Fluid regulation

By Ben Walsh
January 15, 2014

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On Thursday, 7,500 gallons of a toxic chemical, 4-methylcyclohexane methanol (MCHM), spilled from the tank where it was waiting to be used to clean coal into the Elk River in West Virginia.

The spill has highlighted the odd, overlapping, and somehow porous regulation of industrial chemicals, the infrastructure that holds them, and the companies that sell them. MCHM is one of the more than 60,000 chemicals exempt from the Toxic Substances Control Act (TSCA), on the grounds that they were in in use when the law was passed in 1976. As a result, its safety and safe use isn’t regulated by the Environmental Protection Agency.

The West Virginia Gazette’s Ken Ward reports that the plant where the chemical was being held wasn’t regularly inspected by federal or state authorities. The West Virginia Department of Environmental Protection last inspected the plant in 1991, and OSHA has never inspected the site. The last time West Virginia did a water quality test at the location was 2002, and it didn’t mention MCHM. Adding to the sense that this disaster is unfolding in a parallel regulatory universe, the only permit that Freedom Industries, the owner of the site, applied for was for stormwater discharge.

Freedom Industries itself has an impossible-to-invent backstory: it is the little more than two-week old product of a merger, and when its predecessor company was formed two years ago, one of the two founders was a two-time felon.

Jedediah Purdy calls the disaster a “tableau of abdication: years of privatization and non-regulation followed by panic.” Not only does MCHM fall beyond various industry regulators’ responsibilities, state health authorities don’t quite know what to make of it. West Virginia health authorities set acceptable exposure levels to MCMH for humans by extrapolating from a single, non-peer reviewed study of lethal exposure in rats. The result, Purdy writes, “tells us nothing about disease risks, chronic ailments, and bioaccumulation”.

A senior scientist at the Environmental Defense Fund dives deep into the science behind the state’s “safe” MCMH level of one-part-per-million, and comes away concerned:

We have no way of knowing whether or not it is safe.  The data needed to make that assessment simply do not exist for this chemical. And that distressing reality is in no small part due to the failings of our nation’s chemical safety law..

Matt Stroud surveys the damage done — the West Virginia Gazette has a live map showing where the water has been declared safe to drink — and concludes “the real problem is that this could’ve been much worse than it was”. Stroud quotes Juliana Serafin, an assistant professor of chemistry at the University of Charleston, who studies chemical disasters:

There have been many close calls,” she said. “But usually we’re worried about the air. With this water crisis, this is one of the first times we’ve worried about our water. And we should be concerned. Because it turns out that 300,000 people get their drinking water from the same place.”

Or, as the World Economic Forum put it last year, water supply crises are a “societal risk”. — Ben Walsh

On to today’s links:

Innovation
Whisper, the app that turns your secret angst into dumb meme photos – Kevin Roose

Bout That Life
Welcome to Wall Street, here’s your “massively inefficient workflow” – The Epicurean Dealmaker

Must Read
A spot-on screed on the failures of the elites – Martin Wolf

Ugh
Being poor causes people to go hungry, which causes them to get sick – Matt O’Brien
How startups will be hurt by the end of net neutrality  - Fred Wilson

Charts
Imagining America’s labor market recovery as a football field – Macroblog

Revolving Door
Switzerland’s new top financial regulator was formerly head of a UBS unit tied to Libor manipulation – FT

Black Market
Making cocaine in the microwave: Inside Colombia’s decentralizing drug economy – Vocativ

Remuneration
Congress’ terrible record on the minimum wage for tipped employees – Fortune

Beta
Hedge funds are learning to be better indexers – Sam Ro

Billionaire Whimsy
“No self-respecting billionaire would ever buy a condo that shared a floor with someone else” – Curbed

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