EPA Financial Follies
In 1894, Venture capitalist William Love built a canal by Niagara Falls with the intent of using it to power a hydroelectric plant. However, as a result of the recession of 1895 he ran out of money and for the next 50 years, the Love canal was a swimming hole in the summer and a skating rink in the winter. In 1942, Hooker Chemical was allowed to dump hazardous waste in the canal. Keep in mind, they were breaking no laws for the simple reason that there were no environmental laws at that time. In 1947, Hooker Chemical bought the land and surrounding land. By 1950 the dumping ends, and Hooker Chemical, cognizant of the fact the waste they dumped in the canal was highly poisonous, sealed the canal with impermeable cement and a ceramic top to prevent the seepage of the chemicals into the water table. In 1951, the school board takes the land by eminent domain, against the protests of Hooker Chemical, and proceeds to build a school and surrounding athletics fields. While building the school, the ceramic top was perforated and sewer lines permeated the cement walls. The result was that chemicals leached into the water table lakes and rivers. These chemicals were extremely carcinogenic and poisonous including 130 pounds of dioxin. Three ounces of dioxin dissolved in water can kill 1 million people according to the EPA. If you look at the images below, you can see how the area was populated in between 1951 to 1981.
The effect of the chemicals in the water table was dramatic and devastating. Cancer cases and birth defects increased exponentially, and by 1980 the entire area was evacuated. The Love Canal became the poster child for environmentalists everywhere. These environmentalists stated how this was an example of irreparable damage to the earth and this area would be uninhabitable for hundreds of years to come. As a result, Jimmy Carter was able to have the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) in his lame duck days as president. This Act is more commonly known as the Superfund Law. What this law did was identify hazardous waste sites throughout the US (known as Superfund sites) and use the funds collected from the Superfund to clean these sites under the control and guidance of the EPA. Since the Act's inception, the EPA has identified approximately 1300 Superfund sites throughout the US and territories (below).
What CERCLA also did was impose a tax on all companies that produce a product that is potentially polluting. The funds from these taxes goes into the Superfund and is used to clean up the sites along with fines and civil/criminal actions from the polluters of the sites. According to its website, the EPA has spent an average of $245 million dollars per year on cleanup of identified sites, and approximately half the sites have been cleaned. How effective have they (EPA) spent the money allocated to them. According to a study commissioned by the EPA, and performed by Kip Viscusi and James Hamilton, they found that EPA cleanups of Superfund sites cost an average of almost $12 billion for every cancer case prevented. Even more amazing is that virtually all--99.5 percent--of the cancer cases that will be averted by EPA efforts are prevented by the first 5 percent of the agency's expenditures. The remaining 95 percent of expenditures avert only 0.5 percent of the cancer cases--at a cost per case of an astonishing $200 billion. Who is running this agency? Wouldn't this money be better spent towards research on Cancer, or yet not spent at all. The EPA has very little, if any, oversight, and under the Obama administration has had a free reign to exert, in my opinion, its extremist agenda. For instance, they have closed over 100 power plants (coal fired) with an average employment of 200 people/plant that have lost there jobs and have caused the price of electricity to skyrocket (in NH & Ma, prices of some firms are increasing by 50%).
Incidentally, whatever happened to the Love Canal; the area was deemed cleaned up and habitable by the EPA in September 2004 (EPA web site).
John Tommasi is a retired Senior Lecturer of Economics & Finance from Bentley University and the University of New Hampshire.