Federal Water Tap, September 16: Amid Higher Risks, CBO Considers How to Expand Disaster Insurance Coverage

The Rundown

• CBO analyzes policies to increase disaster insurance coverage and maintain affordability.
• EPA finds permit violation at agribusiness giant’s carbon capture and sequestration project in Illinois.
• GAO warns of the potential for cost increases for a multibillion-dollar cleanup of mercury contamination at a Cold War-era nuclear weapons facility in Tennessee.
• FERC is evaluating a proposed pumped storage hydropower project in Wyoming that would use an existing Bureau of Reclamation reservoir.
• EPA internal watchdog calls out nine states for failure to submit water infrastructure funding audits.

And lastly, California representatives ask for a state of emergency over health hazards from Tijuana River pollution.

“Immediate action must be taken to respond to this imminent and serious threat to our communities from regular exposure to air and water toxins. A federal emergency declaration would help residents of South San Diego get access to the air purifiers and testing equipment that they need to protect themselves against this imminent threat.” – Letter from four U.S. representatives from Southern California to President Joe Biden and Gavin Newsom, the governor of California.

The letter requests federal assistance to deal with the effects of sewage pollution in the Tijuana River. The river, which begins in Mexico and enters the U.S. near San Diego, has been a cesspool for years. The letter calls attention to recent research finding high levels of noxious gases along the river. In response, some area school districts have restricted outdoor recreation. The representatives note that President Obama’s declaration of a federal emergency helped Flint residents respond to their water crisis.

By the Numbers

$3.2 Billion: Estimated cost, over two decades, to complete the cleanup of mercury contamination at the Energy Department’s Oak Ridge site, in eastern Tennessee. During the Cold War, the nuclear weapons production facility released some 700,000 pounds of mercury that entered soil, groundwater, streams, air, and buildings. The Government Accountability Office warns that the cost estimate could increase if individual projects are not comprehensively managed.

972: Megawatt generating capacity of a proposed pumped storage hydropower facility in Wyoming. The Seminole Project would use the Bureau of Reclamation’s Seminole reservoir in its design, which is being evaluated by the Federal Energy Regulatory Commission. Pumped storage uses upper and lower reservoirs to meet peak electric demand.

News Briefs

Carbon Sequestration Problem
The EPA faulted the agribusiness giant Archer-Daniels-Midland for violating water pollution rules at the company’s carbon capture and sequestration project in Illinois, Capitol News Illinois reports.

The agency found that liquefied carbon dioxide leaked from a monitoring well into “unauthorized zones,” a violation of the company’s permit.

ADM says the leak did not affect groundwater or public health. The carbon capture and sequestration project began operating in 2011.

Studies and Reports

Insuring Disaster
Insurance markets are being rocked by greater exposure to intensifying natural hazards. Major companies are reducing coverage, increasing premiums, or exiting high-risk markets like California or Florida. What to do?

The Congressional Budget Office published a report on ructions in the insurance market and how to maintain affordable coverage.

There are options within private markets. Community insurance, for one. This is where policies are bundled and linked with adaptation measures. Another: “parametric” policies that pay out when thresholds for rain or wind are breached. Payouts come faster, but might not cover all the damage.

Then there are public options. CBO looked at two. The federal government could act as a reinsurer – in effect, backstopping the losses of private insurers. Or it could offer policies directly, as with flood insurance. In both cases, the CBO sees risks. Taxpayers could shoulder expensive bills if risks are not correctly priced.

Missing Audits
The EPA Office of Inspector General notified the EPA that nine states did not submit legally required audits of their drinking water and wastewater infrastructure revolving funds.

These states are in line to receive $4.7 billion from the Infrastructure Investment and Jobs Act for their revolving funds. The OIG did not name the states.

On the Radar

Budget
The end of the federal fiscal year is two weeks away, and Congress, true to recent form, has not passed a budget. A continuing resolution to maintain current funding levels is most likely.

Army Corps Environmental Justice
The Army Corps of Engineers will hold three public meetings this week to gather public input on its environmental justice plan.

The meetings – Sept 17-19 – are virtual and open to the public. But registration is required. See the above link.

Federal Water Tap is a weekly digest spotting trends in U.S. government water policy. To get more water news, follow Circle of Blue on Twitter and sign up for our newsletter.

Brett Walton

Brett writes about agriculture, energy, infrastructure, and the politics and economics of water in the United States. He also writes the Federal Water Tap, Circle of Blue’s weekly digest of U.S. government water news. He is the winner of two Society of Environmental Journalists reporting awards, one of the top honors in American environmental journalism: first place for explanatory reporting for a series on septic system pollution in the United States(2016) and third place for beat reporting in a small market (2014). He received the Sierra Club’s Distinguished Service Award in 2018. Brett lives in Seattle, where he hikes the mountains and bakes pies. Contact Brett Walton