The cost of cleaning up a major toxic waste spill in the West caused by an Environmental Protection Agency contractor could soar as high as $27.7 billion.
That's the conclusion of study released Tuesday morning by the right-leaning American Action Forum. The group is one of the first to attempt to estimate the clean-up cost of what will likely be remembered as one of the biggest environmental disasters of 2015.
The toxic spill began Aug. 5 when an EPA contractor accidentally ruptured a wall holding back millions of gallons of wastewater containing a variety of toxic substances such as mercury and lead at a closed gold mine in Colorado.
The resulting spill created a yellow plume of toxic sludge that flowed through Colorado, New Mexico and Utah via the Animas and San Juan rivers.
EPA and state officials say much of the toxic plume has dissipated in the Animas River, which the EPA confirmed Friday as being back to pre-spill conditions. But concerns remain that pollution in the rivers' sediment layers may have to be removed, with officials predicting a clean-up effort that could take years to complete.
The American Action Forum's study attempts to piece together estimates of the cost of the clean-up effort by reviewing a variety of the EPA's own assessments and modeling that were used for related events such as oil spills.
It also examined agency cost estimates for its controversial Waters of the U.S. rule, as well as regulations for limiting water discharges from power plants.
The study concludes that the cost of the toxic waste spill "might range between $2.7 million, $424 million, or $16.3 billion, but it will probably take months to assess the full damage," which could push estimates higher.
The study says using EPA's assessments for oil spills could push the clean-up costs to as high as $27.7 billion. But the study concedes that it cannot be precise in its cost estimates, because there is little precedent for the EPA to rely upon to inform a direct assessment of the clean up.
"I think it is more likely to be in the millions because the high-end figures are based off of oil spills in the Arctic (a close comparison), however the total volume for this is less than the average major oil spill," Sam Batkins, American Action Forum's regulatory affairs director, said in an email.
The study shows that EPA's cost assessment of a power plant rule is also instructive in determining the clean-up costs, because it deals with toxins being discharged into the water, although at much lower concentrations than were recorded in the Animas spill.
It says that the spill in Colorado released more than 3 million gallons of toxic sludge into the water, "which translates into more than 25 million pounds."
The group calculates that by assuming "a monetary equivalent of 90 cents per gallon of toxic waste the cost of the Animas River spill [will] be at least $2.7 million" when using the numbers from the power plant rule.
However, there are problems in using the power plant rule as a basis of comparison. The rule "was not designed to regulate acute pollution events, but rather the gradual effects of water pollution," the study says. The Animas River spill had 300 to 3,500 times the normal levels of arsenic and lead.
The $2.7 million estimate also does not account for the cost of so-called "non-use" benefits. The Animas spill reflects a number of "direct use costs" based on the "thousands of local residents, farmers, anglers and tourists [who] cannot use the river in its polluted state." On top of those costs, others could be added.
At the same time, the study raises questions about the EPA's priorities. It suggests that the Animas spill occurred at a time when the agency had sought to increase its focus on President Obama's climate change agenda. The president's budget proposed reducing funding for EPA water protection programs to do that, the study says.
"In the president's [fiscal year] 2015 budget, he and EPA proposed to cut more than $555 million from clean water protection while increasing the climate change budget by $46 million," reads the concluding paragraph of the analysis. "Perhaps we are seeing the results from those budget decisions now."