caused health effects ranging from shortness of
breath and burning eyes to general sickness and nausea.

     To counter these charges, Earthline testified that it
planned to construct a $400,000 road around the outskirts of
the Village that would remedy the problem of access to the
site.34  Earthline testified that it had not yet started to
construct this alternative route because it wanted to be as-
sured of the economic feasibility of such a project.  Earth-
line held that odors and possible related health effects were
due not to emissions from its faciliy, but to area residents
burning trash in open barrels and dumping sewage in a nearby
trench.

     Future nuisance--The plaintiffs charged that the landfill
presented a future nuisance because the site was unsuitable
for hazardous waste disposal and would be unable to contain
the wastes in the future, thereby causing environmental con-
tamination. 35  The controversy over the suitability of the
site centered on the permeability of its soil and the possi-
bility of subsidence of land over the abandoned mine.

     If mine subsidence were to occur, the plaintiffs charged,
the disposal trenches could develop cracks that would allow
leachate to seep out and contaminate the groundwater.36

     Expert witnesses for the plaintiffs testified that sub-
sidence had occurred in the mine underlying the site, and that
cracks resulting from subsidence could extend all the way to
the surface and breach the disposal trenches.37

     Earthline1s witnesses responded that the likelihood of
subsidence was negligible and that any subsidence cracks that
might develop would not extend to the bottoms of the
trenches.  However, the plaintiffs were able to challenge
Earthline1s witnesses with evidence that subsidence cracks
extending to the surface had in fact developed in the area
surrounding the landfill.38

     The second major area of-dispute over the site's suita-
bility concerned soil permeability.  The permeability tests
originally taken at the Wilsonville site during the IEPA per-
mit procedures showed that the site met the IEPA standards,
which require that waste must be contained within ten feet of
the disposal site for five hundred years.39  Evidence pre-
sented during the trial claimed that the tests were in error
and that the site is actually 100 to 10,000 times more perme-
able than what the standards allow, with a containment time
possibly as low as 50 years.40


                              180

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     EPA and the Illinois State Geological Survey testified in
Earthline's defense that after extensive monitoring of the •
disposal facility, they had determined that it was safe, met
all existing criteria for a chemical waste landfill, including
permeability requirements, and showed no signs of having con-
taminated the surrounding soil or groundwater.4!

Circuit Court Decision—
     On August 28, 1978, after 16 months of litigation the
court ruled in favor of Wilsonville and its allies in the
litigation and ordered the disposal facility closed and all
wastes buried there exhumed.42

     The court had to choose between the conflicting testimony
of two sets of expert witnesses and in the end sided with the
plaintiff's witnesses.  In general, the court found that the
Earthline site had caused air, water, and soil pollution and
would continue to do so in the future.  It found that trans-
portation of wastes to the site posed an imminent hazard to
the public, that there was a "strong likelihood" that wastes
would escape from the landfill within twenty years through
subsidence cracks, and that toxic substances from the site
have traveled and/or will travel to adjoining lands.  The
court also found that Earthline was deceptive and misled
Wilsonville as to the purpose of the site and the materials to
be buried there.43

Appeals—
     Earthline appealed the decision to the Illinois Appellate
Court and asked the court to stay the Circuit Court's order.
On September 14, 1978, the Appellate Court denied Earthline
permission to remain open during the appeals process,44 but
granted it a stay on exhuming the wastes pending the outcome
of its appeal.

     On September 21, 1979, the Appellate Court of Illinois
upheld the Circuit Court's decision to close the site, and
again ordered the exhumation of all wastes.4^  It stayed
this order, however, pending appeal to the Illinois Supreme
Court.    •  -    .       '-...:''_.''   ..     •     ...,'''"'•"'

     In its appeal, Earthline had argued, among other things,
that IEPA and the Illinois Pollution Control Board, and not
the Circuit Court had jurisdiction over the case, or, alterna-
tively that the Court should have deferred to those two agen-
cies.  The Appellate Court, however, found that the Circuit
Court did have jurisdiction over the case; the fact the IEPA
had issued it a permit to operate as a hazardous waste land-
fill did not prevent the Circuit Court from ruling on whether
or not the landfill created a public nuisance.46
                              181

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      Earthline had also argued on appeal that the "manifest
weight of the evidence" did not support the Circuit Court's
finding 'that the landfill constituted a present and future
nuisance.  The Appellate Court recognized that the expert
testimony offered by both sides conflicted, but held that the
plaintiffs had shown that release of the substances in the
landfill would have catastrophic consequences.  Even if the
chances that a release in fact would occur were uncertain and
even if the threat of releases might be remote in time, the
Appellate Court found that the consequences of- a release were
so serious as to justify the Circuit Court's injunction against
the site.47

      Earthline had further argued that the Circuit Court
should have balanced the benefits of its landfill against any
possible harm that might result from it.  The Appellate Court
found that balancing was not required, again because of the
extreme seriousness of possible harm from the site.48

      In October 1979, Earthline petitioned the Illinois
Supreme Court for leave'to appeal the Appellate Court's deci-
sion to close the site.49  The Supreme Court denied Earthline's
petition.  On May 6, 1980, Earthline petitioned the Supreme
Court once again and on May 15, 1980, the court granted
Earthline leave to appeal."

      On May 22, 1981 the Supreme Court affirmed the lower
court rulling and ordered SCA Services to remove all wastes and
contaminated soil buried on-site and to restore and reclaim
the site.51

Epilogue:  Problems of Public Acceptance—
      The Wilsonville case illustrates several problems in-
volved in siting a hazardous waste facility.  Along with ques-
tions of the site's geological suitability, public acceptance
of and the degree of local control over the site also played
a critical role in the controversy.

      Because the IEPA preempts local authority in siting hazar-
dous waste facilities, the Village of Wilsonville had no control
over the siting of the Earthline landfi-1.  The siting process
was carried out solely between the facility sponsor, Earthline,
and the Illinois Environmental Protection Agency.  During both
the Circuit Court and Appellate Court trials, local officials
expressed dissatisfaction over not having been given a substan-
tive role in the siting process.52  The Illinois Pollution
Control Board has authority to conduct public hearings on siting
of hazardous waste facilities, but hearings were never conduc-
ted on the Earthline landfill.
                              182

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Local citizens say they did not petition the Board for hearings
because they were unaware of the threat that the facility
presented, and were unaware that such review measures were
available.53

      Earthline attempted to secure support from local residents
prior to the opening of the facility through an open house and
meetings with local elected officials.  However, residents
testified that while they were told that the facility was going
to "recycle industrial residues," they did not understand that
it involved dangerous chemicals or the potential for environ-
mental contamination.54 Earthline was not legally required to
involve the residents in the siting procedure, but doing so
would have allowed the residents to express concern over the
transport of hazardous wastes through the Village, or the
proximity of the burial trenches to residential property;55
and perhaps would have led to an amicable resolution of .these
problems.

      Local officials also claimed Earthline had promised to
provide jobs for local residents in order to gain public ac-
ceptance.  Due to the decline of coal mining in the area, this
perceived promise was a major factor in the Village's initial
non-resistance to the facility.  Earthline, however, failed to
employ local citizens, so the Village had no economic interest
in the continued operation of the facility.

Costs

Private Costs of Siting a Hazardous Waste Disposal Facility—
      SCA Disposal Services has hesitated to provide cost
figures of its investment in the Wilsonville site, primarily
because the company may yet seek certiorari by the U.S. Supreme
Court,  ffowever, SCA admits that its expenditures have been
substantial,  The costs of litigation alone have been three-and-
one-half tiraes as much as it originally invested to develop the
site.56

      Without the cost figures from SCA, the following discus-
sion of private costs is limited to the "types" of costs in-
curred by the company in developing the Wilsonville site.

      Cost of site selection—Earthline originally examined
several alternative locations for a landfill before choosing
the Wilsonville site on the basis of hydrogeologic suitability
in a relatively undeveloped area.  This phase included the
costs of locating various alternative locations, initial test-
ing for suitability as a landfill, and finally contracting
with the owner of the property under a financial agreement to
develop the aite.^7
                              183

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     Cost of securing IEPA permits—The procedure for develop-
ing a hazardous waste landfill in Illinois requires extensive
testing of the hydrological and geological characteristics of
the site in order to get IEPA permit approval once the site is
selected.  SCA/Earthline spent nine months securing develop-
ment and operational permits from the IEPA for the Wilsonville
site.58  The first step, securing a development permit, in-
cluded extensive testing of the hydrogeological characteris-
tics of the site, designing the facility according to specifi-
cations required under the Illinois Environmental Protection
Act for hazardous waste landfills, as well as submitting ex-
tensive technical designs for the proposed processes of waste
treatment, disposal, and storage.59  The second step, once
the development permit was granted by IEPA, included the costs
of constructing the landfill according to the IEPA specifica-
tions, and submittal of an application upon completion of con-
struction to the IEPA for an operational permit.  The IEPA
spent approximately four months reviewing the site for an
operational permit, granting final approval to the site in
November of 1977.6
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facility.  The values of the homes range from $15,000 to
$30,000, and would b& rendered valueless if the wastes migrated
from the site.63  However at the current time residential
property has not been contaminated.

      Acute and latent health effects—At the present time the
site does not pose an immediate health threat to local resi-
dents.  Fifteen citizens stated that they experienced nausea/
headaches, and general sickness from the odors emanating from
the site; however, extensive EPA monitoring has not found any
environmental contamination. 64  Again, the health danger that
the site imposes is a potential future danger of chemical
migration from the site.  Both the EPA and the IEPA feel that
the site does not pose a threat to public health in the future
because, the site is fully contained.65

      Cost of not having the site—Closing the Wilsonville site
will also impose indirect costs.  One such, cost will be the
loss of an approved hazardous waste facilityr. one of the few
which EPA has found suitable for the disposal of PCBs.  Hazar-
dous waste generators in the area once served by the Wllsonville
site may have to pay more and haul their wastes farther to find
another suitable disposal site.

      Another indirect cost is the chilling effect the court's
order to close and exhume the site might have on other firms
considering investing in hazardous waste disposal.  Firms might
conclude from the Wilsonville experience that official approval
of a hazardous waste disposal facility offers no protection
against disgruntled neighbors who want to close the facility.
The resulting uncertainty might lead some firms to decide
against investing in hazardous waste-disposal facilities.  By
reducing the supply of disposal facilities, this would tend to
make hazardous waste disposal more expensive.  Firms that chose
to operate hazardous waste facilities in spite of the uncertain-
ty might raise their fees to insure themselves against the
possibility of an adverse judgment.

      On the other hand, the Wilsonville site is in some ways
unique.  For example, it is constructed on an abandoned coal
mine and is fairly close to an inhabited area.  These factors
may keep the Wilsonville case from setting a.precedent with
wide-ranging applicability, thus reducing its chilling effect.
The Wilsonville case could also have the beneficial side effect
of inducing operators of hazardous waste facilities to take
even more care in the siting of their facilities.

Cost of Removing Wastes from the Site—-
      SCA will bear the direct cost of the Illinois Supreme
Court's decision to uphold .the lower court's order to perma-
nently close and exhume all wastes from the Wilsonville land-
fill.66
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      A rough estimate of the total cost of exhuming the
Wilsonville site is approximately $2,000,000.67  SCA was
required to post a $2,000,000 bond pending further appeal.  The
two million dollar figure is based upon an affidavit SCA presen-
ted to;the appellate court during its August 1978 request for
a stay to remain operative during the appeals process.68  The
affidavit stated that the cost of exhuming wastes buried during
the anticipated nine month appeal process would be $737,000
based on 1978 labor and equipment costs.69

      Since the site had been operative for a year-and-a-half
at the time of SCA's request and contained approximately two-
and-one-half times the .amount of wastes listed in the affidavit,
approximately two million dollars may potentially be the cost
of exhuming the entire site.70  However, an attorney for SCA
pointed out that this figure would not include transportation
fees, or disposal charges at an alternative site.71

      SCA is also unsure of where it might dispose of the
wastes from the Wilsonville landfill if higher court Review
forces exhumation.  However, SCA's attorneys feel that the r~
regulations promulgated under the Resource Conservation aud
Recovery Act (RCRA) will require new disposal measures, and
possibly encourage the opening up of new disposal sites and
thus enlarge SCA's alternative for disposal of any exhumed
waste.72

Footnotes

1.    U.S. EPA, Siting of Hazardous Waste Management Facilities
      and Public Opposition, (Report SW-809)  November 1979,
      p. 305.

2.    Ibid.

3.    U.S. EPA, Technical Report on Earthline Corporation
      Landfill, Wilsonville Illinois, October 1977, p. 11.

4.    Supra, note 1, p. 304.

5.    Ibid.

6.    Ibid.

7.    Illinois Environmental Protection Act,  C1977 111. Rev.
      Stats. Chap. 111-1/2.  1001, et seq.).

8.    Supra, note 1, p. 305.
                              186
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 9.  Supra, note 3.   Copy  of  letter  from Earthline Corpora-
     tion, February  11,  1976.

10.  Brief for Appellee, Village of  Wilsonville v. Earthline
     Corporation, 33 111.  App.  3rd,  396 N.E.2d 522  (4th Dist.,
     1979) .

11.  Supra, note 1,  p.  305.

12.  State of Illinois,  Appellate Court, Consolidated Case No.
     79-218, Wilsonville v. SCA, p.  5.

13.  Ibid., p. 5.

14.  Ibid., p. 6.

15.  Supra, note 1,  p.  305.

16.  State of Illinois,  County  of Sangamen,  Sworn Affidavit of
     Douglas Andrews, August  28, 1978.

17.  Ibid.

18.  Ibid., Exhibit  B (List of  companies under contract with'
     Earthline, 1978).

19.  Supra, note 1,  p.  306.

20.  Ibid.

21.  Ibid., p. 307.

22.  Ibid.                                                  .

23.  Ibid.

24.  Ibid.

25.  Conversation with  Fred Prillaman, Attorney  for  SCA
     Services, May 1980.

26.  Ibid.

27.  Illinois Cir. Ct., Macoupin County, Macoupin County  v
     SCA, original complaint  filed  May  1977.

28.  Complaint of Macoupin County Farm  Bureau, Village  of
     Wilsonville et al. v. Earthline Corporation, No.  77-CH-10
     (Macoupin Cty.  Cir. Ct., May  1977).

29.  Supra, note 1,  p.  308.
                              187
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30.  State of Illinois,  County of  Macoupin, Complaint for
     Injunction, Illinois v.  Earthline, William J. Scott,
     Attorney General,  No. 77, 13.

31.  Ibid., p. 4.

32.  Supra, note 1,  p.  308.

33.  Ibid., p. 308.

34.  State of Illinois,  Appellate  Court, Fourth District,
     Agency No. 29-218,  Court Opinion, September 21, 1979.

35.  Supra, note 30.

36.  Ibid.

37.  Village of wilsonville  et al.  v. Earthline Corporation,
     33 111. App. 3d 163, 396 N.E.2d  552  (4th Dist. 1979).

38.  Ibid.

39.  Illinois State Geological Survey, "Geological and
     Geochemical Considerations on Disposal of Industrial
     Chemicals at Wilsonville, Illinois, Staff Report,
     November 3, 1977.   See  also,  Illinois Environmental
     Protection Act, (1977 111. Rev.  Stats. Chapt. 111-1.2,
     1001, et seq.).

40.  U.S. EPA, Technical Report Earthline Corporation
     Landfill, October  1977,  U.S.  EPA, p. 3 (see also 42 Fed.
     Reg. 26574 May 24,  1977  [PCBs]).

41.  Illinois Appellate Court, Village of Wilsonville v SCA,
     App. 3 111., December,  163, 396, N.E.2d 552.

42.  Village of Wilsonville  et al  v.  Earthline Corporation,
     No. 77-CH-10 (Macoupon  County Cir. Ct. August 28, 1977),

43.  Ibid.

44.  Conversation with  Fred  Prillaman, Attorney for SCA,
     Springfield, Illinois,  June 1980.

45.  Supra, note 41.

46.  Ibid.

47.  Ibid.

48.  Ibid.
                              188
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49.    Conversation with Anne Carr,  Illinois Attorney General's
      Office, May 1980.

50.    Ibid.

51.    Village of Wilsonville v.  SCA Services, Inc., Environmen-
      tal Law Reporter, 11 ELR 20698, (111. Sup. Ct.,
      May 22, 1981)

52.    Supra,  note 1,  p.310

53.    Ibid.,  p.  310.

54.    Ibid.,  p.  312.

55.    Ibid.,  p.  312.

56.    Conversation with Stuart Dobbs, Attorney for SCA,
      Springfield, Illinois, May 1980.

57.    Supra,  note 1,  p. 305.

58.    Ibid.,  p.  307.

59.    Illinois Environmental Protection Act, (1977 111. Rev.
      Stats., Chapt.  111-1.2 1001,  et seg.).

60.    Supra,  note 1,  p. 307.

61.    Supra,  note 59.

62.    Supra,  note 1,  p. 305.

63.    Conversation with Stuart Dobbs, Attorney for SCA,
      Springfield, Illinois, May 1980.

64.    Illinois Seventh Circuit Court, Macoupin County,
      Consolidated Case No. 77-CH-lO, 77-CH-13, Post-trial
      Brief of Amicus Curiae, U.S.  EPA, July 10, 1978.

65.    Ibid.

66,    Conversation with SCA Attorney Fred Prillaman,
      Springfield, Illinois, May 1980.

67.    Illinois Appellate Court, Fourth District, No. 77-CH-lO,
      Notice of Appeal, Wilsonville v. SCA, August 28,  1978,
      Sworn Affidavit of James Douglas Andrews, August  28,  1978,

68.    Ibid.,  Exhibit A.

69.    Ibid.,  Exhibit A.

                             189
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70.  Conversation with SCA Attorney, Fred Prillaman,
     Springfield, Illinois, May 1980.

7.1.  Ibid.

72.  Ibid.
                              190
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HAZARDOUS CHEMICAL WASTES STORED ILLEGALLY AT EASTERN RUBBER
COMPANY IN CHESTER, PENNSYLVANIA

Introduction

      Between 1974 and 1977 Melvin Wade,  through his tire
shredding business located along the Delaware River in eastern
Pennsylvania, illegally stored and disposed of hazardous waste
chemicals, which he obtained from ABM Disposal Services, a
waste transport company.   Wade disposed of the wastes by
emptying the drums onto the ground or into culverts that flowed
into the Delaware River.   He then resold the drums to recyclers.
Wade is believed to have received approximately 50,000 drums
of waste.

      The Pennsylvania Department of Environmental Resources
CDER) discovered the illegal disposal site in March 1977.  DER
immediately obtained a search warrant and orally ordered the
site to shut down.  DER later brought administrative action
against both Wade and ABM Disposal Services, ordering the site
be cleaned up and permanently closed.  The site was closed down
but neither ABM nor wade,  both bankrupt, took action to clean
up the site.

      In February 1978 a massive fire broke out on the property
causing many of the barrels to explode and the buildings used
to store barrels to collapse.  Exploding barrels shot off the
site, threatening nearby liquified natural gas storage tanks.
Clouds of toxic fumes forced the closing of the Commodore
Barry Bridge, a major commuter route between Philadelphia and
the suburbs of New Jersey.  Forty-five firemen were hospital-
ized for severe toxic smoke inhalation, skin rashes, and burns.

      Wade was convicted on criminal charges in August of 1980
and is currently serving a 2-5 year jail sentence.  The U.S.
Environmental Protection Agency (EPA) has filed a civil suit
against Wade; as of October 1981 the case has not gone to trial.
EPA has conducted extensive monitoring of the site to determine
the extent of the environmental contamination.  DER has begun
to clean up the site.  A complete cleanup of the site is
expected to cost $1.25 million to $3 million.

Background Information

The Location—
      The Eastern Rubber Tire Company is located on a three-
acre tract along the Delaware River in Chester, Pennsylvania,
 approximately 12 miles southeast of Philadelphia.  Its owner,
Melvin Wade, established the tire shredding company in
1970.1  The site is located in a highly industrialized area
with a natural gas storage facility located directly north of
the property and an approach to the Commodore Barry Bridge

                             191
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directly to the south.  The site's eastern border is the
Delaware River.  Residential property is located approximately
10-15 blocks west of the site, separated from it by commercial
and industrial buildings.

Waste Disposal--
     In 1974 Wade agreed to accept 55-gallon drums of waste
from ABM Disposal Service Company, a waste transporting and
disposal firm.2  The tire-shredding business had been only
marginally profitable and several storage buildings stood
empty.  ABM agreed to pay Wade approximately $1.50 for each
drum of waste that he took.3  it is unclear whether Wade
agreed to dispose of the wastes he took from ABM, or merely to
store them.  However, since there is no indication that ABM
expected to reclaim the wastes in the future, it can be as-
sumed that Wade was to dispose of the wastes.

     ABM, based in Chester, Pennsylvania, has been in the
business of transporting and disposing of waste materials
since 1970.4  The Wade site is one of several ABM used to
dispose of the wastes it hauled.5  ABM's president,
Franklin B. Tyson, has a history of state convictions for
illegal dumping going back 15 years.6  In spite of this,
companies such as General Electric, Texaco, Scott Paper, Sun
Co., Exxon, Dupont, Boeing-Vertol, and Smithkline contracted
with ABM to transport and dispose of their wastes.7  A total
of 51 corporations contracted with ABM for transport and dis-
posal of their wastes in 1977-1978.8

     ABM's transport and disposal charges were very low:  ap-
proximately $17 per drum, which is considered half the usual
cost for disposal of industrial chemicals.9  ABM's price was
so low that, according to the Philadelphia, Inquirer, "its cus-
tomers could hardly have believed that their hazardous wastes
were being legally and safely disposed of."10  ABM ap-
parently was able to undercut its competitors because the
company's only expenses were trucking the wastes a few miles
to Melvin Wade's property and the $1.50 per barrel it paid
Wade.11

     The wastes ABM delivered to Wade included inflammable,
explosive, caustic, acutely toxic, and carcinogenic sub-
stances. 12  Wade claims that at the time he received the
wastes he thought they were harmless.  Wade disposed of the
waste by dumping the barrels on the ground or into storm
sewers and culverts emptying into the Delaware River.  Wade
resold the drums he had emptied for $6 apiece to a drum
recycling firm nearby.13  ABM delivered approximately 300
drums of waste per week to the site between 1974 and 1977; the
total number of drums delivered to the site is estimated to be
more than 50,000.I4
                             192
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     The Pennsylvania Solid Waste Management Act of 1970*5
requires permits for the operation of processing and disposal
systems of solid -wastes, including industrial and agricultural
chemical residues, and makes it unlawful to dump or deposit
wastes without a permit.16  If a disposal creates a health
hazard or a public nuisance, or adversely affects the environ-
ment or economic development of an area, permits may be re-
voked.  The Wade site did not have any permits to dispose of
wastes and was therefore operating in violation of the Act.

Response—

     Discovery of the problem; immediate response--0n
March 30, 1977, the Pennsylvania Department of Environmental
Resources (DER) discovered the Wade disposal site during an
investigation of ABM Disposal Services.*•?  Prior to the
discovery of the site by DER officials, local residents had
complained to city officials about noxious odors emanating,
from Wade's property.1**  However, the city never Acted on
the complaints.

     At the time DER discovered it, the site contaified over
10,000 barrels of hazardous wastes as well as seven tanker
trucks of liquid chemicals.  The barrels were rusted and leak-
ing, creating pools of waste.  Because of its proximity to the
Delaware River, as well as to residential areas, the site
posed a severe threat to the environment and public health.
DER immediately obtained a search warrant to investigate the
site and on April 1, 1977, orally ordered the site to shut
down1^ under authority of the Pennsylvania Solid Waste
Management Act.  Wade discontinued disposal and storage opera-
tions at the site upon DERVs order and has kept it closed
since then.

     On July 1, 1977, DER followed up on its oral order of
April 1977 by issuing a formal administrative order requiring
Wade to clean up and permanently close the site,20  yiade,
however, failed to clean up the site.  In July 1977 DER also
issued an administrative order requiring ABM Disposal S-ervices
to clean up the site; however, ABM immediately filed a no-
asset bankruptcy claim and the site remained contaminated.21

     Explosion and fire—On February 2, 1978, six months after
DER issued its clean-up orders, a massive explosion of unknown
origin occurred on the Wade property.  The resulting fire
destroyed a majority of the tire shredding facility's build-
ings, forcing Wade into bankruptcy.                      -
                                                    1 '   '....'(••
     At the time of the fire  the site still contained approxi-
mately 10,000 barrels of chemicals and seven tanker trailers
filled with liquid chemicals.22  Over 5,000 of the barrels
had been stored inside the tire facility's buildings, which

                              193               '          '
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collapsed during  the  fire,  burying the wastes.   The remaining
barrels of waste,  stacked in open storage areas around the
property, either  exploded or were severely ruptured during the
fire. vFewer  than 1,000  of the 10,000  barrels remained
intact*23.

     The explosion and fire endangered a large  liquified
natural gas storage tank and ten to twenty tanks filled with
propane at an electrical plant within  200 yards of. the Wade
site.  Fortunately, the  tanks were not harmed.

     Toxic fumes  from the fire forced  the closing of the
Commodore Barry Bridge,  a major commuter route  between
Philadelphia  and  New  Jersey, which runs along the southern end
of the site.

     Forty-five firemen  were hospitalized as a  result with
injuries ranging  from severe toxic smoke inhalation to skin
rashes and minor  burns.24  The injuries were extensive be-
cause highly  caustic  chemicals damaged the firemen's protec-
tive clothing.  The firemen were unprepared for the fire be-
cause they were not aware that the site, which  they thought
was just a tire shredding facility, had been used as a storage
area for chemical waste.

     The Chester  fire department is composed of both volunteer
and paid employees.   The city paid the hospitalization costs
for the salaried  firemen, but not for  the volunteers.25  The
volunteer firemen have considered bringing a class action suit
against the City  of Chester to get compensation for their
medical expenses .26

     The aftermath of the February fire intensified the health
and environmental hazards posed by the site. Thousands of
disintegrating  and leaking  barrels that had once contained
such chemicals  as sodium copper cyanide, benzene, and phenol
covered the property.27   The chemicals formed open cesspools
on top of the soil, seeped  into underground water sources, and
caused toxic  runoffs  into the Delaware River.   Heavy metals,
such as nickel, copper,  and lead accumulated in the river
sediment as well  as unknown amounts of chemicals that were
carried downstream.28 Additional smaller fires continued to
erupt after the February fire, a result of spontaneous explo-
sions from the  mixing of highly combustible chemicals from the
leaking drums.  The smaller fire generated visible smoke and
fumes.  Among the chemicals identified is cyanide, which when
mixed with acid can produce a lethal gas.29

     Enforcement  and  cleanup—The explosion of  the Wade site
brought the problem of cleaning up the site to  the forefront
of local residents' attention.  In February 1978, in response
to the fire,  Chester  residents formed  the Wade  Dump Site

                              194
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Committee to pressure for enforcement action and cleanup of
the site.  The Committee has concentrated its efforts on three
areas of concern:  seeking compensation for volunteer firemen
that were injured in the fire,  investigating possible injuries
to residents' health, and pressuring the state to clean up the
property.30

      The Committee successfully pressed the District Attorneys
Office to bring criminal charges against Wade.  On May 9, 1979,
after a year of investigation,  Wade was charged with causing
a catastrophe, failing to prevent a catastrophe, and three
counts of illegal dumping under the Pennsylvania Clean Streams
Act.31

      Wade did not appear for a pretrial hearing on the criminal
charges in March 1980 nor for the original trial date in
April 1980.  However, in August of 1980 Wade was convicted and
in January of 1981 was sentenced to 2-5 years in jail.32

      The Wade site remained severely contaminated after the
February 1978 fire.  Preliminary tests in Januaryl979, done by
EPA, have identified over forty-five hazardous chemicals in the
open drums found on the site.33  Hazardous wastes have migrated
from the site to the Delaware River through runoff and percola-
tion through the soil. 4  Analyses of air samples taken at the
site indicate that the hazardous wastes have volatilized and
that fumes from the wastes are migrating from the site to nearby
residential and commercial areas.35

      Based on the results of these tests, EPA on April 13,1979
filed a complaint against Wade and ABM Disposal Services under
Section 7003 of the Resource Conservation and Recovery Act of
1976,36 which authorized EPA to bring suit against sites presen-
ting an "imminent and substantial endangerment to health or the
environment."  In its suit, EPA asks the court to enjoin Wade
and ABM from using the site for waste disposal, and to order
the defendants to clean up the site.  As of October 1981 a trial
date for the suit still has not been set.

      The site was unfenced and freely accessible after the
February 1978 fire.  Children played on the site, residents
collected empty barrels for trash containers, and scavengers
used cutting torches to remove pieces of the burned-out build-
ings.  Concerned citizens began pressuring city officials to
erect a fence around the property, but the city said no money
was available for such a project.  Finally, in July 1979, a
year and a half after the fire, DER erected a fence around the
property.37

      DER however started to clean up the site even before
EPA's suit to force cleanup has been resolved, because it


                              195
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feels that the wastes on the site are too hazardous to remain
there.  DER retained a consulting firm in August 1979 to de-
velop a comprehensive plan for cleanup of the Wade site. 38
The plan includes three phases:  identification and removal of
intact drums; hydrogeological testing of soil and river sedi-
ment; and removal of contaminated soil or alternative measures
to prevent further chemical runoff into the Delaware River.39
In February 1980 Rollins Environmental Services began the first
phase of cleanup operations by identifying and removing intact
drums of waste from the site.40  Problems such as the discovery
of drums filled with PCBs which required special handling as
well as collapsed buildings in which the wastes were stored
added to the difficulty of preliminary cleanup efforts.   The
wastes removed from the site have been transported ten miles
away to an approved disposal facility owned by Rollins in
Bridgeport, New Jersey.41

      DER payed for the preliminary cleanup, at an estimated
cost of $650,000, with Clean Water Fund monies, financed by
fines imposed on polluters.  It estimates that  the ultimate
cost of disposing of the drums that are on the site may be
$1,200 per barrel.42  Proper disposal of the waste at the outset
would have cost $50 to $100 per barrel.43  DER does not believe
that it can recover from Wade or ABM the cost of the cleanup
becuase both are bankrupt.  However, DER plans to file suit to
place a lien on Wade's remaining property.44

      The second phase of the cleanup involves a series of
hydrogeological tests in order to evaluate the degree of con-
tamination and the potential pollution of the soil, groundwater,
and the Delaware River.  DER, whose available funds were
exhaused in the first phase of the cleanup, has secured EPA
funding for the study.45

      The full extent of contamination has not yet been deter-
mined, but EPA's preliminary tests have detected over fifty
chemicals in samples taken from topsoil, as well as substan-
tial concentrations of heavy metals in river-bottom sediment.46
Until the study is complete, EPA can only speculate on the
alternatives available for the ultimate decontamination of the
site and the Delaware River.

      Among alternatives under consideration for decontami-
nating the site is removing all topsoil.  This alternative is.
the most costly, and a major problem with it would be the
hazard to surrounding residents and workers that would be
created from stirring up dust contaminated with toxic chemi-
cals during the cleanup.  Other measures available include
installing a "berm" on top of the soil along the river bank in
order to prevent surface water runoff, or a "grout curtain,"
                               196
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an impermeable shield installed underground, to prevent
further groundwater contaminaton."47

     However, if contamination is severe, the only effective
alternative may be the complete removal of soil.  These
measures would prevent further contamination of the Delaware
River.  However, if EPA's study reveals extensive sediment
contamination, dredging the Delaware River may be necessary as
well.  The total cost of these measures for a comprehensive
cleanup, including cleanup of the site and the river, have
been estimated to be from $1.25 million to $3 million.48

Costs

Private Costs of Waste Disposal—

  .,..  Actual cost of illegal disposal—The private costs of
illegal disposal of hazardous wastes on the Wade site are com-
pared to what would have been the costs of proper disposal.
The private costs include the market transactions between the
waste generators and ABM Disposal Services for the transporta-
tion of the chemical wastes, and secondly, the agreement
between ABM and Eastern Rubber Company, for the storage and
disposal of the wastes.

     ABM Disposal Services charges approximately $17 per
55-gallon drum to transport and dispose of the generator's
chemical and highly toxic wastes.49  The $17 figure is about
half of what industry experts say is the usual cost for the
safe disposal of the wastes.50

     ABM, in an agreement with Melvin Wade, owner of Eastern
Rubber Company, paid Wade $1.50 per 55-gallon drum to accept
the chemical wastes.^1  ABM's profit for hauling the wastes
to an illegal site thus was roughly fifteen dollars per
SS-xjallon drum.  Wade, in turn, emptied several thousand of
the 55-vjailoti. drums by spilling their contents on the ground
and then resold the drums for approximately $6.00 each to a
drum .r.eprbcessing company nearby.52

     Comparative cost of proper disposal—Proper disposal of
the hazardous wastes on the Wade site would have cost approxi-
mately $35 to $50 per 55-gallon drura.53  This estimate is
based on the average waste disposal charges of legally per-
mitted disposal facilities located in the vicinity of the site.

Social Costs of Illegal Disposal--
     The social costs resulting from the illegal disposal of
hazardous wastes on the Wade site include damage to natural
resources, human health, and property.
                              197
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      Natural resource damage—The Wade site is severely con-
taminated with the hazardous chemical wastes that were stored
and disposed of there.

      Analyses of wastewater samples .taken from storm sewers on
the' Wade site indicate that the wastes have migrated into the
Delaware River.  Preliminary test results have fund substantial
concentrations of heavy metals in the Delaware River, including
chromium, nickel, copper, and lead.54  Because the site is near
the Delaware River and has a high-water table, wastes can be
expected to continue to migrate from the site into groundwater
wources and into the Delaware R:.ver via surface runoff and
unde::«rround percolation, 55  Air samples taken at the site in-
dicate that fumes from volatilized hazardous wastes are present
over the site, and that the fumes have migrated to nearby
residential and commercial areas.56

      To fully assess natural resources damage, DER, in con-
junction with EPA'S National Environmental Investigation Team
(NEIS), began testing the air, water, and soil at the site in
July i.979-."- DER has secured funding from EPA under Section 311
of the Federal Water Pollution Control Act to study the extent
of chemical contamination in the Delaware River.58

      Property damage—Wade claims his property would be worth
up to $4 million after cleanup, but the most prospective buyers
have offered for it in its present condition is $750,000.59
Residential property values have decreased in the area
surrounding the Wade site, but the extent of devaluations has
not been estimated.  Local residents within a fifteen-block
area adjacent to the site are concerned that due to noxious
fumes and the potential soil and water contamination they will
be unable to sell their homes.60

      Health effects—The wastes present at the Wade site are
acutely toxic, mutagenic, and carcinogenic, affect the nervous
system, and bioaccumulate.61  They present a severe potential
threat to human health both individually and through possible
synergies.

      Acute health effects were suffered by the firemen who
fought the blaze that consumed the site in February 1978.
Forty-five firemen were hospitalized as a result of the fire.
The health injuries reported were severe smoke inhalation of
toxic fumes, and minor skin rashes and burns.62  Many fire-
men were burned by the highly acidic and corrosive chemicals
which ate holes through their clothing.  The firemen were un-
prepared for the fire because they were not aware that the
rubber plant's facilities had been used as a storage area for
chemical waste.  The City of Chester has paid the hospital!za-
tion costs of salaried firemen,63 but the volunteer firemen
                              198
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who were injured have  not  recovered  the costs of their injuries.

      People living near the  site  have complained about diffi-
culty in breathing, burning eyes,  coughs,  skin rashes, and
nausea.  The Center for Disease  Control in Atlanta is currently
working with the Wade  Dump Site  Committee  to gather information
on the health effects.64   The Committee is taking a door-to-door
survey of a fifteen-block  area surrounding the site.

      Because many of  the  wastes present at the site exert slow
working and insidious  health  effects,  latent damage to the
health of area residents is a real possibility.

      Enforcement and  Litigation Costs—The public litigation
costs at the present time  include  the  pre-trial expenses in the
U.S. EPA's civil action suit  against Wade  and ABM, as well as
Delaware County's criminal action  against  Wade.  The cost
figures are limited to man-hours invested  in the cases as of
June 1980.

      As of October 1981 EPA's action  against Wade has not gone
to trial, fully three  years after  initial  involvement with the
site.65  EPA's Region  III  Office,  having primary responsibility
in the action against  Wade, had, by  1980,  invested approximately
one-and-a quarter man  years of effort, with forty percent of
this in attorneys' time alone. 66  in addition, EPA headquarters,
Department of Justice, and the Pennsylvania Attorney General had
spent approximately one-tenth of a man year on the Wade Case. 67

      Delaware County's criminal action against Wade, initiated
in February of 1978, consumed approximately one-half of a man
year's effort in attorneys' time,  as well  as an additional one-
quarter of a man year  in investigative work before the case
went to trial in August of 1980.

      Cleanup costs—The EPA's study cf the contamination of the
Delaware is expected to cost  between $150,000 and $225,000, paid
for through Section 311 funding  of the Clean Water Act.69 DER
which spent $650,000 on initial  remedial actions, has exhaused
its fund.  A complete  cleanup of the site, however, will cost
from $1.25 million to  $3 million.70  Additional remedial action
money for PCB cleanup  may  be  provided  under Superfund; as of
October 21, 1981 EPA's decision  to provide Superfund money is
still pending. 71  DER  estimates  that the ultimate cost of
disposing of the drums on  site may be  $1,200 dollars per barrel.
The original costs of  disposal at  an approved site would have
been $50 to $100 per barrel.72
                             199
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Cost Redistribution—
     EPA's suit against Wade and ABM asks the court to order
the two defendants to clean up the site to EPA's satisfac-
tion.  This would shift the cost of cleanup from the govern-
ment to the parties that contaminated the site.   However,
because both Wade and ABM have declared bankruptcy, their
ability to pay for a cleanup seems doubtful.   In fact, DER
does not expect to be able to recover from Wade  or ABM the
$650,000 it is spending on a preliminary cleanup, although it
plans to place a lien on Wade's remaining assets.73

     The volunteer firemen who were hospitalized as a result
of the fire at the site are considering suing the City of
Chester to gain compensation for their medical expenses.   This
would shift the cost to the city, but not to  the parties
ultimately responsible for the firemen's injuries, i.e., ABM
and Wade.

     So far no residents in the vicinity of the  Wade site  have
brought suit for compensation for possible health effects  or
loss of property value.

Footnotes

 1.  Ben. A. Franklin, "Cleaning Up Toxic Wastes," New York
     Times, April 22, 1979.

 2.  Ibid.

 3.  Ibid.

 4.  Nordland and Friedman, "Poison at Our Door  Step Series,"
     Philadelphia Inquirer, September 24, 1979.
 9.  Ibid.
12.  EPA v. Wade, No. 79-1426 (E.D.  Pa.,  March 30,  1979)
     amended complaint.
                             200
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13.  Ben. A Franklin, "Cleaning Up Toxic Wastes," New York
     Times, April 22, 1979.
14.  Memorandum of Points and Authorities,  EPA v. Wade (E.D.
     Pa. April 13, 1979).
15.  Pennsylvania Solid Waste Management Act, S§7, 9, 1968 Pa.
     Laws, as amended 1972.
16.  Ibid.
17.  Supra, note 13.
18.  Conversation with Gene  Hains, Director, Wade Dump Site
     Committee, May 1980.
19.  Supra, note 13.
20.  Conversation with Keith Welks, Attorney, Pennsylvania
     DER, May 1980.
21.  Supra, note 4.                               - '•'-. >
22.  Wade Dump Site Committee, Report on Wade Site Fire, 1979.*
23.  Ibid.
24.  Ibid.
25.  Supra, note 18.
26.  Ibid.
27.  Supra, note 12.
28.  Ibid.
29.  Dixon and Beldon, "Cancer Peril Found at Dump,*
     Philadelphia Inquirer,  February 8, 1980.
30.  Supra, note 18.
31.  Conversation with John Crane, Attorney, Delaware County,
     May 1980.
32.  Conversation with Keith Welks, Attorney Generals Offide,
     October 21, 1981.
33.  Supra, note 12.
34.  Ibid.
3-5.  Ibid.                                  ..,,.-•'.-...
                             201                     -......•••
-------
36.  Memorandum of Points and Authorities, U.S. EPA v. Wade,
     No. 79-1426 (E.D.  Pa.,  April  13,  1979).  Resource
     Conservation and Recovery Act of  1976, as amended, 42
     U.S.C. §6973.

37.  Conversation with Gene  Mains,  Wade Dump Site Committee,
     May 1980.

38.  Conversation with Keith Welks, Attorney, Pennsylvania
     DER, May 1980.

39.  "Contract for 'Wade Dump1 Cleanup Effort," Delaware   /•
     County Times, March 27, 1980.

40.  Ibid.

41.  Supra, note 20.

42.  Supra, note 20.

43.  Supra, note 4.

44.  Supra, note 20.

45.  Supra, note 20.

46.  Supra, note 12.

47.  Conversation with Joe Donevon, EPA Region III, Attorney,
     July 15, 1980.

48.

49.

50.

51.  Ibid.

52.  Ibid.

53.  Ibid.

54.

55.

56.

57.  Conversation with Joe Donevon, Attorney, EPA Region  III,
     May 1980.


                              202
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58.  Supra, note 20.

59.  Gail Becker,  "Dump Owner Freed," The Bulletin, Chester-,
     Pennsylvania,  December  27,  1979.

60.  Conversation with  Gene  Hains, Wade Dump Site Committee,
     June 1980.

61.  Harry Hartland,  "Wade Dump  Called Worst in Five States,"
     Delaware County  Daily Times, December  21, 1979.

62.  Supra, note 4.

63.  Conversation with  Gene  Hains, Wade Dump Site Committee,
     June 1980.

64 „  Phillip Dixon, "Evidence  'Soft1  at Dump Site," Delaware
     County Daily Times, January 15,  1980.

65.  Conversation with  Joe Donevon, U.S. EPA Region III,
     Attorney, June 1980.

66.  Ibid.

67.  Ibid.

68.  Conversation with  John  Drane, Attorney for Delaware
     County, Pennsylvania, June  1980.

69.  Conversation with  Keith Welks, Pennsylvania DER,
     Attorney, June 1980.

70.  Ibid.
71,  Conversation with Keith Welks, Attorney  Generals  Office,
     October 21, 1981.

72.  Ibid.

73.  Ibid.
                             203
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PCB DUMPING IN NORTH CAROLINA

Introduction

     In late July and early August,  1978,  Robert Burns and his
two sons secretly dumped approximately 30,000 gallons of
transformer oil containing PCBs,  a highly  toxic and persistent
chemical, along the shoulders of  211 miles of roads in North
Carolina.  Burns had obtained the transformer oil from the
Ward Transformer Company of Raleigh, North Carolina.  Federal
regulations issued in the spring  of  1978 permitted PCB oil to
be disposed of only in incinerators, but since no approved
incinerators were in operation in August  1978, the oil could
only be stored.

     The state of North Carolina  has covered the PCB-contami-
nated soil with activated carbon  and asphalt.  After studying
methods of both treating the contaminated  soil on site and
removing the soil for disposal elsewhere,  the state has pro-
posed to remove the soil and dispose of it in specially con-
structed landfill in Warren County,  North  Carolina.  A court
restraining order has thus far prevented the state from carry-
ing out this proposal.

     Damage from the dumping includes possible latent health
effects from PCBs, which are suspected of  carcinogenic, muta-
genic, teratogenic, and behavioral effects and loss of crops
growing near the contamination.

Background Information

The Location—
     Burns and his sons dumped PCB oil along 211 miles of road
shoulders in fourteen North Carolina counties, mostly in rural
areas.  (See Figure B-3.)l

Waste Disposal—
     Discovery—In the last week  of  June,  1978, a mixture of
liquid chemicals, later identified as PCB  liquids, was dis-
charged along remote roads within the Fort Bragg Military
Reservation.  Fort Bragg personnel investigated the discharge
and took samples of the contaminated soil,  but apparently the
samples were not analyzed and no  further action was taken.2

     In late July 1978, private citizens reported a similar dis-
charge to the North Carolina Highway Patrol.   This discharge
had occurred on July 27 and 29, 1978 along the shoulders of
North Carolina Route 28 north of  the Town  of Centerville in
Warren County, North Carolina.  The  Highway Patrol notified
the state Division of Health Services, who in turn notified
the Water Quality Program of the  Department of Natural


                              204
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                                       LOCATION  MAP      !
                                      HIIIHIPCB SPILLS
Figure B-3.   Location of PCB Spills  in North Carolina
                        205
                                                                    --4
-------
Resources and Community Development (DNRCD).   Personnel from
the Raleigh field office of the Water Quality Program on
July 31 investigated the discharge as if it were an oil
spill.  Since they, could find no oil ponded or evidence of oil
in surface waters, the investigators returned to their offices
without taking further action.'

     On August 2, 1978, a farmer in Johnston County complained
to the Water Quality Operations Branch of the Division of
Environmental Management that vapors from a spill on North
Carolina Route 210 in front ,of his farm were giving his
workers headaches and nausea.  The Division sent a chemist to
the scene to investigate the spill.  The chemist took samples
of grass, soil and water from the site for analysis.  On his
way home from work that day, the same chemist encountered a
similar spill along state Route 1004 near Snow Hill in
Alamance, and took soil samples of that spill as well.4

     By August 4, 1978, the DNRCD reported that it had iden-
tified the material discharged along the road in Johnston
County as Aroclor-1260, a preparation of polychlorinated
biphenyls (PCBs).5

     As soon as this identification was made, the DNRCD noti-
fied the emergency response branch of the regional office of
the Environmental Protection Agency, the North Carolina
Attorney General and the North Carolina Department of Crime
Control and Public Safety.  Law enforcement officials through-
out the state were notified of the spills by means of the
Police Information Network, and news of the spills was re-
leased to the press.*>

     Extent of spill--As the spills and the identification of
PCBs were publicized, reports of additional spills came in
from highway patrol officers, highway maintenance personnel,
and private citizens.  Gradually the extent of the pollution
became clear.  Although there were some spills in June and
July, most of the spills took place on the nights of August 1,
2 and 3, 1978; additional spills may have occurred on the
nights of August 5 and 8, 1978.7  Altogether, 211 miles of
road shoulders in fourteen counties were contaminated with the
PCB oil.8  For the most part, the contaminated roads are in
rural areas.  Approximately 30,000 to 35,000  gallons of PCB
oil were discharged along the roads, contaminating roughly
40,000 cubic yards of soil.9  The strip of contaminated soil
is approximately four inches wide.  Samples of contaminated
soil were found to have PCBs in concentrations ranging from
6.5 to 7.5 milligrams of PCB per gram of soil.10
                              206
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Response--

     Protection of public health--As soon as PCBs were iden-
tifled in the discharged oil,tEe DNRCD notified the emergency
response branch of the regional office of the Environmental
Protection Agency, the North Carolina Attorney General, and
the state Department of Crime Control and Public Safety.  Law
enforcement officials throughout the state were notified of
the spills by means of the Police Information Network, and
news of the spills was released to the press.

     On August 5, officials from the Water Quality Operations
Branch met with persons living along some of the affected
roads.  At the request of some of the residents along North
Carolina Route 210, the state Department of Transportation on
August 5 and 6 covered the spill along that road with a layer
of sand to suppress the odors given off by the discharged
liquid.^1  These odors were from the chlorinated benzene
solvents that were in the PCB mixture, and not from the PCBs
themselves.12

     On August 15, the governor of North Carolina requested
the President of the United States to declare the affected
counties a disaster area in order to qualify for federal aid.
The governor also asked the federal government for aid from
the Federal Highway Emergency Assistance Fund.  Both these
requests for federal aid were denied.^3

     The Division of Health Services within the Department of
Human Services first briefed local health directors on the PCB
spills and then, as the public demanded more information,
issued a notice August 16, 1978 on the health effects of the
spill.  In this notice the Department advised people to avoid
contaminated areas, and not to eat produce from nor graze
cattle on those areas.  Nonetheless, the Department stressed
that the PCB contamination posed no health threat.  The
Department on August 18 also took blood samples from residents
exposed to particularly high levels of PCBs.  The tests did
not detect higher than normal levels of PCBs in these per-
sons. 14

     The state Department of Agriculture in mid-August found
some sampled crops from fields along the spill routes had be-
come contaminated with PCB-tainted dust.  As a result of this,
the Department on August 25, 1978 issued an advisory warning
against human consumption of crops grown within 100 yards of
the contamination.  It also cautioned farmers not to use pas-
turage growing within 100 yards of the contamination to feed
livestock intended for human consumption, and urged that the
first four to five rows of feed corn growing along the con-
taminated roads be plowed under.  Agricultural extension
agents delivered this advisory in person to people living

                               207
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along the contaminated roads.  The Department issued a second
advisory August 29, repeating the warning of the first advisory,
and asking that gardens within 100 yards of the contamination
be plowed under; many persons are reported to have done so.15

     After conducting further tests, the Department of Agricul-
ture issued a third notice September 14, 1978, advising the
public that consumption of garden produce grown near the spills
would present no unreasonable risk to health provided the
produce was peeled or well washed.  The Department sill advised
farmers not to graze dairy or beef cattle within one hundred
yards of the spills since those animals would concentrate PCBs
in their milk and flesh.16

     To prevent the spilled PCBs becoming more widely dispersed
in the environment, the state Department of Transportation on
August 28 began to cover the PCB-contaminated soil with a 10%
solution of activated carbon.  The carbon was intended to
absorb and bind the PCBs.  A coating of liquid asphalt was
then applied on top of the carbon solution to prevent erosion,-1-'
As of October 1980, the PCB -contaminated soil remains along
the 211 miles of roadway shoulder, covered with carbon and
asphalt.

     Enforcement—After a large-scale investigation involving
North Carolina, EPA and New York State officials, a North
Carolina grand jury August 28, 1978 charged Robert Burns and
his sons Randall and Timothy Burns with operating the tank     0
truck that sprayed the PCB oil along the North Carolina roads.
Robert Burns is the owner of Transformer Sales Co. of Allegheny,
New York, a small company that salvages, transports, stores,
and resells PCB oil from transformers.1'

     He and his sons were identified by eyewitnesses who had
helped the Burnses one night when the truck they were using for
dumping ran off the road and had to be towed.

     Burns said that he had obtained the PCB oil from the Ward
Transformer Company in Raleigh, North Carolina with the under-
standing that the would dump the oil in the manner that he did.
The Ward Transormer Company, on the other hand, maintains they
paid Burns to take the oil with the understanding that he
would store it at his facility in New York and recycle it.

     Because at the time there was no one state law specif-
ically prohibiting the dumping of toxic substances, the
Burnses were indicted under a variety of laws:  they were
charged with two counts of felonious damage to public property
(i.e., the shoulders of state roads, which the state owns or
                              208
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for which the state holds the right-of-way) ,  felonious con-
spiracy to damage public property, felonious  criminal nuisance,
two counts of misdemeanor injury to growing plants,  and mis-
demeanor operation of a disposal system without a permit. The
indictment covered only dumping in Halifax County.  That county
was chosen for charging the Burnses because eyewitnesses had
seen the Burnses duaping there.20

     At the federal level, disposal of PCBs is regulated by the
Toxic Substances Control Act, 21 which provides for civil
penalties of up to $25,000 per day and criminal penalties of
up to $25,000 per day and imprisonment for up to one year for
violation of the disposal regulations. 22   in  January 1979, a
federal grand jury returned an indictment against the Burnses
charging them with violating the Toxic Substances Control Act,

     In a plea bargaining arrangement, the Burnses eventually
pled guilty to reduced charges in both the state and federal
cases in return for testifying against two persons at the Ward
Transformer Company who are suspected of  complicity in the
dumping , Robert Ward, Jr. and Robert Ward III.  Robert Burns
received prison sentences of three to five years in the State
case and one and one-half years in the federal case; both lie
and his sons received probationary sentences  in the state and
federal courts. 23
     Robert Ward, Jr. runs the Ward Transformer Company of
Raleigh, North Carolina, which supplied the PCS oil to the
Burnses for disposal.  The Ward Transformer Comapny is a
closely-held family corporation that buys, sells and rebuilds
surplus electric transformers and manufactures dry transformers
and switching gear. The company, which has been in business
approximately fifty years, has annual sales of roughly $5
million and employs 110 persons. 24
     On January 22, 1979, a North Carolina grand jury indicated
the Wards on two counts of serving as accessories before the
fact and one count of conspiracy in connection with the dump-
ing. 25, A federal grand jury indicted the Wards for violating
the PCB disposal retirements of the Toxic Substances Control
       ' '                     ''''''           '           '"'
     The Wards have been tried on  the state's charges.  The
elder Wards has been acquitted and charges against the younger
Ward were dropped. 26  in the federal  case Ward was convicted
and sentenced to two and one-half  years in prison, a five year
probation term, and a $200,000 penalty. 27
     Although the culprits were  apprehended in this case, the
probability at that time that a  person dumping PCBs would be
caught may not have been too great.   In August 1978 there was
no law in North Carolina specifically banning the dumping of
                             209
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toxic wastes, and in the absence of law, there were no en-
forcement officials other than peace officers to catch persons
like the Burnses dumping wastes.

     Under federal law, the Toxic Substances Control Act pro-
hibited such dumping but the regional EPA office charged with
enforcing the Toxic Substances Control Act was not fully
staffed in August 1978.  At that time there were only two
field personnel to enforce the Act within the entire region,
and enforcement guidelines to direct these personnel had not
yet been devised.2^

     To close the gap in the .legal framework that prevented
state prosecutors from charging the Burnses under one specific
law, North Carolina has enacted a statute making it a felony
to dump toxic substances, punishable by a fine of up to
$100,000 per day or imprisonment.29

     Cleanup—Covering the PCB spills-with activated carbon
and asphalt was only a temporary solution intended to immobil-
ize the PCBs until a permanent means of cleaning up the con-
tamination could be devised.  The state, which has assumed
responsibility for the cleanup, had two alternatives for a
permanent solution available to it:  it could attempt to treat
the contamination where it lay on the shoulders (in situ
treatment) or it could remove the contaminated soil for dis-
posal elsewhere.  If the second alternative were chosen, the
soil could be disposed of at the nearest existing EPA-approved
PCB landfill, which is in Alabama; incinerated; or disposed of
in a landfill constructed in North Carolina especially for
this contaminated soil.

     Removal of contamination—The state initially chose to
remove the contaminated soil, and it developed a method for
doing so.  The shoulders with PCB contamination would be
thoroughly wetted down, the contaminated, soil would be
trenched out and fed into waiting trucks, and then the
shoulders would be reshaped and seeded.  The state tested this
method on October 5, 1978 along one mile of PCB-contaminated
North Carolina Route 58 in Warren County.  Tests showed that
the removal did not significantly increase ambient levels of
PCB in the air and did not expose the workers conducting the
removal to the PCBs.30  The state had to overcome local
opposition before it could test the removal method.  The
Warrentdn Town Board objected to the test because the state
planned to store the soil removed during the test in a highway
maintenance shop yard near the town's water supply.  The town
obtained a restraining order prohibiting storage of the soil
in the maintenance yard on September 21, 1978, just before the
test was originally scheduled to be conducted.  The, state
secured a more remote, privately-owned site for storing the
removed soil and the test then was carried out.31-

                               210
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     Disposing of the soil that would be removed by a full-
scale removal operation was the next hurdle to be overcome.
Incineration of the soil was rejected because thus far there
are no EPA-approved PCB incinerators, and because given the
volume of soil to be disposed of,  incineration would be too
costly.  Disposal of the soil in the existing EPA-approved PCB
landfill in Alabama was also rejected.   It was estimated that
using the landfill would cost $12  million, largely because of
the expense of transporting the contaminated soil, and this
was considered prohibitive.32  it  is also an open question
whether the state of Alabama would have accepted so much
hazardous waste from another state.

     Problems in siting a disposal facility—Having rejected
these two alternatives for disposing of the contaminated soil,
the state began to look for a suitable landfill site in North
Carolina.  After considering over  100 sites,33 the state
settled on a site in Chatham Couunty, and on November 21, 1978
the Chatham County Board of Commissioners voted to sell the
state six acres of land in the county landfill for construc-
tion of a permanent disposal facility for the contaminated
soil.  Public opinion in Chatham County was strongly opposed
to this plan, however.  Because of the opposition, on
December 15, 1978, the state withdrew its offer to purchase
the land, and on December 18, 1978,  the County Commissioners
reversed themselves and voted not  to sell the land to the
state.34

     The state next turned to a site in Warren County (see
Figure B-4).  The site was privately owned and its owners were
willing to sell it to the state.  The state applied to EPA on
December 12, 1978 for the necessary permit and asked EPA to
waive four requirements contained  in EPA's regulations for
chemical waste landfills, namely,  that it be permitted not to
use an artificial liner within the landfill, that the distance
between the bottom of the landfill and the seasonal high
groundwater table be ten rather than fifty feet, that it not
be required to analyze groundwater for chlorinated hydro-
carbons, and that it not be required to install a leachate
collection system.35

     Because the land at the Warren County site was privately
owned, approval from County officials was not necessary as it
was in Chatham County.  However, on January 2, 1979, the
Warren County Board of Commissioners passed a resolution
objecting to locating a permanent  PCB disposal site within the
county.36  warren County residents and state environmental
organizations expressed their strong opposition to the pro-
posed landfill, singling out for particular attention the
requested waivers of EPA's chemical landfill regulations,
which they felt would make the landfill more hazardous.  The
Board of Commissioners of neighboring Vance County entered the

                              211
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fight, resolving on April 2, 1979 that it "opposed and
strongly objected to" PCB disposal in Warren County or any of
four other nearby counties.37  However, the state continued
with its plans, and on June 4, 1979 received a permit from EPA
for the proposed Warren County landfill.   EPA granted three of
the requested waivers, but denied the request for a waiver of
the leachate collection system requirement.38

     Because of the opposition aroused by the two efforts to
site a landfill for the contaminated soil, the state in early
1979 began to explore other alternatives.  The state re-
considered in situ treatment of the contamination, and in
February 1979 tested an in situ method proposed by Dr.
Jerome B. Weber of North Carolina State University.  On the
theory that the activated carbon had immobilized the PCBs, Dr.
Weber proposed to till fertilizer and lime into the contami-
nated shoulders and then plant them with grass.  The grass
would be monitored to ensure that it was not taking up the
carbon-fixed PCBs.  Eventually, Weber believed, microorganims
would break down the PCBs.  The state tests indicated that
this treatment method would be effective, and the governor
threw his support behind it.  EPA also conducted tests, how-
ever, and these tests found that the PCBs were still bioavail-
able even though they were bound in the activated carbon.  As
a result, on June 4, 1979, EPA denied the state's request for
the waiver of regulations that would have been necessary to
carry out the in situ method.39

     After this setback, the state considered using multiple
disposal sites because of continuing strong opposition to
using the Warren County site.  Since residents in a given
county could be expected to oppose having their county serve
as the disposal site for PCB-contaminated soil from other
counties, the state proposed to dispose each county's con-
taminated soil in its own county landfill.  However, some of
the fourteen county landfills that would be used in this plan
are geologically or hydrologically unsuitable for PCB dis-
posal.  Of the fourteen counties, less than one-third approved
the plan; the remainder either opposed the plan or tem-
porized.^^

     Since neither the in situ nor multiple site approaches
seemed feasible, the state returned to its plan of disposing
of all the contaminated soil in a specially-constructed land-
fill in Warren County.  This plan, however, soon ran into
legal roadblocks.

     On August 16, 1979, Warren County sued the state of North
Carolina and the owners of the land on which the landfill
would be situated, seeking to prevent the state from purchas-
ing the tract of land on grounds that the landfill would con-
stitute a public nuisance, that it would be in violation of

                              212
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federal regulations, and that an Environmental Impact State-
ment should have been filed under state law.4^  That same
day the court issued a temporary restraining order forbidding
the sale of the tract to the state.42

     On August 21, 1979, the Warren County Board of Commis-
sioners passed a resolution prohibiting the storage or dis-
posal of PCBs or materials contaminated with PCBs within the
boundaries of Warren County.43  Warren County amended its
complaint twice, first on August 22, 1979 to add as a cause of
action the enforcement of the August 21 resolution, and then
on September 14, 1979, to add the Regional Administrator of
EPA as a defendant, charging that EPA should have filed an
Environmental Impact Statement regarding the approval of the
disposal site.

     On September 6,1979, the court issued a preliminary
injunction prohibiting,the state from clearing or grading the
Warren County site and from storing or disposing of PCBs at
the site.44  The state,  however, was not enjoined from buy-
ing the tract of land on which the landfill would be con-
structed, and it subsequently bought the land.

     On September 22, 1979, owners of land adjacent to the
Warren County site, Henry F. and William Twitty and Jean
Adams, also filed suit against the state, seeking an injunc-
tion against dumping PCBs at the site.  The landowners brought
suit under the same causes of action as did Warren County, and
in addition claimed that use of the site as a PCB dump would
deprive them of their property without compensation and due
process of law.45

     EPA, on September 28, 1S.79, successfully petitioned the
U.S. District Court for the Eastern District of North Carolina
to remove the case to its jurisdiction.  After the landowners
on November 18, 1979 amended their complaint to include the
Regional EPA Administrator as a defendant, EPA on January 21,
19&0 successfully petitioned to have that case removed to
federal court as well.  The two cases will be combined for
trial.  A trial date has not been .set.

     Warren County residents are opposed to having the PCB
landfill constructed in their county for several reasons.
First, of course, is the natural fear of having hazardous
materials stored nearby.  Besides that, residents feel that
the waivers of EPA's regulations will make the landfill more
hazardous.  Residents also suspect that the state plans to use
the site for disposal of other hazardous wastes after the
PCB-contaminated soil has been disposed of.  In support of
this theory, they point out that the state has purchased a
142-acre tract, when only 16 to 20 acres would be necessary
                             213
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for the PCB landfill alone. Warren County  is  poor,  and resi-
dents fear that the landfill will scare  off new industries,
especially the food processing  industry, that might otherwise
be inducted to locate in  the county.   There is some sentiment
that Warren County was chosen as the  site  for the landfill
because it lacks effective representation.  The county is of
course represented in the state legislature and in  Congress,
but none of the legislators representing the  county are resi-
dents of the county. **>

     The state's plans to dispose of  the soil contaminated with
PCBs in Warren County have been blocked  by a  1978 restraining
order still in effect as  of October 1981.  The contaminated
soil remains along the roadsides.

     Private litigation—On July 7, 1980,  a person  living
along one of the spill routes,  T. Mitchell Langdon, brought a
class action suit against numerous North Carolina state of-
ficials, EPA officials, the Burnses,  Robert E.  Ward, Jr., and
the Ward Transformer Company.^7 Langdon asked the  court to
order the defendants to collect and remove the soil along the
spill routes that is contaminated with PCBs.   He is also
seeking up to $10 billion in damages  from  the defendants for
himself and for the class of people who  own property along the
spill routes, live along  the spill routes, or travel on them.

Costs

Private Acosts of Disposal—

     Actual cost of illegal disposal—According to  the state,
the Ward Transformer Company paid the Burnses approximately
$1.70 per gallon to dispose of  the PCB oil, with the agreement
that 70 cents per gallon  would  be returned to Ward  Transformer
as a cash kick-back.  The kick-back presumably was  arranged to
evade taxes.48  other than the  cost of acquiring and operating
a 750-gallon tank track,  there  were no direct private costs
associated with illegally dumping the PCB  oil along the road-
sides.

     Comparative cost of  proper disposal—The appearance of
new EPA regulations 49 on disposal of PCBs shortly before the
North Carolina dumping took place severely restricted the
range of alternatives available to a  firm  like the  Ward
Transformer Company that  wished to get rid of PCB oil.  These
regulations, which took effect  Aptil  18, 1978,  require that
liquid PCB mixtures, such as the ones removed from  the Wards'
be disposed of by incineration  in an  EPA-approved incinerator.
In August 1978, there was no such approved incinerator in
existence, meaning that PCB oil could not  be  disposed of, but
could only be stored.50


                             214
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     A rough idea of the comparative costs of storing PCB oil
in compliance with the EPA regulations can be gained from
price information supplied by Holley Electric Corporation, a
PCB oil storage facility in Jessup,  Georgia.   Holley charges
roughly $12 per drum of oil per month of storage,  the equiv-
alent of $0.22 per gallon per month.  Transportation to the
storage facility is not included;  Holley charges $2.44 per
loaded mile to transport PCB oil;  a  load consists of approxi-
mately 80 barrels.51

     Although there still are no approved PCB incinerators, an
incinerator run by Rollins Environmental Services of Deer
Park, Texas appears to be close to receiving  EPA approval.
Rollins expects to charge roughly $3 to $4 per gallon to in-
cinerate PCB oil.52

Social Costs of Illegal Disposal--

     Natural resource damage—The North Carolina Wildlife
Resources Commission detected up to  12 ppm PCBs in mourning
doves collected from areas contaminated with  PCB oil; up to
0.92 ppm of PCBs were found in a control group of mourning
doves taken from a county where no PCBs had been,dumped.  Up
to 4.8 ppm PCBs were found in rabbits taken near the PCB
spills; no PCBs were detected in controls.53

     The U.S. Food and Drug Administration has set no toler-
ances for PCBs in game.  The closest tolerance is that for
poultry; it allows 3.0 ppm PCB in poultry fat.  The Wildlife
Resources Commission tested for PCBs on a wet weight basis.
The Commission attempted to convert  their measurements to a
fat basis; in doing so, they found that doves were contami-
nated with up to 480 ppm of PCBs, or 160 times the FDA toler-
ance for PCBs in poultry.54

     However, Dr. Renate Kimbrough of the Center for Disease
Control believes that the Commission improperly analyzed the
data.  She feels that people eating  game having the detected
levels of PCB contamination would not exceed  the FDA's safe
daily intake standard for PCB.  She  also feels that the Com-
mission did not analyze enough control specimens to determine
what the "background" level of PCB contamination is.55

     Property damage-—Some garden and agricultural produce was
destroyed or not harvested as a result of the PCB spills..
North Carolina officials have not estimated the extent of the
damages or monetized them, but note  that damages were limited
to garden produce, some commercial vegetable production, and
some corn grown for silage.  There was no loss in milk pro-
duction.
                              215
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     The milk of dairy cattle grazing near contaminated areas
was found in August 1978 to be contaminated with PCBs in con-
centrations as high as 0.214 parts per million (ppm).  This,
however, is significantly lower than the current federal
tolerance of "1.5 ppm PCB (fat basis)  in milk.56  some dairy
herds near contaminated areas were monitored for a year after
the spill; over that time the PCB contamination has dwindled
to near trace amounts.  Vegetables growing near the contamina-
tion were tested and found to have low levels of PCB contamin-
ation ranging up to 0.652 ppm.  There are no federal toler-
ances for PCB contamination in vegetables.  The contamination
found in the vegetables is not considered dangerous.57

     There is no evidence of a decline in property values
along the spill routes, and no PCBs have been found in domes-
tic wells in the affected areas.58

     Acute and latent health effects—immediately after the
dumping, persons near the spills complained of nausea, head-
aches, and burning sensations in the throat and nose.  Since
PCBs are relatively non-volatile, these effects are attributed
to the chlorinated benzene solvents present in the dumped PCB
mixture.  Chlorinated benzenes harm the endocrine and nervous
systems, the liver, heart, and lungs.59  Residents along the
spill routes have reported births of congenitally malformed
children, dog fetuses aborting, sick cattle, and headaches.
These reports have been investigated by the North Carolina
Division of Health Services, but so far no causal link or
statistical correlation with the PCB spill has been found.60

     Although it is difficult to assess the degree to which
humans have been exposed to the dumped PCBs, or will be ex-
posed in the future, latent health effects as a result of the
spills must be considered a real possibility.  The medical and
scientific communities have reached the conclusion that PCBs
are very hazardous.  Their potential latent medical effects
include cancer, birth defects, mutagenicity, and changes in
behavior.61  Reassuringly, a series of blood samples taken
from persons living along the spill route have found no sig-
nificant accumulation of PCBs in the blood.62

     Enforcement and litigation costs—No estimate has been
made of what it cost the state of North Carolina and the
federal government to apprehend, indict, and try the Burnses
and the Wards, nor of legal costs for the class action suit
seeking cleanup and compensation.

     Cleanup  costs—The cost of the immediate response to the
PCB spills--including analysis of the spilled material,
surveying the extent of the pollution, covering the contami-
nated soil with carbon and asphalt, investigating possible
                              216
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agricultural and health effects, notifying the public, and
general administrative costs—has not been estimated.

     The state of North Carolina estimates that it will cost
$1,580,000 to remove the contaminated soil from the road
shoulders, reshape the shoulders, haul the contaminate
material to the disposal site, and construct the disposal
site.63

Cost Redistribution—
     So far there has been no redistribution of social and
private costs.  However, in June 1981 the State of North
Carolina filed suit against Ward and Burns seeking to recover
approximately $12 million in damage and punitive costs.  This
suit, if successful, could substantially redistribute social
of private costs.

Private Costs of Siting Hazardous Waste Facilities--
     So far there have been no expenditures by private parties
on behalf of siting the landfill.  All the private expenditures
have been made in an attempt to keep the landfill from being
sited, first in Chatham County, then in Warren County.  These
expenditures include appearing at public hearings, writting to
government officials and representatives, and, for the land-
owners near the proposed Warren County site, legal fees.  The
amount of these expenditures has not been estimated.

Social Costs of Siting Hazardous Waste Facilities—

     The Costs of Having a Site  (Regional)—

     Natural resource damage—According to the draft Environ-
mental Impact Statement prepared by the state of North Carolina,
the proposed Warren County landfill will not adversely affect
air or water quality, plant or animal life, or historical or
archaeological resources.  The only adverse environmental effect
the state identified was the removal from agricultural produc-
tion of the five acres used for the landfill.64

     Property damage—Landowners adjacent to the proposed
Warren County landfill allege that the landfill would con-
stitute a private nuisance, impairing the enjoyment of their
property, and lowering its value. *>5

     Acute and latent health effects—According to the staters
draft Environmental Impact Statement, the landfill will have
no adverse health effects on workers or area residents.6**

     The cost of refusing the site—In its draft Environmental
Impact Statement, the state says that the Warren County site
                              217
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is the best of the six most suitable disposal sites that have
been identified.  Another one of these six sites could pre-
sumably be used instead of the Warren County site, but at a
higher, total cost.  Since the other five sites are not far
from Warren County or the PCB contamination, using one of them
would not impose greater removal, transportation, or disposal
costs.  However, the state would be forced to bear the cost of
duplicating site evaluation, applying for an EPA permit, and
gaining official and public approval for any new site, and
this cost could be considerable.  In addition, the other suit-
able sites are either closer to populated areas or have less
favorable hydrologic characteristics,67 which could increase
the chance that the landfill would adversely affect natural
resources or public health and safety.

     Other alternatives avilable would be to:  1) Transport
the contaminated material to an existing EPA-approved chemical
waste landfill in Alabama; it is estimated that this would
cost $12 million*^  2) Incinerate the contaminated soil.
The cost of this alternative has not been estimated, but it
would surely be more than the $12 million estimated for dis-
posing of the material in Alabama, since the material would
have to be transported even further to reach an incinerator,
and incineration is much costlier than landfilling.  It should
also be noted that so far EPA has not approved any PCB in-
cinerators, although applications for two incinerators are
pending.  3) Treat the waste in situ.  This is not permitted
by federal regulation, so North Carolina would have to bear
the additional cost of a legal battle with the federal govern-
ment and possible penalties.  In addition, the in situ treat-
ment may not protect the environment and public health and
safety as well as removal and disposal of the material would.

     Government expenditures to site facilities—The state of
North Carolina has spent a substantial but uncalculated amount
,of money to identify and investigate possible disposal sites,
seek approval from EPA, local officials and residents, and
defend itself against the lawsuits seeking to prohibit use of
the Warren County site.  EPA and its counsel, the Department
of Justice, have also had to pay an unknown amount to defend
the federal government against the Warren County suits.

Footnotes

 1.  State of North Carolina, Removal and disposal of soils
     contaminated with PCBs along highway shoulders in North
     Carolina (Draft Environmental Impact Statement,
     December 28, 1979), p. 1.

 2.  Ibid.

 3.  Ibid.

                             218
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 4.  Ibid.,  p.  2.

 5.  Ibid.

 6.  Ibid.

 7.  Ibid.,  p.  3.

 8.  Ibid.,  p.  1.

 9.  Ibid.

10.  U.S. Environmental Protection Agency,  Studies conducted
     in connection with PCS  spills in North Carolina
     (November  9,  1978), p.  38.

11.  Supra,  note 1,  p.  2.
12.  David Hershman,  The  Dumping  of  PCBs on North Carolina
     Highways,  Integrated Case Studies Program, Duke Univer-
     sity (draft;  paper  in  press)t p.  5.

13-  Supra, note 1,  pp.  3-4.

14,  Interview  with  Dr.  Martin Hines,  Chief of Epidemiology,
     North Carolina  Department of Human Resources (May 28,
     1980) .

15.  Interview  with  Leonard Blanton, Deputy Director, North
     Carolina Food and Drug Protection Division (May 12,
     1980); Interview with  Dr. William Cobb, Director, North
     Carolina Food and Drug Protection Division (May 28, 1980).

16.  Ibid.

17.  Supra/ note 1,  p. 9; supra,  note 11, p. 5.

18.  See State  of North  Carolina  v.  Robert Burns, Indictment,
     August 28, 1978.

19.  Marc Leepson, "The  Waste That Wouldn't Go Away," Environ-
     mental Action 10:11 (October 7, 1978), p. 4.

20.  Interview  with  Donald  Stevens,  North Carolina Department
     of Justice (May 12,  1980).

21.  15 U.S.C.  §§2601-2629.

22.  Ibid., §2615.

23.  Interview with Ralph W. Jenning, EPA Region IV (October 21, 1981).
                              219
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24.  Interview with Donald Moore,  Sales Manager,  Ward Trans-
     former Company (May 13, 1980).

25.  See State of North Carolina v.  Robert  Earl "Buck" Ward
     Jr., Indictment,  January 22,  1979.

26.  Supra, note 20.

27.  Supra, note 23..


28.  Ibid.
29.  N.C.G.S. §14-284.2 (1979).

30.  Supra, note 1, pp. 4, 10-11.

31.  Supra, note 12, pp. 11-12.

32.  Supra, note 1, pp. 25-26.

33.  Interview with David Kelly, North Carolina Department of
     Crime Control and Public Safety (May 23,  1980).

34.  Supra, note 12, p. 12.

35.  Application to EPA (December  12,  1980).

36.  Resolution of Warren County Board of Commissioners
     (January 2, 1979).

37.  Resolution of Vance Countv Board  of  Commissioners
     (April 2, 1979) .

38.  Letter from John C. White, Region IV EPA  Administrator,
     to North Carolina Governor James  B.  Hunt  (June 4,  1979).

39.  Supra, note 12, pp. 13-14.

40.  Supra, note 33.

41.  Warren County v.  North Carolina et al, No. 79  CVS  167
     (Warren Cty. Sup.  Ct., filed  August  16, 1979).

42.  Ibid., Temporary restraining  order (August 16, 1979).

43.  Warren County, An ordinance prohibiting the storage and
     disposal of PCBs (August 21,  1979).

44.  Supra, note 41, preliminary  injunction  (September  6,
     1979) .

                              220
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45.  Twitty, et al.  v.  State of  North Carolina No.  79-CO8-183
     (Warren Cty. Sup.  Ct.,  filed September  12» 1979).

46.  Interview with  Charles  Johnston, Warren County Attorney
     (May 28, 1980); Interview with Lewis  A. Thompson III,
     attorney for Twitty et  al.  (May 28, 1980).

47.  Langdon v. Hunt, No.  80-487-CIV-5  (E.D. North  Carolina,
     July 7, 1980).

48.  Supra, note 20.

49.  43 Fed. Reg. 7150-7164  (February 17,  1978).

50.  Interview with  William  Gunter, PCB regulation  team
     leader, EPA (May 12,  1980).

51.  Interview with  Gary Odom, Holley- Electric Company
     (May 13, 1980).

52.  Interview with  William  Stevens, Rollins Environmental
     Services (May 12,  1980).

53.  Memorandum from Carl W. Betsill, Wildlife Biologist,
     North Carolina  Wildlife Resources  Commission to Grady
     Barnes, Assistant  Chief, Division  of  Game, North Carolina
     Wildlife Resources Commission (January  25, 1979).

54.  Ibid.

55.  Interview with  Dr. Renate Kimbrough (June 23,  1980).

56.  32 C.F.R. §109.30(3)(1). ;

57.  Supra, note 15.

58.  Supra, note 33,

59.  Coate, W.B., Schoenf isch,, W.H:> Lewis T.R., Busey, W.M.
     1977.  Chronic  inhalation exposure of cats, rabbits and
     monkeys to 1,2,4-trichlorobenzene. Arch* Environ. Health
     32(6)-.249-255.

     Fomenko, V.N. 1965.  Determination of the maximum per-
     missible concentration  of tetrachlorobenzene in water
     basins.  Hyg. Sanit. (USSR).  30:8-15.

     Rimington, C.,  and Ziegler, G. 1963.  Experimental
     porphyria in rats induced by chlorinated  benzenes.
     Biochem. Pharm. 12:1387-1397.

60..  Supra, note 14.

          - - •  '           •  - '221          -  •"'   '
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61o  See, generally, 42 Fed. Reg. 6532 et seq.  (February 2,
     1977);  National Institute for Occupational Safety and
     Health, Criteria for a recommended standard.   Occupa-
     tional exposure to polychlorinated biphenyls  (PCBs).
     Washington:  December 1977.

62.  Supra,  note 14.

63.  Supra,  note 1, p. 9.

64.  Ibid.,  pp. 34-37.

65.  Supra,  note 45.

66.  Supra,  note 1, p. 36.

67.  Ibid.,  pp. 23-24.

68.  Ibid.,  p. 36.
                             222
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GENUINE RISK:  KENTUCKY'S VALLEY OP THE DRUMS

Introduction

      On a ten-acre site near Brooks, Kentucky, Arthur L.
Taylor stored and dumped the drums of chemical wastes that he
hauled away from Louisville industries.  Eventually thousands
of drums, some empty, some full and oozing waste, littered
Taylor's dump, giving the site its popular name:  The Valley
of the Drums.  The Valley of the Drums became an abandoned
waste dump in 1978 when Arthur Taylor died, leaving a small
estate inadequate to pay for the massive efforts needed to
clean up the site.

      Although Kentucky environmental officials had known of
Taylor's operation since 1967, the state did not take action
to close and clean up the site until January 1979.  In March
1979, the U.S. Environmental Protection Agency joined the
cleanup efforts prompted by reports that oil and other
chemicals from the site were entering nearby Wilson Creek.
EPA spent $300,000 of emergency clean up funds to sort and
stack the drums of waste and divert runoff from the site
through a treatment plant before it enters Wilson Creek.

      EPA counted 17,051 drums on the surface of the dump.  Of
these 11,628 were empty, 3,239 contained solid wastes and the
remaining 2,184 contained liquids.    An unknown number of drums
lie buried in the dump and a substantial amount of earth has
been contaminated by wastes that Taylor poured directly into
pits.  In soil and water samples taken in and around the dump,
EPA has detected 197 organic chemicals and 28 metals, includ-
ing 21 suspected carcinogens, mutagens, and teratogens and 26
priority water pollutants.

      EPA's cleanup was only a stop-gap aimed at preventing
runoff into Wilson Creek; the Agency was initially restricted
to such measures because use of the emergency funding used to
pay for the cleanup was limited to abating immediate threats
to navigable waters.

      By the Summer of 1980 Kentucky had managed to persuade
five of the largest generators of the waste dumped at the Taylor
site to remove the filled drums that could be identified as
having originated with them.This action tgok_care of 1,300 of
the filled drums. J¥ftTfj:ire~|^	„	_
Environmental Response^ Compensation and Liability Act of 1980
(CERCLA) the state has received $400,000 and all the liquid
waste at the site has been removed.  As of October 19-80,
officials are planning to conduct a feasibility study to assess
the cost of total cleanup.
                              223
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Background Information

The Location—
     The Valley of the Drums is located in a rural area in
Bullitt County, Kentucky,  fifteen miles south of Louisville*
(See Figure B-4.)   Fortunately, the site is well suited
geologically for service as a waste dump,  being made up of
relatively impermeable shale and clay that prevents surface
water from percolating down to groundwater.  In fact, a
Kentucky state geologist reported that "the Site would be
excellent for the disposal of hazardous waste by incineration
or chemical treatment and  with proper engineering would be
technically sound for burial also."l

Waste Disposal—
     From 1967 until his death in February 1978,  Arthur Taylor
hauled drummed chemical wastes from manufacturers in
Louisville.  According to  the generators of the waste, Taylor
assured them he was hauling these wastes to approved landfills
and incinerators.2  Taylor did haul some of the waste to the
nearby Smith landfill, but much of it he brought to his
property in Bullitt County near Brooks,  Kentucky.  Here Taylor
disposed of the wastes by  pouring them into pits in the ground
or nearby Wilson Creek, burying them in drums on the property,
or burning them in open fires.  Taylor cleaned and stored the
drums he had emptied on the site until he  eventually resold
them to drum recyclers.

     Later investigations  have found that  Taylor hauled waste
primarily for five generators:  Reliance Universal, a paint
and coatings manufacturing company;  Ford Motor Company, which
has an automobile assembly plant near Louisville; the
George W. Whitesides Company, a solvent recycler; Kurfees
Coatings, which manufactures paints and coatings; and Louis-
ville Varnish, another coatings manufacturer.   Analyses have
shown the wastes in the Valley to be predominantly paints,
pigments, solvents used in the paint industry, and plastics.3

     Taylor charged up to  $2.50 per drum to remove waste.4
This fee apparently covered in most cases  both hauling and
disposal of the waste at his dump.   Reliance Universal, how-
ever, reports that it paid Taylor $2,50  per drum to haul the
waste to the Smith Landfill near the Valley of the Drums, and
paid Taylor an additional  $3.00 per drum to cover disposal at
the landfill.  Reliance eventually discovered that Taylor was
not delivering all its waste to the landfill and was ap-
parently pocketing the landfill charge.  Reliance then began
to pay the landfill separately for waste that Taylor hauled
there.5

     Another waste generator, Ford Motor Company, reports that
it chose Taylor as it did  other waste haulers, by seeking

                              224
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iemt_.  i. .^ ^>^7?!g3^.i/r^s§3g?r*'''r I
       Figure B-4.   Location of the  Valley of the Drums.
                              225
                                        best available copy.
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competitive bids.  Ford required Taylor, like other waste
haulers, to sign an agreement stating that the wastes hauled
from Ford would be disposed of in a legal manner.6

     Records of the generators from which Taylor hauled waste
indicate that he hauled at least 27,389 drums during the
eleven years he was in business.7  in March 1979, 17,051
drums were counted on the surface of the site; the remaining
10,000 or more drums are presumed to have been buried at the
site, disposed of elsewhere, or emptied at the site and resold
to recyclers.8

     Taylor's operation was a small one, consisting of just
himself and a few occasional employees and a couple of
trucks.  Taylor did not have the required permits for hauling
hazardous waste or for using his property as a disposal
site.9

Response—

     State enforcement action—Kentucky state environmental
officials knew of Taylor's operation since 1967, but even
though he was operating illegally, the state took no action to
close his dump until 1979.

     The first state contact with the site came on
December.13, 1967, when the solid waste and air pollution
control programs of the Department of Natural Resources and
Environmental Protection jointly investigated reports of open
burning at the Taylor dump.  Officials gave Taylor information
on operating a sanitary landfill.  When they returned a year
later, state investigators found open burning continuing to
take place, but took no enforcement action.^

     The state next became involved with the Taylor dump in
November 1975 when the Division of Water Quality of the
Kentucky Department for Natural Resources and Environmental
Protection (DNREP) inspected the site in response to com-
plaints from neighboring landowners.  Joseph Vanhoozer, who at
the time owned land abutting Wilson Creek just downstream from
the Valley reports that the vapors coming from wastes dumped
into Wilson Creek were overpowering at times, and that pigs he
kept on this property once became covered with red paint after
they had wallowed in the creek.11  Another neighboring land-
owner, Jelline Bolt Owen, had to move a horse from her proper-
ty because of the wastes in Wilson Creek.12  Mr. Vanhoozer
and Ms. Owen complained to various governmental authorities
about the pollution, including the local fire and health de-
partments1-* in addition to the Water Quality Division.

     A Water Quality Division inspector sent to the site in
response to the complaints took samples from Wilson Creek, but

                              226
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noted that there was no need to test them because they were
almost pure oil and paint.I4  As a result of this and other
inspections, the Division filed an administrative complaint
against Taylor in early 1976, which charged him with viola-
tions of water pollution control law, including discharges of
paint, oil, and other industrial wastes to Wilson Creek;
failure to obtain a permit for the discharges;  and failure to
report spills.15  on April 23, 1976, a hearing was held on
the administrative complaint at which the Division presented
its case against Taylor.  Ms. Owen testified that the pollu-
tion in Wilson Creek was sometimes so thick that one could
walk on it.l*>  Taylor did not appear at the hearing to
present a defense, nor did he send a representative, although
he had been notified of the hearing.17

     After this hearing, the enforcement system apparently
broke down.  Testimony indicated that Taylor was violating the
law, but the hearing officer presiding over the case did not
file a report indicating tow the case should be resolved until
August 1978, over two years later.  The hearing officer said
that he took so long in issuing a report because he had for-
gotten about the case.18  Apparently the Division of Water
Quality did not press him to issue a report.  The "recommended
order" he finally filed in August 1978 recommended that the
site be closed and that Taylor's estate—Taylor died in
February 1978--be fined $3,000.  The order was never imple-
mented, however, because the Secretary of the Department for
Natural Resources and Environmental Protection declined to
sign it, feeling that the case was "too bollixed up" to en-
force the order after the delays.19

     In May 1977, the Division of Hazardous Material and Waste
Management of DNREP began to investigate the Valley of the
Drums.  During one of several visits to the site in May 1977,
inspectors discovered Taylor digging a trench for the burial
of drums.  Taylor was told that he must have a permit to oper-
ate a disposal site.  Taylor agreed to cease operations and
apply for a permit.  Taylor went to Frankfort, the state capi-
tal, on May 25, 1977 to discuss obtaining a permit, but never
filed an application for one,  Although an  inspection on
June 7, 1977 found no activity at the Valley, by October 1977
there was evidence that Taylor had resumed  burying drums,
still without a permit.  The Division warned Taylor on
November 14, 1977 that he was operating in  violation of the
law.  The next day he requested another permit application
form.  Further inspections in late November 1977 revealed that
Taylor had buried  more waste on the site,  so on November 30,
1977, the Division asked DNREP's Office of General Counsel to
take legal action to stop the disposal and  clean up the
site.20  inexplicably,  the Office of General Counsel never
brought charges against Taylor and the Division of Hazardous
Materials and Waste Management did not pursue the matter.

                              227
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     DNREP finally took action to close and clean up the site
in January 1979, nearly a year after Taylor's death.  On
January 12, 1979 the Department took samples of drum contents
and surface water on the site.  Analysis revealed wastes typi-
cal of the paint industry, including such solvents as methyl
ethyl ketone, toluene, ethyl benzene, butyl alcohol, and
xylene.  No pesticides or PCBs were detected at this time.21
On January 22, 1979, EPA and the state Division of Sanitary
Engineering surveyed the houses within a one-mile radius of
the dump and found only two with wells.  All other houses were
served by the Louisville Water Company or by cisterns.22

     One of these houses was found to have low concentrations
of such organics as chloroform, bromodichloromethane, xylene,
and diethylphthalate in its well water.  Apparently the con-
centrations were not considered high enough to warrant chang-
ing water supplies.  At the other house no organic compounds
in concentrations greater than 5 micrograms per liter (equiva-
lent to 5 ppm) were found.23

     DNREP initiated legal action on January 22, 1979, when it
filed an administrative complaint against Nell Taylor, Arthur
Taylor's widow, alleging that she was transporting and dispos-
ing of hazardous waste without a permit, operating a solid
waste disposal site without a permit, and discharged pollu-
tants into Wilson Creek.  DNREP asked that Mrs. Taylor be
enjoined from future activities in violation of the law, be
required to clean up the site, and be assessed civil penalties
of $31,000 per day.24

     A hearing was held on DNREP's complaint March 27, 1979,
and on March 29, 1979, the presiding hearing officer filed an
interim report.  DNREP presented its case at this hearing, but
since Mrs. Taylor did not present a case other than by cross-
examination of DNREP's witnesses, the hearing officer's report
stated only the undisputed facts in the case.  It did not con-
clusively adjudicate the case nor did it consider whether to
impose penalties on Mrs. Taylor.25  DNREP1s complaint against
Mrs. Taylor has lain dormant since March 1979 because the
Department has chosen to take other non-legal measures to try
to clean up the Valley.

     Grand Jury investigation--The Bullitt County Grand Jury,
at the request of Circuit Court Judge C.V. Sanders, investi-
gated dumping at the Taylor site during its February 1979
term.  On March 5, 1979, the Grand Jury reported that it could
find "no evidence of criminal conduct on the part of those
manufacturers whose waste by-products have been stored in
Bullitt County."  After further investigations during its
April and December 1979 terms, the Grand Jury broadened this
finding, stating that "under the laws in existence at the time
hazardous wastes were disposed of on the site, no indictable


                              228
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offenses had been committed."26   The Grand Jury, of course,
only addressed itself to criminal offenses, and did not con-
sider civil liability.

     Emergency cleanup—On March  2,  1979,  the U.S. Environ-
mental Protection Agency began emergency cleanup  operations
under S311 of the Federal Water Pollution  Control Act,27
which authorizes the cleaning up  of  discharges of oil and
hazardous substances to navigable waters.   DNREP requested the
emergency aid after finding that  oil and chemicals from the
site were being washed into Wilson Creek.
                                                       ^».
     To contain contaminated runoff  from the site, EPA's con-
tractor dug ditches to divert surface water to a catchment
pond, where a filtration unit was installed to purify dis-
charge from the pond before it entered Wilson Creek.  In addi-
tion, an underflow dan and aeration  units  were installed in
Wilson Creek.  These measures achieved a 98% reduction in
pollutants leaving the site.28

     The contractor next sorted and  stacked drums according to
their contents.  As of March 21,  1979, there were estimated to
be 17,051 drums on the surface of the Taylor- duwpY "of Which
11,628 were empty.  Of the full drums, 3,239 contained solids,
and 2,184 contained liquids.  The empty drums, except for a
few suitable for resale, were crushed and  stacked on the
site.  In addition, an unknown number of drums are buried at
the site and an unknown amount of soil has been contaminated
with chemical wastes.29

     EPA was unable to have the drums removed from the site
and properly disposed of because  $311 of the FWPCA only auth-
orizes expenditures to abate immediate threats to navigable
waters.  With the catchment and filtration system installed on
site, that goal had been achieved.  The state and EPA both
claim to not have the money needed to clean up the site per-
manently and dispose properly of  the waste there.       —

     During the cleanup, EPA took numerous soil and water
samples within and around the site.   Analysis.found 126. or-
ganic compounds in standing water and runoff from. the. site...
These were mostly solvents, ketones, pthalates and other or-
ganic compounds associated with the  paint  and plastics indus-
tries.  No PCBs were detected in  any of the water from the.,
site.  Tests of sediments from several drainage areas on the
site showed a large number of .organic compounds, along with
lead, zinc and titanium.  PCBs in concentrations of up to
14 ppm were found in sediment from three sampling sites.30
The only chlorinated pesticide found was 1.7 ug/1 of
1,2,4-trichlorobenzeae in one of  the samples.
                             229
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     Water samples from Wilson Creek had approximately the
same range of organic compounds as those found in runoff from
the site.  No PCBs were found in the water in Wilson Creek,
but uo to 3 ppm of PCBs were found in sediment from the creek
bed.3T

     EPA analyzed fish and crayfish from Wilson Creek near the
Valley of the Drums and further down the drainage for chlor-
dane and PCBs.  The fish sample taken nearest the Valley of
the Drums had no detectable concentrations of either of the
substances.  Other fish in the drainage had up to 2.97 ppm of
chlordane, and 0.48 ppm of PCBs.32  The FDA tolerance for
PCBs in the edible portion of fish at the time of the sampling
was 5 ppm; since August 1979 it has been set at 2 ppm.33
The PCBs detected thus far were below the FDA tolerances, but
on March 21, 1979, Eugene Mooney, Secretary of DNREP, advised
against eating fish from Wilson Creek.34  jt is unclear
whether the chlordane found in the fish originated at the
Valley of the Drums.  One EPA scientist believes that the
source of the chlordane more likely is termite treatment of
houses in the area.35

     Of 142 compounds identified in the water and soil on and
near the site, 40 are included in the Human Effects Section of
the Registry of Toxic Effects, 27 are in the Carcinogenic
Effects Section, and 6 are in the Teratogenic Effects
Section.36

     The cleanup cost roughly $300,000 and the analyses of
soil and water cost approximately $200,000.37

     EPA's cleanup of the site has only a temporary solution,
which the head of the Emergency Response Branch of EPA's
Region IV characterized as a "band-aid" designed to last six
to eight months.  According to the EPA engineer who.designed
the system, the site's water filtration plant requires a
rejuvenation costing around $20,000 every six months.  EPA
recharged the system's filter and cleared out the diversion
tranches in July 1979 at a cost of $28,000; since then main-
tenance of the plant has been the state's responsibility.38
The state is about to clean and recharge the filtration system
again;  it estimates that this will cost $10,000.39

     Comprehensive cleanup—Because of the limitations of §311
of the Federal Water Pollution Control Act, the State of
Kentucky had to look to other sources for a complete cleanup
of the site that would go beyond the containment achieved in
March 1979.  A complete cleanup will be expensive.  State
officials estimate that it will cost roughly $2.5 million to
analyze, remove, and properly dispose of the wastes dumped at
the Valley of the Drums.^0  Because Taylor's widow,, who
inherited the site from Taylor, had only limited resources,

                              230
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the state has not pursued its complaint against her.  If the
state obtained a judgment against her,  she would in all proba-
bility declare bankruptcy,  leaving the  state with the property
and the responsibility for  cleaning it  up.  Instead, the state
decided to try to get the generators of the waste to clean up
the site.

     The state at first considered an innovative approach to
cleaning up the site proposed by William Fluhr.  Fluhr wanted
to buy the dump site and operate on it  a model chemical waste
disposal center, including  a liquid waste incinerator, a
solvent recycling facility, and a barrel cleaning service.
Once in operation on this site, Fluhr would have incinerated
or recycled the wastes dumped on the site.41  Fluhr and
Mrs. Taylor are reported to have agreed on a price of $30,000
for the 25-acre site.42  However, the current agriculture
zoning of the property would not permit operation of the waste
facility, and the community objected to any zoning change,
thereby scuttling the plan.

     The state next turned to the generators of the waste
dumped at the site.  Rather than sue the generators to force a
cleanup, however, the state had decided to pursue a voluntary
effort.  The state has managed to persuade the five firms that
generated most of the waste dumped at the Valley of the Drums
to pick up and properly dispose of the  wastes that they can
identify as having originated with them.  The companies that
have agreed to do this are the Ford Motor Company, Reliance
Universal, Louisville Varnish, Kurfees  Coatings, and the
George Whitesides Company.

     Because drums are often recycled and because Taylor him-
self emptied and refilled drums, it is  very difficult to posi-
tively identify markings on the outside of drums, as they do
not necessarily indicate the source of  the drums' contents.
This makes it difficult to positively identify the origin of
the wastes at the Valley of the Drums.   As a result, the five
companies have claimed only around 1,300 of the 5,423 full
drums on the site.4^  pOr example, Reliance Universal, whose
records indicate that Taylor hauled 13,301 drums of its
waste,44 picked up only 950 drums of waste.45  Ford Motor
Company records show that Taylor hauled 10,105 drums of its
waste;46 it is picking up just 338 drums from the site.47

     Reliance Universal, the first of the five companies to
remove its waste, picked up 950 drums it had identified in May
and June 1980.  Reliance will dispose of the liquid waste it
removes from the site at an incinerator in Kentucky.  Solid
wastes will be disposed of at a secure chemical landfill in
Ohio, as there are no approved hazardous waste landfills in
the state of Kentucky.4°
                              231
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      Reliance estimated that it would cost approximately $65
per drum to remove and dispose of 950 drums of waste from the
site,49 or around $62,000 altogether.  This corresponds roughly
with cost figures supplied by Ford, which estimates that it
will cost approximately $50 per drum to test, remove and dis-
pose of the 338 drums of waste it has identified at the Valley
of the Drums.50  If Reliance's figure is correct, it will
cost the five waste generators approximately $85,000 altogether
to remove and dispose of the 1,300 drums of waste that they
have agreed to pick up from the site.

      In September of 1981, the State received $400,000 from
the Environmental Protection Agency under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980.
These funds have been used to remove the remaining 4,000 full
drums of liquid waste and to upgrade surface water treatment
at the site.  The Kentucky Bureau of Environmental Protection
plans to conduct a feasibility study in the near future to
assess the extent of underground damage and the associated
cost of remedial action.51

Costs

Private Costs of Waste Disposal—

      Actual cost of illegal disposal—Taylor charged up to
$2.50 per drum to dispose of waste.  At least one waste gener-
ator, Reliance Universal, paid Taylor an additional $3.00 per
drum to cover disposal fees at a nearby landfill.  However,
Taylor apparantly failed to deliver the waste to the landfill
and simply pocketed the additional money.

      Comparative cost of proper disposal—Proper disposal of
the wastes found at the Valley of the Drums would have cost
between $15 and $25 per drum in 1976.52

The Social Cost of an Abandoned Site—

      Natural resource damage—Because of the low permeability
of theclay soil at the Valley of the Drums, groundwater appears
not to have been contaminated by the wastes dumped there.
Wastes from the Valley of the Drums may be responsible for
the low level of organic contamination found in one drinking
water well near the site.  Taylor's direct dumping into Wilson
Creek and runoff from the site polluted that creek, which
empties into the Ohio River.  The effects of the pollution
have not been quantified.  Fish and crayfish in Wilson Creek
are contaminated with low levels of PCBs and chlordane.
                             232
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The chlordane contamination cannot be definitely tied to the
Valley of the Drums, but the PCS contamination probably can
be.  Although the concentrations found thus far are below FDA
tolerances for PCB contamination in fish, the state of
Kentucky has advised against fishing in Wilson Creek.  This
has caused a loss in recreational resources.

     Property daroage--Presuraably Mrs. Taylor's land is worth
far leas than it would be if waste had not been disposed of
there.  Her exact losses are hard to determine, however.  As
of January 1, 1978, Bullitt County Property Tax Rolls indi-
cated that Taylor owned real property worth $10,000; ap-
parently this was the dump site.53  However, Fluhr was re-
ported to have been willing to pay three times that amount in
1979 for the property if he could get rezoned to accommodate a
waste disposal operation.  Without the rezoning, Fluhr was not
interested in the property.  Mrs. Taylor is reported to be
continuing to try to sell the dump site.54  Since she has.
not yet"met with success, the value of the property may be
quite low.

     Joseph Vanhoozer last year sold property he owned on
Wilson Creek downstream from the Valley of the Drums.  He felt
.that the property was worth $14,000.  Many people inquired
about the property, but most lost interest after hearing that
it was near the Valley of the Drums.  Vanhoozer finally sold
the property for $8,000.55  other property owners near the
Valley of the Drums would probably suffer similar losses if
they tried to sell their property.

      Acute and latent health effects—No acute health effects
have been reported.It is possible that chemicals in the
runoff from the site may cause latent health effects if they
enter drinking water via Wilson Creek and the Ohio River or
are taken up by fish that are later consumed by humans.
Seventy-three of the contaminants found at the site are listed
in the Registry of Toxic Effects, indicating possible health
•dangers'..      • '.       :         '        '     ,••-•••

     Enforcement and litigation costs--The state of Kentucky
calculates that it had spent $24,391.12 in connection with the
Valley of the Drums as of October 3, 1979, excluding over-
bead.  Part of this sum went for enforcement and part went for
supervising and arranging cleanup.  This expenditure was for
both enforcement of waste and disposal laws and regulations
and for supervising cleanup; how much went to each of these
categores has not been calculated.

     Bullitt County, Kentucky, spent an undetermined amount
for the three grand juries that investigated the Valley of the
Drums.
                              233
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      Since no private parties have filed suit against Taylor
or his estate, no private ligitation costs have been incurred
in connection with this case.
    3*U
      Cleanup costs—EPA has spent $328,000 to clean up the
site and recharge the filtration system once,  $200,000 for
analysis of soil and water samples.  In September of 1981, EPA
designated an additional $400,000 from Superfund to remove
liquid wastes and upgrade surface water treatment.

      An undetermined amount of the $24,391.12 spent by the
state of Kentucy in. connection with the Valley of .the Drums as
of October 3, 1979 went to arranging and supervising cleanup.
The state also expects to spend $10,000-to clean and recharge
the filtration systea on the site.

      The five major generators of waste at the site will spend
approximately $85,000 to remove 1,300 drums of waste from the
site.  $2.0 million or more will still have to be expended
before the Valley of the Drums is cleaned up for good.

Redistribution of Costs-
      All indications are that Taylor is at fault for the pol-
lution.  He therefore should be the one to pay, but he is dead,
his business is defunct, and his estate does not have the
resources to pay for a cleanup.  The state could sue his widow,
but if it did she probably would declare bankruptcy, leaving the
state with the property and the responsibility for cleaning
it up.

      The generators of the waste dumped at the Valley of the
Drums likely reaped economic benefits from Taylor's waste dis-
posal operation, so it might be argued that they are morally
if not legally liable for bearing some of the  cleanup costs.
The hypothetical generators' benefits stem from the presumption
that the fees Taylor charged were lower than what it would have
cost to properly dispose of the wastes.  Since paying the full
cost of proper waste disposal should be seen as one of the costs
of doing business, the generators in effect received a discount
on their waste disposal costs.  Some of the generators are
paying back at least part of what they gained  from lower-cost
improper waste disposal by picking up wastes they can identify
as having originated vith them.

      In the end, however, it appears that the cost of cleaning
up the Valley of the Drums will be borne by the public at large.
Both the state and federal government will probably end up
paying for the total cleanup, using either general revenues or
the Superfund which is financed by a tax on chemical feedstocks
which will ultimately be paid by consumers.
                              234
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Footnotes

 1.  Memorandum from Hussein Aldis  to John T.  Smither,
     Director of Division of Hazardous Material  and Waste
     Management (March 16,  1979).

 2.  Interview with William Christoph, Managing  Engineer,
     Louisville Assembly Plant,  Ford  Motor Company (June  10,
     1980); Interview with Paul  Brooks, Reliance Universal
     International (June 10, 1980).

 3.  Interview with Jack Wilson, Commissioner, Kentucky Bureau
     of Environmental Protection (June 10, 1980).

 4.  Interview with Jack Wilson  (July 8, 1980);  Interview with
     Paul Brooks (July 9, 1980).

 5.  Interviews with Paul Brooks (June 10, 1980  and July  9,
     1980).

 6.  Interview with William Christoph (June 10,  1980).

 7.  Interview with Royal Nadeau, Environmental  Response  Team,
     U.S. EPA (June 16, 1980).

 8.  Kentucky Department for Natural  Resources and Environ-
     mental Protection CDNREP) Historical Summary [of Valley
     of the Drums]  (no date).

 9.  Supra, note 3.

10.  Supra, note 8.

11.  Interview with Joseph Vanhoozer  (June 12, 1980).

12.  Jim Adams and Jim Detjen,  "The barrels:   a  problem that
     just won't go away."   [Louisville] Courier-Journal
     (January 17, 1979), p. E7.

13.  Supra, note 11.

14.  Supra, note 12.

15.  Ibid.

16.

17.

18.

19.  	

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20.  Supra, note 8?  Jim Adams and Jim  Detjen,  "'Valley  of
     Drums':  Pleas for action went  unheeded"  [Louisville]
     Courier-Journal (February 4, 1979),  p. E7.

21.  Supra, note 8.

22.  Ibid.

23.  Kentucky DNREPf Briefing Summary  (March 19,  1979).

24.  Bureau of Environmental Protection v. Mrs. A.L. Taylor,
     File No. 1615-06 (Administrative  Complaint before  DNREP,
     filed January 22,  1979).

25.  Ibid., Report and  Recommendation  of  the Hearing Officer
     (March 29, 1979) .

26.  Reports, Bullitt County Grand Jury,  February, April,  and
     December Terms 1979.

27.  33 U.S.C. §1321.

28.  Richard D. Stonebraker and Al J.  Smith, Jr.,  "Containment
     and treatment of a mixed chemical discharge  from the
     'Valley of the Drums'  near Louisville, Kentucky"  (no
     date).

29.  Supra, note 8.

30.  Ibid., U.S. EPA, Louisville Hazardous Waste  Site Briefing
     Summary (April 6,  1979).

31.  Ibid.

32.  Supra, note 7.

33.  21 C.F.R. §109.30.

34,  DNREP, Press Release (March 21, 1979).

35.  Supra, note 7.

36.  Ibid.

37.  "Needed:  Hazardous waste disposal  (but not  in my  back-
     yard)" 13 Environmental Science and  Technology 914
     (August 1979).

38.  Interview with Al  J.  Smith, Jr.,  U.S. EPA (May 27,  1980).

39.  Interview with Jack Wilson (July  9,  1980).
                             236
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40.  Supra, note 3.

41.  Supra, note 37.

42.  Interview with Jack Wilson (June 11,  1980) .

43.  Supra, note 3.

44.  Supra, note 7.

45.  Supra, note 4.

46.  Supra, note 7.

47.  Supra, note 6.

48.  Supra, note 45.

49.  Ibid.

50.  Supra, note 6.

51.  Interview with Barry Burres, Kentucky Bureau of Environ-
     mental Protection  (October 21, 1981).

52.  Interview with Fred Schwartz,  CECOS International
     (July 9, 1980).

53.  Jim Adams and Jim Detjen "Opinions vary about 'Valley of
     Drums' Operator" [Louisville]  Courier-Journal
     (January 23, 1979)  p.  E7.

54.  Supra, note 3.

55.  Supra, note 11.
                              237
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