Environmental remediation costs: Estimating and funding cleanup

Environmental remediation costs include preliminary assessments, site investigations, feasibility studies, remedial actions and more. While some of these costs are fixed, many vary from site to site and can be a challenge to estimate. During environmental cleanup projects, developers often begin work only to realize there are significant differences between their actual costs and the costs projected at the beginning of site investigations and proposed remedial actions. Such discrepancies between actual and estimated costs might lead them to call off the entire redevelopment project, especially when it involves several stakeholders, such as the local community, municipality, landowners, lenders, regulatory authorities, site auditors and remediation consultants. Accurate estimates of environmental remediation costs are critical to determine the economic feasibility of a redevelopment project and ensure it sees completion.

Below, we discuss some of the factors affecting the accuracy of projected remediation costs and how teaming with an experienced consultant can help developers minimize financial risks and gain the confidence of other stakeholders.

Factors affecting environmental remediation costs

The outcome of an environmental redevelopment project is often based on risks, costs, benefits and remediation viability. Developers need to justify the proposed remediation actions along with associated costs involved for a contaminated site. This highlights the need for an accurate environmental remediation costs estimate.

A few factors can affect the estimated costs of a redevelopment project. They are:

Limited availability of information

Preliminary estimates of environmental remediation costs are based on limited information provided by remedial investigations (RIs) and associated feasibility studies. While the primary objective of an RI is to determine the potential risk of contaminants, the feasibility studies are conducted to select the right remediation strategy for the site.

However, conventional sampling and analysis methods can not estimate the full extent of the contamination. The number of samples collected and analyzed is often limited by the costs of standard fixed-laboratory analyses. This constraint on sample numbers affects the accuracy of conclusions regarding the extent of contamination at the site. These conclusions, in turn, affect forecasting quantities, such as estimated soil vapor extraction flow rates and groundwater pumping rates, used to evaluate appropriate remediation methods.

Uncertain scope of work

Even after repeated sampling, a contaminated site might have unique challenges, such as contamination that extends horizontally or vertically beyond the planned sampling grid boundaries. Even the detection of an underground storage tank at the site can affect the overall budget and timeline for environmental remediation. To address such unanticipated conditions or unforeseen circumstances, estimators must consider all possible contingencies, evaluate their likelihood at a specific site and factor them into cost estimates. As a redevelopment project proceeds and more data is available, the contingencies gradually reduce to offer better clarity on the selected remedial design and its implementation.

Inexperienced environmental consultants

The experience of environmental consultants involved in the project is one of the key factors that influence the accuracy of environmental remediation cost estimates. Each contamination site is unique and demands customized estimates that consider a range of potential scenarios and associated costs. Inexperienced environmental consultants and engineers might conduct Environmental Site Assessments with inadequate sampling and fail to identify underground anomalies that will affect the scope of the redevelopment project. Apart from projecting the costs and expenses of RIs, feasibility studies and remedial actions, consultants need to factor in additional costs or indirect costs associated with project management, remedial design, construction management and technical support when estimating the overall budget of the project. An inexperienced estimator might lack the breadth of knowledge to accurately account for this wide array of costs.

Collaboration with our clients to create the best remedial action options for a site is what we feel separates Fehr Graham from other firms. For example, if there is a closed environmental site with continuing obligations, an inexperienced consultant may suggest additional site investigation activities. At Fehr Graham, unless we observe something that warrants additional investigation, we won't open a new environmental case. Instead, we will work with the client and the regulatory agency to redevelop the site while staying within the boundaries of the state closure documentation. This forward thinking coupled with historical knowledge avoids unnecessary site investigation, saves the client money and expedites redevelopment.

Environmental consultants and engineers play a role beyond estimating remediation costs of a redevelopment project. Thorough estimates can also help developers fund their remediation projects through grants, revolving loans and tax incentives. Developers can also benefit from additional tax credits that are available for projects that meet or exceed sustainable design standards. Teaming with the right experts can help developers secure funding solutions while reducing the risks of cost overruns and improving the appeal of redevelopment projects to lenders.

Ensuring accurate estimates of environmental remediation costs

At Fehr Graham, our in-house team of skilled professionals has been improving communities through redevelopment projects since 1973. Our end-to-end environmental remediation services have addressed challenging redevelopment projects while helping developers navigate the complicated financial stacks associated with these projects. Our expertise in redeveloping contaminated sites provides you with comprehensive data, including highly customized site assessments, realistic cost estimates and effective remediation plans that improve the outcome of redevelopment projects in your community.

Fehr Graham is your one-stop solution for redevelopment projects. Contact us to learn how we can help you accurately estimate environmental remediation costs or give us a call at 920.453.0700