Closing up shop
Michelle Purcell provides an insight into the decommissioning of licensed industrial sites in Ireland
September 2008 marked the beginning of the deepest recession in Ireland since the 1980s. Since then, an air of uncertainty has lingered, jobs continue to be lost and countless businesses have closed.
The economic shift profoundly affected how environment consultancies meet the needs of their clients, as well as how they operate, attract and, more importantly, retain business. At URS, there has been an noticeable increase in the number of licensed industrial sites requiring decommissioning expertise.
Licensed activities
In Ireland, the Environmental Protection Agency (EPA) is the competent authority for granting and enforcing integrated pollution control* (IPC) licences for specified industrial and agriculture activities listed in the first schedule to the Environmental Protection Agency Act 1992 (as amended).
Since 2007, there has been a significant change in the profile of IPC licensees. Prior to that year, the majority of IPC licences issued by the EPA were for industrial processing facilities.
Fast forward to 2012, and 95% of IPC licences were issued for activities in the intensive agricultural sector. And, in 2012, the EPA did not issue a single IPC licence to a newly operating industrial facility; the only licences issued were revisions to existing ones. This is a sign not only of Ireland’s economic woes but also those affecting Europe, where many large-scale Irish industrial facilities export their goods.
Conversely, the number of IPC-licensed sites notifying the EPA of their closure has soared. No single sector in particular has been affected; it is a problem across the board, from large facilities to small sites.
The decommissioning stage in the lifecycle of a site is often overlooked or dismissed, and sometimes lacks the excitement of the commissioning phase. However, a closed, vacant site can present a great risk to the environment if remaining residuals are not appropriately dealt with. There is a real danger that the “out of sight, out of mind” attitude will proliferate.
Risks can be both seen and unseen. Unbunded barrels of waste oils are an example of an obvious, visible risk. What is not so obvious, however, is what is going on beneath the surface of the site, in the soil and groundwater. Contamination associated with the site’s historic or more recent operations is a common occurrence that can have significant implications for the local environment and human health.
There are a number of options available to the licensee in Ireland upon cessation of the licensed activity. After the activity stops, the licensee has up to three years to restart the activity, providing some breathing space to allow for activities to begin again if business picks up. If the activity recommences within three years, it can be accommodated under the existing IPC licence; if not, the licence ceases to exist as a legal authorisation. This does not, however, mean that the IPC licence conditions are no longer a legal requirement. To restart the activity after three years, the licensee has to apply for a new IPC licence.
A second option is to transfer the IPC licence to another interested party. This can occur if the site in question is sold and the buyer intends to carry out the licensed activity. This process transfers all responsibilities, liabilities and obligations provided for under the licence to the buyer.
The third option open to the licensee is to surrender the IPC licence. This route is only considered when the licensed activity will never recommence and is the route chosen by most closed IPC-licensed sites in Ireland. This process completely removes the IPC licence and its associated obligations.
Shutting down
The process of surrendering an IPC licence can vary significantly in complexity and involves a number of defined stages, all overseen by the EPA. Before the agency will consider the prospect of a site surrendering its IPC licence, the licensee must decommission the site to the EPA’s satisfaction.
URS has been involved in numerous decommissioning projects in Ireland and has found that their successful completion is dependent on the thorough assessment of a site’s previous operational activity and history.
Aspects that must be reviewed include the storage and handling of materials, chemicals used, previous incidents, waste management practices and emission characteristics. This enables environmental scientists to identify potential risk areas onsite and tailor the decommissioning measures accordingly. Equally important is a meticulous approach to record keeping so that details of all activities at the site, such as waste movements, emissions monitoring and tank testing, are documented.
The first step in closing an IPC licensed site is to activate the decommissioning management plan (DMP). A DMP, which is prepared by the licensee during operation, sets out the tasks to be completed upon the cessation of activities or closure of the site. All plans require EPA approval before they can be implemented.
A key aspect of the DMP is the establishment and underwriting of the financial provision available for site decommissioning – this is the sum the licensee pledges to put aside and use for site decommissioning activities only. Financial provisions are often underwritten in the form of a bond or a parent company guarantee. Establishing a viable financial provision can prove problematic, especially when a business is struggling to stay afloat. It is, however, a vital mechanism for ensuring that all remaining environmental liabilities on a site are addressed during the decommissioning phase.
Once decommissioning activities are complete, an independent closure audit is required. This must be conducted by an objective third party, often an environment consultant or scientist. A report detailing the findings is then completed and submitted to the EPA for review. The key objective of the independent audit is to determine whether the site, in its state at the time of the inspection, poses a risk to the environment and whether all environmental issues have been satisfactorily addressed and closed out. If this has not been achieved, then the onus shifts back to the licensee to address the outstanding issues.
When the EPA is satisfied with the independent audit report, it will complete an exit audit and thoroughly examine and assess the decommissioning activities undertaken. It is at this stage that the agency will decide whether the site is in a condition likely to pose further environmental risks. If a satisfactory outcome is reached, the licensee can then make an application to surrender the IPC licence. This will be accepted, unless there are outstanding issues.
The unfortunate reality in Ireland is that the majority of formerly IPC-licensed sites that have achieved successful licence surrender will sit idle for years. Many become dilapidated and rundown. Very few of these sites find a new buyer and, in the majority of cases, the most economically advantageous option is demolition. This situation is not likely to improve in the near future in Ireland and presents an ongoing challenge to industry, environmental scientists and regulatory agencies.
* The integrated pollution prevention and control (IPPC) licensing regime in Ireland was recently renamed as integrated pollution control (IPC) with the introduction of the Industrial Emissions Directive
Michelle Purcell is an environmental scientist at URS and an Affiliate member of IEMA.