The Business of Brownfields: Managing Risk using EQuIS and GIS
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The Business of Brownfields: Managing Risk using EQuIS and GIS

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Presented by Mitchell Beard, CEO, EarthSoft, Inc.

Presented by Mitchell Beard, CEO, EarthSoft, Inc.
2005 National Brownfields Conference
Technology Solution Series
November 3, 2005, Denver, Colorado

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The Business of Brownfields: Managing Risk using EQuIS and GIS The Business of Brownfields: Managing Risk using EQuIS and GIS Presentation Transcript

  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Presented by Mitchell Beard, CEO EarthSoft, Inc. mbeard@earthsoft.com November 3, 2005 2005 National Brownfields Conference Denver, Colorado Technology Solution Series Nick Thomas, Moderator November 2005 Copyright EarthSoft
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS F E A T U R II N G FEATUR NG Environmental Quality Information System (EQuIS) November 2005 Copyright EarthSoft
  • What is EQuIS? • Sample data warehouse (Chemistry and Geology) • Tools for checking and loading data from lab and field, enforcing data quality • ArcGIS ‘wrapper’ to query and extract data spatially, creating labeled maps • Links to many 3rd party tools commonly used by environmental professionals for visualizations and data analysis
  • EQuIS Clients • Government – EPA Regions 1,2,3,4,5,6,10 – States of AR, CA, CO, DE, LA, MS, NE, NJ, NV, NY, OH, RI, WV – Cities and Counties: Denver, Seattle, San Bernardino, Los Angeles, others – Army, Navy, Air Force, DOE, Coast Guard – Several Port Authorities • Consultants – Most! (80% of the consultants at this conference) • Labs – Most! (75% of the labs at this conference) • Industrials – Shell, BP, Rohm and Haas, Cemex, Olin, many others
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS RAINIER COURT Senior and Family Housing Redevelopment, Seattle Brownfields 2005 - Phoenix Awards EPA R10 Pat Chemnick: Southeast Effective Development (SEED) Dave Cook, L.G.: GeoEngineers, Inc. SEED
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Specific Case Study for Brownfields • GeoEngineers imported 50,000 analytical results for Brownfield Properties into EQuIS. Speed was of the essence. • GeoEngineers used EQuIS to integrate and validate their sampling data so they could compare it to regulatory cleanup standards. • Where standards were exceeded, GeoEngineers easily loaded data into ArcGIS to display contamination across multiple sites. • They used EQuIS + ArcGIS + GeoEngineers Decision Model to calculate, map, and prioritize environmental risks—they managed “real property” risks with confidence.
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS A ! Cleanup A ! A ! A ! AAA ! !! A ! A A A ! ! ! A ! A ! A Action: ! A ! A ! A ! A A ! ! A A ! A A ! A ! ! A ! A !! A ! A A A ! ! A A ! ! ! A ! AA ! ! Initial A ! A A ! ! A ! A ! A A ! ! A A ! ! A A A ! ! ! A A ! A A ! A ! ! ! A ! A ! A Regulatory ! A ! A ! A A ! ! A A A ! ! A A ! ! A ! A A AA ! ! ! ! ! A ! A A A ! ! A ! AA Buy-In ! ! ! A A ! ! A ! AA ! A ! ! A A A ! ! ! A ! A A ! ! A ! A ! A A ! A ! ! A A A ! A ! ! ! A ! Combine Targeted A ! Brownfield A ! A A ! ! Assessments (TBAs) and graphically “sell” approach
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Cleanup Action: Initial Regulatory Buy-In • Soil sample locations exceeding cleanup levels PAH's METALs PETROLEUM PCE PCB's
  • Selecting a Remedy with Multiple Plumes • PCE • PCB’s • Petroleum Senior Housing • Metals Family • PAH’s Housing
  • Senior and Family Housing Phases: Solutions Building and Parking Garage Concrete Slab Liquid Boot Vapor Barrier Beneath Townhomes Asphalt Concrete Surface Parking Hardscape Pedestrian Walkway Area
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS In The Words of Our End-User “All new data collected went into EQuIS as well, which allowed us to easily display all phases of data collection together. We were able to ask lots of detailed questions and quickly get answers through custom queries.” “All of these outputs were also displayed using ArcGIS…a major communication tool with regulators, helping to show where samples were taken, what kind, how deep, and delineate areas of contamination.” “We could even show areas where risks were not a concern. The data primarily spoke for itself. When data are presented clearly, there is little room left for interpretation and disagreement.” Rob Smith, Senior Scientist, Technical Systems Developer, GeoEngineers, Inc. (10.21.05)
  • Case Study • State of NJ retained Environmental Alliance to respond to impacted residential wells. • Identified PRPs that subsequently retained Environmental Alliance to define extent. • Using ArcView and EQuIS, Environmental Alliance quickly identified impacted properties for installation of temporary “point of entry” remediation systems. • ArcView and EQuIS aided Environmental Alliance in quickly generating maps and figures defining the aerial extent of a one-mile long plume.
  • Environmental Alliance, Inc. 1812 Newport Gap Pike Wilmington, DE 19808 302.995.7544
  • Environmental Alliance, Inc. 1812 Newport Gap Pike Wilmington, DE 19808 302.995.7544
  • Brownfield changes will affect Data mgmt requirements... Expect major modifications to Brownfields Revitalization and Environmental Restoration Act of 2001. EPA is expected to finalize the All Appropriate Inquiries (AAI) rule around the end of 2005 or beginning of 2006 Major Changes: Considerable restrictions on who can complete Phase I Environmental Site Assessments (ESAs) • More comprehensive research requirements • One year shelf life for Phase I ESAs • Phase I ESA Updates will no longer be allowed • Transaction Screens will not provide Federal liability protection under the proposed AAI rule. ASTM is now rewriting the Transaction Screen standard as a business risk management screening tool. Our Favorite Change: Requires greater documentation of quot;data gapsquot; (no available historical sources for some period of time). The Environmental Professional (EP) must identify and discuss the reason for each gap, identify all sources consulted to fill the gap, and comment on the significance of the data gaps with respect to the EP's ability to identify releases.
  • EQuIS / GIS for Assessment Grants The USEPA says they have a goal for FY 2006 of having 1,000 Brownfields Assessed, spending up to $72M nationally. They are executing this by giving three types of grants to government, local community groups, and NGOs. ( We have not found instances where they have given a grant to a quot;for-profitquot; institution to promote investments in Brownfields. ) The grants come in three forms: 1) Assessment (these require Phase 1s and 2s); 2) Revolving Loan Funds (capitalizing costs for clean-ups); and 3) Clean-ups (subsidizing actual costs of clean-ups). It appears ASSESSMENT grants are typically capped at $200k either for one site, or for several. We believe grants for clean-ups can go higher for certain sites. Overall, grants can go to a Community-wide strategy to assess a number of Brownfield sites (a portfolio), or they can target only one.
  • The Economics of Brownfields (Using EQuIS/ArcGIS Vs. NOT Using) EQuIS + ArcGIS can produce a National or Regional ‘Weather Map’ for the Brownfields market. A Map where investors could make informed decisions about “sunny” properties versus “stormy” ones. With this Map, transactions in the market would rise considerably—and so would the economic benefits. Greatest Opportunity: Identifying properties where Natural Attenuation would remedy the site... If the purchase of a Brownfield property results in a DIRECT positive economic/fiscal benefit to the community…Then there is a measurable benefit to using tools that produce valuable information about purchasing opportunities (e.g., where risks are understood).
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS An Investment Opportunity A Non-Profit or IB Launches a National Brownfields Acquisition and Redevelopment • Property data are Strategy. flagged where risks Their strategy is to find and buy properties are above local, Rank where Real risks are LOWER than Perceived state, or federal risks. Properties regulatory levels LOAD Check Find BUY Map Risks Historical and Quality Risks New data directly from the Field or • Bank uses EQuIS to • Bank uses ArcGIS Lab for many manage disparate to delineate and sites data across a large display where real portfolio of property risks are Brownfield and are not. properties.
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Applied to Brownfield Properties = Valuable Intelligence About Real Vs. Perceived Risks! Find and Integrate Good Sort Properties Meeting Top GIS Intelligence to + = Data about Properties Environmental Risk Criteria Manage Property Risks
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Enter EQuIS and GIS Geographic Information Systems (GIS) present real world data as interactive layers of information contamination roads parcels GIS elevation land use real world
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS What We Get If the data put into the GIS are Timely, Relevant, and Accurate (e.g., good quality) then… contamination roads parcels GIS elevation land use real world
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS What We Get We get valuable intelligence about locations and their attributes—especially their Real risks contamination roads Brownfields GIS elevation land use real world
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Price is Determined by Information about Risks In other words: Price of ‘clean’ property ($) - Real Risks - Perceived Risks - Unknown Risks = Property Price ($) Note: The focus is on the impact of environmental risks to pricing. Clearly, financial, demographic, and other risks will also impact pricing Brownfield properties.
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Pricing Environmental Risks @ Brownfields: • If reliable data about environmental risks are abundantly available, the market will price and trade them well. • If reliable data about environmental risks are scarcely available, the market will NOT price and trade them well. The problem with #2 is that the market may shield itself by assuming an over-protective risk level for a whole class of Brownfield Properties—one that is false and inflated. ? to Insurance Company: Q) How do you price the policy for your brownfields (without a data management system)? A) Who cares? We just take the consultants number and multiply it by 1000....
  • 5 win income 4 settle 3 2 lose probability OPEX + budget cost recovery soil volume MNA SVE site site site e site 1 1 at 1 1 reserve sum av xc E lifecycle current reserve cost groundwater MNA Pump/treat 30 yrs 10 yrs 2 yrs cost future reserve probability PRP share = cost RemedyDEFENDER PortfolioDEFENDER
  • EQuIS/GIS for Petroleum Brownfield Sites In the Brownfields Law, there is a mandate that 20% of these grants go explicitly for Petroleum sites. Grant applications must state if they are applying for a petroleum site grant or a hazardous waste site grant. USEPA (really RCRA) makes a clear distinction between a hazardous waste site and a petroleum contaminated site. EQuIS is already used by many companies to manage petroleum waste data, including Shell, BP, Valero, Tosco, and many consultants.
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS The Business of Brownfields Goal Resell damaged property that is valuable if rehabilitated (e.g., remediated). Gamble Will Fair Market Value exceed costs of acquisition and remediation? Theory The better the information about property risk, the more accurate its market price. Reality Final Price = What Someone is Willing to Pay…but what drives this?
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS The Size of the Business of Brownfields... 600,000 Resell damaged property that is valuable sites if rehabilitated (e.g., remediated). Gets Will Fair Market Value exceed costs of progressively acquisition and remediation? harder More Phase The better the information about property 2 ESAs risk, the more accurate its market price. Data are Final Price = What Someone is Willing to required to Pay…but what drives this? quantify risk
  • Using EQuIS and ArcGIS at Brownfields The Path to Economic Gains 1. Investments in Brownfields Yields Economic Benefits. 2. Great Information about Risks Promotes Investments. 3. EQuIS + ArcGIS Delivers Great Information about Risks. As an Investor, Regulator, or Consultant to Either…How can you afford NOT to know your risks? Use EQuIS + ArcGIS to KNOW and MANAGE your risks. Use EQuIS + Arc GIS to make wise investments in Brownfields Redevelopment—the kind that deliver long- term ECONOMIC GAINS.
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Other Problems • Perceived Risks may be Higher than Real Risks • Investors Falsely Assume that Brownfields are too Risky as an Investment Class. • Or just as bad, they invest in other properties where reliable information is perceived as more abundant (e.g., Greenfields).
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS The Value is in the Intelligence About Risks The Value is “ We Make Good Decisions” Because… Quality Data + GIS + A Valid Decision Model = Minimized Risks and Maximized Benefits.
  • The Business of Brownfields: Managing Risk Using EQuIS and GIS Lowering Perceived Risks Improves Opportunities for Investment Where EQuIS is used to store, validate, and ensure the quality of your property data. Where EQuIS is used to query and prioritize site data against regulatory risk levels. Where ArcGIS is used to quantify and map risks to manage properties with Valuable Intelligence.
  • Using EQuIS and ArcGIS at Brownfields The Path to Economic Gains 1. Investments in Brownfields Yields Economic Benefits. 2. Great Information about Risks Promotes Investments. 3. EQuIS + ArcGIS Delivers Great Information about Risks. As an Investor, Regulator, or Consultant to Either…can you afford NOT to know your risks? Use EQuIS + ArcGIS to KNOW and MANAGE your risks. Use EQuIS + Arc GIS to make wise investments in Brownfields Redevelopment—the kind that deliver long- term ECONOMIC GAINS.
  • The Economics of Brownfields (Using EQuIS/ArcGIS Vs. NOT Using) TAKE THIS HOME... What Drives the Market Demand for Brownfields? What Drives the Market Supply of Brownfields? ANSWER: GREAT INFORMATION EQuIS + ArcGIS = GREAT INFORMATION Can You Risk NOT Knowing?
  • Our Target Market • Industrial clients with multiple large brownfields • Investors or Non-Profits seeking brownfields • Insurance agencies for brownfields • Regulatory agencies with hundreds or thousands of brownfields • Consultants with multiple large brownfields • Clients already having GIS and relational database capability or infrastructure, directly or through a consultant