Jim.PrayTech.COM

A common misconception among purchasers of commercial real estate is that the only good environmental due diligence result is one in which no contamination is found in soil samples taken as part of a Phase II audit. This ignores the fact that soils in Iowa have trace amounts of metals which are byproducts of the degradation and erosion of native rock and glacial till.

As an example, lets assume that during a Phase II inspection of a site that a laboratory reports that soil extracted from a soil boring contains lead. A common reaction among buyers is to assume that by finding lead in the soil that a pending sale will have to be called off because the site is “contaminated.” That reaction may well be totally misguided. Soils in many areas of Iowa naturally contain background levels of various metals, including lead. In some parts of northeast Iowa, including Dubuque, the alluvial soil has very high levels of lead that exceed most state and federal standards. In some cases, geologists attribute the lead in alluvial soil to lead that has migrated to those soils through erosion of local lead-bearing rock. Galena, Illinois has been a national producer of lead and lies just on the other side of the Mississippi from Iowa. The Mines of Spain area south of Dubuque has been mined for lead as far back as the late 1700s.

Until recently, there was no comprehensive information on the metals content in Iowa soils. That situation has now, gratefully, changed.

The Iowa Department of Natural Resources has recently has produced a document with the unfortunately vague title of “The Iowa State-Wide Trace Element Soil Sampling Project: Design and Implementation.”

This Iowa study was conducted by a joint venture between the Eastern Mineral Resources Group (EMRG) of the United States Geological Survey (USGS) and the Iowa Geological and Water Survey (IGWS) of the Iowa Department of Natural Resources (IDNR). The major goals of the Iowa study were to “determine baseline, or at least background concentrations of naturally occurring chemical elements across Iowa based on soil samples, and to use the resulting data set to provide context for a number of geological and environmental studies.” Id. at 16. The samples were taken from soil, as opposed to stream sediment. The shallow samples were from 0-8 inches deep and the “deep” samples were taken from 12-24 inches below the surface. I assume that the focus on such shallow soil samples was to try to correlate the results to USGS sampling of stream sediments in other states. Regardless of the motivation, taking soil samples from such a shallow depth is likely to understate the trace metals in native soils for those metals that can be transported by water, leach, or which can migrate into deeper soils as the soils are disturbed by agricultural activity. Lead is one example of a metal that has demonstrated a propensity to migrate to a lower depth due to its density.

Still, the results are very interesting for anybody with an interest in understanding background levels of metals in Iowa soil.

Lead was found in 100% of all samples across the state, with a mean of 20.86 ppm. However, a very high concentration of lead was found in deep samples in and around the Danbury, Iowa area in Woodbury and surrounding counties.

It is worth noting that arsenic was found in 100% of all soil samples with elevated levels found in southern and central Harrison, Shelby, Audubon and Guthrie Counties and northern Pottawattamie, Cass and Adair counties. One sample in Audubon County was more than 19 ppm of Arsenic. The statewide mean concentration was 9.19 ppm. The geologist who authored the report attribute the arsenic to the breakdown of pyrite and glacial till and rock parent material. Id. at page 72. The report also noted that 48% of rural drinking water wells in Iowa contain arsenic above the USEPA’s maximum contaminate level (MCL) of 10.0 ppb for public water supplies. Iowa has a human health criterion for arsenic at 0.18 ppb. This means that it is nearly impossible to comply with Iowa law unless you import or distill your water supply.

On page 44 of the report, Barium was found at elevated levels in all of the Counties along the Missouri River south of Woodbury County, Iowa, with a band running across the state along State Highway 92.

Chromium, Mercury, were also found in many of the samples from around the state. Mercury was found in 96.99% of all samples with a mean sample result of 0.03 ppb. The highest result was 0.40 ppb.

The United States Geological Survey (USGS) and the Iowa Geological and Water Survey (IGWS) of the Iowa Department of Natural Resources should be congratulated for getting consistent data in what appears to be a scientifically sound effort.

The United States Congress has only intervened on behalf of two industries to provide special exemptions or protection from antitrust law under the Clayton Antitrust Act: Major league baseball and “gasohol .” In the Energy Tax Act of 1978 gasohol was defined as a blend of gasoline with at least 10 percent alcohol by volume, excluding alcohol made from petroleum, natural gas, or coal. The Gasohol Competition Act does not define gasohol.

In 1980 Congress passed as an amendment to the Clayton Antitrust Act the Gasohol Competition Act. The law provides as follows:

§ 26a. Restrictions on the purchase of gasohol and synthetic motor fuel

(a) Limitations on the use of credit instruments; sales, resales, and transfers
Except as provided in subsection (b) of this section, it shall be unlawful for any person engaged in commerce, in the course of such commerce, directly or indirectly to impose any condition, restriction, agreement, or understanding that—
(1) limits the use of credit instruments in any transaction concerning the sale, resale, or transfer of gasohol or other synthetic motor fuel of equivalent usability in any case in which there is no similar limitation on transactions concerning such person’s conventional motor fuel; or
(2) otherwise unreasonably discriminates against or unreasonably limits the sale, resale, or transfer of gasohol or other synthetic motor fuel of equivalent usability in any case in which such synthetic or conventional motor fuel is sold for use, consumption, or resale within the United States.

(emphasis supplied).

Any practice or even state law to the contrary can be challenged as violative of the Clayton Antitrust Act. This law has survived numerous constitutional challenges.

The Act does not prevent gasohol retailers from labeling pumps indicating that the gasohol or synthetic fuels were manufactured by a third party, nor from issuing liability disclaimers for damage resulting from the use of such fuels. The retailers also had no obligation to advertise the sale of alternative fuels or to add additional pumps to their facilities for their distribution.

There appears to be no substantial impediment to using the Gasohol Competition Act against parties discriminating against the sale of E15 on the same basis that the Act was used against the oil companies that discriminated against the use of a 10% blend.

James L. Pray
BrownWinick Law Firm
666 Grand Ave. Suite 2000
Des Moines, IA
515-242-2404

Several news outlets are reporting on a new study published in the Journal of Pediatrics that suggests a correlation between ingestion of organophosphate pesticides and Attention Deficit Hyperactivity Disorder in children. The study has not yet appeared on the publication’s website. The study involved taking one-time urine samples in 1,139 children between the ages of 8 and 15. The urine of 94% percent of the children tested had at least some of six pesticide breakdown compounds (metabolites) that were tested. The links to the articles are here:

http://featuresblogs.chicagotribune.com/features_julieshealthclub/2010/05/study-common-pesticides-linked-to-adhd.html

http://www.latimes.com/business/nationworld/wire/sns-ap-us-children-pesticides,0,5755096.story

For one compound in particular, 20% of the children with above-average levels had ADHD. In children with no detectable amount in their urine, only 10 % had ADHD. Food products especially high in pesticides include frozen blueberries, strawberries, and celery. This study was based on interviews with parents to gauge whether the children had ADHD. Also, only one urine sample was taken. The news reports of the study do not report exactly how organophosphates or their metabolites can cause ADHD or list which compounds the study examined.

There are a lot of reasons why the BP gulf offshore drilling oil spill that started on April 22, 2010 may be a turning point in the environmental and energy areas. In the buildup to the spill, we saw an embattled Democratic President cave under enormous pressure by both voters and the oil lobby to open up offshore drilling. We saw polls show for the first time that most Americans were willing to give economic growth priority over protecting the environment (March 21, 2010 CNN poll and a March 7, 2010 Gallop poll – http://www.pollingreport.com/enviro.htm). In fact, according to the Gallop poll, public willingness to prioritize protection of the environment plummeted from 71% in 1990 (shortly after Exxon Valdez) to only 38% in March of 2010. The oil lobby experienced unparalleled success in D.C. and state legislatures pushing back funding and tax credits for alternative energy sources and renewable energy sources. Even the climate change legislation stalled. What traction that legislation was beginning to get during the last several weeks had more to do with the compromise over the extension of offshore drilling than a strengthening of concern over the environment.

The extent of devastation along the Louisiana, Alabama, Mississippi and perhaps even Texas and Florida coastlines will be enormous and fed to the public in a 24/7 news cycle. Also, while the Exxon Valdez spill took place in a very remote part of the United States, this spill will be easily seen and experienced by millions of residents. The images of millions of birds and animals dying gruesome deaths and fishermen losing their jobs, along with the devastation of shellfish beds for decades to come will be very hard for the oil and energy industry to counterbalance. Even the coal industry is reeling with coal mine deaths nearly a weekly occurrence during the last several weeks, not to mention possible federal bribery charges.

Time will tell if public support for the environment increases as a result of this spill, but I’d bet that it is likely. You can also rest assured that a Democratic Congress will convene hearings on how the spill took place, what safety measures were not taken, and how the early estimates were so wrong – anything to take the focus off of public anger over the deficit. Already there are stories that there was strong lobbying by BP against any requirement to install the emergency controls that could have stopped the spill, controls that are mandatory in other countries.

What are the facts?

1. What is endangered?

Although the spill is estimated to be 61 miles wide at this time, when it intersects with the coastline it will be much larger. This is because coastlines are not straight. Louisiana has 397 miles of coastline, Alabama has 53 miles of coastline, and Mississippi has 41 miles of coastline. Therefore, assuming that the weather continues to push the oil slick to the north, it is likely that more than 500 miles of America’s coastline will be rendered unusable for quite some time to come. Areas endangered by the spill include:

Louisiana’s Delta national Wildlife Refuge and Breton National Wildlife Refuge,

Mississippi’s Grand Bay National Wildlife Refuge and

Alabama’s Bon Secour National Wildlife Refuge.

2. How much is spilling?

The official press reports indicate that the well is releasing 200,000 gallons per day. The Coast Guard has estimated the release at 336,000 gallons per day. Some environmental advocacy groups have studied satellite photos and estimate that the well is releasing 850,000 gallons a day. That would be nearly 10 gallons per second. The Exxon Valdez spilled 11 million gallons of crude oil. Regardless, it appears that it is likely that this spill will eclipse the Exxon Valdez in size and scope.

3. What about BP?

BP has announced that it has on the scene 180,000 feet of absorbent booms with 300,000 on order. That is about 90 miles of booms. Were it not for the fact that coastlines are not straight, that they don’t always work, and that storms may render them ineffective, that might be seen as a significant effort. BP stock is down by 24 billion dollars in response to investor concern over the financial impact on BP. However, Wall Street Journal, in article that was quickly taken off the free site, pumped BP as a definite “buy” given that the damage claims are unlikely to approach 24 billion dollars. http://online.wsj.com/article/BT-CO-20100430-710365.html?mod=WSJ_World_MIDDLEHeadlinesEurope

EPA has announced that it may only apply greenhouse gas emission control requirements to new and modified stationary sources with emissions over 75,000 tons for 2011 and 2012. This is a step back from initial efforts to place the cut-off at 25,000 tons. This move is being made in the face of increasing congressional opposition.

http://www.reuters.com/article/idUSTRE6224M520100303

Iowa Department of Natural Resources has revised the forms to use for the annual Title V emission inventory. The deadline to file the report is March 31, 2010. Greenhous gas emissions must also be reported.

www.iowadnr.gov/air/prof/oper/oper.html.

Iowa is criticized for failing to pass an ethanol mandate.

As reported in the press, Senate File 2359 did not get sufficient support to allow the bill to move forward. That bill would have created a mandate that all gasoline sold in Iowa have at least 10% ethanol. Only 73% of gasoline sold in Iowa contains ethanol. Opposition to the bill was led by the fuel retailers, petroleum marketers, and the trucking industry. Because Iowa is the nation’s leading producer of ethanol, the failure to enact an ethanol mandate has been criticized as “ironic” in Energy Tribune:

At the very same time that the ethanol lobby is pushing the Obama administration to break the “blend wall,” which prohibits gasoline retailers from selling fuel containing more than 10% ethanol, the Iowa legislature can’t even pass a measure that would require Iowans to buy gasoline containing 10% ethanol.

Source: http://www.energytribune.com/articles.cfm?aid=3402

30,000 gallon ethanol spill in Iowa.

The Union Pacific experienced a 30,000 gallon ethanol leak from a tank car in Greene and Boone Counties in Iowa on March 2nd. The train was reported to have been enroute from Blair Nebraska to Texas. Initial investigation suggests that the cause of the leak was a mechanical failure on the bottom outlet valve on the tank car. The bottom valve is usually equipped with two separate caps. The only ethanol plant in Blair Nebraska is an 85,000 gallon per year Cargill wet mill ethanol plant. I am not stating that the Cargill plant was the source or was at fault pending an announcement by authorities after further investigation.

Source: http://www.amestrib.com/articles/2010/03/04/boone/news/doc4b8fc60613f67500873903.txt

On February 22, 2010, the United States Supreme Court denied cert on two petitions for cert filed by parties challenging the Sixth Circuit’s decision on the applicability of the Clean Water Act and NPDES rules to certain pesticide applications. The press release by CropLife America is as follows:

CROPLIFE AMERICA EXPRESSES DISAPPOINTMENT AT US SUPREME COURT’S DECISION TO NOT REVIEW RULING ON NPDES PERMITTING
WASHINGTON, DC – CropLife America (CLA) expressed its disappointment with the U.S. Supreme Court’s decision not to review a recent ruling from the 6th Circuit Court of Appeals regarding National Pollutant Discharge Elimination System (NPDES) permits. CLA had filed a cert petition asking the Supreme Court to review and reconsider the three-judge panel’s decision which struck down the U.S. Environmental Protection Agency’s (EPA) regulation that NPDES permits are not required when applying pesticides to or near water sources. Historically, agricultural pest management activities have been treated as non-point sources under the Clean Water Act and have not required NPDES permits.

“The panel’s ruling creates another legal burden for our farmers, custom applicators and agricultural dealers, and leads to additional regulations which may well further prevent food growers from maximizing their output,” said Jay Vroom, president and CEO of CLA. “We are disappointed that the 6th Circuit’s decision could cause the U.S. government to continue to practice a precautionary policy which is detrimental not only for farmers, but could prevent the country from producing more food, fuel and fiber for a growing world population.”

The final decision by the 6th Circuit is stayed until April 2011. Despite the Supreme Court’s decision, CLA will continue to pursue additional avenues to contain the 6th Circuit’s ruling. The organization will also continue to work with key stakeholders to ensure that the critical needs of agriculture are best preserved.

“While we recognize that only a very small percentage of cert petitions are accepted for review,” said Douglas Nelson, executive vice president and general counsel of CLA, “we are also aware of decisions of other federal courts in NPDES cases which affirm the regulatory framework of EPA and Congress to treat pesticides as non-point source applications. Regardless, CLA will continue to work with EPA to minimize the burden placed on farmers and reduce the disruption this will cause across the crop protection industry.”

CLA filed the cert petition with the U.S. Supreme Court on November 2, 2009, with support from a host of agricultural allies including: Agribusiness Association of Iowa, BASF Corporation, FMC Corporation, Responsible Industry for a Sound Environment, Southern Crop Production Association and Syngenta Crop Protection, Inc. A separate cert petition challenging the 6th Circuit’s decision was also filed by the American Farm Bureau Federation, American Forest & Paper Association and The National Cotton Council.

Several amici briefs supporting CLA’s cert petition were also filed by various state departments of agriculture and national trade associations. Additionally, over 30 members of Congress, including both Democrats and Republicans, also filed a brief requesting the Supreme Court accept the case.

For more information about CLA and its involvement in the regulatory and policy issues affecting modern agriculture, visit www.croplifeamerica.org.

James L. Pray was counsel for one of the parties seeking cert., Agribusiness Association of Iowa.