How much does basic environmental compliance cost?

Written By: Doug Ruhlin | Jul 18, 2014

Time to Read 5 Minutes

Getting your facility into compliance isn't just a good idea, it's required if you want to comply with environmental laws. Many people say it's too expensive to be in complete compliane with rules and regulations. Here we discuss why people should be concerned about how expensive it is to get caught out of compliance, and the true costs of complying with applicable regulations.

We get a lot of people contacting us asking "Do I have the right permits? How do I know? Where do I begin?"

Well, considering environmental regulations exist on the federal, state, sometimes county, and sometimes city level, it's somewhat of a nightmare for most people to figure out. So step one is get an environmental audit performed by a third party. They'll figure out what you have, what you need, and what course of action is right for you.

Ok, easy enough. How much? What's the cost of environmental compliance?

What is the cost of Environmental Compliance?

The Hard Costs of Environmental Compliance

Well, that's not an easy answer. Here's why:

  • The cost of the audit. If you're good at something, never do it for free, and when it comes to an audit, you want someone who's good at them. Don't skimp out. So, you're going to have professional fees right off the bat. Without knowing where you are, what type of facility you have, and some other information, that's an impossible number to estimate.
  • Permit & approval fees. You'll have to pay annual fees, inspection fees, application fees, and other costs associated with regulatory permit and approvals. Some are difficult to understand, and take time and money to get them completed correctly, so hiring something, either to be on staff permanently as a new employee, or using a third party consulting firm is your best bet, but this is going to cost you as well. Again, without knowing details of what is necessary, it's impossible to guess a figure here.
  • Site improvements and changing business practices. We find most people who are getting into compliance have to change certain aspects of their organization. If you're not up to speed on current regulations, you're likely doing business like it's the good ole days. Getting into environmental compliance means adhering to these current regulations, which can include modifying the way you do business or changing how aspects of your site functions. For instance, you may need to construction secondary containment around fuel tanks to get into compliance with your SPCC Plan. We find these costs can be pretty significant in terms of dollars and man-hours.
  • Environmental monitoring, sampling, and testing. You should expect that most permits and approvals you're now adhering to come with requirements for some sort of monitoring, sampling, or testing. While these costs usually are pretty low, they tend to happen on a regular basis, over a long period of time, such as stormwater sampling & testing as per requirements in stormwater permits.
  • Personnel time & expenses. You'll have to have someone conducting site inspections, sampling, testing, recording data, keeping permits, plans, and approvals organized, someone to deal with inspectors, get training, or travel to different sites (if you're a large operation). You might need to hire a new staff member, or increase the roles of your current employees. You need to factor in time and benefits, meaning this could be a substantial cost to you.
  • Additional professional fees. Chances are if you're completely not in compliance, you'll need to pay for additional services along the way, such as lawyers, engineer fees, additional environmental firms, etc. This can get very costly as well.
  • Other hard costs at your facility. To comply with your permit, you may need new equipment, personal protective gear, or other miscellaneous items to stay in compliance. These costs tend to be pretty low, but if you need a lot of little things, the cost can pile up quickly.
  • Fines, penalties, and violations. Hopefully your environmental consultant is helping keep these away completely, or at least as low as possible. Just be prepared because you might have to pay for neglecting to adhere to regulations. You may need to implement an environmental management system to adhere to regulator demands. Even worse, you may need to temporarily shut down. These costs can be anywhere from zero to millions of dollars.

If you're running a modest sized industrial operation, you can expect the cost of environmental compliance is going to be a few thousand dollars a year. Larger facilities should expect to pay more. Just like payroll taxes, and equipment maintenance, environmental regulations do cost money, and need to be viewed just like any other business expense.

Some of these costs can be avoided all together. Review the range of permits available for your facility. Ensure your staff is well trained and knowledgeable so they aren't learning on the job and making mistakes. Talk to your trade association. Talk to your competitors (if you're friendly enough). Make an anonymous call to your city, county, or state regulatory agency and ask some questions. Talk to an environmental consultant and pick their brain. You have options, and in today's era of instant information thanks to the internet, you can't play dumb and say you didn't know.

Environmental regulations aren’t going to go away regardless of how much we wish they would, and failing to plan for these costs can be part of a plan for financial failure. If you're struggling to stay in environmental compliance with your regulations, click here to contact us, or give us a call at 609-693-8301 to discuss how we can help keep your facility running smoothly.

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