Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, June 11, 1995 TAG: 9506090058
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: CATHRYN McCUE STAFF WRITER
DATELINE: LENGTH: Long
The owner hired an environmental consulting firm that specialized in hazardous waste to haul away the offending barrels. Williams, an environmental attorney with Gentry, Locke, Rakes and Moore of Roanoke, helped his client close the deal.
Three days later, the barrels were back in the warehouse. Apparently, the original owner and the environmental company had a disagreement over payment, and the environmental company decided to rescind its services, so to speak.
``No competent contractor in the world would do that,'' Williams said.
After some haggling, the seller arranged to have the barrels removed, again.
This kind of incident vexes lawyers like Williams, along with bankers, real estate agents, home buyers, small-business owners, executives of huge corporations, local governments; indeed, almost anyone who has to hire an environmental consultant.
Some consultants in this relatively new field are better than others, and some are just plain bad. There's no federal or state oversight of the profession. And in Virginia, which requires testing and licensing of such occupations as manicurists and auctioneers, environmental consultants are not required to be licensed.
``The term consultant, that's an unrestricted term,'' said Ray Allen Jr., director of the Virginia Department of Professional and Occupational Regulation. ``It sounds like something somebody made up and put on their business card. A consultant is anybody who can get money for their advice.''
Its a burgeoning industry, cashing in on the public's demand - as voiced through myriad environmental laws - for clean air, water and land and for preservation of natural resources. Big firms with hundreds of employees are setting up local branches, medium-size firms are merging to compete with big firms, and small outfits are cropping up all the time.
This year, 44 environmental firms are listed in the Roanoke Valley telephone directories, from A Better Way Environmental Services to Water Chemistry Inc. Of those, nine are operations of companies from outside the region.
In contrast, 1990's telephone book listed 11 companies, and only six were headquartered in the Roanoke or New River valleys.
``We see new firms on a monthly basis, almost,'' said Greg Magnus, publisher of a Richmond-based magazine, Virginia's Environment, which targets local governments and industries that need help complying with complex environmental regulations. It also helps the consultants market themselves.
Times were, any consultant with a phone got jobs, Magnus said. Now, ``It's a very competitive industry.'' Some recent newcomers to the field are former Department of Environmental Quality employees who took Gov. George Allen's job buyout offer.
Even with a cooling political climate in Richmond and Washington toward aggressive environmental rules, Magnus and others predict a solid future for consultants. And with that, as in most other fast-growing industries, come less reputable practitioners.
``Everybody that has a backhoe is an environmental consultant, and everybody that took a chemistry class has a lab,'' said Deb Oyler, president and owner of Environmental Directions Inc.
A native of Roanoke, Oyler has degrees in microbiology and medical technology. After some years in pharmaceuticals, she made the switch to environmental sciences, working with a local firm to develop bioremediation techniques in which microbes ``eat'' pollutants.
She then took part in setting up an environmental lab in Blacksburg, and in 1991, started Environmental Directions, the first consulting firm in Virginia to operate a mobile lab. The company now employs 15 people, including a professional engineer and geologist, and rang up sales last year of $1.2 million.
Oyler said she has, on occasion, been hired to ``clean up after a cleanup.'' Most times it involved underground storage tanks, which fell under strict federal rules in 1988. Some ``tank yanker'' would go in and crack the tank while excavating it, Oyler said. The result was an even worse mess.
And a Kentucky businessman recently found that the hazardous-waste hauler he'd been contracting with for 10 years simply was dumping the stuff on another part of his property. Oyler cleaned that one, too.
More rare, but also a problem, is when a firm goes too far, and ends up charging the industry or public entity for unnecessary work. She recently worked with a client who, under another consultant's advice, had dug 23 ground-water monitoring wells where Oyler contended only four were needed.
``The health concerns, that's what it all boils down to,'' Oyler said. Her industry exists because of government regulations, driven by the public demand for a healthy place to live, work and play.
``You don't want to be living in Love Canal by not knowing what's going on,'' she said, making reference to a notorious chemical dump near Buffalo, N.Y., that resulted in a whole neighborhood's being evacuated in the 1970s and '80s.
Andrew Haggling, with Virginia's Department of Environmental Quality, said he provides a list of about 300 consultants to people needing the service, but does not make any recommendations. ``We wouldn't ever want to get into that end of it,'' said Haggling, who works in petroleum-spill remediation. ``We get into a lot of nasty issues when we say someone's not competent or not qualified. We leave that to the Better Business Bureau.''
It's not rare, Haggling said, that the department returns reports for lack of information or because of a difference of interpretation. He's run across few incompetent consultants.
``Typically, the repercussions for the environment are not as severe as the nightmare for the client,'' Haggling said.
Delays in getting a permit for air emissions, a landfill or discharge of waste water translate into lost dollars for many companies. Sometimes major business decisions hinge on the efficiency and accuracy of a consultant's work.
The nightmares can really get bad when it comes to real estate deals. The law states that the owner is legally responsible for cleaning up any contamination found on site, regardless of whether that person put it there.
This law has cracked wide open the market for consultants doing site assessments for property buyers. Such a ``phase one'' assessment generally consists of a deed of title search and other land-use records, a walk around the property for visual inspection, and simple tests for things like radon and asbestos. Knowing ahead of time that a tannery used to occupy the property, for instance, would be a red flag for a potential buyer.
A full-blown ``phase one'' for a couple of acres in a commercial or industrial area would cost $2,500 to $3,000, depending on the consultant and thoroughness of its work, said Russell Patterson, with Environmental Directions.
For banks and other lending institutions, the liabilities are all too real. Some banks have foreclosed on bad loans only to find themselves the not-so-proud owners of a Superfund sites, dishing out thousands, or millions, of dollars to clean them.
Just ask NationsBank Corp. Vice President Stephen Jones. He handles the bank's environmental risk group, based in Dallas.
In the late the bank approved a ``little bitty loan'' of $35,000, backed up by a piece of property in Florida worth $80,000. The borrower defaulted on the loan, and the bank foreclosed. Beforehand, the bank had hired an engineering firm to do a site assessment. In a two-page report, the firm said there were no problems.
``Lo and behold, in 1991, when my department was formed, one of the first things that happened was we got a call from the Florida Department of Environmental Protection,'' Jones recalled.
It turns out a former metals-refinishing shop had buried solvents in drums, which had started leaking. Nationalistic ended up paying $600,000 to clean up the property and some adjacent property.
``This kind of stuff happens to everyone,'' Jones said. ``There's a lot of legitimate, good firms out there. Unfortunately, there's a lot of riffraff out there.''
For the past couple years, his chief chore has been screening consultants for bank customers to use. Using a long questionnaire with tough criteria, Jones has qualified 126 firms to work on real estate transactions. Nationalistic will accept no others.
In the absence of federal or state guidelines, dozens of privately run professional organizations across the country have formed to offer training and certification for consultants. But again, some are better than others, Jones said.
There are groups that require extensive coursework and testing, and others that give a self-graded exam and mail out ``boxtop environmental titles.''
In response, New Mexico Rep. Bill Richardson introduced legislation in 1993 directing the Environmental Protection Agency to establish minimum standards. The bill, co-sponsored by Rep. Rick Boucher, D-Abingdon, received bipartisan support and was attached to the Superfund reauthorization package, which eventually died in committee.
But while the bill still was kicking, Jones said, one of the organizations sent a memo to consultants around the country telling them to hurry up and get certified so they could be grandfathered in if the bill passed.
Jones heard that one person certified his dog - ``That is an example of the crap that is going on in this industry right now.''
Richardson's aides say the congressman is debating whether to reintroduce the bill. ``This kind of bill, one wouldn't think it fits the parameters of the new Republican Congress,'' said one.
Yet more and more people are relying on consultants to make personal, public and business decisions. There's the farmer who needs to know if he has any wetlands before he expands his farm. There's the dry cleaner and the auto repair shop owner who don't know how the Clean Air Act amendments will affect them, and the homeowner who wonders if there's an old dump underneath her house.
There's the developer who must identify any endangered species before turning the first shovel of dirt. There's the city that's trying to build a flood-control project, and the utility trying to build a major transmission line - all of them need environmental professionals who are expert in the technical and legal know-how.
Jack Jackson relies on consultants. As environmental projects engineer for Petroleum Marketers Inc. in Roanoke, his job is to make sure the company complies with the multiple state and federal regulations for underground tanks and above-ground tanks, as well as to protect the company from liability on property purchases.
As has NationsBank, Jackson has developed a list of consultants he has worked with and trusts. Even so, he asks for bids to make sure he's ``not being victimized,'' because there's a lot of money at stake.
Petroleum Marketers has spent about $1 million in the past five years complying with environmental laws, Jackson said. He estimates about half of that is spent on consultants, sometimes for assessing contamination, but more often for pollution-prevention reports required by the state and federal governments.
``These reports are not cheap - trust me, they're not cheap,'' he said. ``We just have to rely heavily on their integrity and their ability to respond.''
Although he's heard ``war stories'' about bad consultants, Jackson has not had that experience. Part of the reason may be that Jackson, who has an engineering background, often watches over the consultants' shoulder when they take soil or ground-water samples.
It would be reasonable to expect Oyler and other consultants to be nervous about the future, what with a regulatory backlash sweeping Richmond and D.C. For months, environmentalists have raised the cry that zealous Republicans will go too far, and cripple natural resource protection laws.
In Virginia, consultants and their clients both have felt the impact of Gov. Allen's determination to halt what he sees as excessive and burdensome environmental policies. Oyler estimates she lost about $1 million in potential business last year when the state loosened requirements on cleaning up pollution from underground storage tanks. Of course, that was money her clients saved.
And Rick DiSalvo, office manager and vice president of Draper Aden Associates in Blacksburg, said his consulting firm also lost revenue because of that change.
Further, Draper Aden has proposals on hold with several major clients to meet the 1990 Clean Air Act amendments. Last year, Allen sued the Environmental Protection Agency over the laws, questioning the agency's right to punish states into complying with federal law. DiSalvo said the potential clients are waiting to see what happens before acting on the proposals, worth several hundreds of thousands of dollars in business to Draper Aden.
Meanwhile, he's holding off on hiring more experts until he knows he has work for them. ``There are jobs to be gained if there are more stringent air regulations,'' he said.
What Allen apparently has done in his push to create jobs, DiSalvo said, is shift earning power from one sector of the economy - the environmental industry - to the more traditional industrial sector. That's where jobs are easier to put a finger on and count, he noted.
Still, DiSalvo and others predict that the downturn in their field is a blip in the big picture.
``I think it's still a very good field to be in,'' said Magnus, the magazine publisher. "There's a lot of work, even with the new [state] administration.''
Oyler, for one, is looking overseas for new markets. She's done work in Mexico and Canada, and is working with a brokerage firm to find work in Singapore and Malaysia.
As for the proliferation of consultants, Oyler said she thinks the industry, which is still relatively new, will settle down after a few more years. The ``fly-by-nights'' will be weeded out and consumers will become more savvy.
In the meantime, Jones of NationsBank and others will continue to act as unofficial watchdogs. He's written articles and goes to conferences preaching the virtues of strict guidelines for consultants.
``I'm a name they're aware of,'' he said. ``These guys ought to be accountable before they call themselves consultants and do the work.''
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