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© 2012 Environmental Data Resources, Inc.
Environmental and Fracking Concerns Risks, Reality and Protecting Homeowners
SEPTEMBER 12, 2012
Larry Schnapf
Schnapf Law LLC
www.SchnapfLaw.com
Jack Huntress
Managing Director
Residential Market
Environmental Data Resources
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1. Overview on Environmental Contamination
2. Vapor Intrusion – An Emerging Risk
3. Disclosure and Common Law
4. Fracking – Reality and Myth
Today’s Webinar
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PART 1: Environmental Contamination
3
Sites Across U.S.
• 23 million records of property
contamination since 1990
• Includes:
- Superfund sites
- Brown fields
- Old gas stations
- Landfills
- Meth labs
- Spills
- State hazardous waste sites
- And more . . . .
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Page 4
PHOENIX LAS VEGAS
POMPTON LAKES MADISON
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Page 5
Residential properties are routinely
impacted by environmental
contamination
SOURCES
Meth Labs
Landfills
Gas Stations
Dry Cleaners
Former Industrial Sites
Fracking
EXAMPLES
Pompton Lakes
Maryland Square
Middlefield-Ellis-Whisman
ISSUES
Vapor Intrusion
Soil contamination
Groundwater pollution
Meth contamination
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Page 6
Numerous references exist regarding
the consideration of environmental
contamination for residential properties
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Freddie Mac Form 70
Fannie Mae Form 1004
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Freddie Mac Single-Family Seller/Servicer Guide
Volume I, Section 44.15(i)
Page 8
The appraiser must consider any known Contaminated Sites or
Hazardous Substances that affect the property or the neighborhood in
which the property is located. The appraiser must also note the
presence of Contaminated Sites or Hazardous Substances in the
appraisal report, make appropriate adjustments to reflect any impact on
market value, and comment on the effect they have on the marketability
of the subject property.
• Proximity of the property and/or its neighborhood to a
Contaminated Site
• Proximity of the property to ground water contamination,
chemical or petroleum spills or other Hazardous Substances
that are expected to impact the area for more than one year
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Why now?
• Greater scrutiny then ever before
• Consumer protection on all agencies radar
• Vapor intrusion a better understood risk
• Technology now allows for inexpensive screening/disclosure
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PART 2: Vapor Intrusion – Emerging Risk
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• Pathway means that “city water” does not give free and clear
• Exposure and therefore risk even when people are on city
water
• Mitigation can be similar to that of radon (air handling)
• Petroleum hydrocarbons and chlorinated solvents the common
culprits
• Plumes can be extensive – hundreds of homes at a time
impacted
Vapor Intrusion
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• Dry cleaner release
• Plume over 1 mile long
• Under affluent residential
neighborhood
Case Study #1 – Maryland Square
Page 12
LAS VEGAS
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White Swan Cleaner-Sea Girt
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Roxana, Illinois Benzene Plume
Page 14
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Roxana Groundwater Plume
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Roxana Cross-section GW and VI
Page 16
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PART 3: Disclosure and Common Law
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Dealing with OFFSITE contamination in most cases
The Issue
Page 18
Pall-Gelman 1,4-dioxane plume - Ann Arbor, MI
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Is order of the day and trends create new considerations
• Urban Renewal
• Suburban Sprawl
Examples
MA, TX and LA explosions
Consumer Protection
Page 19
June 19th….AUSTIN — The state plans to compile a registry of businesses with dangerous chemicals so
citizens can learn about hazards like the fertilizer plant in West, where a fire triggered a massive blast of
ammonium nitrate.
http://www.dallasnews.com/news/west-explosion/headlines/20130617-after-west-explosion-texas-may-
compile-public-database-of-hazardous-chemical-sites.ece
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PART 4: Fracking – Reality from Myths
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• Not new! – Developed in late 1940s, Large scale in late 60s
• Goal is to get petroleum hydrocarbons out of low permeability
rock (i.e. Stuff won’t move unless there is a path
• These are Secondary and Tertiary “plays”
• Today it is largely about shale and natural gas
• Largest possible seismic event know was 3.3
• Fracturing fluids are a concern – most of them are patented
and about 90% is water with 10% being sand and chemicals
(known carcinogens in some cases)
• It occurs deep, typically 2000-3000 feet down…we get our
drinking water 200-300 feet down typically so fairly large
separation.
Some Background on Fracking
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• Short for “Induced Hydraulic Fracturing”
• Injection of a fluid (typically water based) into rock layers with
the purpose of extracting oil or gas
What is Fracking?
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Shale formations
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Casing to Depth
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Fracking in Detail
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Marcellus Shale
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North Dakota BOOM!
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• Casing Failure
• Above Ground Tanks
• Surface ponds
Most common risks
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Bringing in LOTS of Water
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Surface Lagoons
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Surface Storage – Above Ground Tanks
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• Safe Drinking Water Act- Underground Injection Control
• Clean Air Act (well head emissions)
• State Oil and Gas Programs
• Permitting, well design, siting pits/tanks,
• State Environmental Laws
• groundwater, surface water, air emissions
• Local Ordinances
Regulatory Regime
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SWDA UIC Program
• Underground Injection
• Subsurface emplacement of fluids by well injection
• Endangers DWS if results or reasonably expected to result in
presence of contaminants causing non-compliance or adversely
affecting health §300h(d)(2)
• Fracking Exclusion- §300h(d)(1)(B)(ii)
• Underground injection of fluids or propping agents (other than
diesel fuels)pursuant to hydraulic fracturing related to oil, gas or
geothermal production
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• Leasing Issues
• Royalties, term, bonus, rental payments, delays, etc
• Operations May Be Larger and Closer Than Thought
• Landowners left with impacted land
• Traffic in towns that never had traffic
• Damage to roads through heavy equipment transport
Additional Issues
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• Separation of thousands of feet from actual fracking to water
supply wells
Fact from Fiction
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Questions!
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