by James A. Bacon
Writing in the Times-Dispatch today, my friend Noah Sachs highlights a systemic risk in our society: the threat of chemical leaks and spills to our water supply. Last year the release of toxic chemicals into the Elk River disrupted the drinking supply of 300,000 inhabitants of Charleston, W.Va. Closer to home, a Duke Power plant in North Carolina dumped coal ash into the Dan River. And a train derailment in Lynchburg sent three railroad cars into the James River.
“The accidents in 2014 are a stark reminder of the vulnerability of our drinking water, and we can’t fix the problem by imposing new requirements on water systems alone,” writes Sachs, a professor of environmental law at the University of Richmond. “We have to look upstream to the real source of the problem. Industries that store toxic chemicals near our waterways are putting Virginians at risk.”
The threat is real, and I credit Sachs for bringing attention to it. The question is how best to address the risk. Do we, as he suggests, need to impose a new set of regulations? Or are there potential private-sector remedies that could ameliorate the risk at less cost?
Sachs proposes three guiding principles for Virginia regulation:
- Businesses that store large volumes of toxic chemicals “should be subject to some public oversight.”
- There should be “minimum standards” for construction, inspection and maintenance of chemical storage tanks. Setbacks and secondary containment of requirements should be imposed for tanks near water sources.
- Tank owners should prepare public communications and response plans in the event of an incident.
In this day and time, when the Environmental Protection Agency has taken upon itself to rewrite the Clean Air Act in order to regulate carbon dioxide emissions and shut down much of the coal industry, these standards do not sound especially unreasonable or onerous. But that’s hardly the criteria we should use when enacting new regulations. We should also seek to minimize the impact on industry consistent with our obligation to protect the public.
The red flag is Sachs’ suggestion that “minimum standards” should apply to everyone. Invariably, there will be instances in which the minimum standards are irrelevant, inappropriate or represent regulatory overkill. The problem is inherent with one-size-fits-all government regulations — they cannot take all unique circumstances into account.
What alternative is there to regulation? The tort system. Corporations should be held accountable for the harm they cause others. If a company spills chemicals into the water, it should be liable for the cost of the clean-up and compensation to those who suffer harm. Government should impose one rule only: As a condition of storing and transporting toxic chemicals, companies should be required to buy insurance. Insurance companies then would serve the risk-mitigation role. The insurers’ own inspectors would assess the level of risk and premiums would be adjusted accordingly. Companies could buy down those premiums by implementing measures such as those Sachs describes or perhaps by devising other solutions unique to their operations.
Regulators apply standard remedies and discourage innovative approaches, especially in situations when there may be idiosyncratic, site-specific solutions. Instead of telling industry how to do its job, perhaps Virginia should simply tell industry that the commonwealth will hold polluters liable for clean-up and damages — and let industry figure out how best to tackle the challenge.
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