FIGURE 5-1 Stylized diagram of economic losses.

A key issue at sites that have recalcitrant and/or poorly accessible contaminants that prevent site closure is that costs to the potentially responsible party and affected parties can continue indefinitely, indicated by the arrows on the right side of Figure 5-1. Even with a remedial action plan, groundwater quality may not be returned to baseline conditions for a very long time. This residual and recalcitrant contamination increases the cost uncertainties faced by all parties associated with such a site.

Potentially Responsible Party Costs

The costs faced by a potentially responsible party are the costs of remedial actions and litigation expenses (discussed in a previous section). Remedial action costs are influenced by available cleanup technologies, the extent of contamination, and the health effect pathways of the contaminants. The cost of conducting remediation is closely tied to the cost of energy and to the cost of landfill space. As the cost of energy rises, more energy-intensive remediation methods like excavation and thermal treatment will become less competitive with methods that use or enhance natural processes.

The time it takes from the initiation of the first cleanup action until construction completion has varied since the initiation of Superfund in 1980, but was typically about nine years for NPL facilities in the late 1990s (EPA, 2002b), while the average economic cycle in the United States from 1945 to 2001 has been about 67 months or about 5.6 years (NBER, 2010). Thus, a typical cleanup at a Superfund facility can bridge two or three cycles of the national economy, during which annual cleanup and monitoring costs can increase or decrease. One factor that could induce such variation is energy

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