Quantifying Groundwater Injury and Service Loss in Natural Resource Damage Assessments
James Holmes, Stratus Consulting Inc. Boulder, CO
Ann Maest, Stratus Consulting Inc., Boulder, CO
Jennifer Peers, Stratus Consulting Inc., Boulder, CO

New Mexico vs GE: Implications for Groundwater NRDA
Vicky L. Peters, consultant,Lakewood, CO  

Identifying, Scaling, and Evaluating Groundwater Restoration Projects as Compensation for Groundwater Injuries
Diana Lane, Stratus Consulting Inc., Middletown, CT
Karen Carney, Stratus Consulting Inc., Washington, DC
Josh Lipton, Stratus Consulting Inc., Boulder, CO

Economics of Groundwater Damage Assessment
David Chapman, Stratus Consulting, Boulder, CO
W. Michael Hanemann, University of California at Berkeley, Berkeley, CA

The New Jersey Approach to Groundwater Natural Resource Damage Assessment
John K. Dema, Law Offices of John K. Dema, P.C., Christiansted, St. Croix, USVI

Quantifying Groundwater Injury and Service Loss in Natural Resource Damage Assessments
James Holmes, Stratus Consulting Inc.,PO Box 4059, Boulder, CO 80302, USA, Tel: 303-381-8000, Fax: 303-381-8200, Email:  jholmes@stratusconsulting.com
Ann Maest, Stratus Consulting Inc., PO Box 4059 , Boulder , CO 80302 , USA , Tel: 303-381-8000, Fax: 303-381-8200, Email: amaest@stratusconsulting.com
Jennifer Peers, Stratus Consulting Inc., PO Box 4059 , Boulder , CO 80302 , USA , Tel: 303-381-8000, Fax: 303-381-8200, Email: jpeers@stratusconsulting.com

The U.S. Department of Interior regulations (43 CFR Part 11) for natural resource damage assessment (NRDA) provide guidance for determining if hazardous substance releases have injured groundwater. However, the regulations provide insufficient guidance for quantifying the extent of groundwater injury and service loss. Quantifying groundwater injury generally requires modeling of the past, present, and future extent of groundwater plumes. Calculating service loss resulting from lost use of groundwater adds an additional level of complexity, as Trustees must establish a reasonable scenario for groundwater use and estimate the “safe yield” over time, or how much groundwater could have been used but for the release of hazardous substances. Lost use may also include additional modeling to estimate the buffer area adjacent to the plume that cannot be pumped in order to prevent lateral plume movement and subsequent well contamination. In total, groundwater injury and service loss quantification may include calculations of past, present, and future stock volume, flux, use scenarios, and safe yield. Trustees should evaluate existing groundwater data and consider lost use scenarios carefully when selecting the most appropriate and cost-effective approach to groundwater injury quantification.

New Mexico vs GE: Implications for Groundwater NRDA
Vicky L. Peters, consultant, (formerly with the Colorado Attorney General’s Office), 2025 Field St., Lakewood, CO 80215 USA, Tel and Fax: 303-238-5752, Email: vlfp@comcast.net

In October 2006, the tenth circuit court of appeals upheld the district court’s dismissal of New Mexico ’s claim for natural resource damages resulting from groundwater contamination in the South Valley near Albuquerque .  Based on the judicial opinions in New Mexico v. General Electric, many responsible parties have asserted that they are not liable for natural resource damages (NRDs) despite extensive contaminant plumes. This presentation will briefly summarize what the appellate opinion does and does not say about groundwater NRD claims and will explore some of the more important assessment issues raised in the case. It is the goal of this presentation, and the States-only platform session generally, to suggest and develop approaches to address such issues. For a number of procedural, legal and analytical reasons, the author concludes that the recent decision should have little impact on groundwater NRD claims brought under CERCLA.

Identifying, Scaling, and Evaluating Groundwater Restoration Projects as Compensation for Groundwater Injuries 
Diana Lane, Stratus Consulting Inc., 148 Highland Avenue, Middletown, CT, USA, Tel: 860-704-8564, Fax: 860-704-8364, Email: dlane@stratusconsulting.com
Karen Carney, Stratus Consulting Inc., 1920 L Street, NW, Suite 420, Washington, DC 20036, Tel: 202-741-1233, Email: kcarney@stratusconsulting.com
Josh Lipton, Stratus Consulting Inc., PO Box 4059, Boulder, CO, USA, Tel: 303-381-8000, Fax: 303-381-8200, Email: jlipton@stratusconsulting.com

Restoration of injured natural resources is the ultimate goal of natural resource damage assessment (NRDA). According to the U.S. Department of Interior regulations for NRDA (43 CFR Part 11), Trustees of natural resources develop alternatives that will “restore, rehabilitate, replace, and/or acquire the equivalent of the injured resources.”  In some cases, initial restoration projects are identified and costs estimated as part of the quantification of natural resource damages during the assessment phase of an NRDA. However, final restoration projects must be identified, evaluated, selected, and implemented after NRDA damages have been awarded. This post-award phase of NRDA analysis has proven to be a significant challenge to Trustees. In this presentation, we describe potential categories of groundwater restoration projects, including water conservation, remediation of orphan plumes, source protection, and increased water storage. We then provide examples of specific types of projects within these broad categories. In our discussion, we emphasize the challenges that can be associated with scaling and evaluating projects, and potential approaches for coping with inadequate or incomplete information.

Economics of Groundwater Damage Assessment
David Chapman, Stratus Consulting,  1881 Ninth Street, Suite 201, Boulder CO 80302Tel: 303-381-8289, Email: DChapman@stratusconsulting.com
W. Michael Hanemann, Department of Agricultural & Resource Economics, University of California at Berkeley, 207 Giannini Hall, Berkeley, CA 94720, Tel: 510-841-6443, Fax: 510-643-8911, Email: hanemann@are.berkeley.edu

The Department of Interior NRD regulations establish a preference for calculating natural resource damages residual to any cleanup actions as the cost of restoring, rehabilitating, replacing or acquiring the equivalent of injured resources.  One way of doing this is by performing resource equivalency analyses that will be discussed by Dr. Lane.  Another approach is to use Value Equivalency Analysis (VEA). VEA is recognized in the NOAA regulations through the value-to-value method and is an accepted approach under the European Union’s Environmental Liabilities Directive. This survey-based approach allows trustees to determine how much of what kind of projects provide value to the public equivalent to the value held for the resource in its uninjured state. 

In addition to the costs of restoration or replacement, trustees may recover “compensable damages” for interim losses that occur from the time of the release until restoration  or replacement projects achieve baseline conditions, i.e, a level of services provided by the resource before it was injured by the release of hazardous substances. For these damages, the current regulations reflect an assumption that economic valuation will be used, although a recently proposed rule would change the presumption to restoration cost-based assessment for these damages as well. How that might be done raises several economic and policy issues. Regardless, economic, or monetary, valuation in some cases makes sense and may include market as well as non-market values.  The presentation examines the conceptual, empirical and legal/policy issues that can arise with alternative measurement approaches. From an economic perspective, a distinctive feature of groundwater is that, unlike surface water, it is a stock resource. The economic cost of  using a stock resource includes not just the cost of extraction but also the economic value of the diminution in future stock. The presentation discusses how this is pertinent for damage assessment.

The New Jersey Approach to Groundwater Natural Resource Damage Assessment
John K. Dema, Law Offices of John K. Dema, P.C., 1236 Strand Street, Suite 103, Christiansted, St. Croix, USVI 00820, Tel: 340-773-6142, Fax: 340-773-3944, Email: jdema@lojkd.com

New Jersey’s natural resource damages program is administered by the New Jersey Department of Environmental Protection’s Office of Natural Resource Restoration (“ONRR”), which was established in the early 1990s.  In order to create an efficient mechanism for deriving a monetary value for lost groundwater resources, ONRR created a formula.  The formula considers the contaminant plume size, duration of injury, groundwater recharge rates, and water rates charged for tap water in order to derive a monetary value (damages) for injuries to ground water resources of the State.  Over time, ONRR has utilized this formula to recover tens of millions of dollars in cash, land, and restoration projects.  All of these recoveries have been through settlements.  However, in the litigation context, ONRR’s program has been transitioning to an approach that focuses on (1) restoring injured ground water to its pre-discharge condition and (2) obtaining for preservation sufficient undeveloped uplands that are threatened by the prospect of development to ensure clean recharge of ground water elsewhere in the vicinity of the site (preferably in the same watershed).  By obtaining land that will be preserved in perpetuity, the state is receiving compensation for the value lost for the time period during which the injured ground water resource continues to have concentrations of hazardous substances (including petroleum constituents) above their pre-discharge concentrations.  In order to determine the appropriate number of acres, ONRR and its experts convert the plume area to a three dimensional injured volume of water for each year by multiplying the area by a recharge rate.  A present value calculation is then applied to the volume, which is then converted back to a two-dimensional area of land using a recharge rate.  By applying this methodology, New Jersey’s program emphasizes restoration and replacement of injured ground water resources.