Environmental due diligence is a form of proactive environmental risk management typically conducted before purchasing, selling, or leasing a property or business. Due diligence investigations can help prevent costly environmental liabilities by identifying them early in the transaction, thereby protecting all parties’ interests. There is an increased opportunity for significant cost-savings when the hired consultant accounts for tangential aspects during their investigation.
Environmental due diligence encompasses tangential aspects that are not the primary focus of the investigation. Aspects such as these may indirectly impact the environmental risks or liabilities associated with the property or business or the transaction’s overall feasibility or value.
Tangential Aspects of Environmental Assessment: A Case Study
A major oil company requested environmental due diligence for a large property acquisition. The property acquisition was part of a larger company acquisition and involved hundreds of oil and gas well locations, facilities, tanks, and equipment. It was necessary to modify the Phase I assessment for the work. Of the hundreds of well locations, 50 were chosen for Phase I work and field verification. According to the consultants, any environmental liabilities exceeding $2 million must be identified during this evaluation. Phase I examined the locations of wells for potential environmental liabilities, such as petroleum releases, but did not examine the wells themselves. Even though the consultants were experts in evaluating the condition of oil and gas wells, the oil company addressed this aspect of the investigation in-house. The company did not consider the tangential legal implications, liability for plugging costs, potential impacts on property value, and potential penalties for non-compliance with regulations.
Many wells excluded from the consultants’ due diligence were over 50 years old and out of operation. The company’s in-house investigators did not perform a field review. The result was an underestimation of the number of wells that required plugging and their associated costs. The estimate for plugging a well was between $20,000 and $30,000 per well. The plugging costs for this transaction were much higher, ranging from $80,000 to $120,000 per well, resulting in a $42 million increase. The oil company made a mistake in thinking the plugging costs were insignificant. Environmental due diligence should always include tangential factors.
Additional examples of tangential aspects of environmental due diligence might include the following:
The information obtained during or upon completing an investigation can inform negotiations and contractual arrangements between the parties involved in the transaction. Environmental consultants could spot some issues big enough to kill a deal. Other issues may allow buyers to adjust the purchase price or negotiate an indemnity to shift financial responsibility for environmental risk. It may also be possible to purchase environmental insurance for sufficient financial protection.
The specific steps involved in environmental due diligence depend on the type and scope of the transaction, as well as any applicable regulations or guidelines. Consult an experienced environmental professional to ensure that your due diligence process meets all your needs and requirements. Find out more about SCS’s environmental due diligence services.
With climate change becoming a center of attention globally, much focus has pointed toward carbon capture and storage (CCS) in recent years. While USEPA has published general guidance for Class VI permitting, it is still a new permitting challenge for both scientists and regulators alike. Drawing on lessons learned from more familiar and well-developed regulatory frameworks will be beneficial.
In our Technical Bulletin, Applying Lessons Learned From Municipal Solid Waste and Coal Combustion Residuals to the Development of Testing and Monitoring Plans for CO2 Storage Projects, we focus on the testing and monitoring aspect of Class VI permitting and related complexities, including the project’s overall scale, enhanced costs, and enhanced regulatory risk. We discuss the key considerations for developing an effective CCS Testing and Monitoring Plan based on lessons learned from developed MSW and CCR monitoring programs, as well as how early planning and good judgment can help navigate the complexities associated with CCS projects and ultimately reduce those complexities and associated project costs.
Recommendations include meticulous site characterization efforts early in the CO2 storage project and tailoring the monitoring network. The latter includes placing monitoring wells based on multiphase modeling predictions, designing geochemically and geomechanically compatible monitoring wells, and using strategic statistical techniques to analyze and interpret monitoring data.
It is important to remember that for CO2 storage, groundwater monitoring is not intended to be the primary monitoring method for detecting fluid leakage and migration. It is only one of many required testing and monitoring methods. Even so, the monitoring network must be planned and established appropriately and then tightly coordinated with the other testing and monitoring methods to maximize the protection of underground sources of drinking water.
SCS Engineers will continue to post timely information, resources, and presentations to keep you well informed. These include additional guidance, industry reaction, and webinars with our teams using our website, on SCS Engineers LinkedIn, and on SCS YouTube on-demand forums.
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Energy Savings Add Up – Improving Industrial Carbon Footprint
Businesses know they can significantly improve their bottom line by reducing operating costs. One way to reduce costs and carbon footprint is through energy efficiency upgrades – particularly in an industrial environment. Energy cost savings directly impact the bottom line and can increase profit margins. For example, 5% to 15% annual energy cost reductions can be realized by conducting a retro-commissioning project to optimize your facility’s mechanical systems. The up-front cost of the retro-commissioning project is normally within a 1 to 2-year simple payback. So, to realize these financial benefits, here are some general tips demonstrating the benefits of implementing energy cost-saving projects.
Let’s start with a simple example. Say a company has a net profit of 5% and would like to increase its net profit. There are generally two ways to do this; either increase revenue or decrease costs. If your business were to look at reducing costs by implementing an energy project that would save them $1,000 annually, that would be equivalent to otherwise earning an additional $20,000 in revenue ($1000/0.05 = $20,000). An energy efficiency project of this type has the same impact on profits as increasing sales 20:1.
If the energy project has a return greater than the borrowing rate, then you can finance the project, and you may improve cash flow with relatively little risk. Let’s say a business finances an energy project with a $100,000 loan for 15 years at an interest rate of 10%. Your business has no up-front cost, but pays ~$13,100 each year for 15 years. The energy project you were considering was calculated to generate ~$14,900 each year in annual energy cost savings. Since the energy cost savings exceed the financed payments, the project exhibits a net-positive cash flow of $1,800 annually with no upfront costs.
Simple payback is an important financial consideration under many circumstances in conjunction with the Internal Rate of Return (IRR). If an energy project has an IRR greater than your business’s profit margin, energy cost-savings projects are where you should invest money. For example, suppose a business has determined they will consider energy projects with a 2% return above their net profit of 4.0% (i.e., anything >6.0%). In that case, an energy project with a lifespan of 20 years and an IRR of 6.5% fits their financial goals. In this scenario, the project’s simple payback is irrelevant to the goal of returning an established minimum IRR. Had the company insisted on a 2- to 3-year simple payback, an opportunity that could have far exceeded their financial expectations, would have been overlooked.
Consider looking at energy costs differently than currently viewing them. Energy savings realized from a potential energy project are conversely an existing waste stream (a penalty). By doing nothing, the excess energy consumption continues to drain your operating cash every month, not to mention the impact on your carbon footprint. Reducing energy costs and eliminating energy waste can add to a business’s operations’ efficiencies and impress shareholders looking for a lower carbon footprint.
How can you realize energy and cost savings benefits without knowing where to turn next? The first step under the umbrella of energy management is to perform a formal study to identify energy savings opportunities accomplished through an Energy Assessment. The Energy Assessment looks at how energy is consumed at your facility and, through the formal process, will provide you with the fundamental knowledge you need to make a case for implementing energy cost-saving projects. From there, you can work with the decision-makers to prioritize energy savings in your business. Below are a few ideas that may make sense for your business and lower your carbon footprint:
Building system performance can decline, and energy consumption can increase over time, even when performing routine maintenance on equipment. However, you can increase productivity, improve work environments, and reduce maintenance costs while saving money by conducting an energy assessment and investing in your business’s discovered energy savings opportunities.
About the authors:
Sam Cooke, PE, CEM, is a Vice President and Project Director at SCS Engineers. He has over 40 years of engineering experience specializing in manufacturing energy management assessments and implementation projects. Sam was the technical lead for projects involving the performance of energy assessments at over 100 manufacturing companies, including compressed air audits, compressed air leak surveys, process heating assessments, manufacturing HVAC assessments, lighting assessments/replacement, refrigeration efficiency assessments, etc.
Tony Kriel, PE, LEED AP, is SCS Engineers’ National Expert on Facility Energy Management. He has 13 years of consulting experience as a mechanical engineer. His project experience includes specializing in Cx, RCx, ASHRAE Level I-III energy audits, and other design-related energy services. Tony has managed multiple large (>million square foot) projects and has worked with industrial, commercial, military, federal, state, municipal, and solid waste clients. He is a LEED Accredited Professional AP BD+C, and LEED AP O+M. His projects include Commissioning (Cx), Retro-Commissioning (RCx), ASHRAE Energy Audits, Energy Modeling, Geothermal Feasibility and Design, and Solar PV.
SCS Engineers specializes in industrial energy assessments and water conservation evaluations. For more information, please get in touch with Sam Cooke PE, CEM, Tony Kriel PE, LEED AP, or
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What’s Environmental Consulting?
Jackie Rennebohm stands on a landfill in Madison, Wisconsin, pops open a monitoring well, bails some water, and dumps it on the ground while a cluster of neighbors looks on. They see she had no qualms about coming into contact with the liquid— it’s what a young professional does in a day’s work, she tells them.
“I explain that we strategically place the wells to monitor for contaminants that could leak from the landfill but let them know the site is lined for protection. In 30 years, there’s been no detection of pollutants from the landfill,” Rennebohm says.
She’s upbeat, sincere, and informative; they are interested and feel confident in her explanation of landfill science and engineering. Being a good neighbor is a goal of every landfill.
Gaining trust can go a long way on the job and is something Rennebohm has always prioritized. She figures it’s played a big role in her ability to climb the ropes at SCS Engineers and to offer her clients and project managers what they need—that and her attention to detail and her thirst to keep learning.
Her earliest charge as a new geology graduate seven years ago was logging soils and documenting details for groundwater management. She quickly began learning about different soil types; how to classify them; the features of each that affect their ability to carry contaminants; and how and where those contaminants might migrate.
Moving into new territories
As she’s developed in her career, she’s taken on greater roles and now owns more parts of larger environmental consulting projects.
Beyond monitoring groundwater at landfills and water in nearby private wells and reporting her findings to regulators, the ambitious scientist dedicates her time to the remediation of real estate properties. She begins with Phase 1 Environmental Site Assessments (ESAs), scrutinizing topographic maps, soil maps, investigation reports from local regulatory agencies, and other historical data to determine if a property likely has hazardous contaminants. Depending on her findings, she digs deeper, conducting a Phase 2 ESA by testing soil and groundwater to confirm if the site is contaminated.
“I like doing Phase 1 Assessments, especially because they really challenge you to be meticulous in identifying issues that could be material concerns. You can’t miss a single detail, or an issue could come up later that could cost time and money for our clients.”
“Developers make huge investments, and if it were mine, I’d want to know I hired someone who will be as conclusive as possible.”
If Rennebohm’s due diligence confirms contamination to resolve, she transitions to remediation planning mode.
“That’s when we move from investigator to developing a sound strategy to protect the health of the neighbors, the environment, and the property developer’s bottom line,” she says.
The plan may entail removing or cleaning impacted soil and, in some cases, installing a vapor barrier to prevent volatile gases from migrating into buildings. The solutions are unique to each site, ensuring the groundwater stays pristine and any new structures are in healthy environments.
She’s gotten good at getting to the route of a problem and coming up with an action plan leveraging conceptual site models. She relies on these models to form a hypothesis, gather data, and then does more research to build on her initial findings. With that comes more knowledge to piece the puzzle together ultimately. “I might start by looking for potential groundwater contaminants, then work to determine where those contaminants would likely move downgradient. Once I collect enough preliminary data about the subsurface, I can form a scientific hypothesis. The deeper I go, the closer I get to having answers to inform possible next steps,” she says.
It takes a keen eye
One of her college professors would say that the best research geologist sees the most rocks. In her eyes, it’s the same principle as being the best environmental consultant.
“It’s about being out there and physically looking at soil sample after sample and analyzing groundwater in multiple scenarios. You get a solid understanding of site conditions across different parts of the state, weighing many variables. The more you observe, the more you learn, and you apply that learning in the field,” she says.
Expanding her knowledge and showing what she can do with it has been key to advancing in her career – and it ties into that priority she broached earlier: gaining trust.
She says you must show your project managers you are ready to work on more environmental consulting tasks.
“It’s been important to my supervisors to see that I understand the conceptual site model to know where we are starting with a project and where we need to go to reach the end goal. As important is offering ideas for how to get there instead of waiting to be told what to do. It’s rewarding that my team trusts my judgment.”
From researcher to environmental consultant
Rennebohm’s found her sweet spot in environmental consulting.
“In school, I really liked geological research, learning about life, time, processes, and change. Research is important, though I also enjoy working in the field to help make meaningful changes. It’s gratifying to see blighted properties transform into valuable assets with purpose. Or to be part of a team drawing up a proposal and winning it. You own your work, and it’s a proud feeling,” she says.
She’s left to run with more these days. She serves as the primary author and reviewer of large environmental reports when she formerly contributed short summaries. And she spends more time with clients than in the days when she’d make a quick call from the field to brief them on one point in the big picture. Now Rennebohm’s their point of contact for scheduling requests, coordinating work, writing proposals, and preparing quotes.
What’s ahead
“I see myself doing a lot more on the client relations side. I like interacting with them and coordinating the work needed to meet their goals,” she says.
And she wants to venture further into another territory: business development, a space she hadn’t envisioned herself entering a few years ago.
“While I have a customer service backbone, I thought, I’m a scientist, not a salesperson. But I think differently now that I’ve grown at SCS.”
She’s networking at business conferences and meetings, explaining to residents the important roles of landfills and telling developers how consultants who do environmental site assessments can help them protect their investments.
“I’ve come to realize business development isn’t exactly selling. It’s listening, then working with people. It’s providing clients with the insight to reach their goals,” she says.
Environmental consulting builds mental dexterity. She believes that branching out into more roles and working with more people helps build character.
“I’m becoming more open-minded and breaking out of my shell, and I can contribute more to the big picture. In all I do, I’m working to protect people and the environment.”
Contact SCS Engineers to join our professionals with rewarding careers. in environmental consulting.
Today’s blog highlights successful K-12 recycling education programs in Wisconsin’s green schools that walk the walk in teaching kids and their parents important lessons about sustainability and the environment. Wisconsin’s Green Schools Webinar entitled “Re-imagine, Re-design & Re-cycle: School Waste Collection Systems That Work!” is taking advantage of the Carton Council funding to further zero waste in schools. The webinar is free to attend and open to everyone, with content designed specifically for K12 champions leading recycling programs for their school or district.
As schools set their sights on zero waste goals and seek to shift as much material from the trash to recycling and composting streams, they need an efficient material management system that is easy to use for students and staff alike and is sustainable to operate. Attendees of this webinar will hear directly from three different school districts about their recent innovations in bin design, construction, and placement.
The event includes students building receptacles and hallway recycling programs that are helping to maintain one district’s classroom eating program. The programs are re-imagining unique systems for collecting valuable items such as milk carton material.
Panelists include Brittney Albin, Sustainability Coordinator for Lincoln Public Schools; Chris Jimieson of SCS Engineers and a parent recycling advocate; and Madison Metropolitan School District’s Jeremy Drake, a Principal at Strategy Zero Waste Solutions.
Mar 22, 2023, 04:00 PM in Eastern Time (US and Canada)
The Carton Council will award $2,000 each to 25 communities that improve their resident education, with special attention paid to food and beverage cartons. Additionally, there will be first, second, and third-place prizes to recognize winners who provide outstanding communications and marketing efforts. 1st place will receive an additional $3,000, 2nd place an additional $2,000, and 3rd place an additional $1,000. More information about how communities can participate is here.
Recycling Tips and Resources for schools, parents, and municipalities:
SCS Engineers Project Manager Chris Jimieson is a panelist on the Carton Council’s Green Schools Webinar: Re-imagine, Re-design & Re-cycle: School Waste Collection Systems That Work!, on March 22 (3:00 – 4:00 pm Central).
As schools set their sights on zero waste goals and shift trash to recycling and composting streams, they need an efficient material management system that is sustainable to operate and easy for students and staff to use. Webinar attendees will hear directly from three different school district leaders about their recent innovations in bin design, construction, and placement, including students who are building their own eating and recycling programs that are conducive to sustainability, including systems to collect valuable items such as milk carton material.
This webinar is free and open to everyone. The content is designed specifically for K12 champions leading recycling programs for their school or district.
Panelists:
Chris Jimieson, parent recycling advocate, Madison Metropolitan School District (Program Manager for SCS Engineers)
Brittney Albin, Sustainability Coordinator, Lincoln Public Schools
Jeremy Drake, Principal/STRATEGY Zero Waste Solutions
This webinar is sponsored by the Carton Council.
Meet SCS Engineers’ carbon sequestration and deep well injection experts at BOOTH 729 at the 39th annual International Fuel Ethanol Workshop (FEW) & Expo, June 12-14, in Omaha, Nebraska.
The FEW provides cutting-edge content and unparalleled networking opportunities to the global ethanol industry within a dynamic business-to-business environment. It is the largest, longest running ethanol conference in the world—and is powered by Ethanol Producer Magazine.
The FEW delivers timely presentations with a strong focus on commercial-scale ethanol production – from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is also the ethanol industry’s premier forum for unveiling new technologies and research findings. The program extensively covers cellulosic ethanol while remaining committed to optimizing existing grain ethanol operations.
Abstract: Carbon Capture and Storage (CCS) is becoming increasingly attractive due to growing climate change concerns as well as tax incentives related to conducting CO2 capture. Facilities that capture CO2 may consider storing captured CO2 via geologic sequestration (GS). GS at a given location requires a Class VI Underground Injection Control (UIC) permit for a Class VI UIC well(s) to inject supercritical CO2. These permits require multiphase flow modeling to delineate both the extent of the supercritical CO2 plume and areas that exceed a critical pressure threshold as a result of injection. We have found numerical modeling is also valuable during project scoping to provide a sense of what the total CO2 storage capacity may be for a given project. To determine long-term storage capacity, CO2 trapping (storage) mechanisms must be considered, including structural/stratigraphic, capillary, solution, and mineral trapping (depending on geochemistry). Solubility trapping appears to be the ultimate trapping mechanism for injected CO2 under most geochemical conditions; therefore, solution storage efficiency will be a key metric for project scoping. Solubility trapping occurs when the CO2 dissolves from its separate, buoyant phase into formation pore water. If the total available pore space for the project and the solubility limit of CO2 can be estimated, then the total solution storage capacity can also be estimated. Then numerical modeling can be used to estimate design and operational parameters to quickly examine under what conditions the most efficient use of pore space occurs. In this example, we investigated what factors may promote solution storage efficiency using a multiphase flow model. This includes how supercritical CO2 injection rate, duration, and location(s) affect solution storage efficiency. This simplified study concluded that injection rate, duration, and location(s) all affect solution storage efficiency. Project-specific considerations need to be incorporated into the model in order to determine the conditions ideal for maximizing solution storage efficiency.
The 2023 FEW program has four concurrent tracks and three additional events:
The FEW typically draws industry professionals from all 50 states and more than 30 countries. Upwards of 550 biofuels producers from 209 facilities all over the world attend each year.
The 2023 FEW proudly visits Omaha, NE. We look forward to seeing you there!
Click for more information as speakers and topics are announced. Early Bird Registration ends May 3.
SCS Engineers welcomes Michael Wright to the firm as Senior Project Manager in Environmental Services. Wright’s work takes underutilized or contaminated properties and returns them to productive use.
Wright comes to SCS as a licensed professional geologist, geophysicist, hydrogeologist, and licensed general contractor. He has more than 35 years of experience on national projects, including work for the Federal Department of Defense, Army Corps of Engineers, EPA, Forest Service, and Caltrans. His clients include those in commercial real estate, finance and manufacturing, and port authorities, including the Port of Los Angeles. Wright also has an extensive background in conducting environmental insurance claim investigations and providing litigation support.
Wright holds specialty certifications in OSHA Health and Safety, OSHA Hazard Recognition, and Constructions Quality Management for Contractors. Wright holds professional affiliations with the Bay Area Geophysical Society, Groundwater Resources Association, and National Ground Water Association.
On February 13, 2023, the EPA announced the availability of $2 billion of grant funding to address emerging contaminants, like Per- and Polyfluoroalkyl Substances (PFAS) in drinking water across the country. This investment, which is allocated to states and territories, will be made available to communities as grants through EPA’s Emerging Contaminants in Small or Disadvantaged Communities (EC-SDC) Grant Program and will promote access to safe and clean water in small, rural, and disadvantaged communities while supporting local economies.
This initial allotment of $2 billion to states and territories can be used to prioritize infrastructure and source water treatment for pollutants, like PFAS and other emerging contaminants, and to conduct water quality testing. EPA awards funding to states based on an allocation formula that includes factors such as population, number of water systems, and data related to emerging contaminants. EPA’s implementation documents contain information on how EPA will award and administer the EC-SDC grants. Participating states and territories should submit application packages for the grant funding at https://www.grants.gov.
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The Mississippi “Magnolia” Chapter of SWANA invites you to attend their 2023 SWANA Spring Conference at the IP Casino Resort Spa in Biloxi, MS, April 4-6, 2023.
The conference provides the chance to learn from experts who deal with the technical, practical, and regulatory aspects of safe and successful solid waste management. There will also be several opportunities to network with our sponsors, exhibitors, and other attendees.
Click here for conference details and registration information
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