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Author Archives: John.Rosengard
…As Far As You Can Throw Them
A multiparty cleanup site brings together companies and agencies which normally don’t want to be in business together. Add in the fact that they have a negative present value project and little hope for concluding the project quickly creates a … Continue reading
Posted in Uncategorized
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Stimulus Funding
One of the useful outcomes of the American Recovery and Reinvestment Act has been the recovery.gov website, which details the spending of the stimulus funds. Some CERCLA sites and brownfield projects have already spent their funds on accelerated cleanups and … Continue reading
Idle Iron
On September 15, the Interior Department issued a Notice to Lessees 2010-G05 that idle platforms, wells and pipelines in the Gulf of Mexico will need a removal plan, independent of previous obligation to remove equipment within a year of the … Continue reading
Financial Assurance – Still Looming
Last January, USEPA published an Advanced Notice of Proposed Rulemaking, to implement Section 108(b) of CERCLA. USEPA’s approach has been to identify industries where a demonstration of financial responsibility will prevent future claims to Superfund. Bankruptcy is the leading cause … Continue reading
Strategic Default
Protecting your portfolio against Strategic Defaults Strategic defaults are on the rise. The LA Times reports that 2008 saw 588,000 homeowners strategically default on their mortgages, more than twice as many as in 2007. The Wall Street Journal has also … Continue reading
Applying a Quick Test for Reserve Adequacy
In a previous blog entry, I noted the idea of calculating the ratio of a company’s environmental remediation reserve to spending in the last fiscal year. A ratio of 10:1 would show some long-term thinking about liabilities, while a ratio … Continue reading
Posted in Environmental Liabilities, Environmental Reserves, Reserve Balance, Reserve Ratio
Tagged Kerr-McGee, Tronox
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Reserve Updates Are Not Decision Analysis
By this time of year, most remediation teams are done budgeting for next year and have returned their attention to meeting this year’s budget. In managing environmental remediation liabilities and asset retirement obligations, it may be obvious that your company … Continue reading
Environmental Liabilities and Bankruptcies
In the last several years, a few bankruptcies have triggered significant redistributions of environmental liabilities at CERLA Superfund sites. General Motors, Lyondell, Solutia (originally part of Monsanto) and Tronox (once part of Kerr-McGee) are the latest examples. When there is … Continue reading
Posted in CERCLA, FAS 5, FASB 143, FASB 157, Superfund
Tagged Bankruptcies, CERCLA, FASB 157, General Motors, Lyondell, Solutia, Superfund
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FASB 157 and the Deadbeat Dividend
In 2006, the Financial Accounting Standards Board released Statement 157 on Fair Value Measurement. This standard applies not just to assets, but to environmental liabilities as well. One new obligation is that environmental remediation liabilities (covered under FASB 5) and … Continue reading